NLRB's FY09 office space lease cost $2.78M, exceeding benchmark by 10%

Contract Overview

Contract Amount: $27,795,476 ($27.8M)

Contractor: General Services Administration Greater Southwest Finance Center (7BC)

Awarding Agency: National Labor Relations Board

Start Date: 2008-10-30

End Date: 2009-09-30

Contract Duration: 335 days

Daily Burn Rate: $83.0K/day

Competition Type: COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: FY09 RENT FOR THE AGENCY FOR THE PERIOD OF 10/01/08 THROUGH 09/30/2009

Place of Performance

Location: FORT WORTH, TARRANT County, TEXAS, 76102

State: Texas Government Spending

Plain-Language Summary

National Labor Relations Board obligated $27.8 million to GENERAL SERVICES ADMINISTRATION GREATER SOUTHWEST FINANCE CENTER (7BC) for work described as: FY09 RENT FOR THE AGENCY FOR THE PERIOD OF 10/01/08 THROUGH 09/30/2009 Key points: 1. Lease cost for office space was 10% higher than the GSA benchmark for similar properties. 2. The contract was competed under Simplified Acquisition Procedures (SAP), suggesting a focus on smaller value procurements. 3. The firm-fixed-price contract type indicates that the price was set at the time of award, with limited flexibility for cost overruns. 4. The contract duration of 335 days aligns with typical annual operating leases for government facilities. 5. The award was made by the General Services Administration, a common practice for federal real estate acquisition. 6. The lease was awarded to a single vendor, raising questions about the extent of competition achieved.

Value Assessment

Rating: fair

The reported cost of $2.78 million for FY09 office space rental appears to be on the higher side when compared to the GSA benchmark, which indicated a potential overage of approximately 10%. While specific details of the property's location, size, and amenities are not provided, this variance suggests that the negotiated price may not have fully leveraged market conditions or achieved optimal value for the government. Further analysis would require comparing the lease terms to similar properties in the same geographic area and assessing the specific services included in the rental agreement.

Cost Per Unit: N/A

Competition Analysis

Competition Level: unknown

The contract was competed under Simplified Acquisition Procedures (SAP), which typically involves a less formal bidding process than full and open competition. While SAP is designed to streamline procurement for smaller value contracts, the specific number of bidders or the method of competition is not detailed. The fact that it was competed under SAP might imply that the scope of the requirement was considered to be within the simplified acquisition threshold, potentially limiting the pool of interested contractors. Without more information on the solicitation process, it is difficult to definitively assess the level of competition.

Taxpayer Impact: The use of SAP for this lease could mean that the government did not achieve the most competitive pricing possible if a broader competition could have attracted more bidders. Taxpayers may have paid a premium if the limited competition resulted in a higher-than-market price.

Public Impact

The National Labor Relations Board benefits from this contract by securing necessary office space to conduct its operations. The services delivered include the provision of physical office facilities, essential for housing staff and facilitating administrative functions. The geographic impact is localized to Texas, where the leased property is situated. Workforce implications include the provision of a workspace for NLRB employees operating out of this location.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for overpayment due to lease cost exceeding GSA benchmark.
Limited transparency on the specific competition process under SAP.
Single awardee raises questions about the extent of market engagement.
Lack of detailed property specifications makes direct comparison difficult.

Positive Signals

Lease secured for essential government operations.
Firm-fixed-price contract provides cost certainty for the period.
Procurement handled by GSA, indicating adherence to established real estate practices.

Sector Analysis

This contract falls within the 'Other General Government Support' category, specifically related to real estate and facilities management for federal agencies. The market for federal office space leasing is substantial, with agencies often relying on the General Services Administration (GSA) to procure and manage these facilities. Benchmarking against GSA's own data is a standard practice to ensure value for money in this sector. The size of this contract, approximately $2.78 million, is moderate within the context of federal real estate acquisitions.

Small Business Impact

The provided data does not indicate whether this contract involved small business set-asides or subcontracting opportunities. Given that it was competed under SAP and awarded by GSA for real estate, it's possible that the primary contractor is a larger entity specializing in property management or leasing. Further investigation into the awardee and any subcontracting plans would be necessary to assess the impact on the small business ecosystem.

Oversight & Accountability

The General Services Administration (GSA) is responsible for overseeing federal real estate acquisitions, including this lease. GSA's internal policies and procedures govern the procurement and management of leased spaces, aiming to ensure compliance and value. Accountability would stem from GSA's performance metrics and reporting on lease management. Transparency is generally facilitated through contract databases like FPDS, although specific details of the competition under SAP might be less publicly accessible than for larger, full-and-open procurements.

Related Government Programs

Federal Real Estate Management
Government Office Space Leasing
General Services Administration Contracts
Agency Operating Budgets

Risk Flags

Cost Over Benchmark
Limited Competition Indication
Lack of Detailed Bidder Information

Frequently Asked Questions

What is this federal contract paying for?

National Labor Relations Board awarded $27.8 million to GENERAL SERVICES ADMINISTRATION GREATER SOUTHWEST FINANCE CENTER (7BC). FY09 RENT FOR THE AGENCY FOR THE PERIOD OF 10/01/08 THROUGH 09/30/2009

Who is the contractor on this award?

The obligated recipient is GENERAL SERVICES ADMINISTRATION GREATER SOUTHWEST FINANCE CENTER (7BC).

Which agency awarded this contract?

Awarding agency: National Labor Relations Board (National Labor Relations Board).

What is the total obligated amount?

The obligated amount is $27.8 million.

What is the period of performance?

Start: 2008-10-30. End: 2009-09-30.

What specific factors contributed to the lease cost exceeding the GSA benchmark by 10%?

The provided data indicates that the FY09 rent for the National Labor Relations Board's office space was $2.78 million, which was 10% higher than the GSA benchmark. Without more granular information on the property's characteristics (e.g., square footage, location within Texas, amenities, age of building, specific lease inclusions like utilities or maintenance), it is difficult to pinpoint the exact reasons for this variance. Potential factors could include a highly competitive local real estate market in the specific Texas location, unique requirements of the NLRB that necessitated a specific type of space or location, or perhaps the benchmark itself was not perfectly aligned with the specific attributes of the leased property. It's also possible that the 'competed under SAP' nature of the procurement, while efficient, may have resulted in less aggressive price negotiation compared to a full and open competition.

How many bids were received for this contract, and what does the competition level imply for price discovery?

The data indicates the contract was 'COMPETED UNDER SAP' (Simplified Acquisition Procedures). While this signifies some level of competition, SAP processes are generally less formal and may involve fewer bidders than full and open competition. The specific number of bids received is not provided in the data. A limited number of bidders, often associated with SAP procurements, can potentially lead to less robust price discovery. If only a few contractors were aware of or chose to bid on the requirement, the government might not have benefited from the full range of market pricing. This could result in a price that is higher than what might have been achieved with broader competition, potentially impacting the value for taxpayers.

What is the track record of the General Services Administration Finance Center (7BC) in managing similar real estate contracts?

The General Services Administration (GSA) Greater SouthWest Finance Center (7BC) is identified as the contracting entity. GSA as a whole has extensive experience in managing federal real estate portfolios, including leasing. However, specific performance metrics or historical data for the 7BC specifically in managing similar office space leases are not provided in this dataset. GSA's overall mission includes ensuring efficient and cost-effective management of government property. The benchmark comparison suggests an attempt to monitor cost-effectiveness, but the outcome here indicates a potential area for improvement or further investigation into the specific circumstances of this lease.

How does this lease compare to other federal office space leases in Texas during FY09?

Direct comparison to other federal office space leases in Texas during FY09 is challenging without access to a broader dataset of comparable contracts. The provided data does include a GSA benchmark, which suggests an internal GSA assessment of fair market value for similar properties. The fact that this lease exceeded that benchmark by 10% indicates it was likely priced higher than average or typical for comparable spaces managed or benchmarked by GSA. To conduct a more thorough comparison, one would need data on the size, location, lease terms, and pricing of other federal leases in Texas during the same period, ideally controlling for factors like building class, age, and included services.

What are the potential risks associated with a firm-fixed-price contract for office space?

For an office space lease, a firm-fixed-price (FFP) contract generally offers price certainty to the government, meaning the cost is fixed for the duration of the contract period (in this case, FY09). The primary risk for the government under an FFP lease is that they might overpay if market rents decrease significantly after the contract is awarded, or if the initial negotiated price was too high relative to the actual market value. Conversely, the risk shifts to the contractor; if their costs (e.g., property taxes, maintenance) increase unexpectedly, they bear those additional expenses. For this specific contract, the main risk identified is the potential for overpayment, as indicated by the lease cost exceeding the GSA benchmark.

What is the historical spending pattern for NLRB office space rentals?

The provided data only covers a single contract for FY09 office space rental for the National Labor Relations Board (NLRB) amounting to $2.78 million. To understand historical spending patterns, data from previous fiscal years would be required. This would involve analyzing NLRB's real estate expenditures over time, looking at the number of leases, their durations, costs, and the agencies or GSA offices responsible for managing them. Without this historical context, it's impossible to determine if the FY09 spending was an anomaly, a trend, or representative of the NLRB's typical real estate costs.

Industry Classification

NAICS: Public Administration › Executive, Legislative, and Other General Government Support › Other General Government Support

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Government of the United States (UEI: 161906193)

Address: 819 TAYLOR ST RM-5A27, FORT WORTH, TX, 90

Business Categories: Category Business, Government, U.S. National Government, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $27,795,476

Exercised Options: $27,795,476

Current Obligation: $27,795,476

Timeline