Interior Department awards $6.6M contract for Nevada fire engine cover and crew quarters, exceeding benchmark by 26%

Contract Overview

Contract Amount: $6,600,000 ($6.6M)

Contractor: Hess Contracting LLC

Awarding Agency: Department of the Interior

Start Date: 2025-09-12

End Date: 2027-09-10

Contract Duration: 728 days

Daily Burn Rate: $9.1K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 10

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: GAOA - OROVADA FIRE ENGINE COVER & CREW QUARTERS, NV

Place of Performance

Location: OROVADA, HUMBOLDT County, NEVADA, 89425

State: Nevada Government Spending

Plain-Language Summary

Department of the Interior obligated $6.6 million to HESS CONTRACTING LLC for work described as: GAOA - OROVADA FIRE ENGINE COVER & CREW QUARTERS, NV Key points: 1. Contract value of $6.6 million for fire engine cover and crew quarters. 2. Awarded to HESS CONTRACTING LLC, a company with a significant federal contracting presence. 3. Competition was full and open after exclusion of sources, indicating a broad search for bidders. 4. The contract duration is 728 days, suggesting a medium-term project. 5. The contract type is Firm Fixed Price, which shifts cost risk to the contractor. 6. The award amount is 26% higher than the government estimate of $5.2 million. 7. The project is located in Nevada, a state with increasing wildfire risks.

Value Assessment

Rating: questionable

The contract's value of $6.6 million significantly exceeds the government's estimate of $5.2 million by approximately 26%. This suggests potential overpricing or unforeseen project complexities. Benchmarking against similar construction projects for emergency services in the region would be necessary to fully assess value for money. The firm fixed price nature of the contract means the government is locked into this higher cost, regardless of actual contractor expenses.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES'. This indicates that while the competition was intended to be broad, certain sources were excluded, potentially limiting the pool of bidders. With 10 bids received, the competition level appears moderate, but the exclusion of sources warrants further investigation into why certain contractors were not considered.

Taxpayer Impact: The moderate competition level, coupled with an award price significantly above the government estimate, suggests that taxpayers may not have received the most competitive pricing possible. Further analysis into the exclusion criteria could reveal if taxpayer funds were used efficiently.

Public Impact

The primary beneficiaries are the Bureau of Land Management (BLM) firefighters in Nevada who will receive improved facilities for equipment and living quarters. The contract will deliver essential infrastructure to support firefighting operations in a region prone to wildfires. The geographic impact is concentrated in Nevada, specifically where the Bureau of Land Management operates. The project will likely create temporary employment opportunities for construction workers in the local Nevada economy.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Award price significantly exceeds government estimate, raising concerns about cost efficiency.
The 'exclusion of sources' in the competition process could limit competitive pricing and transparency.
Lack of detailed justification for the price difference between estimate and award.
Potential for scope creep or unforeseen issues driving up the final cost despite fixed price.

Positive Signals

Firm Fixed Price contract shifts cost risk to the contractor.
Full and open competition (even with exclusions) aims to solicit a wide range of offers.
The contract supports critical infrastructure for wildfire suppression efforts.
Awarded to a contractor with federal contracting experience.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a vital part of the broader construction industry. The federal government is a significant consumer of construction services, particularly for infrastructure supporting public services like firefighting. Comparable spending benchmarks for similar facilities in other federal land management agencies or state-level projects would provide further context on the $6.6 million award.

Small Business Impact

The contract data indicates that small business participation was not a primary set-aside consideration (ss: false, sb: false). While HESS CONTRACTING LLC may utilize small businesses for subcontracting, there is no explicit requirement or set-aside noted in this award. This means opportunities for small businesses are dependent on the prime contractor's procurement practices, rather than a direct mandate from the government.

Oversight & Accountability

Oversight for this contract will primarily fall under the Bureau of Land Management (BLM), a division of the Department of the Interior. Accountability measures are inherent in the Firm Fixed Price contract type, which obligates the contractor to deliver the specified work within the agreed-upon cost. Transparency is facilitated by the public nature of federal contract awards, though detailed justifications for pricing discrepancies are not always readily available. The Inspector General for the Department of the Interior would have jurisdiction over any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Wildfire Suppression Infrastructure
Federal Building Construction
Bureau of Land Management Facilities
Emergency Services Support Contracts
Department of the Interior Construction Projects

Risk Flags

Award price significantly exceeds government estimate.
Potential for limited competition due to source exclusion.
Lack of detailed justification for cost variance.
Need for benchmarking against similar regional projects.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Interior awarded $6.6 million to HESS CONTRACTING LLC. GAOA - OROVADA FIRE ENGINE COVER & CREW QUARTERS, NV

Who is the contractor on this award?

The obligated recipient is HESS CONTRACTING LLC.

Which agency awarded this contract?

Awarding agency: Department of the Interior (Bureau of Land Management).

What is the total obligated amount?

The obligated amount is $6.6 million.

What is the period of performance?

Start: 2025-09-12. End: 2027-09-10.

What is the track record of HESS CONTRACTING LLC in completing federal construction projects, particularly those related to emergency services?

HESS CONTRACTING LLC has a history of federal contracting, primarily within the construction sector. While specific details on past performance for emergency service facilities are not provided in this summary, their presence in federal contracting suggests experience with government procurement processes and requirements. A deeper dive into their contract history, including past performance evaluations and any reported issues on previous projects, would be necessary to fully assess their reliability for this specific award. Examining the value and complexity of their prior federal construction awards can offer insights into their capacity to handle projects of this scale and nature.

How does the $6.6 million award compare to the estimated cost of similar construction projects for fire stations or support facilities by other federal agencies?

The $6.6 million award for the fire engine cover and crew quarters is approximately 26% higher than the government's estimate of $5.2 million. To benchmark this value, one would need to compare it to similar projects undertaken by agencies like the Forest Service, FEMA, or Department of Defense for comparable facilities. Factors such as geographic location, specific construction requirements (e.g., materials, climate resilience), and the level of amenities included significantly influence project costs. Without direct comparable data, it is difficult to definitively state if this award represents a fair market price, but the substantial difference from the estimate raises a flag for further scrutiny.

What specific factors might have contributed to the award price exceeding the government's estimate by 26%?

Several factors could explain the 26% cost overrun compared to the government's estimate. These might include underestimation of material costs, labor shortages in the Nevada region driving up wages, unexpected site preparation challenges, or the inclusion of more robust specifications than initially anticipated. The 'exclusion of sources' in the bidding process could also have limited the competitive pressure, allowing the winning bidder to propose a higher price. Furthermore, market fluctuations in construction materials or a surge in demand for such services could have influenced the final negotiated price. A detailed review of the government's original estimate versus the contractor's proposal would be needed to pinpoint the exact reasons.

What are the potential risks associated with a Firm Fixed Price contract when the award price significantly exceeds the initial estimate?

While a Firm Fixed Price (FFP) contract shifts cost risk to the contractor, an award price significantly exceeding the initial estimate can still pose risks. For the government, the primary risk is paying a premium for the service, potentially indicating inefficient price discovery or an inflated market. If the contractor underestimated the true cost and the FFP is too high, they may cut corners on quality to maintain profitability, leading to subpar construction. Conversely, if the contractor accurately priced a complex or high-cost project that the government underestimated, the FFP ensures the project is completed, but at a higher than anticipated cost to taxpayers. The risk here is primarily financial, ensuring the government received the best possible value.

How does the 'full and open competition after exclusion of sources' procurement method impact price discovery and taxpayer value?

The 'full and open competition after exclusion of sources' method aims to balance broad competition with specific needs or limitations. While 'full and open' suggests an intention to solicit offers from all responsible sources, the 'exclusion of sources' clause indicates that certain potential bidders were deliberately not considered. This exclusion can limit the number of competitive bids received, potentially reducing price discovery and leading to higher costs for taxpayers if the excluded sources could have offered more competitive pricing. The justification for excluding sources is critical; if exclusions are arbitrary or unjustified, it undermines the principle of maximizing taxpayer value through robust competition.

What is the historical spending pattern for similar fire engine cover and crew quarter facilities by the Bureau of Land Management or Department of the Interior?

Analyzing historical spending patterns for similar facilities by the Bureau of Land Management (BLM) or the Department of the Interior (DOI) is crucial for context. Without specific historical data presented here, it's challenging to provide a precise comparison. However, federal agencies typically maintain records of past contracts for construction and facilities. Examining previous awards for similar projects, including their costs, durations, and competition levels, would reveal whether the $6.6 million award is an outlier or consistent with past spending. Trends in construction costs, inflation, and the specific needs of the BLM in Nevada would also inform this analysis.

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: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 140L0625R0006

Offers Received: 10

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 32 W ONEIDA ST, PRESTON, ID, 83263

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $6,600,000

Exercised Options: $6,600,000

Current Obligation: $6,600,000

Actual Outlays: $208,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline