USPTO's $193M contract for chemical/patent databases awarded to American Chemical Society, a sole-source procurement

Contract Overview

Contract Amount: $192,980,576 ($193.0M)

Contractor: American Chemical Society

Awarding Agency: Department of Commerce

Start Date: 2015-04-01

End Date: 2025-09-30

Contract Duration: 3,835 days

Daily Burn Rate: $50.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::OT::IGF USPTO LICENSED USE OF STN, SCIFINDER AND ADDITIONAL RELATED PRODUCTS AND SERVICES.

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20036

State: District of Columbia Government Spending

Plain-Language Summary

Department of Commerce obligated $193.0 million to AMERICAN CHEMICAL SOCIETY for work described as: IGF::OT::IGF USPTO LICENSED USE OF STN, SCIFINDER AND ADDITIONAL RELATED PRODUCTS AND SERVICES. Key points: 1. The contract represents a significant investment in specialized information services for patent examination. 2. Sole-source award suggests limited alternatives or unique capabilities offered by the contractor. 3. Long contract duration (2015-2025) indicates a sustained need for these resources. 4. The fixed-price contract type aims to control costs, but the large value warrants close monitoring. 5. Performance context is critical given the essential role of these databases in USPTO's core mission. 6. Sector positioning is within information services, specifically supporting intellectual property and scientific research.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging due to its specialized nature and sole-source award. The price of $193 million over approximately 10 years suggests a substantial annual cost. Without comparable contracts or detailed cost breakdowns, it's difficult to definitively assess if this represents excellent value. However, the fixed-price structure provides some cost certainty for the government. The long-term commitment implies the perceived value is high for the USPTO.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning the USPTO did not conduct a competitive bidding process. This typically occurs when a single source is uniquely qualified to provide the required goods or services, or in cases of urgent need where competition is not feasible. The lack of competition limits the government's ability to leverage market forces to achieve the lowest possible price.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive pressure. While the service is essential, the sole-source nature means there's less assurance that the price reflects the most economical option available.

Public Impact

USPTO patent examiners benefit directly through access to critical research and chemical databases. The services delivered are essential for evaluating patent applications, ensuring innovation is properly documented and protected. Geographic impact is national, supporting the USPTO's operations across the United States. Workforce implications include enabling USPTO's scientific and technical staff to perform their duties efficiently and effectively.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price escalation over the contract's long duration without competitive review.
Risk of vendor lock-in due to the specialized and sole-source nature of the procurement.
Dependence on a single contractor for critical information resources could pose a risk if performance falters.

Positive Signals

Contract provides access to essential, specialized databases crucial for USPTO's mission.
Long-term award indicates a stable and reliable source of information for patent examiners.
Fixed-price contract type offers budget predictability.

Sector Analysis

This contract falls within the broader information services sector, specifically focusing on scientific and technical databases. The market for such specialized data, particularly for intellectual property applications, is often concentrated among a few providers. The American Chemical Society, as a major publisher of chemical information, is a key player in this niche. Comparable spending benchmarks are difficult to establish due to the unique nature of patent-related databases and the sole-source award.

Small Business Impact

This contract does not appear to involve small business set-asides. Given the specialized nature of the databases and the sole-source award to a large organization like the American Chemical Society, there are likely no subcontracting opportunities for small businesses directly related to this primary contract. The focus is on acquiring a specific, high-value information service.

Oversight & Accountability

Oversight for this contract would primarily reside with the U.S. Patent and Trademark Office (USPTO) contracting officers and program managers. As a Department of Commerce agency, the USPTO is subject to internal oversight mechanisms and potentially the Department of Commerce's Office of Inspector General for audits and investigations. Transparency is limited by the sole-source nature, but contract performance metrics and payment details should be publicly available through federal procurement databases.

Related Government Programs

USPTO Information Technology Services
Scientific and Technical Information Dissemination
Intellectual Property Database Services
Federal Research and Development Support

Risk Flags

Sole-source procurement limits competition and potentially increases costs.
Long contract duration may lead to vendor lock-in and missed opportunities for cost savings.
Lack of detailed performance metrics in summary data hinders assessment of value for money.

Frequently Asked Questions

What is this federal contract paying for?

Department of Commerce awarded $193.0 million to AMERICAN CHEMICAL SOCIETY. IGF::OT::IGF USPTO LICENSED USE OF STN, SCIFINDER AND ADDITIONAL RELATED PRODUCTS AND SERVICES.

Who is the contractor on this award?

The obligated recipient is AMERICAN CHEMICAL SOCIETY.

Which agency awarded this contract?

Awarding agency: Department of Commerce (U.S. Patent and Trademark Office).

What is the total obligated amount?

The obligated amount is $193.0 million.

What is the period of performance?

Start: 2015-04-01. End: 2025-09-30.

What is the historical spending trend for this specific contract or similar services at USPTO?

The provided data indicates a single definitive contract awarded in 2015 with an estimated value of $192,980,575.90, running through September 2025. This suggests a significant, sustained investment in these specific databases. Without access to historical procurement data prior to 2015 or details on other contracts for similar services, it's difficult to establish a precise spending trend. However, the long duration and substantial value of this single award imply a consistent and high level of expenditure for these resources over the past decade. Future spending would depend on contract renewals or the establishment of new agreements.

How does the cost per year for this contract compare to industry benchmarks for similar database access?

Calculating an exact annual cost requires dividing the total contract value ($192,980,575.90) by the contract duration (approximately 10 years, from April 2015 to September 2025). This yields an approximate annual cost of $19.3 million. Benchmarking this figure against industry standards for specialized scientific and patent databases is challenging due to the unique nature of the content (SciFinder, STN) and the sole-source award. Typically, such specialized databases command premium pricing. Without specific details on user numbers, access levels, and comparable sole-source agreements, a precise comparison is difficult. However, given the critical function and limited alternatives, this annual figure may be within a reasonable range for highly specialized, mission-critical data.

What are the specific performance metrics and Service Level Agreements (SLAs) associated with this contract?

The provided data does not include specific performance metrics or Service Level Agreements (SLAs) for this contract. Typically, government contracts, especially those for critical information services, would outline expectations for uptime, data accuracy, response times for support, and delivery of updates. For a contract of this magnitude and duration, it is highly probable that detailed performance standards were established. These would be crucial for the USPTO to monitor the contractor's adherence to requirements and ensure the value derived from the databases. The absence of this information in the summary data highlights a potential gap in transparency regarding performance oversight.

What is the track record of American Chemical Society as a government contractor, particularly for similar information services?

The American Chemical Society (ACS) is a well-established organization known for its extensive publishing of chemical literature and databases, including SciFinder and STN, which are critical resources for the USPTO. As a government contractor, ACS's track record would be reflected in its performance on this specific sole-source contract and potentially others. Given the long duration (2015-2025) and significant value of this award, it suggests a history of satisfactory performance or a unique capability that the USPTO relies upon. Detailed performance reviews and past performance evaluations would typically be part of the government's assessment, though such granular data is not provided here.

Are there any known risks or challenges associated with the contractor's ability to fulfill this contract over its entire duration?

Potential risks associated with this contract primarily stem from its sole-source nature and the long duration. A key risk is vendor lock-in, where the USPTO becomes heavily reliant on ACS and SciFinder/STN, making it difficult and costly to switch providers even if better alternatives emerge or prices increase significantly. Another risk involves the potential for price increases over the contract's lifespan, as there is no competitive pressure to keep costs down. Furthermore, any disruption in ACS's ability to provide or maintain these specialized databases, whether due to technical issues, financial instability, or changes in their own business strategy, could significantly impact USPTO's operations.

Industry Classification

NAICS: Information › Other Information Services › All Other Information Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2540 OLENTANGY RIVER RD, COLUMBUS, OH, 43202

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

Financial Breakdown

Contract Ceiling: $197,793,239

Exercised Options: $194,793,239

Current Obligation: $192,980,576

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline