DHS FEMA awards $255.6M for hotel lodgings to American National Red Cross in Texas
Contract Overview
Contract Amount: $255,562,533 ($255.6M)
Contractor: American National RED Cross, the
Awarding Agency: Department of Homeland Security
Start Date: 2005-10-22
End Date: 2005-10-24
Contract Duration: 2 days
Daily Burn Rate: $127.8M/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Other
Official Description: HOTEL LODGINGS
Place of Performance
Location: HOUSTON, HARRIS County, TEXAS, 77001
State: Texas Government Spending
Plain-Language Summary
Department of Homeland Security obligated $255.6 million to AMERICAN NATIONAL RED CROSS, THE for work described as: HOTEL LODGINGS Key points: 1. Significant contract value of $255.6 million for hotel lodgings. 2. Awarded to a single, well-known non-profit organization. 3. Short duration (2 days) suggests an emergency or immediate need. 4. Sector is hospitality/lodging, often subject to fluctuating demand and pricing.
Value Assessment
Rating: questionable
The contract is cost-plus-fixed-fee, which can lead to higher costs than fixed-price contracts if not carefully managed. The benchmark for similar contracts is difficult to ascertain without more specific details on the services provided and location.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
Despite being awarded under full and open competition, the award went to a single entity. This suggests either a highly specialized need or that only one offeror was deemed suitable. The price discovery mechanism is unclear without knowing the number of bids received and their pricing.
Taxpayer Impact: The significant cost raises questions about value for money, especially given the short duration. Taxpayer funds are being used for emergency lodging.
Public Impact
Provides essential temporary housing during emergencies. Supports disaster relief efforts, impacting affected populations. Potential for high per-diem rates impacting overall cost-effectiveness. Contractor's reputation and capacity are critical for successful execution.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost-plus-fixed-fee structure can incentivize higher spending.
- Lack of transparency on competition details despite 'full and open' designation.
- High total contract value for a very short period.
Positive Signals
- Addresses critical need for emergency lodging.
- Award to a recognized humanitarian organization.
- Potential for rapid deployment of services.
Sector Analysis
The hospitality sector, particularly for emergency lodging, can experience price volatility. Benchmarks are highly dependent on specific location, duration, and service level, making direct comparison challenging.
Small Business Impact
The data indicates no specific set-aside for small businesses. The award to a large non-profit organization suggests limited direct opportunities for small businesses in this specific contract.
Oversight & Accountability
Oversight is crucial for cost-plus-fixed-fee contracts to ensure funds are used efficiently and appropriately. The short duration may limit the scope for extensive oversight during the contract period itself.
Related Government Programs
- Hotels (except Casino Hotels) and Motels
- Department of Homeland Security Contracting
- Federal Emergency Management Agency Programs
Risk Flags
- High cost for a short duration.
- Cost-plus-fixed-fee contract type.
- Lack of detail on competition outcomes.
- Potential for price gouging in emergency situations.
- Limited transparency on specific services rendered.
Tags
hotels-except-casino-hotels-and-motels, department-of-homeland-security, tx, dca, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Homeland Security awarded $255.6 million to AMERICAN NATIONAL RED CROSS, THE. HOTEL LODGINGS
Who is the contractor on this award?
The obligated recipient is AMERICAN NATIONAL RED CROSS, THE.
Which agency awarded this contract?
Awarding agency: Department of Homeland Security (Federal Emergency Management Agency).
What is the total obligated amount?
The obligated amount is $255.6 million.
What is the period of performance?
Start: 2005-10-22. End: 2005-10-24.
What specific emergency or event necessitated such a large expenditure for short-term lodging?
The data does not specify the exact event, but the short duration (2 days) and large sum suggest a significant, immediate need, likely related to a natural disaster or large-scale emergency response. The Federal Emergency Management Agency (FEMA) typically handles such situations, indicating a disaster relief context.
How was the 'full and open competition' process managed to result in a single awardee for this substantial amount?
While designated 'full and open', the award to a single entity implies that either only one proposal met the stringent requirements, or the nature of the requirement (e.g., immediate availability, specific capacity) limited viable options. Further details on the solicitation and evaluation process would clarify the competition's effectiveness.
What is the justification for the cost-plus-fixed-fee pricing structure in this context, and how does it compare to potential fixed-price alternatives?
Cost-plus-fixed-fee is often used when the scope of work is not precisely defined or subject to change, common in emergency response. However, it carries a risk of cost overruns. A fixed-price contract might have been more cost-effective if the requirements were stable, but could have deterred bidders if uncertainty was high.
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: FULL AND OPEN COMPETITION
Solicitation Procedures: ALTERNATIVE SOURCES
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: P.O. BOX 73013, CHICAGO, IL, 90
Business Categories: Category Business, Nonprofit Organization, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $970,562,533
Exercised Options: $970,562,533
Current Obligation: $255,562,533
Timeline
Start Date: 2005-10-22
Current End Date: 2005-10-24
Potential End Date: 2005-10-24 00:00:00
Last Modified: 2008-05-31
More Contracts from American National RED Cross, the
- THE Purpose of This Letter Contract and Eventual Definitive Contract IS to Acquire Services Related to the Functionality and System Changes That the Contractor Must Make Before Collecting Convalescent Plasma Samples — $110.3M (Department of Health and Human Services)
- American RED Cross:1108672 [13-007730] — $36.1M (Department of Health and Human Services)
- Donor Apheresis Services — $15.1M (Department of Health and Human Services)
- Blood Products — $4.8M (Department of Veterans Affairs)
- Blood and Blood Products — $3.2M (Department of Veterans Affairs)
View all American National RED Cross, the federal contracts →
Other Department of Homeland Security Contracts
- THE United States Coast Guard HAS a Requirement to Procure UP to Twenty-Six (26) Fast Response Cutters (frcs) on a Firm Fixed Price (FFP) Basis With an Economic Price Adjustment (EPA). Phase II of the FRC Program Will Complete the Fleet for a Total of 58 Cutters — $2.1B (Bollinger Shipyards Lockport, L.L.C.)
- Design and Construct NEW Vertical Barrier and Power Distribution, Lighting, Cameras, Equipment Shelters and Linear Ground Detection System (lgds) in Hildago County, NM — $1.8B (Fisher Sand & Gravel CO)
- Production&delivery of National Security Cutter (NSC) 6 — $1.7B (Huntington Ingalls Incorporated)
- YUM-2 Vertical Border and Waterborne Barrier Construction — $1.7B (Fisher Sand & Gravel CO)
- Construct Vertical Border Barrier — $1.6B (Fisher Sand & Gravel CO)