Commerce awards $1.27M for automated liquid handler maintenance, citing sole-source justification

Contract Overview

Contract Amount: $126,772 ($126.8K)

Contractor: Hamilton Company

Awarding Agency: Department of Commerce

Start Date: 2022-10-16

End Date: 2026-10-15

Contract Duration: 1,460 days

Daily Burn Rate: $87/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: PURCHASE A ONE-YEAR SERVICE AGREEMENT FOR MAINTENANCE AND REPAIR AND FOUR ONE-YEAR OPTION PERIODS FOR A HAMILTON STAR AUTOMATED LIQUID HANDLER

Place of Performance

Location: GAITHERSBURG, MONTGOMERY County, MARYLAND, 20899

State: Maryland Government Spending

Plain-Language Summary

Department of Commerce obligated $126,772 to HAMILTON COMPANY for work described as: PURCHASE A ONE-YEAR SERVICE AGREEMENT FOR MAINTENANCE AND REPAIR AND FOUR ONE-YEAR OPTION PERIODS FOR A HAMILTON STAR AUTOMATED LIQUID HANDLER Key points: 1. The contract's value appears reasonable for a specialized service agreement covering a critical laboratory instrument. 2. Limited competition due to sole-source award may have impacted price discovery and potentially led to higher costs. 3. The firm-fixed-price structure shifts performance risk to the contractor, which is generally favorable for the government. 4. This award supports essential research and development activities at NIST, a key scientific agency. 5. The contract duration of four option years suggests a long-term need for this specific maintenance service. 6. The absence of small business set-aside indicates the primary contractor is likely not a small business.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific details on the service level agreement and the complexity of the Hamilton STAR system. However, the total award ceiling of $1.27 million over potentially five years (one base + four options) for maintenance and repair of a single automated liquid handler seems within a plausible range for specialized scientific equipment. Comparisons to similar service agreements for high-end laboratory automation would be necessary for a more definitive assessment of value for money. The firm-fixed-price contract type is appropriate for managing costs when the scope of work is well-defined.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed under the Simplified Acquisition Procedures (SAP) and was awarded on a sole-source basis to Hamilton Company. This indicates that the agency determined that only Hamilton Company could provide the required maintenance and repair services for their specific automated liquid handler. The lack of competition means that potential cost savings that might arise from a competitive bidding process were not realized. This approach is typically justified when a product or service is unique and only available from a single source.

Taxpayer Impact: Sole-source awards limit opportunities for other businesses to compete for government contracts and can potentially result in higher prices for taxpayers compared to competitively awarded contracts.

Public Impact

Researchers and scientists at NIST benefit from the reliable operation of the Hamilton STAR automated liquid handler, enabling uninterrupted scientific workflows. The contract ensures the availability of critical laboratory services for research and development projects. The primary geographic impact is within Maryland, where NIST facilities are located. Workforce implications are minimal, primarily involving specialized technicians from Hamilton Company performing maintenance.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and potential cost savings for taxpayers.
Lack of transparency in the justification for sole-source award.
Potential for price escalation in option periods without competitive pressure.

Positive Signals

Firm-fixed-price contract shifts performance risk to the contractor.
Award supports critical scientific research at a leading government agency.
Contract duration indicates a recognized long-term need for the service.

Sector Analysis

The contract falls within the 'Other Electronic and Precision Equipment Repair and Maintenance' sector, specifically NAICS code 811219. This sector encompasses services for a wide range of electronic and precision equipment. The market for specialized laboratory automation equipment maintenance is often characterized by a few key manufacturers holding proprietary knowledge and service capabilities, leading to sole-source or limited competition scenarios for their specific products. Comparable spending benchmarks would likely be found within other federal agencies utilizing similar high-throughput laboratory automation systems.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. The sole-source nature of the award to Hamilton Company, a likely large business, further suggests that small business participation was not a primary consideration in this specific procurement. This contract does not appear to contribute to the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily reside with the National Institute of Standards and Technology (NIST) contracting officer and program managers. They are responsible for monitoring contractor performance, ensuring compliance with contract terms, and approving any modifications or option exercises. Transparency is limited due to the sole-source nature of the award. There is no specific mention of an Inspector General's direct involvement in this particular award, though the IG's office generally has oversight over federal spending.

Related Government Programs

National Institute of Standards and Technology (NIST) Research and Development Contracts
Federal Contracts for Laboratory Equipment Maintenance
Sole-Source Procurements for Specialized Services
Department of Commerce Service Agreements

Risk Flags

Sole-source award may limit price competition.
Lack of transparency regarding specific justification for sole-sourcing.
Potential for contractor lock-in due to specialized equipment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Commerce awarded $126,772 to HAMILTON COMPANY. PURCHASE A ONE-YEAR SERVICE AGREEMENT FOR MAINTENANCE AND REPAIR AND FOUR ONE-YEAR OPTION PERIODS FOR A HAMILTON STAR AUTOMATED LIQUID HANDLER

Who is the contractor on this award?

The obligated recipient is HAMILTON COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Commerce (National Institute of Standards and Technology).

What is the total obligated amount?

The obligated amount is $126,772.

What is the period of performance?

Start: 2022-10-16. End: 2026-10-15.

What is the specific justification provided by NIST for awarding this contract on a sole-source basis to Hamilton Company?

The provided data indicates the contract was 'NOT COMPETED UNDER SAP' and was awarded to 'HAMILTON COMPANY'. While the specific justification narrative is not included in the abbreviated data, sole-source awards are typically justified under Federal Acquisition Regulation (FAR) Part 6.302 when only one responsible source is available or capable of meeting the agency's needs. For specialized laboratory equipment like the Hamilton STAR automated liquid handler, this often stems from proprietary technology, unique maintenance requirements, or the need for manufacturer-specific expertise to ensure proper functioning and avoid voiding warranties. NIST would have had to document that no other vendor could provide the necessary maintenance and repair services.

How does the firm-fixed-price contract type benefit the government in this scenario?

A firm-fixed-price (FFP) contract is generally advantageous for the government when the scope of work is well-defined and the risks associated with performance are understood. In this case, for maintenance and repair services of an automated liquid handler, the FFP structure means that Hamilton Company is obligated to perform the specified services for the agreed-upon price. This shifts the risk of cost overruns due to unforeseen difficulties or inefficiencies from the government to the contractor. It provides budget certainty for NIST, as the price is fixed regardless of the contractor's actual costs. This contract type is suitable for services where performance requirements are clear and the potential for changes in scope is minimal.

What are the potential risks associated with a sole-source award for specialized equipment maintenance?

The primary risk of a sole-source award is the lack of price competition, which can lead to higher costs for the government than if the contract had been competed. Without competing bids, the contractor has less incentive to offer the lowest possible price. Additionally, sole-source awards can limit opportunities for other qualified vendors, potentially stifling innovation and market competition in the long run. There's also a risk that the agency may become overly reliant on a single supplier, potentially leading to lock-in effects and reduced leverage in future negotiations. Transparency can also be a concern, as the justification for sole-sourcing needs to be robustly documented and defended.

What is the significance of the contract's duration (base year plus four option periods)?

The contract's duration, with a one-year base period and four one-year option periods, indicates a sustained and long-term requirement for the maintenance and repair services of the Hamilton STAR automated liquid handler. This suggests that the instrument is critical to NIST's ongoing research and development operations and that the agency anticipates needing this specific support for the foreseeable future. Exercising option periods allows the government to retain the contractor's services without needing to conduct a new full procurement process, providing continuity and administrative efficiency. However, it also means the government is committed to potentially significant spending over the full contract term.

How does this contract align with NIST's mission and its role in scientific advancement?

This contract directly supports NIST's mission to promote U.S. innovation and industrial competitiveness by advancing measurement science, standards, and technology. The Hamilton STAR automated liquid handler is a sophisticated piece of laboratory equipment likely used for high-throughput screening, sample preparation, or other critical research functions. Ensuring its reliable operation through dedicated maintenance and repair services is essential for the integrity and efficiency of NIST's scientific research. By maintaining this equipment, NIST can continue to conduct cutting-edge research, develop new standards, and provide the measurement infrastructure that underpins scientific and technological progress in the nation.

Industry Classification

NAICS: Other Services (except Public Administration) › Electronic and Precision Equipment Repair and Maintenance › Other Electronic and Precision Equipment Repair and Maintenance

Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR BUILDINGS

Competition & Pricing

Extent Competed: NOT COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 4970 ENERGY WY, RENO, NV, 89502

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $158,665

Exercised Options: $126,772

Current Obligation: $126,772

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline