NASA awards $22.3M for liquid helium supply, with Linde Inc. as the sole awardee
Contract Overview
Contract Amount: $22,291,461 ($22.3M)
Contractor: Linde Inc.
Awarding Agency: National Aeronautics and Space Administration
Start Date: 2009-10-01
End Date: 2014-09-30
Contract Duration: 1,825 days
Daily Burn Rate: $12.2K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: SUPPLY OF LIQUID HELIUM
Place of Performance
Location: DANBURY, FAIRFIELD County, CONNECTICUT, 06810
Plain-Language Summary
National Aeronautics and Space Administration obligated $22.3 million to LINDE INC. for work described as: SUPPLY OF LIQUID HELIUM Key points: 1. The contract value of $22.3 million over five years suggests a significant, ongoing need for liquid helium. 2. The award was made under full and open competition, indicating a broad search for potential suppliers. 3. The fixed-price contract structure aims to provide cost certainty for the government. 4. The duration of the contract (1825 days) suggests a long-term requirement for this critical industrial gas. 5. The industrial gas manufacturing sector is characterized by specialized production and distribution networks. 6. The contract's performance period spans a significant portion of the late 2000s and early 2010s.
Value Assessment
Rating: good
The contract value of $22.3 million over five years averages approximately $4.46 million annually for liquid helium. Benchmarking this against industry averages for industrial gas supply is challenging without more specific volume and purity data. However, given the specialized nature of liquid helium and its critical applications, particularly for NASA, this annual spend appears reasonable for a sole awardee under a competitive process. The firm fixed-price structure provides predictability.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting that multiple vendors were solicited and had the opportunity to bid. The fact that only one award was made, to Linde Inc., could indicate that Linde was the most competitive offer, or that the market for specialized liquid helium suppliers meeting NASA's stringent requirements is limited. Further details on the number of bids received would provide a clearer picture of the competition dynamics.
Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it aims to secure the best possible price through market forces. Even if only one award was made, the competitive process itself should have driven down costs compared to a sole-source procurement.
Public Impact
This contract directly supports NASA's scientific research and space exploration missions by providing a critical cryogenic fluid. Liquid helium is essential for cooling superconducting magnets in scientific instruments and equipment used in space and ground-based research. The services delivered ensure the operational readiness of NASA facilities and research programs. The primary beneficiaries are NASA researchers and the scientific community relying on NASA's infrastructure and data. The geographic impact is primarily centered around NASA facilities that utilize liquid helium, likely concentrated in areas with major research centers.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for price increases in subsequent contract periods if competition diminishes.
- Dependence on a single supplier for a critical, specialized material could pose supply chain risks.
- The long contract duration might not fully capture market fluctuations in helium prices or alternative cooling technologies.
Positive Signals
- Awarded under full and open competition, suggesting a robust initial market evaluation.
- Firm fixed-price contract provides budget certainty for NASA.
- Linde Inc. is a major global supplier of industrial gases, implying established expertise and capacity.
- The contract duration indicates a stable, long-term supply solution for NASA's needs.
Sector Analysis
The industrial gas manufacturing sector is a mature industry focused on the production and distribution of gases like oxygen, nitrogen, argon, and specialty gases such as helium. Liquid helium is a niche but critical product, primarily used in applications requiring extremely low temperatures, such as MRI machines, scientific research (like particle accelerators and cryogenics), and semiconductor manufacturing. The market is characterized by high capital investment for production and distribution infrastructure, and significant players like Linde Inc. dominate global supply. NASA's requirement represents a significant, albeit specialized, demand within this sector.
Small Business Impact
This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the prime contractor, Linde Inc., is a large corporation. There is no explicit information regarding subcontracting plans with small businesses. Therefore, the direct impact on the small business ecosystem from this specific award is likely minimal, unless Linde Inc. voluntarily engages small businesses for support services or components not directly related to helium production.
Oversight & Accountability
The contract is subject to standard federal procurement oversight. As a firm fixed-price contract awarded under full and open competition, oversight would focus on delivery compliance and adherence to contract terms. NASA's internal oversight mechanisms and potentially the Government Accountability Office (GAO) would be the primary bodies for review. Transparency is generally maintained through contract databases like FPDS. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.
Related Government Programs
- Industrial Gas Supply Contracts
- Cryogenic Fluid Procurement
- NASA Research and Development Support
- Specialty Chemical and Material Contracts
Risk Flags
- Potential for supply chain disruption due to helium's finite nature.
- Price volatility risk for a long-term fixed-price contract.
- Dependence on a single supplier for a critical resource.
Tags
nasa, industrial-gas-manufacturing, liquid-helium, firm-fixed-price, full-and-open-competition, connecticut, national-aeronautics-and-space-administration, defense-industrial-base, research-and-development-support, specialty-gas, cryogenics
Frequently Asked Questions
What is this federal contract paying for?
National Aeronautics and Space Administration awarded $22.3 million to LINDE INC.. SUPPLY OF LIQUID HELIUM
Who is the contractor on this award?
The obligated recipient is LINDE INC..
Which agency awarded this contract?
Awarding agency: National Aeronautics and Space Administration (National Aeronautics and Space Administration).
What is the total obligated amount?
The obligated amount is $22.3 million.
What is the period of performance?
Start: 2009-10-01. End: 2014-09-30.
What is the historical spending trend for liquid helium by NASA or similar agencies?
Analyzing historical spending on liquid helium requires a broader data set than provided. However, the $22.3 million awarded to Linde Inc. over five years (2009-2014) represents an average annual expenditure of approximately $4.46 million. To understand trends, one would need to examine prior contracts for liquid helium by NASA and other agencies like the Department of Energy (which operates national laboratories with significant cryogenic needs) or the National Science Foundation. Comparing this average annual spend to previous periods could reveal increases or decreases in demand, price fluctuations, or shifts in supplier base. Without access to a comprehensive historical database filtered for 'liquid helium' and relevant agencies, a precise trend analysis is not possible. However, the sustained award over five years suggests a consistent and significant requirement.
How does the per-unit cost of liquid helium in this contract compare to market rates or other federal contracts?
The provided data does not include specific per-unit cost information (e.g., price per liter or kilogram) for the liquid helium supplied under this NASA contract. The total award amount of $22.3 million over five years, with no volume specified, prevents a direct calculation of the per-unit cost. To perform such a comparison, detailed delivery orders specifying quantities and corresponding prices would be necessary. Benchmarking would involve comparing these unit prices against publicly available market rates for industrial gases, data from other federal contracts for similar liquid helium supplies (potentially to different agencies or research institutions), and potentially against prices offered by other major industrial gas suppliers. Given the specialized nature and transportation costs associated with liquid helium, prices can vary significantly based on location, volume, purity, and delivery frequency.
What is Linde Inc.'s track record in supplying industrial gases to the federal government, particularly NASA?
Linde Inc., and its predecessor companies, have a long-standing history as a major global supplier of industrial, process, and specialty gases. Their track record with the federal government, including NASA, is likely extensive. As a primary player in the industrial gas market, Linde routinely competes for and wins large-scale contracts. For NASA, a consistent supply of specialized gases like liquid helium is critical for research and operations. While this specific contract highlights a significant award, a comprehensive review would involve examining all contracts awarded to Linde Inc. by NASA and other federal agencies over several years, looking at performance ratings, any past disputes or contract modifications, and the types of gases and services provided. Their market position suggests a generally reliable performance history, but specific contract performance data would be needed for a definitive assessment.
What are the primary risks associated with this liquid helium supply contract?
Several risks are associated with this liquid helium supply contract. Firstly, supply chain disruption is a significant concern; helium is a finite resource, and geopolitical factors or production issues can impact availability and price. Secondly, the specialized nature of liquid helium requires specific storage and handling infrastructure, posing risks if this infrastructure is compromised or inadequate. Thirdly, the long-term nature of the contract (five years) means NASA is exposed to potential price volatility in the helium market over that period, despite the fixed-price structure, as market conditions could shift dramatically. Lastly, dependence on a single supplier, even if awarded competitively, carries inherent risk if that supplier faces operational challenges or goes out of business. Ensuring robust contingency plans and monitoring market dynamics are crucial.
How does the competition level (full and open) typically influence the final price for specialized industrial gases like liquid helium?
A 'full and open competition' process is designed to maximize the number of potential bidders and thereby foster price competition. For specialized industrial gases like liquid helium, where the market might be concentrated among a few large suppliers, this process aims to ensure that the government receives the most advantageous pricing available. Even if only one award is ultimately made, the knowledge that multiple companies were solicited and evaluated encourages competitive behavior. The effectiveness of this competition in driving down price depends on the actual number of qualified bidders, the structure of the bids submitted, and the government's negotiation leverage. In markets with few suppliers, 'full and open' might still result in limited effective competition, but it remains the preferred method for ensuring a fair market evaluation and price discovery.
What are the implications of a 'firm fixed price' contract for a volatile commodity like helium?
A 'firm fixed price' (FFP) contract shifts the risk of cost overruns to the contractor (Linde Inc. in this case). For a commodity like helium, which can be subject to market price fluctuations due to supply constraints or increased demand, an FFP contract provides budget certainty for the buyer (NASA). However, it also means that if the market price of helium increases significantly during the contract period, the contractor bears the loss unless the contract includes specific escalation clauses (which are not indicated here). Conversely, if the market price decreases, the contractor benefits from a higher profit margin. The contractor likely factored potential price volatility into their initial bid, potentially leading to a higher baseline price to mitigate their risk over the five-year term.
Industry Classification
NAICS: Manufacturing › Basic Chemical Manufacturing › Industrial Gas Manufacturing
Product/Service Code: FUELS, LUBRICANTS, OILS, WAXES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 39 OLD RIDGEBURY RD, DANBURY, CT, 06810
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $22,291,461
Exercised Options: $22,291,461
Current Obligation: $22,291,461
Contract Characteristics
Commercial Item: COMMERCIAL ITEM
Parent Contract
Parent Award PIID: NNK09OO20B
IDV Type: BOA
Timeline
Start Date: 2009-10-01
Current End Date: 2014-09-30
Potential End Date: 2014-09-30 00:00:00
Last Modified: 2016-11-30
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