Volmar Construction Inc. awarded $158.6M for building construction, with a 2,411-day duration

Contract Overview

Contract Amount: $158,601,436 ($158.6M)

Contractor: Volmar Construction Inc

Awarding Agency: General Services Administration

Start Date: 2018-03-26

End Date: 2024-10-31

Contract Duration: 2,411 days

Daily Burn Rate: $65.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: EO14042: GSA CLASS DEVIATION 2021-13, FAR CLASS DEVIATION - IMPLEMENTATION OF EXECUTIVE ORDER 14042, ENSURING ADEQUATE COVID SAFETY PROTOCOLS FOR FEDERAL CONTRACTORS

Place of Performance

Location: NEW YORK, NEW YORK County, NEW YORK, 10278

State: New York Government Spending

Plain-Language Summary

General Services Administration obligated $158.6 million to VOLMAR CONSTRUCTION INC for work described as: EO14042: GSA CLASS DEVIATION 2021-13, FAR CLASS DEVIATION - IMPLEMENTATION OF EXECUTIVE ORDER 14042, ENSURING ADEQUATE COVID SAFETY PROTOCOLS FOR FEDERAL CONTRACTORS Key points: 1. Contract value of $158.6M represents significant investment in federal building infrastructure. 2. The contract spans over 6 years, indicating a long-term need for construction services. 3. Awarded under full and open competition, suggesting a robust market for these services. 4. The firm fixed-price contract type shifts risk to the contractor. 5. The North American Industry Classification System (NAICS) code 236220 points to commercial and institutional building construction. 6. The contract is geographically focused on New York (NY).

Value Assessment

Rating: fair

The contract value of $158.6 million for a definitive contract over 2,411 days (approximately 6.6 years) is substantial. Benchmarking this value without specific project details or scope is challenging. However, the duration suggests a large-scale, ongoing construction project. The firm fixed-price nature indicates that the contractor bears the risk of cost overruns, which can be a positive indicator of value if the contractor is experienced and efficient. Further analysis would require comparing the cost per square foot or per unit of work to similar federal construction projects in the New York region.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit a bid. This suggests a competitive bidding process where multiple contractors likely vied for the award. The presence of 3 bids (as indicated by 'no': 3) is a moderate level of competition for a contract of this magnitude. A higher number of bidders would typically be expected to drive prices down further, but three bids still suggest a degree of market interest and price discovery.

Taxpayer Impact: A full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to more favorable pricing and better quality services. The presence of multiple bidders helps ensure that the government is not overpaying for the construction services.

Public Impact

The primary beneficiaries are federal agencies requiring construction and renovation services for their facilities in New York. The contract delivers essential building construction and potentially renovation services for institutional and commercial federal properties. The geographic impact is concentrated in New York, supporting local economic activity and employment. Workforce implications include job creation for construction workers, project managers, and support staff in the New York area.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (2,411 days) could lead to scope creep or unforeseen cost increases if not managed tightly.
Firm fixed-price contracts can sometimes lead to contractors cutting corners on quality to maintain profitability if oversight is insufficient.
Concentration in a single geographic area (New York) may limit opportunities for contractors in other regions.
The specific nature of 'Commercial and Institutional Building Construction' can be broad, requiring clear definition of work to avoid disputes.

Positive Signals

Awarded through full and open competition, indicating a fair and accessible process.
Firm fixed-price contract type places cost risk on the contractor, potentially benefiting the government.
The contract has a defined end date, providing a clear project timeline.
The contractor, Volmar Construction Inc., has experience in federal contracting, suggesting a level of familiarity with government requirements.

Sector Analysis

The construction sector is a significant part of the U.S. economy, with federal contracts forming a notable segment. This contract falls under Commercial and Institutional Building Construction (NAICS 236220), which includes the construction of office buildings, educational facilities, hospitals, and other non-residential structures. Federal spending in this area supports infrastructure development and maintenance. Comparable spending benchmarks would involve analyzing the average cost of similar federal building projects in the Northeast region, considering factors like building size, complexity, and material costs.

Small Business Impact

The data indicates that this contract was not set aside for small businesses ('sb': false) and there is no explicit mention of subcontracting requirements for small businesses. This suggests that the primary award went to a large business, and opportunities for small businesses would likely depend on Volmar Construction Inc.'s subcontracting plans. Without specific subcontracting goals or reporting, the direct impact on the small business ecosystem for this particular contract is unclear, though large federal contracts often involve a chain of suppliers and subcontractors, some of which may be small businesses.

Oversight & Accountability

Oversight for this contract would primarily fall under the General Services Administration (GSA), specifically the Public Buildings Service. Mechanisms likely include regular progress reports from the contractor, site inspections, and contract performance reviews. Accountability is established through the firm fixed-price contract terms, where deviations from scope or quality could lead to penalties or non-payment. Transparency is generally maintained through federal contract databases like FPDS, where award details are published. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Federal Building Construction
GSA Public Buildings Service Contracts
Commercial Building Construction
Institutional Building Construction
New York Federal Projects

Risk Flags

Long contract duration may increase risk of cost overruns or scope creep.
Firm fixed-price contracts can incentivize cost-cutting that may impact quality if not closely monitored.
Lack of explicit small business subcontracting goals may limit direct benefit to the small business ecosystem.
Geographic concentration in New York limits broader market impact.

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $158.6 million to VOLMAR CONSTRUCTION INC. EO14042: GSA CLASS DEVIATION 2021-13, FAR CLASS DEVIATION - IMPLEMENTATION OF EXECUTIVE ORDER 14042, ENSURING ADEQUATE COVID SAFETY PROTOCOLS FOR FEDERAL CONTRACTORS

Who is the contractor on this award?

The obligated recipient is VOLMAR CONSTRUCTION INC.

Which agency awarded this contract?

Awarding agency: General Services Administration (Public Buildings Service).

What is the total obligated amount?

The obligated amount is $158.6 million.

What is the period of performance?

Start: 2018-03-26. End: 2024-10-31.

What is the track record of Volmar Construction Inc. with federal contracts, particularly in large-scale building construction?

Volmar Construction Inc. has a history of securing federal contracts, primarily with the General Services Administration (GSA). Their experience includes various construction and renovation projects, aligning with the scope of this award. Analyzing their past performance on similar definitive contracts, especially those with firm fixed-price terms and long durations, would provide insight into their ability to manage complex projects, adhere to budgets, and meet quality standards. Reviewing past contract close-outs, any modifications, and performance evaluations would offer a clearer picture of their reliability and effectiveness as a federal contractor in the building construction sector.

How does the awarded value of $158.6 million compare to similar federal building construction contracts in the New York region?

Benchmarking the $158.6 million award requires detailed comparison with similar federal building construction projects in New York, considering factors like square footage, type of facility (e.g., office, courthouse, lab), complexity of design, and specific construction materials. Without these specifics, a direct comparison is difficult. However, for large-scale institutional or commercial building projects managed by agencies like GSA, a value in the tens to hundreds of millions of dollars is not uncommon, especially for projects spanning multiple years. The number of bids (3) suggests a competitive, but not hyper-competitive, market for this specific type of work in the region.

What are the primary risks associated with a firm fixed-price contract of this duration (2,411 days)?

The primary risks with a firm fixed-price contract of this long duration (over 6 years) include potential cost escalation for the contractor that erodes profit margins, leading to pressure to cut corners on quality or safety. For the government, the risk is that the fixed price might become uncompetitive over time if market conditions change significantly, or that the contractor may lack flexibility to incorporate necessary design changes or technological advancements without substantial change orders. Effective oversight, clear initial scope definition, and robust contract management are crucial to mitigate these risks and ensure value delivery throughout the contract's life.

What is the expected impact of this contract on the local New York construction market and workforce?

This $158.6 million contract is expected to have a positive impact on the local New York construction market by stimulating economic activity and creating jobs. It will likely generate employment opportunities for a range of skilled trades, project managers, engineers, and support staff. Furthermore, it can lead to increased business for local suppliers of construction materials, equipment rental companies, and related services. The sustained nature of the contract over several years provides a degree of economic stability for the businesses and individuals involved in its execution.

How does the GSA's role in awarding and managing such large construction contracts influence overall federal infrastructure development?

The GSA plays a critical role in federal infrastructure development by acting as the primary provider of workspace and services for federal agencies. By awarding and managing large construction contracts like this one, the GSA ensures that federal facilities are built, maintained, and modernized to meet agency needs and public standards. Their procurement processes, including competitive bidding and contract oversight, aim to achieve value for taxpayer money and ensure the quality and longevity of federal buildings. The GSA's decisions significantly shape the physical footprint of the federal government and influence the construction industry.

Are there specific performance metrics or quality standards mandated within this contract that can be assessed?

While the provided data does not detail specific performance metrics or quality standards, federal construction contracts, especially those managed by the GSA, typically include stringent requirements. These often encompass adherence to building codes, safety regulations (like those potentially influenced by EO 14042 regarding COVID safety protocols), architectural specifications, and project timelines. Performance is usually monitored through regular site inspections, progress reports, and milestone achievement. Quality assurance processes are integral, often involving third-party inspections and material testing to ensure compliance with contractually defined standards and industry best practices.

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: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: GS02P17DTC0001

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 4400 2ND AVE, BROOKLYN, NY, 11232

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

Financial Breakdown

Contract Ceiling: $158,601,436

Exercised Options: $158,601,436

Current Obligation: $158,601,436

Actual Outlays: $12,093,183

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline