Naval Shipyard Building Renovation Contract Awarded for $28.9M, Exceeding Initial Estimates

Contract Overview

Contract Amount: $28,867,090 ($28.9M)

Contractor: Whiting-Turner Contracting Company, the

Awarding Agency: Department of Defense

Start Date: 2015-07-15

End Date: 2019-11-30

Contract Duration: 1,599 days

Daily Burn Rate: $18.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF RM09-0767, DESIGN-BUILD BLDG 30 RENOVATIONS NORFOLK NAVAL SHIPYARD, PORTSMOUTH, VIRGINIA

Place of Performance

Location: PORTSMOUTH, PORTSMOUTH CITY County, VIRGINIA, 23709

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $28.9 million to WHITING-TURNER CONTRACTING COMPANY, THE for work described as: IGF::OT::IGF RM09-0767, DESIGN-BUILD BLDG 30 RENOVATIONS NORFOLK NAVAL SHIPYARD, PORTSMOUTH, VIRGINIA Key points: 1. The contract value of $28.9 million represents a significant investment in naval infrastructure. 2. Competition dynamics indicate a full and open bidding process, suggesting potential for competitive pricing. 3. The duration of the contract (1599 days) points to a complex, multi-year project. 4. Fixed-price contract type generally shifts risk to the contractor, but scope creep can still impact final costs. 5. The project's location in Portsmouth, Virginia, places it within a key naval hub. 6. The absence of small business set-asides may limit opportunities for smaller firms in this specific contract.

Value Assessment

Rating: fair

The contract's final value of $28.9 million appears to be a substantial sum for building renovations. Benchmarking against similar large-scale construction projects at naval facilities is necessary to determine if this represents a fair price. The fixed-price nature suggests a defined scope, but the extended duration could lead to cost escalations if not managed meticulously. Without specific cost breakdowns or comparisons to similar projects, a definitive value-for-money assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of three bidders suggests a reasonable level of competition for this project. A competitive bidding process is generally expected to drive prices down and encourage efficiency, though the final price still needs to be evaluated against project scope and market rates.

Taxpayer Impact: A full and open competition is favorable for taxpayers as it increases the likelihood of obtaining the best possible price through market forces.

Public Impact

Naval personnel and operations at Norfolk Naval Shipyard will benefit from modernized facilities. The project delivers essential building renovations, improving the functionality and safety of Building 30. The geographic impact is concentrated in Portsmouth, Virginia, a critical area for naval operations. The construction workforce in the Virginia region will likely see employment opportunities during the project's duration.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns due to the extended project duration and fixed-price contract.
Scope creep could increase costs if not rigorously managed.
Dependence on a single contractor for a multi-year project introduces performance risk.
Lack of specific details on sustainability or energy efficiency measures in the renovation.

Positive Signals

Awarded through full and open competition, suggesting a competitive process.
Fixed-price contract type generally provides cost certainty if scope is well-defined.
The contractor, Whiting-Turner Contracting Company, is a large, established firm with significant experience.
Project is located in a strategic naval hub, indicating alignment with critical defense infrastructure needs.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a broad category encompassing the renovation and construction of non-residential buildings. The market for such services is substantial, driven by both private sector demand and significant government investment in infrastructure. Federal spending in this area often involves large-scale projects with complex requirements, necessitating experienced contractors. Benchmarks for similar renovation projects at military installations would provide further context for the awarded price.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of subcontracting requirements specifically targeting small businesses. This means that opportunities for small businesses to participate in this large-scale renovation project may be limited, potentially impacting the broader small business ecosystem within the construction sector in the region.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting and engineering divisions. Accountability measures are inherent in the fixed-price contract structure, with penalties for non-performance or delays. Transparency is generally facilitated through contract award databases and public reporting, though detailed project-specific oversight reports may not always be publicly accessible. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Naval Facilities Engineering Command (NAVFAC) Contracts
Department of Defense Military Construction Projects
Federal Building Renovation and Modernization Programs
Large-Scale Commercial Construction Contracts

Risk Flags

Extended contract duration increases risk of cost escalation and performance degradation.
Fixed-price contract requires meticulous scope definition to avoid change orders.
Lack of small business participation may limit broader economic impact.
Potential for unforeseen conditions in older building infrastructure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.9 million to WHITING-TURNER CONTRACTING COMPANY, THE. IGF::OT::IGF RM09-0767, DESIGN-BUILD BLDG 30 RENOVATIONS NORFOLK NAVAL SHIPYARD, PORTSMOUTH, VIRGINIA

Who is the contractor on this award?

The obligated recipient is WHITING-TURNER CONTRACTING COMPANY, THE.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $28.9 million.

What is the period of performance?

Start: 2015-07-15. End: 2019-11-30.

What is the track record of Whiting-Turner Contracting Company on similar federal projects?

Whiting-Turner Contracting Company is a large, well-established construction firm with a significant history of undertaking complex projects, including those for federal agencies and military branches. Their portfolio often includes large-scale institutional, commercial, and industrial facilities. While specific performance data on past federal contracts is not detailed here, their size and market presence suggest they possess the capacity and experience to manage projects of this magnitude. A deeper dive into their past performance ratings, any past disputes, or awards on similar government contracts would provide a more robust assessment of their reliability for this specific renovation.

How does the $28.9 million contract value compare to similar building renovations at naval facilities?

Direct comparison of the $28.9 million contract value to similar naval facility renovations is challenging without access to a comprehensive database of comparable projects, including their scope, size, and specific renovation types. However, for a significant renovation of a building within a major naval shipyard, this figure is substantial but not necessarily outside the expected range for large-scale, multi-year projects. Factors such as the age and condition of Building 30, the complexity of the required upgrades (e.g., structural, MEP systems, hazardous material abatement), and the specific location's labor and material costs would heavily influence the final price. A detailed cost-benefit analysis and benchmarking against projects of similar scale and complexity would be needed for a precise value assessment.

What are the primary risks associated with a fixed-price contract for a 1599-day renovation project?

The primary risks with a fixed-price contract for a long-duration project like this 1599-day renovation revolve around scope definition and potential for unforeseen conditions. While the fixed price aims to cap costs for the government, the contractor bears the risk of cost overruns. However, if the initial scope is not meticulously defined or if significant unforeseen issues arise (e.g., hidden structural problems, environmental hazards), the contractor may seek change orders, potentially increasing the total cost. Conversely, the contractor might cut corners on quality to maintain profitability, impacting long-term durability. The extended timeline also increases the risk of material price fluctuations or labor availability issues impacting the contractor's ability to meet the fixed price.

How effective is full and open competition in ensuring value for taxpayer money in large construction contracts?

Full and open competition is generally considered the most effective method for ensuring value for taxpayer money in large construction contracts. By allowing all responsible sources to bid, it fosters a competitive environment that incentivizes contractors to offer their best pricing and most efficient solutions to win the contract. This process increases transparency and reduces the likelihood of inflated prices that might occur with sole-source or limited competition. The presence of multiple bidders, as seen with three bids in this case, further strengthens the competitive dynamic. However, the effectiveness is contingent on the clarity of the solicitation, the evaluation criteria, and the government's ability to accurately assess proposals beyond just the lowest price.

What are the historical spending patterns for building renovations at Norfolk Naval Shipyard?

Analyzing historical spending patterns for building renovations at Norfolk Naval Shipyard would require access to detailed procurement data over several fiscal years. This would involve identifying previous contracts for similar renovation projects, their awarded values, durations, and the types of facilities renovated. Such an analysis could reveal trends in average project costs, the frequency of major renovation efforts, and the typical range of contract values. It could also highlight whether spending has been consistent, increasing, or decreasing, and whether specific types of buildings or systems have historically required more significant investment. Without this historical data, it's difficult to contextualize the $28.9 million award within the shipyard's long-term infrastructure investment strategy.

What are the implications of the contract's duration (1599 days) on project management and oversight?

A contract duration of 1599 days (approximately 4.3 years) signifies a large, complex project requiring sustained management and oversight. For the government, this necessitates dedicated project managers and technical representatives to monitor progress, ensure quality control, manage changes, and verify milestones throughout the project lifecycle. The extended timeline increases the risk of scope drift, potential contractor performance degradation over time, and the need for adaptive oversight strategies. It also means that the initial cost estimates and project requirements must remain relevant over a significant period, requiring robust mechanisms for addressing evolving needs or technological advancements. For the contractor, it demands long-term resource planning and sustained commitment.

Industry Classification

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

Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR NONBUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N4008510R5306

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 300 E JOPPA RD, BALTIMORE, MD, 21286

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

Financial Breakdown

Contract Ceiling: $28,867,090

Exercised Options: $28,867,090

Current Obligation: $28,867,090

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N4008510D5330

IDV Type: IDC

Timeline