GSA awards $126.8M for Des Moines Courthouse design, with construction phase yet to be determined

Contract Overview

Contract Amount: $126,761,052 ($126.8M)

Contractor: Ryan Companies US Inc

Awarding Agency: General Services Administration

Start Date: 2018-06-21

End Date: 2023-09-05

Contract Duration: 1,902 days

Daily Burn Rate: $66.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIXED PRICE INCENTIVE

Sector: Construction

Official Description: IA0089ZZ NEW DES MOINES FEDERAL COURTHOUSE CMC SITE: TBD, DES MOINES, IA THIS AWARD IS FOR CMC DESIGN PHASE SERVICES FOR THE NEW DES MOINES COURTHOUSE. SITE IS TO BE DETERMINED.

Place of Performance

Location: DES MOINES, POLK County, IOWA, 50309

State: Iowa Government Spending

Plain-Language Summary

General Services Administration obligated $126.8 million to RYAN COMPANIES US INC for work described as: IA0089ZZ NEW DES MOINES FEDERAL COURTHOUSE CMC SITE: TBD, DES MOINES, IA THIS AWARD IS FOR CMC DESIGN PHASE SERVICES FOR THE NEW DES MOINES COURTHOUSE. SITE IS TO BE DETERMINED. Key points: 1. The contract value represents a significant investment in federal infrastructure, specifically for judicial facilities. 2. The fixed-price incentive contract type suggests a focus on cost control while allowing for performance-based adjustments. 3. The extended duration of the contract (over 1900 days) indicates a complex, multi-phase project. 4. The absence of small business set-asides warrants further examination of subcontracting opportunities. 5. The project's reliance on a single awardee for the design phase may limit initial market feedback on alternative approaches. 6. The General Services Administration (GSA) is the awarding agency, known for managing federal building projects.

Value Assessment

Rating: fair

The total award of $126.8 million for the design phase of a federal courthouse is substantial. Benchmarking this against similar courthouse design projects is challenging without more specific project scope details. However, the fixed-price incentive structure implies that the government aims to control costs, but the final price could escalate based on performance metrics. The lack of a defined site at the time of award raises questions about the completeness of the initial scope and potential for future change orders.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely considered. The presence of two bids suggests a moderate level of competition for this design phase. While full and open competition is generally preferred for ensuring fair pricing and access to a broad range of capabilities, the specific number of bidders (two) may not represent the highest degree of market engagement possible for such a significant project.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically drives down costs through market forces. However, with only two bids received, the potential for achieving the most competitive pricing may have been constrained compared to scenarios with a larger number of interested parties.

Public Impact

The primary beneficiaries are the judicial system and federal agencies requiring courthouse facilities in Des Moines, Iowa. The services delivered include the design phase for a new federal courthouse, laying the groundwork for future construction. The geographic impact is focused on Des Moines, Iowa, contributing to local economic development through construction and related services. Workforce implications include employment opportunities for architects, engineers, construction managers, and administrative staff during the design and subsequent construction phases.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of a defined site at the time of award could lead to scope creep and cost overruns during the design and construction phases.
The fixed-price incentive contract type, while aiming for cost control, can still result in higher-than-anticipated costs if performance targets are not met efficiently.
With only two bids received, the level of competition might not have been sufficient to secure the most cost-effective design solutions for taxpayers.
The extended contract duration suggests potential for delays and associated cost increases if project milestones are not managed effectively.

Positive Signals

Awarding under full and open competition maximizes the pool of potential contractors, promoting fairness and broad market access.
The use of a fixed-price incentive contract signals an intent to manage costs and reward efficient performance.
The GSA's involvement suggests adherence to established federal building standards and project management protocols.
The project addresses a clear need for federal judicial infrastructure, ensuring the continuity and modernization of court services.

Sector Analysis

The construction sector, particularly commercial and institutional building construction, is a significant part of the federal procurement landscape. This contract falls within the broader category of federal building construction and renovation projects managed by agencies like the GSA. The market for federal courthouse construction is specialized, requiring firms with experience in secure, high-functionality public facilities. Comparable spending benchmarks would typically involve analyzing the cost per square foot for similar government buildings, factoring in design complexity and regional labor costs.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the primary award went to a large business. While there is no explicit information on subcontracting plans, the significant value of the contract implies potential opportunities for small businesses to participate as subcontractors, particularly in specialized trades or services during the construction phase. The GSA often has goals for small business participation, which would need to be monitored.

Oversight & Accountability

The General Services Administration (GSA) is responsible for overseeing this contract. Oversight mechanisms typically include regular progress reports, site inspections, and financial reviews. Accountability measures are embedded in the contract terms, particularly with the fixed-price incentive structure, which links payment to performance. Transparency is generally maintained through public contract databases, although specific design details and internal GSA reviews may not be fully public. The Inspector General's office of the GSA would have jurisdiction over potential fraud, waste, or abuse related to this contract.

Related Government Programs

Federal Courthouse Construction Projects
GSA Public Buildings Service Contracts
Design-Build Construction Services
Fixed-Price Incentive Contracts
Commercial and Institutional Building Construction

Risk Flags

Site Not Finalized at Award
Limited Competition (2 Bidders)
Potential for Scope Creep
Extended Contract Duration

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $126.8 million to RYAN COMPANIES US INC. IA0089ZZ NEW DES MOINES FEDERAL COURTHOUSE CMC SITE: TBD, DES MOINES, IA THIS AWARD IS FOR CMC DESIGN PHASE SERVICES FOR THE NEW DES MOINES COURTHOUSE. SITE IS TO BE DETERMINED.

Who is the contractor on this award?

The obligated recipient is RYAN COMPANIES US INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $126.8 million.

What is the period of performance?

Start: 2018-06-21. End: 2023-09-05.

What is the track record of Ryan Companies US Inc. in completing federal construction projects of similar scale and complexity?

Ryan Companies US Inc. has a substantial history of engaging in large-scale construction projects, including federal facilities. While specific data on their track record for federal courthouses of this exact magnitude is not detailed here, their general experience in commercial and institutional building construction suggests they possess the necessary capabilities. A deeper dive would involve reviewing their past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS) for similar federal contracts, looking for indicators of on-time delivery, budget adherence, and quality of work. Their portfolio often includes complex projects, indicating a capacity to manage multi-faceted government contracts.

How does the awarded amount compare to the estimated cost for the design phase of similar federal courthouses?

Direct comparison of the $126.8 million award for the design phase of the Des Moines Courthouse to similar projects is difficult without more granular data on project scope, size (square footage), and specific design requirements. Federal courthouses are complex facilities with high security and specialized functional needs, which can significantly influence design costs. Benchmarking would ideally involve analyzing the cost per square foot for design services on recently completed federal courthouses of comparable complexity. The fixed-price incentive nature of this contract also means the final cost is subject to performance, making a static comparison less definitive. However, the substantial figure suggests a significant undertaking.

What are the primary risks associated with awarding a design contract before a site is finalized?

Awarding a design contract before a site is finalized introduces several key risks. Firstly, there is a significant risk of scope creep and associated cost increases. Design elements are inherently site-dependent; changes in location can necessitate substantial revisions to architectural plans, structural designs, and utility connections, leading to change orders and budget overruns. Secondly, it can lead to inefficiencies and delays. The design team may invest time and resources into plans that are later rendered obsolete or require modification due to site constraints or selection criteria. Thirdly, it can impact the overall project timeline, as the site selection process itself can be lengthy and unpredictable, potentially delaying the commencement of construction.

What is the expected effectiveness of the fixed-price incentive (FPI) contract type in controlling costs for this courthouse design project?

The Fixed-Price Incentive (FPI) contract type is designed to provide greater incentive for the contractor to control costs and complete work efficiently than a standard fixed-price contract. In an FPI contract, the final price is adjusted based on the contractor's performance relative to target cost and target profit goals. If the contractor finishes under the target cost, both the contractor and the government share in the savings. Conversely, if costs exceed the target, the contractor's profit is reduced, and there's a ceiling on the total price. For this courthouse design project, the FPI aims to motivate Ryan Companies US Inc. to manage design expenses effectively while achieving performance objectives. Its effectiveness hinges on the realism of the target cost and the sharing formula agreed upon.

How has federal spending on courthouse construction and design evolved over the past five years, and does this award align with trends?

Analyzing federal spending trends on courthouse construction and design requires access to historical budget data and contract awards across agencies like the GSA and the Administrative Office of the U.S. Courts. Generally, federal investment in infrastructure, including judicial facilities, can fluctuate based on appropriations, aging building stock, and national security priorities. The $126.8 million award for the design phase of a new courthouse suggests a continued commitment to modernizing or expanding judicial infrastructure. Without specific trend data, it's difficult to definitively state if this award aligns perfectly, but it represents a significant allocation for a single project, indicating ongoing investment in this sector.

What are the implications of having only two bidders for this significant federal contract?

Having only two bidders for a contract valued at over $126 million has several implications. On the positive side, it still represents competition, which is better than a sole-source award. It suggests that the requirements were specific enough or the market small enough that only a limited number of firms could or chose to bid. However, it also raises concerns about the potential for suboptimal price discovery. With fewer bidders, the government may not have benefited from the full spectrum of competitive pressures that could drive down costs or foster innovation. This limited competition could potentially lead to higher prices than if more firms had participated, and it might indicate barriers to entry for other qualified contractors.

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: TWO STEP

Solicitation ID: 6P1QW-17-1001

Offers Received: 2

Pricing Type: FIXED PRICE INCENTIVE (L)

Evaluated Preference: NONE

Contractor Details

Parent Company: Ryan Companies US, Inc.

Address: 533 S 3RD ST STE 100, MINNEAPOLIS, MN, 55415

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

Financial Breakdown

Contract Ceiling: $126,761,052

Exercised Options: $126,761,052

Current Obligation: $126,761,052

Actual Outlays: $84,406,608

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline