GSA awards $39.7M for Social Security Administration building renovation, exceeding initial estimates by 16%

Contract Overview

Contract Amount: $39,712,898 ($39.7M)

Contractor: Turner Construction Company

Awarding Agency: General Services Administration

Start Date: 2021-02-18

End Date: 2023-05-15

Contract Duration: 816 days

Daily Burn Rate: $48.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 7

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: SOCIAL SECURITY ADMINISTRATION - PERIMETER EAST BUILDING - 4TH FLOOR RENOVATION AND CAFETERIA UPGRADE CONSTRUCTION IN WOODLAWN, MD.

Place of Performance

Location: BALTIMORE, BALTIMORE CITY County, MARYLAND, 21235

State: Maryland Government Spending

Plain-Language Summary

General Services Administration obligated $39.7 million to TURNER CONSTRUCTION COMPANY for work described as: SOCIAL SECURITY ADMINISTRATION - PERIMETER EAST BUILDING - 4TH FLOOR RENOVATION AND CAFETERIA UPGRADE CONSTRUCTION IN WOODLAWN, MD. Key points: 1. The contract value of $39.7 million represents a significant investment in federal infrastructure. 2. Turner Construction Company, a large, established firm, secured this contract, indicating a competitive landscape for major construction projects. 3. The project's duration of 816 days suggests a complex scope of work, potentially involving substantial logistical challenges. 4. The firm-fixed-price contract type aims to control costs, but the final price exceeded initial projections. 5. This renovation project is situated within the General Services Administration's Public Buildings Service portfolio, aligning with broader federal real estate management goals. 6. The project's location in Woodlawn, Maryland, places it within a key Mid-Atlantic region for federal operations.

Value Assessment

Rating: fair

The awarded contract value of $39.7 million for the SSA perimeter East Building renovation and cafeteria upgrade appears to be on the higher end for similar projects. While specific benchmarking data for this exact scope is limited, the final award was approximately 16% higher than the initial estimated value of $34.2 million (derived from the provided 'br' value). This suggests potential cost overruns or scope adjustments during the procurement process. The firm-fixed-price contract type is standard for construction, but the significant increase warrants scrutiny regarding the initial estimate's accuracy and the contractor's pricing strategy.

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. Seven bids were received, suggesting a healthy level of interest and competition for this project. While a good number of bidders, the final award price exceeding initial estimates could imply that the competitive bids were still substantial, or that the initial estimates were conservative. The GSA's standard procurement practices for large construction projects typically involve detailed solicitations to ensure fair competition.

Taxpayer Impact: Full and open competition is generally beneficial for taxpayers as it encourages multiple contractors to bid, driving down prices and fostering innovation. However, in this instance, the final award price exceeding initial estimates suggests that the competitive process did not fully mitigate cost escalations or that the initial budget was not sufficiently robust.

Public Impact

Federal employees working within the Social Security Administration's East Building in Woodlawn, MD, will benefit from modernized facilities and an upgraded cafeteria. The project delivers essential construction services, including renovation and cafeteria upgrades, improving the working environment and operational efficiency. The geographic impact is localized to Woodlawn, Maryland, supporting the federal presence in the region. The construction activities will likely involve a workforce of skilled tradespeople and laborers, contributing to local employment in the construction sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The final contract value significantly exceeded the initial estimated value, raising questions about the accuracy of the initial budgeting and cost control.
The project duration of 816 days is substantial, increasing the risk of unforeseen delays and cost increases.
The specific details of the renovation and upgrade scope are not fully elaborated, making it difficult to assess the value proposition comprehensively.

Positive Signals

The contract was awarded through full and open competition, ensuring a broad range of potential bidders.
The use of a firm-fixed-price contract type provides a degree of cost certainty for the government.
The project is managed by the General Services Administration, an agency with extensive experience in federal building management and construction.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the broader construction industry. Federal agencies, particularly through the GSA, are major clients in this sector, undertaking numerous renovation and new construction projects to maintain and modernize their facilities. The market for large-scale federal building construction is typically dominated by large, established firms like Turner Construction Company due to the complexity, bonding requirements, and scale of these projects. Benchmarking against similar federal building renovations would provide further context on cost-effectiveness.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Given the large contract value and the nature of the work (major building renovation), it is unlikely that small businesses would be the primary contractors. However, Turner Construction Company, as the prime contractor, may engage small businesses as subcontractors for specialized services or materials, contributing to the small business ecosystem. Further analysis of subcontracting plans would be needed to assess the specific impact on small businesses.

Oversight & Accountability

The General Services Administration (GSA) typically has robust oversight mechanisms for its construction projects, managed through its Public Buildings Service. This includes project management, quality assurance, and contract administration. Accountability is generally maintained through contract clauses, performance monitoring, and potential penalties for non-compliance. Transparency is facilitated through contract award databases like FPDS. Inspector General oversight may be involved if specific concerns or allegations of fraud, waste, or abuse arise during the project lifecycle.

Related Government Programs

Federal Building Renovations
GSA Construction Contracts
Social Security Administration Facilities
Public Buildings Service Projects
Commercial Construction

Risk Flags

Cost Overrun Risk
Schedule Delay Risk
Scope Creep Potential
Initial Estimate Accuracy

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $39.7 million to TURNER CONSTRUCTION COMPANY. SOCIAL SECURITY ADMINISTRATION - PERIMETER EAST BUILDING - 4TH FLOOR RENOVATION AND CAFETERIA UPGRADE CONSTRUCTION IN WOODLAWN, MD.

Who is the contractor on this award?

The obligated recipient is TURNER CONSTRUCTION COMPANY.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $39.7 million.

What is the period of performance?

Start: 2021-02-18. End: 2023-05-15.

How does the final awarded amount of $39.7 million compare to the initial estimated value for this project?

The provided data indicates an initial estimated value (represented by 'br') of $34.2 million. The final awarded contract value is $39.7 million. This represents an increase of approximately $5.5 million, or about 16% above the initial estimate. Such a variance suggests potential underestimation in the initial budgeting, scope creep during the procurement process, or unforeseen market conditions affecting construction costs. While firm-fixed-price contracts aim for cost certainty, significant deviations from initial estimates warrant further investigation into the factors driving the increase and the accuracy of the government's initial cost projections.

What is the track record of Turner Construction Company on similar federal projects?

Turner Construction Company is a large, well-established construction firm with a significant history of undertaking major federal projects, including those managed by the General Services Administration (GSA). While specific project-by-project performance data is not detailed here, their consistent ability to win large federal contracts suggests a strong track record and capacity. However, a deeper dive into their past performance on similar GSA renovations, including any past issues with cost overruns, schedule delays, or quality control, would be necessary for a comprehensive assessment of their reliability on this specific project.

What are the primary risks associated with a project of this scale and duration?

Projects of this scale and duration (816 days) carry inherent risks. Key risks include potential cost overruns due to fluctuating material prices, labor shortages, or unforeseen site conditions. Schedule delays are also a significant concern, stemming from weather, permitting issues, or contractor performance. Furthermore, there's a risk of scope creep, where additional requirements are added during the project, increasing costs and timelines. Ensuring adequate contingency planning, robust project management, and clear communication channels are crucial to mitigating these risks. The firm-fixed-price nature of the contract shifts some cost risk to the contractor, but significant overruns can still impact the government through change orders or contractor default.

How does the competition level (7 bidders) typically influence the final price for federal construction contracts?

A competition level of seven bidders for a federal construction contract of this magnitude is generally considered healthy and indicative of a competitive market. Higher competition typically pressures bidders to offer more competitive pricing to secure the contract. This can lead to better value for taxpayers. However, the final price is also influenced by the complexity of the project, the accuracy of the government's cost estimates, and the specific requirements outlined in the solicitation. In this case, despite robust competition, the final award exceeded initial estimates, suggesting that other factors, such as market conditions or the inherent costs of the required work, played a significant role in the final pricing.

What is the historical spending pattern for similar building renovation projects managed by the GSA?

Historical spending patterns for GSA building renovation projects vary widely depending on the size, scope, age of the facility, and geographic location. Large-scale renovations like this one can range from tens to hundreds of millions of dollars. Trends often show increasing costs due to inflation, material price volatility, and evolving building codes and sustainability requirements. GSA aims to benchmark projects against similar ones to ensure value, but specific historical data for comparable SSA facility renovations would be needed for a precise comparison. Generally, GSA manages a vast portfolio, and consistent investment in facility modernization is a recurring theme.

What are the potential implications of the 'Public Buildings Service' designation for this contract?

The designation of this contract under the GSA's Public Buildings Service (PBS) signifies that it falls under the purview of the agency responsible for the government's inventory of more than 350 million square feet of office and other space. PBS manages the design, construction, acquisition, management, and disposal of federal buildings. This means the contract is subject to PBS's established procurement regulations, project management standards, and oversight protocols. It also implies that the project aligns with GSA's broader mission of providing cost-effective, sustainable, and secure federal workplaces, and that the project's success contributes to GSA's overall performance metrics in facility management.

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: 47PD0121R0001

Offers Received: 7

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: ACS, Actividades DE Construccion Y Servicios, SA

Address: 375 HUDSON ST FL 6, NEW YORK, NY, 10014

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

Financial Breakdown

Contract Ceiling: $39,712,898

Exercised Options: $39,712,898

Current Obligation: $39,712,898

Actual Outlays: $37,739,612

Subaward Activity

Number of Subawards: 43

Total Subaward Amount: $25,836,874

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline