GSA awards $40.4M construction contract to Volmar Construction Inc. for New York tenant fit-out

Contract Overview

Contract Amount: $40,358,137 ($40.4M)

Contractor: Volmar Construction Inc

Awarding Agency: General Services Administration

Start Date: 2022-09-26

End Date: 2026-05-31

Contract Duration: 1,343 days

Daily Burn Rate: $30.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: THE PURPOSE OF THIS CONTRACT IS TO PROCURE GC SERVICES FOR THE TENANT FIT OUT PROJECT

Place of Performance

Location: NEW YORK, NEW YORK County, NEW YORK, 10007

State: New York Government Spending

Plain-Language Summary

General Services Administration obligated $40.4 million to VOLMAR CONSTRUCTION INC for work described as: THE PURPOSE OF THIS CONTRACT IS TO PROCURE GC SERVICES FOR THE TENANT FIT OUT PROJECT Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract is a firm-fixed-price type, which shifts cost risk to the contractor. 3. Project duration spans over three years, indicating a significant scope of work. 4. The North American Industry Classification System (NAICS) code 236220 points to commercial building construction. 5. Awarded by the Public Buildings Service, indicating a focus on federal building infrastructure. 6. The contract is not set aside for small businesses, implying larger firms participated.

Value Assessment

Rating: fair

The contract value of $40.4 million for a tenant fit-out project in New York appears substantial. Benchmarking against similar projects is difficult without more specific details on the scope of work, square footage, and complexity of the fit-out. However, given the duration and the nature of commercial construction, the price will need careful monitoring to ensure it remains within reasonable market parameters. The firm-fixed-price structure provides cost certainty but requires thorough initial scope definition to avoid change orders.

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. The data indicates two bids were received. While two bidders suggest some level of competition, it is on the lower end for a contract of this magnitude. A higher number of bidders typically leads to more aggressive pricing and better value for the government.

Taxpayer Impact: The limited number of bids received in this full and open competition may have resulted in a higher price than if more contractors had competed. Taxpayers may have paid a premium due to the reduced competitive pressure.

Public Impact

The primary beneficiaries are federal agencies requiring updated or new office space within the specified New York location. The contract will deliver essential construction services for tenant fit-outs, improving federal workspace functionality. The geographic impact is localized to New York, specifically where the Public Buildings Service has identified a need for tenant improvements. The project will likely involve a workforce of construction laborers, tradespeople, and project managers, contributing to local employment in the construction sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition with only two bids received could indicate potential issues with market reach or contractor interest.
The substantial contract value necessitates robust oversight to manage potential cost overruns or scope creep, despite the fixed-price nature.
Ensuring the quality of work meets federal standards for public buildings is crucial given the long-term use of the facility.

Positive Signals

Awarded through full and open competition, adhering to principles of broad market access.
Firm-fixed-price contract type helps control costs and provides budget certainty for the government.
The project duration of over three years allows for phased execution and potentially better resource management.

Sector Analysis

This contract falls within the commercial and institutional building construction sector, a significant segment of the broader construction industry. This sector encompasses the building of non-residential structures such as offices, retail spaces, and public facilities. Federal spending in this area is crucial for maintaining and upgrading government infrastructure. Comparable spending benchmarks would typically involve analyzing the cost per square foot for similar fit-out projects in major metropolitan areas like New York, considering factors like building class, material quality, and specific tenant requirements.

Small Business Impact

This contract was not set aside for small businesses, and the data indicates the contractor, Volmar Construction Inc., is likely a larger entity. There is no explicit information on subcontracting plans for small businesses. Without a specific small business subcontracting goal, the direct impact on the small business ecosystem for this particular contract may be limited, though larger prime contractors often engage small businesses for specialized services.

Oversight & Accountability

Oversight for this contract will likely be managed by the General Services Administration's Public Buildings Service. Accountability measures are inherent in the firm-fixed-price contract type, which penalizes the contractor for cost overruns. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Federal Building Construction
Public Infrastructure Projects
Government Office Space Modernization
Commercial Real Estate Development

Risk Flags

Limited Competition
Potential for Cost Overruns (despite FFP)
Contractor Performance Risk
Scope Definition Completeness

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $40.4 million to VOLMAR CONSTRUCTION INC. THE PURPOSE OF THIS CONTRACT IS TO PROCURE GC SERVICES FOR THE TENANT FIT OUT PROJECT

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 $40.4 million.

What is the period of performance?

Start: 2022-09-26. End: 2026-05-31.

What is Volmar Construction Inc.'s track record with federal contracts, particularly with the GSA?

Volmar Construction Inc. has a history of federal contracting, primarily with agencies like the General Services Administration (GSA). Analyzing their past performance on similar projects, such as building renovations, fit-outs, and new construction, is crucial. Key metrics to review include on-time completion rates, adherence to budget, quality of work, and any history of disputes or contract modifications. A review of their federal contract database history would reveal the volume and types of contracts they have successfully executed, providing insight into their capacity and reliability for projects like the current tenant fit-out.

How does the awarded price compare to market rates for similar tenant fit-out projects in New York?

Determining the precise value-for-money requires a detailed comparison of the scope of work, square footage, and quality of materials specified in the GSA contract against prevailing market rates for similar commercial tenant fit-outs in New York City. Factors such as the building's existing condition, the complexity of the required systems (e.g., HVAC, electrical, IT infrastructure), and the level of finishes specified will significantly influence costs. Benchmarking against industry cost data from construction cost estimators or real estate firms specializing in commercial interiors would provide a more accurate assessment of whether $40.4 million represents a competitive price for the services rendered.

What are the primary risks associated with this firm-fixed-price construction contract?

The primary risks with a firm-fixed-price (FFP) contract, despite its cost control benefits, revolve around the contractor's ability to accurately estimate all project costs upfront and manage unforeseen conditions. Risks include potential for scope creep if the initial requirements are not perfectly defined, leading to change orders that could increase the total cost. Contractor performance risk is also significant; if Volmar Construction Inc. faces financial difficulties, labor shortages, or material supply chain issues, project delays or quality compromises could occur. Furthermore, the government bears the risk if the fixed price was based on inaccurate assumptions or if market conditions change drastically, making the contractor's bid unfeasible without compromising quality.

What is the expected impact of this contract on federal workspace capacity and functionality in New York?

This contract is expected to significantly enhance federal workspace capacity and functionality in New York by modernizing or creating new office environments. Tenant fit-out projects typically involve reconfiguring existing spaces to better suit the needs of specific agencies, improving workflow, incorporating modern technology infrastructure, and ensuring compliance with current building codes and accessibility standards. The successful completion of this $40.4 million project will likely result in improved working conditions for federal employees, potentially increasing productivity and providing a more secure and efficient operational base for government services delivered from that location.

How has federal spending on commercial building construction, specifically by GSA, trended in recent years?

Federal spending on commercial building construction, particularly by the General Services Administration (GSA), has historically fluctuated based on infrastructure needs, budget appropriations, and administration priorities. In recent years, there has been a continued emphasis on modernizing federal buildings to improve energy efficiency, enhance security, and adapt workspaces for evolving federal workforce needs. GSA's Public Buildings Service manages a vast portfolio, and spending on new construction, renovations, and fit-outs like this one is a core component of its mission. Analyzing historical GSA spending data for NAICS code 236220 and similar construction categories would reveal trends, potential increases or decreases in investment, and the overall scale of federal commitment to maintaining its real estate assets.

What are the implications of only two bids being received for this substantial contract?

The receipt of only two bids for a contract valued at $40.4 million under full and open competition raises questions about the competitiveness of the bidding process. While two bidders do represent some competition, it is significantly less than what is typically expected for a contract of this magnitude, which could potentially lead to a higher price than if more firms had participated. Possible reasons for the limited number of bids include stringent pre-qualification requirements, the complexity or specific nature of the project, the geographic location, or the current workload and capacity of contractors in the region. This situation warrants scrutiny to ensure the government obtained the best possible value.

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: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 47PC0322R0007

Offers Received: 2

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: $40,358,137

Exercised Options: $40,358,137

Current Obligation: $40,358,137

Actual Outlays: $40,017,625

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline