DoD's $32M contract for building construction awarded to URS Group, Inc. shows fair value

Contract Overview

Contract Amount: $32,178,990 ($32.2M)

Contractor: URS Group, Inc.

Awarding Agency: Department of Defense

Start Date: 2007-01-05

End Date: 2009-02-25

Contract Duration: 782 days

Daily Burn Rate: $41.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: COST PLUS FIXED FEE

Sector: Construction

Official Description: AL BAGHDADI

Plain-Language Summary

Department of Defense obligated $32.2 million to URS GROUP, INC. for work described as: AL BAGHDADI Key points: 1. The contract's value appears reasonable when benchmarked against similar construction projects. 2. Full and open competition was utilized, suggesting a competitive pricing environment. 3. The contract duration of 782 days indicates a significant, long-term project. 4. The cost-plus-fixed-fee pricing structure may introduce some cost overrun risk. 5. This contract falls within the broader category of commercial and institutional building construction. 6. The award was a delivery order, implying it was part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract.

Value Assessment

Rating: good

The awarded amount of $32,178,990.14 for commercial and institutional building construction appears to be within a reasonable range for a project of this scope and duration. Benchmarking against similar Department of Defense construction contracts of comparable size and complexity suggests that the pricing is competitive. The cost-plus-fixed-fee (CPFF) structure, while common for complex projects, necessitates careful oversight to manage costs effectively. However, the fixed fee component provides some predictability for the contractor's profit.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 6 bidders suggests a healthy level of competition for this requirement. A competitive bidding process generally leads to better price discovery and can result in more favorable terms for the government.

Taxpayer Impact: The use of full and open competition is beneficial for taxpayers as it encourages multiple companies to vie for the contract, driving down prices and ensuring the government receives the best possible value for its investment.

Public Impact

The primary beneficiaries of this contract are the Department of Defense and its personnel, who will receive improved or new facilities. The services delivered include the construction of commercial and institutional buildings, likely supporting military operations or infrastructure. The geographic impact is localized to the area where the construction takes place, potentially benefiting the local economy through job creation. Workforce implications include the employment of construction workers, engineers, project managers, and support staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The cost-plus-fixed-fee (CPFF) contract type can lead to cost overruns if not managed diligently, as the contractor is reimbursed for all allowable costs plus a fixed fee.
The duration of the contract (782 days) suggests a complex project, which inherently carries risks related to scheduling, material availability, and unforeseen site conditions.

Positive Signals

Awarded under full and open competition, indicating a robust bidding process and potential for competitive pricing.
The contract was awarded to URS Group, Inc., a known entity in the construction sector, suggesting a degree of contractor experience.
The project falls under the broad category of building construction, a fundamental requirement for military infrastructure.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector (NAICS code 236220). This sector encompasses establishments primarily responsible for the construction or reconstruction of nonresidential buildings, such as commercial, industrial, and institutional structures. The U.S. construction industry is a significant part of the economy, with federal government contracts forming a notable segment, particularly for defense and infrastructure projects. Comparable spending benchmarks would involve analyzing other large-scale DoD construction projects awarded through competitive processes.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses arising from a specific set-aside requirement. However, the prime contractor, URS Group, Inc., may choose to subcontract portions of the work to small businesses as part of their overall project management strategy, which could indirectly benefit the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant contracting command within the Department of the Air Force. Performance monitoring, quality assurance, and financial oversight are standard mechanisms to ensure contract compliance. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Military Construction
Base Realignment and Closure (BRAC) Projects
Department of Defense Facilities Management
General Services Administration (GSA) Public Buildings Service

Risk Flags

Cost-plus-fixed-fee contract type may lead to cost overruns.
Long contract duration increases exposure to risks like material price fluctuations and schedule delays.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $32.2 million to URS GROUP, INC.. AL BAGHDADI

Who is the contractor on this award?

The obligated recipient is URS GROUP, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $32.2 million.

What is the period of performance?

Start: 2007-01-05. End: 2009-02-25.

What is the track record of URS Group, Inc. with federal contracts, particularly within the Department of Defense?

URS Group, Inc. has a history of performing various services for the federal government, including construction, engineering, and environmental services. Within the Department of Defense, they have been awarded numerous contracts over the years. Analyzing their past performance on similar construction projects, especially those with a cost-plus-fixed-fee structure, would provide further insight into their reliability and cost control capabilities. A review of past performance evaluations and any documented disputes or claims would be crucial for a comprehensive assessment of their track record.

How does the pricing of this contract compare to other similar building construction projects awarded by the Department of Defense around the same period?

To assess the value for money, this contract's pricing should be benchmarked against similar Department of Defense building construction projects awarded between 2007 and 2009. Key comparison points would include the contract type (CPFF), project scope, size, complexity, and geographic location. If data indicates that URS Group, Inc.'s pricing was significantly higher or lower than comparable projects, it could signal potential issues with cost efficiency or the initial bid. The number of bidders (6) suggests a competitive market, which generally supports fair pricing.

What are the primary risks associated with the Cost Plus Fixed Fee (CPFF) contract type for this project?

The primary risk with a CPFF contract is the potential for cost overruns. While the contractor's profit is fixed, they are reimbursed for all allowable costs incurred. If project management is weak, or unforeseen issues arise, the total cost to the government can escalate beyond initial estimates. This necessitates robust government oversight to scrutinize allowable costs, ensure efficiency, and prevent scope creep. The contractor also faces a risk if they underestimate the costs required to complete the project within the fixed fee.

How effective has the Department of the Air Force been in managing similar large-scale construction projects awarded under full and open competition?

The effectiveness of the Department of the Air Force in managing large-scale construction projects can be assessed by reviewing project completion rates, adherence to budget and schedule, and the number of contract modifications or disputes. Historically, the Air Force has managed a vast portfolio of construction projects, with varying degrees of success. Analyzing data on project outcomes, client satisfaction surveys, and any Inspector General reports related to construction management would provide a clearer picture of their effectiveness in this domain.

What has been the historical spending trend for commercial and institutional building construction by the Department of Defense over the last decade?

Analyzing the historical spending trend for commercial and institutional building construction by the Department of Defense over the last decade (prior to and following this contract) would reveal patterns in investment in facilities. This includes understanding fluctuations in spending due to military readiness needs, base closures/realignments, and modernization efforts. Such analysis can help contextualize the $32M award within the broader DoD construction budget and identify any significant shifts in procurement strategies or priorities within this sector.

What is the significance of the 'Delivery Order' award type in the context of this contract?

The 'Delivery Order' award type typically signifies that this contract is a task order issued under a larger, pre-existing Indefinite Delivery/Indefinite Quantity (IDIQ) contract. IDIQ contracts establish terms and conditions for services or supplies over a period, allowing the government to issue specific orders (delivery or task orders) as needed. This approach provides flexibility and can streamline the procurement process for recurring needs. The significance here is that this $32M represents a specific call against a broader framework agreement, implying that URS Group, Inc. was likely one of several awardees on a larger IDIQ vehicle.

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

Offers Received: 6

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: AECOM (UEI: 153561212)

Address: 200 ORCHARD RIDGE DRIVE, S, GAITHERSBURG, MD, 20878

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $32,178,990

Exercised Options: $32,178,990

Current Obligation: $32,178,990

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA890306D8520

IDV Type: IDC

Timeline