DoD's $14.9M contract for building construction awarded to Walton Construction, highlighting potential value concerns

Contract Overview

Contract Amount: $14,893,588 ($14.9M)

Contractor: Walton Construction Company Limited Liability Company

Awarding Agency: Department of Defense

Start Date: 2006-03-28

End Date: 2008-05-02

Contract Duration: 766 days

Daily Burn Rate: $19.4K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Place of Performance

Location: BILOXI, HARRISON County, MISSISSIPPI, 39534

State: Mississippi Government Spending

Plain-Language Summary

Department of Defense obligated $14.9 million to WALTON CONSTRUCTION COMPANY LIMITED LIABILITY COMPANY for work described as: Key points: 1. The contract's duration of 766 days suggests a significant project scope, potentially impacting overall cost-effectiveness. 2. Awarded under 'Full and Open Competition After Exclusion of Sources,' the procurement method warrants scrutiny regarding its impact on competitive pricing. 3. The fixed-price contract type may offer cost certainty but could limit flexibility if unforeseen issues arise. 4. The contract's value of nearly $15 million positions it as a substantial investment within the construction sector. 5. The absence of small business set-aside flags indicates a focus on larger prime contractors for this project. 6. The contract was awarded to a single entity, raising questions about the breadth of competitive bids received.

Value Assessment

Rating: fair

Benchmarking this $14.9 million contract against similar Department of Defense building construction projects is challenging without more granular data on project scope and specific deliverables. However, the duration of 766 days for a fixed-price contract suggests a potentially significant undertaking. The absence of detailed cost breakdowns makes it difficult to assess the pricing structure's fairness. Further analysis would require comparing the per-square-foot cost or cost per unit of construction against industry standards for similar government facilities.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources.' This specific procurement method implies that while the competition was intended to be open, certain sources were excluded for reasons not immediately apparent from the provided data. It is unclear how many bidders were initially considered or how many ultimately submitted proposals after the exclusion. This limited competition could potentially impact price discovery and may not have resulted in the most competitive pricing achievable under a truly unrestricted full and open competition.

Taxpayer Impact: Taxpayers may have received less competitive pricing due to the exclusion of certain potential bidders. The lack of broad competition could mean that the government did not benefit from the lowest possible price for the construction services rendered.

Public Impact

The primary beneficiaries are the Department of the Navy and potentially the military personnel who will utilize the constructed facilities. The contract delivers commercial and institutional building construction services, contributing to the modernization or expansion of military infrastructure. The geographic impact is localized to Mississippi, where the construction project is situated. The project will likely involve a significant workforce of construction laborers, tradespeople, and project managers, providing employment opportunities in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition due to exclusion of sources may have led to higher costs for taxpayers.
The long contract duration (766 days) increases the risk of cost overruns or scope creep if not managed tightly.
Lack of transparency regarding the reasons for excluding certain sources hinders a full assessment of the procurement process.
Fixed-price contracts can sometimes disincentivize contractors from seeking efficiencies if initial pricing is not rigorously benchmarked.

Positive Signals

The use of a fixed-price contract provides cost certainty for the government, assuming the scope is well-defined.
Awarding to a single, presumably qualified, contractor can streamline project execution and management.
The contract was awarded by the Department of the Navy, a major federal agency with established procurement oversight processes.
The contract falls under NAICS code 236220 (Commercial and Institutional Building Construction), indicating a standard industry classification.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the broader construction industry. The U.S. construction market is vast, with government contracts forming a notable portion. This specific award to Walton Construction Company represents a substantial investment by the Department of the Navy. Comparable spending benchmarks would typically involve analyzing the cost per square foot or per unit of facility built for similar military or government installations, considering regional labor and material costs.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the project's scope or requirements were likely deemed more suitable for larger firms capable of handling substantial construction projects. Consequently, there are no direct subcontracting implications for small businesses mandated by a set-aside provision within this specific contract. However, the prime contractor, Walton Construction Company, may voluntarily engage small businesses as subcontractors, which would contribute to the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Navy's contracting and program management offices. Accountability measures are typically embedded in the contract's terms and conditions, including performance standards and payment schedules tied to milestones. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arise during the contract's performance or closeout.

Related Government Programs

Military Construction Projects
Department of Defense Facilities Management
General Building Construction Services
Federal Procurement Contracts

Risk Flags

Limited Competition
Potential for Higher Costs
Long Contract Duration
Lack of Detailed Cost Breakdown

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.9 million to WALTON CONSTRUCTION COMPANY LIMITED LIABILITY COMPANY. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is WALTON CONSTRUCTION COMPANY LIMITED LIABILITY COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $14.9 million.

What is the period of performance?

Start: 2006-03-28. End: 2008-05-02.

What is the track record of Walton Construction Company Limited Liability Company with federal contracts, particularly with the Department of Defense?

A comprehensive review of Walton Construction Company Limited Liability Company's federal contract history would require accessing detailed procurement databases. Based on the provided data, this specific contract valued at approximately $14.9 million was awarded by the Department of the Navy with an effective date of March 28, 2006, and an end date of May 2, 2008. To assess their track record, one would need to examine the number of previous awards, their total value, performance ratings (if available), and any history of contract disputes or terminations. Understanding their experience with similar-sized projects and construction types (commercial and institutional buildings) would also be crucial for evaluating their capability and reliability as a federal contractor.

How does the awarded amount of $14.9 million compare to similar building construction contracts awarded by the Department of Defense in the same period?

Comparing this $14.9 million contract requires context regarding the specific type and scope of building construction. Contracts for large-scale institutional facilities, such as barracks or command centers, can easily reach this value or exceed it. However, for smaller administrative buildings or specialized facilities, $14.9 million might represent a higher-than-average cost. Benchmarking would involve analyzing the cost per square foot, the complexity of the construction, and the geographic location (as regional costs vary significantly). Without more detailed project specifications (e.g., square footage, type of facility, specific construction requirements), a precise comparison is difficult. However, for a significant building project, this value is within a plausible range for DoD construction.

What are the primary risks associated with a fixed-price contract of this magnitude and duration (766 days)?

The primary risks associated with a fixed-price contract of this magnitude ($14.9 million) and long duration (766 days) revolve around scope definition and unforeseen changes. For the government, the risk is paying a premium if the initial price was too high or if the contractor inflates costs due to perceived inefficiencies. For the contractor, the risk lies in underestimating costs, encountering unexpected site conditions, material price escalations, or labor shortages, which could erode profit margins or lead to financial losses. The extended duration increases the likelihood of encountering such issues. Effective risk mitigation requires meticulous planning, clear scope definition, robust change order management processes, and diligent oversight to ensure the contractor adheres to the agreed-upon price and quality standards.

What does the 'Full and Open Competition After Exclusion of Sources' procurement method imply for the government and taxpayers?

The 'Full and Open Competition After Exclusion of Sources' method implies a deviation from standard unrestricted full and open competition. While the intent is still to foster competition, specific sources were deliberately excluded. The reasons for exclusion could range from national security concerns, past performance issues, or specific technical requirements that only a limited number of firms could meet. For taxpayers, this method carries a potential risk of reduced price competition compared to a truly unrestricted process, which could lead to higher costs. However, if the exclusions were justified and necessary, it might ensure that only capable and appropriate contractors participate, potentially leading to better project outcomes and reduced risk of contractor failure. Transparency regarding the justification for exclusions is key to assessing value for taxpayers.

What are the potential workforce implications of a $14.9 million construction project in Mississippi?

A $14.9 million construction project represents a significant economic stimulus for the local and regional economy in Mississippi. It would likely generate numerous direct jobs for skilled tradespeople (carpenters, electricians, plumbers, masons), general laborers, equipment operators, and project management professionals. Indirect employment would also be created in supporting industries such as material suppliers, equipment rental companies, transportation services, and hospitality. The duration of 766 days suggests sustained employment opportunities over approximately two years. This influx of work can help stabilize or increase local employment rates and contribute to the overall economic well-being of the community where the project is located.

How does the contract's classification under NAICS code 236220 inform our understanding of the services provided?

The North American Industry Classification System (NAICS) code 236220 specifically designates 'Commercial and Institutional Building Construction.' This classification indicates that the contract was for the construction of buildings intended for commercial purposes (e.g., offices, retail spaces) or institutional use (e.g., schools, hospitals, government facilities). It encompasses a wide range of activities, including new construction, additions, alterations, and repairs. This code helps categorize the contract within the broader construction industry, allowing for comparisons with other similar projects and providing insight into the type of expertise and labor required, such as project management, site preparation, foundation work, structural erection, and finishing.

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Commercial and Institutional Building Construction

Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCTION OF BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Walton Construction Company, L.L.C. (UEI: 147990758)

Address: 10 COMMERCE CT, NEW ORLEANS, LA, 02

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N6246705D0184

IDV Type: IDC

Timeline