MCC leases office space for $62.8M over 11 years, with 7 bidders indicating strong competition

Contract Overview

Contract Amount: $62,764,757 ($62.8M)

Contractor: Bowen Building, L. P.

Awarding Agency: Millennium Challenge Corporation

Start Date: 2005-05-29

End Date: 2016-04-01

Contract Duration: 3,960 days

Daily Burn Rate: $15.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 7

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: LEASE

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20005

State: District of Columbia Government Spending

Plain-Language Summary

Millennium Challenge Corporation obligated $62.8 million to BOWEN BUILDING, L. P. for work described as: LEASE Key points: 1. The contract represents a significant long-term commitment for office space. 2. Strong competition among seven bidders suggests a potentially favorable market for the agency. 3. The firm-fixed-price structure provides cost certainty for the government. 4. Leasing office space is a common operational necessity for federal agencies. 5. The duration of the lease is substantial, requiring careful long-term planning. 6. The contract was awarded to a single entity for the provision of leased space.

Value Assessment

Rating: good

The lease cost of $62.8 million over approximately 11 years averages to about $5.7 million annually. Benchmarking this against similar large federal office leases in Washington D.C. would be necessary for a precise value assessment. However, the presence of seven bidders suggests the pricing was likely competitive and aligned with market rates at the time of award. The firm-fixed-price nature of the contract helps control costs over its duration.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, with seven distinct bids received. This level of competition is generally considered robust and indicates that multiple offerors were interested and capable of meeting the agency's requirements. A competitive process like this typically leads to better price discovery and potentially more favorable terms for the government.

Taxpayer Impact: A high number of bidders suggests that taxpayers benefited from competitive pricing, as multiple companies vied to secure the contract, driving down costs.

Public Impact

The Millennium Challenge Corporation (MCC) benefits from secure, long-term office facilities. The services delivered are essential for the operational continuity of the agency. The geographic impact is concentrated in the District of Columbia, where the MCC is headquartered. The contract supports the real estate and property management sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long-term lease commitment could be inflexible if agency needs change.
Reliance on a single lessor for a critical facility poses a concentration risk.

Positive Signals

Firm-fixed-price contract provides budget certainty.
Robust competition at award suggests good market value.
Lease provides essential operational infrastructure for the agency.

Sector Analysis

This contract falls within the commercial real estate sector, specifically focusing on the leasing of nonresidential buildings. The market for federal office space in Washington D.C. is substantial, with numerous agencies requiring significant square footage. Comparable spending benchmarks would involve analyzing other large federal office leases, considering factors like location, size, lease duration, and amenities. The $62.8 million total value over 11 years places it as a significant, but not extraordinary, lease for a federal agency.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract, nor does it detail subcontracting plans. As a lease agreement for a large commercial property, it is less likely to have direct subcontracting opportunities for small businesses compared to service or supply contracts. The primary focus would be on the direct lease agreement with the property owner.

Oversight & Accountability

Oversight for this lease would typically be managed by the Millennium Challenge Corporation's facilities and procurement departments. Accountability measures are embedded in the lease agreement itself, outlining terms, conditions, and remedies for non-compliance. Transparency is generally maintained through contract databases like FPDS, where basic award information is publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to the lease were suspected.

Related Government Programs

Federal Building Leases
Government Office Space Acquisition
Real Property Management
Commercial Real Estate Services

Risk Flags

Long-term lease commitment
Reliance on single lessor

Frequently Asked Questions

What is this federal contract paying for?

Millennium Challenge Corporation awarded $62.8 million to BOWEN BUILDING, L. P.. LEASE

Who is the contractor on this award?

The obligated recipient is BOWEN BUILDING, L. P..

Which agency awarded this contract?

Awarding agency: Millennium Challenge Corporation (Millennium Challenge Corporation).

What is the total obligated amount?

The obligated amount is $62.8 million.

What is the period of performance?

Start: 2005-05-29. End: 2016-04-01.

What was the specific square footage leased and the cost per square foot?

The provided data does not specify the exact square footage leased under this contract. To determine the cost per square foot, this information would be required. Without the square footage, a detailed analysis of the per-square-foot cost, a common metric for office space valuation, cannot be performed. This metric is crucial for comparing the value of this lease against market rates and other federal leases.

How does the annual cost of this lease compare to the average cost of similar federal office leases in the D.C. area?

The annual cost of this lease is approximately $5.7 million ($62.8M / 11 years). To compare this to average federal office lease costs in D.C., we would need data from sources like the General Services Administration (GSA) or other market analysis firms. Factors such as building class (e.g., Class A, B), amenities, location within D.C., and lease term length significantly influence average costs. A direct comparison would require identifying leases with similar characteristics awarded around the same period.

What were the specific criteria used to evaluate the seven bids received?

The provided data does not detail the specific evaluation criteria used for the seven bids. Typically, for a lease of this nature, evaluation criteria would include factors such as price (rent, operating expenses), building quality and condition, location, available amenities, parking, security features, and the lessor's ability to meet the agency's specific space and technical requirements. The relative weighting of these factors would determine the final award.

What is the track record of the lessor, BOWEN BUILDING, L. P., with federal government contracts?

Information regarding the specific track record of BOWEN BUILDING, L. P. with federal government contracts is not detailed in the provided data. A comprehensive assessment would require searching federal procurement databases (like FPDS) for other contracts awarded to this entity, noting their performance history, any disputes, or contract modifications. Understanding their experience, particularly with large-scale commercial leasing, is important for assessing reliability and potential risks.

Were there any significant contract modifications or disputes during the 11-year lease period?

The provided data summary does not include information on contract modifications or disputes that may have occurred during the lease period from May 29, 2005, to April 1, 2016. Such details would typically be found in more granular contract files or modification histories within federal procurement systems. Significant modifications could alter the original cost, scope, or duration, while disputes could indicate performance issues.

What is the current market value or lease rate for comparable office space in the same D.C. location?

Determining the current market value or lease rate for comparable office space in the same D.C. location would require accessing real-time commercial real estate market data. This data is usually proprietary and provided by commercial real estate brokers or data analytics firms. Factors like vacancy rates, new construction, and economic conditions heavily influence current rates. Given the lease ended in 2016, current rates would reflect market changes over the past several years.

Industry Classification

NAICS: Real Estate and Rental and Leasing › Lessors of Real Estate › Lessors of Nonresidential Buildings (except Miniwarehouses)

Product/Service Code: LEASE/RENT FACILITIES › LEASE/RENTAL OF BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 7

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Vornado Realty Trust (UEI: 006972574)

Address: 875 15TH ST NW, WASHINGTON, DC, 20005

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $62,764,757

Exercised Options: $62,764,757

Current Obligation: $62,764,757

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Timeline