State Department Awards $27.5M Contract for Hotel Services in New York
Contract Overview
Contract Amount: $27,506 ($27.5K)
Contractor: Sonesta Benjamin Hotel LLC
Awarding Agency: Department of State
Start Date: 2025-07-22
End Date: 2025-11-30
Contract Duration: 131 days
Daily Burn Rate: $210/day
Competition Type: COMPETED UNDER SAP
Number of Offers Received: 2
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: HOTEL
Place of Performance
Location: NEW YORK, NEW YORK County, NEW YORK, 10022
State: New York Government Spending
Plain-Language Summary
Department of State obligated $27,506 to SONESTA BENJAMIN HOTEL LLC for work described as: HOTEL Key points: 1. Contract awarded to Sonesta Benjamin Hotel LLC for lodging. 2. The contract is for a duration of 131 days. 3. Services are for the Department of State. 4. The contract type is Firm Fixed Price. 5. The North American Industry Classification System (NAICS) code is 721110 (Hotels and Motels).
Value Assessment
Rating: fair
The contract value of $27.5 million for approximately 4 months of hotel services appears high. Benchmarking against typical per-diem rates for government travelers in New York City is necessary to assess value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: unknown
The competition method is listed as 'COMPETED UNDER SAP' (Simplified Acquisition Procedures), suggesting it was competed but potentially among a limited pool of vendors. Further details are needed to understand the extent of competition and its impact on price discovery.
Taxpayer Impact: The taxpayer impact is the $27.5 million allocated for these hotel services, which needs to be justified by the necessity and cost-effectiveness of the chosen vendor and location.
Public Impact
Provides essential lodging for government personnel, potentially supporting diplomatic or operational missions. The cost represents a significant expenditure for temporary accommodation. Location in New York City may indicate specific operational needs or events. The duration suggests a focused, short-term requirement rather than long-term housing.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- High per-diem cost potential
- Limited competition transparency
- Short-term but high value
Positive Signals
- Clear contract duration
- Defined service type
Sector Analysis
The hospitality sector, particularly hotels, sees significant government spending for temporary lodging, conferences, and personnel support. This contract falls within standard government procurement for such services, though the specific value warrants scrutiny against market rates.
Small Business Impact
There is no indication that small businesses were involved in this contract award. Further analysis would be required to determine if opportunities were missed or if the nature of the requirement precluded small business participation.
Oversight & Accountability
The award is a Purchase Order, which is a common method for acquiring goods and services. Oversight would focus on ensuring the services rendered meet the contract's specifications and that the pricing remains justified throughout the performance period.
Related Government Programs
- Hotels (except Casino Hotels) and Motels
- Department of State Contracting
- Department of State Programs
Risk Flags
- High contract value for a short duration
- Lack of detailed justification for expenditure
- Potential for inflated pricing in a high-cost urban area
- Limited transparency on competition details
Tags
hotels-except-casino-hotels-and-motels, department-of-state, ny, purchase-order, under-100k
Frequently Asked Questions
What is this federal contract paying for?
Department of State awarded $27,506 to SONESTA BENJAMIN HOTEL LLC. HOTEL
Who is the contractor on this award?
The obligated recipient is SONESTA BENJAMIN HOTEL LLC.
Which agency awarded this contract?
Awarding agency: Department of State (Department of State).
What is the total obligated amount?
The obligated amount is $27,506.
What is the period of performance?
Start: 2025-07-22. End: 2025-11-30.
What specific events or operational needs necessitate such a high expenditure for hotel services in New York City?
The specific operational needs driving this significant expenditure are not detailed in the provided data. Typically, large government contracts for hotel services in high-cost areas like New York City are associated with major diplomatic events, extended temporary duty assignments for personnel, or critical operational support requiring a centralized location. Without further context, it's difficult to ascertain the precise justification beyond general lodging requirements.
How does the per-unit cost of this contract compare to standard government per-diem rates in New York City?
The provided data does not include a per-unit cost breakdown, making a direct comparison to standard government per-diem rates impossible. The total award of $27.5 million over 131 days suggests a substantial daily rate. A thorough analysis would require obtaining the number of rooms or room-nights procured to calculate an effective daily rate and benchmark it against GSA or State Department per-diem limits for the relevant New York City zip codes.
What measures are in place to ensure the effectiveness and value for money of these hotel services over the contract duration?
Effectiveness and value for money are typically ensured through contract performance monitoring, adherence to service level agreements, and post-performance reviews. For this contract, the Department of State would likely have designated personnel to oversee the services, verify billing, and ensure the hotel meets the required standards. The firm fixed-price nature of the contract helps control costs, but ongoing vigilance is needed to confirm the necessity and appropriateness of the services utilized.
Industry Classification
NAICS: Accommodation and Food Services › Traveler Accommodation › Hotels (except Casino Hotels) and Motels
Product/Service Code: TRANSPORT, TRAVEL, RELOCATION › TRAVEL, LODGING, RECRUITMENT SVCS
Competition & Pricing
Extent Competed: COMPETED UNDER SAP
Solicitation Procedures: SIMPLIFIED ACQUISITION
Offers Received: 2
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 125 E 50TH ST, NEW YORK, NY, 10022
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $27,506
Exercised Options: $27,506
Current Obligation: $27,506
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Timeline
Start Date: 2025-07-22
Current End Date: 2025-11-30
Potential End Date: 2025-11-30 00:00:00
Last Modified: 2026-04-09
Other Department of State Contracts
- Care Logistical Support Services - Clss — $2.3B (Xator LLC)
- Task Order to Provide Project Management Support, Transition Support, Engineering and Design Support, Securing the Infrastructure Support and O&M Support for the Department's IT Consolidation Program — $2.1B (Science Applications International Corporation)
- Global Security Engineering&supply Chain Services — $1.5B (General Dynamics Information Technology, Inc.)
- Slmaqm04c0030 — $1.2B (Dyncorp International LLC)
- THE Purpose of This Action IS to Establish a NEW Contract With General Dynamics Information Technology for Global Supply Chain Management, Logistics and Technology Development Services to Support the Department of State. the Initial Funding Associated With This Contract IS $22,304,578.00. the Overall Contract Value IS $2,200,000,000.00 — $1.2B (General Dynamics Information Technology, Inc.)