GSA awards $151.5M contract for FDA lab construction in Colorado, highlighting firm-fixed-price structure

Contract Overview

Contract Amount: $151,470,288 ($151.5M)

Contractor: J. E. Dunn Construction Company

Awarding Agency: General Services Administration

Start Date: 2023-03-16

End Date: 2029-01-29

Contract Duration: 2,146 days

Daily Burn Rate: $70.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: CONSTRUCTION MANAGER AS CONSTRUCTOR (CMC) SERVICES, NEW FOOD AND DRUG ADMINISTRATION, LABORATORY, BUILDING 22 1 DENVER FEDERAL CENTER, LAKEWOOD, CO 80225

Place of Performance

Location: DENVER, JEFFERSON County, COLORADO, 80225

State: Colorado Government Spending

Plain-Language Summary

General Services Administration obligated $151.5 million to J. E. DUNN CONSTRUCTION COMPANY for work described as: CONSTRUCTION MANAGER AS CONSTRUCTOR (CMC) SERVICES, NEW FOOD AND DRUG ADMINISTRATION, LABORATORY, BUILDING 22 1 DENVER FEDERAL CENTER, LAKEWOOD, CO 80225 Key points: 1. The contract utilizes a firm-fixed-price model, aiming to control costs for the construction of a new FDA laboratory. 2. Awarded to J. E. Dunn Construction Company, the contract represents a significant investment in federal laboratory infrastructure. 3. The project is situated at the Denver Federal Center, a key federal facility in Colorado. 4. This award falls under the Industrial Building Construction NAICS code, indicating a focus on specialized construction services. 5. The duration of the contract extends over several years, suggesting a complex and lengthy construction project. 6. The absence of small business set-aside flags indicates a focus on large-scale construction capabilities.

Value Assessment

Rating: good

The contract value of $151.5 million for a new FDA laboratory building is substantial. Benchmarking this against similar large-scale federal construction projects would provide a clearer picture of value for money. The firm-fixed-price structure suggests an effort to lock in costs, which can be beneficial if the scope is well-defined. However, without detailed cost breakdowns or comparisons to industry standards for similar facilities, a precise value assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through full and open competition, indicating that multiple qualified bidders had the opportunity to submit proposals. This competitive process is generally expected to yield better pricing and terms for the government. The number of bidders is not specified, but the full and open nature suggests a robust selection process.

Taxpayer Impact: Full and open competition is favorable for taxpayers as it promotes a competitive environment, driving down costs and encouraging efficiency from contractors.

Public Impact

The primary beneficiary is the Food and Drug Administration (FDA), which will gain a new laboratory facility to support its research and regulatory functions. The services delivered include the construction of a specialized laboratory building, encompassing all aspects of industrial building construction. The geographic impact is concentrated in Lakewood, Colorado, specifically at the Denver Federal Center. The project will likely have implications for the construction workforce in the Denver metropolitan area, creating jobs and demand for skilled labor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen construction challenges arise, despite the firm-fixed-price structure.
Dependence on the contractor's ability to manage complex construction timelines and quality control.
Risk associated with the long duration of the contract, potentially leading to scope creep or changes in requirements.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Award to a known entity, J. E. Dunn Construction Company, may indicate a track record of successful project completion.
Full and open competition suggests a thorough vetting of potential contractors.

Sector Analysis

This contract falls within the Industrial Building Construction sector, a segment of the broader construction industry focused on facilities for manufacturing, processing, and research. The market for federal laboratory construction is specialized, requiring adherence to stringent government standards and security protocols. Comparable spending benchmarks would involve analyzing other large-scale federal laboratory or research facility construction projects awarded by agencies like GSA, NIH, or DOE.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of specific subcontracting requirements for small businesses in the provided data. This suggests that the primary contractor, J. E. Dunn Construction Company, will likely manage the project with its own resources or through larger subcontractors. The impact on the small business ecosystem is likely minimal unless the prime contractor actively seeks out small business partners for specialized services.

Oversight & Accountability

Oversight for this contract will likely be managed by the General Services Administration (GSA), which awarded the contract on behalf of the FDA. The firm-fixed-price nature of the contract and the defined scope of work are key accountability measures. Transparency is typically maintained through contract award databases and public reporting. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Federal Laboratory Construction Projects
General Services Administration Public Buildings Service Contracts
Food and Drug Administration Facilities
Industrial Building Construction Services

Risk Flags

Potential for cost overruns due to construction complexity
Long contract duration increases risk exposure
Dependence on prime contractor performance
Scope definition accuracy for FFP contract

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $151.5 million to J. E. DUNN CONSTRUCTION COMPANY. CONSTRUCTION MANAGER AS CONSTRUCTOR (CMC) SERVICES, NEW FOOD AND DRUG ADMINISTRATION, LABORATORY, BUILDING 22 1 DENVER FEDERAL CENTER, LAKEWOOD, CO 80225

Who is the contractor on this award?

The obligated recipient is J. E. DUNN 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 $151.5 million.

What is the period of performance?

Start: 2023-03-16. End: 2029-01-29.

What is the historical performance of J. E. Dunn Construction Company on similar federal contracts?

J. E. Dunn Construction Company has a significant history of performing large-scale construction projects, including those for federal agencies. A review of their past federal contract awards, particularly those involving laboratory or specialized facility construction, would be necessary to assess their track record. Key metrics to examine would include on-time completion rates, adherence to budget, and any documented performance issues or awards. Their experience with firm-fixed-price contracts of this magnitude is also a critical factor in evaluating their suitability and potential risks for this specific FDA project.

How does the awarded price compare to industry benchmarks for constructing federal laboratories of this size and complexity?

To benchmark the $151.5 million award, one would need to compare it against the cost per square foot or per cubic foot of recently completed federal laboratory facilities with similar specifications (e.g., specialized HVAC, containment, security). Data from the Congressional Budget Office (CBO), the General Services Administration's (GSA) own cost estimating tools, or industry construction cost databases (like RSMeans) could provide relevant benchmarks. Factors such as location (labor costs, material availability), specific scientific requirements, and the level of technological integration within the lab will significantly influence the final cost, making direct comparisons challenging but essential for a thorough value assessment.

What are the primary risk indicators associated with this specific construction contract?

Key risk indicators for this contract include the inherent complexities of constructing a specialized laboratory facility, which can lead to unforeseen issues impacting schedule and cost. The long duration (2023-2029) increases the risk of material price escalation, labor shortages, or changes in regulatory requirements. While the firm-fixed-price structure aims to mitigate cost risk, it places a higher burden on the contractor to accurately estimate and manage all project elements. The specific location at the Denver Federal Center might also present unique logistical or site-specific challenges. Finally, the reliance on a single awardee, even from full and open competition, carries some risk if performance issues arise.

What is the expected effectiveness of the new FDA laboratory once completed?

The effectiveness of the new FDA laboratory will be measured by its ability to support and enhance the agency's mission in areas such as drug safety, food protection, and medical device regulation. A modern, well-equipped facility is expected to improve research capabilities, increase testing throughput, and potentially accelerate the review and approval processes for regulated products. Its effectiveness will depend on the successful integration of advanced scientific equipment, efficient workflow design, and the recruitment and retention of skilled personnel. The facility's design should also facilitate collaboration and compliance with evolving scientific and safety standards.

How does historical spending on industrial building construction by GSA compare to this award?

Historical spending data from GSA on industrial building construction provides context for the $151.5 million award. GSA, through its Public Buildings Service, manages a vast portfolio of federal facilities. Analyzing GSA's annual reports or contract databases would reveal the typical range and frequency of awards for projects of similar scale and type. This specific award appears to be a significant investment, potentially representing a substantial portion of GSA's annual spending in this specific construction category, especially if it's for a high-priority facility like an FDA lab.

What are the implications of the firm-fixed-price (FFP) contract type for cost control and contractor risk?

The firm-fixed-price (FFP) contract type shifts the majority of the cost risk from the government to the contractor, J. E. Dunn Construction Company. This means the contractor is obligated to complete the work for the agreed-upon price, regardless of unforeseen cost increases. For the government, this provides significant budget certainty and protection against cost overruns, assuming the initial scope was accurately defined. However, contractors typically build in a contingency premium into FFP bids to account for potential risks, which could result in a higher initial price compared to cost-reimbursement contracts. Effective management and clear specifications are crucial to ensure the contractor can deliver within the fixed price without compromising quality.

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Industrial 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: 47PJ0022R0054

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1001 LOCUST ST KANSAS, KANSAS CITY, MO, 64106

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: $158,563,349

Exercised Options: $151,470,288

Current Obligation: $151,470,288

Actual Outlays: $678,197

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline