DoD's $51M transmission line contract awarded to Perini Management Services shows fair value with 2 bids

Contract Overview

Contract Amount: $50,976,654 ($51.0M)

Contractor: Perini Management Services, Inc.

Awarding Agency: Department of Defense

Start Date: 2012-06-22

End Date: 2014-04-13

Contract Duration: 660 days

Daily Burn Rate: $77.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: TRANSMISSION LINES AND SUBSTATIONS

Plain-Language Summary

Department of Defense obligated $51.0 million to PERINI MANAGEMENT SERVICES, INC. for work described as: TRANSMISSION LINES AND SUBSTATIONS Key points: 1. Contract value appears reasonable given the scope of transmission line and substation construction. 2. Full and open competition suggests a competitive bidding environment. 3. The contract was awarded as a delivery order, indicating it was part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract. 4. The fixed-price nature of the contract shifts performance risk to the contractor. 5. The relatively short duration of 660 days for a project of this scale warrants further investigation into the specific deliverables. 6. The absence of small business set-aside or subcontracting goals may limit opportunities for smaller firms.

Value Assessment

Rating: good

The contract's total value of approximately $51 million for transmission lines and substations appears to be within a reasonable range for such infrastructure projects. While direct comparisons are difficult without knowing the exact scope and location, the fact that it was awarded under full and open competition with two bidders suggests a degree of market validation. The firm-fixed-price structure also indicates that the contractor assumed the risk for cost overruns, which is generally favorable for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit a bid. Two bids were received, indicating a moderate level of competition for this specific delivery order. While two bidders are better than one, a higher number of bids could potentially lead to more aggressive pricing and better value for the government.

Taxpayer Impact: The full and open competition, despite receiving only two bids, suggests that taxpayers likely received a fair price. However, exploring opportunities to increase bidder participation in future solicitations could yield even greater cost savings.

Public Impact

The Department of Defense benefits from the construction and maintenance of critical transmission infrastructure. Services delivered include the construction of transmission lines and substations, essential for power distribution. The geographic impact is likely localized to a specific military installation or region where the Department of Defense operates. Workforce implications include employment for construction workers, engineers, and project managers involved in the project.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition (2 bidders) may have restricted price discovery.
The fixed-price contract type could lead to scope creep if not managed tightly.
The absence of small business subcontracting goals might limit opportunities for smaller firms in the supply chain.

Positive Signals

Full and open competition provides a baseline for fair pricing.
The firm-fixed-price contract shifts cost overrun risk to the contractor.
The contract was awarded as a delivery order, suggesting it aligns with a broader strategic acquisition.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, specifically focusing on utility infrastructure. The market for electrical power, transmission, and distribution construction is substantial, driven by both public and private sector demand for grid modernization, expansion, and maintenance. Comparable spending benchmarks would typically be assessed against similar large-scale utility construction projects, considering factors like project complexity, materials, and labor costs in the specific region.

Small Business Impact

This contract did not include any specific small business set-aside provisions, nor were there explicit subcontracting goals mentioned. This indicates that the primary focus was on securing the best overall offer from any responsible source. Consequently, the direct impact on the small business ecosystem is minimal unless the prime contractor voluntarily engages small businesses for subcontracting opportunities, which are not mandated here.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer's representative (COR) from the Department of the Army, ensuring adherence to contract terms, specifications, and delivery schedules. Accountability measures are inherent in the firm-fixed-price structure, where the contractor is responsible for delivering the specified work within the agreed-upon price. Transparency is generally facilitated through contract award databases, though detailed project-specific oversight documentation may not be publicly available.

Related Government Programs

Department of Defense Infrastructure Projects
Utility Construction Contracts
Electrical Transmission and Distribution Systems
Army Corps of Engineers Construction Contracts

Risk Flags

Limited competition may impact price.
Fixed-price contract requires careful scope management.
Potential for unforeseen site conditions in construction.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $51.0 million to PERINI MANAGEMENT SERVICES, INC.. TRANSMISSION LINES AND SUBSTATIONS

Who is the contractor on this award?

The obligated recipient is PERINI MANAGEMENT SERVICES, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $51.0 million.

What is the period of performance?

Start: 2012-06-22. End: 2014-04-13.

What was the specific scope of work for the transmission lines and substations, and how does it compare to industry standards for similar projects?

The provided data indicates the contract was for 'TRANSMISSION LINES AND SUBSTATIONS' with a value of $50,976,654.36, awarded to PERINI MANAGEMENT SERVICES, INC. by the Department of Defense (Department of the Army) with an end date of April 13, 2014. Without the detailed Statement of Work (SOW) or contract line item numbers (CLINs), a precise comparison to industry standards is challenging. However, typical projects of this nature involve the design, procurement, construction, and commissioning of high-voltage transmission lines, associated towers, and electrical substations. Factors such as voltage levels, route length, terrain complexity, environmental considerations, and the specific equipment installed (transformers, switchgear, etc.) heavily influence cost and scope. Industry benchmarks for similar large-scale utility infrastructure projects often consider cost per mile of transmission line or cost per megawatt of substation capacity. Given the firm-fixed-price nature, the contractor was responsible for defining and executing the scope within the awarded amount, implying a defined set of deliverables was agreed upon.

How did the pricing of this contract compare to other similar transmission line and substation projects awarded by the government or in the private sector around the same period?

Benchmarking the pricing of this $51 million contract requires access to a broader dataset of comparable projects. The contract was awarded under 'FULL AND OPEN COMPETITION' with two bidders, suggesting some level of market price discovery occurred. However, without specific details on the project's geographic location, technical specifications (e.g., voltage, length of lines, substation capacity), and the prevailing market conditions at the time (2012-2014), a direct price comparison is difficult. Generally, firm-fixed-price contracts aim to secure a competitive price upfront. If the two bids were closely aligned and reflected market rates for labor, materials, and overhead in the relevant region, the pricing could be considered fair. Conversely, if one bid was significantly lower or higher, it might indicate competitive pressures or unique circumstances. Further analysis would involve examining cost-per-mile metrics for transmission lines or cost-per-MVA for substations from other government contracts or industry reports from that era.

What are the key performance indicators (KPIs) used to assess the success of this contract, and what was the contractor's performance against them?

The provided data does not specify the Key Performance Indicators (KPIs) established for this contract. However, for a construction project involving transmission lines and substations, typical KPIs would likely include adherence to schedule (delivery date of April 13, 2014, for a 660-day duration starting June 22, 2012), quality of workmanship (meeting technical specifications and industry standards), safety performance (incident rates), and budget adherence (completing the work within the $50,976,654.36 firm-fixed price). Assessing the contractor's performance would require access to contract performance reports, inspection records, and final acceptance documentation. Given the contract was awarded as a delivery order under a larger IDIQ, performance might also be evaluated in the context of the overarching contract's performance metrics. Without post-award performance data, it's impossible to definitively state how Perini Management Services, Inc. performed against these potential KPIs.

What is the track record of Perini Management Services, Inc. in executing similar large-scale infrastructure projects for the Department of Defense or other federal agencies?

Perini Management Services, Inc. (PMSI) has a significant history of performing large-scale construction and facilities management projects for the U.S. military and other federal agencies. As a subsidiary of URS Corporation (later acquired by AECOM), PMSI has been involved in numerous complex projects, including infrastructure development, base operations support, and construction of various facilities. Their track record often includes work on military bases domestically and internationally. To assess their specific performance on transmission line and substation projects, a review of their contract history, including past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), would be necessary. This would reveal their history of meeting schedule, cost, quality, and safety requirements on similar projects. While the data shows this specific contract was awarded, understanding their broader performance trends provides context for evaluating the risk associated with this particular award.

Were there any significant risks identified during the solicitation or award process for this contract, and how were they mitigated?

The provided data does not explicitly detail risks identified during the solicitation or award process for this specific delivery order. However, general risks associated with large infrastructure construction projects like transmission lines and substations include technical challenges (e.g., difficult terrain, unforeseen site conditions), environmental compliance issues, labor availability and cost fluctuations, material procurement delays, and safety hazards. The 'FULL AND OPEN COMPETITION' with two bidders suggests that the contracting agency sought to mitigate risks by allowing multiple potential contractors to propose solutions and pricing. The 'FIRM FIXED PRICE' (FFP) contract type is a key risk mitigation strategy for the government, as it transfers the risk of cost overruns to the contractor. Effective mitigation would also involve robust contract administration, including thorough review of the contractor's proposed approach, site investigations, and ongoing monitoring of progress, safety, and quality throughout the contract performance period.

How does this contract's value and scope fit into the broader context of Department of Defense spending on infrastructure and utility modernization?

This $51 million contract for transmission lines and substations represents a component of the Department of Defense's (DoD) ongoing investment in maintaining and modernizing its vast infrastructure. The DoD operates numerous installations worldwide, many of which require robust and reliable power distribution systems. Spending on infrastructure, including utilities, is critical for operational readiness and energy resilience. While $51 million is a significant sum for a single project, it should be viewed within the context of the DoD's overall annual budget, which runs into hundreds of billions of dollars. Contracts like this contribute to ensuring that military bases have the necessary power infrastructure to support their missions. Trends in DoD infrastructure spending often reflect priorities such as energy security, facility upgrades, and compliance with environmental regulations. This contract likely aligns with efforts to ensure reliable power delivery to critical military assets.

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

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: W912ER10R0089

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Tutor Perini Corporation (UEI: 006954432)

Address: 73 MOUNT WAYTE AVE, FRAMINGHAM, MA, 01702

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $85,160,339

Exercised Options: $50,976,654

Current Obligation: $50,976,654

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W912ER11D0014

IDV Type: IDC

Timeline