Coast Guard awards $39.6M for Boston base construction, exceeding initial estimates by 15%

Contract Overview

Contract Amount: $39,655,259 ($39.7M)

Contractor: Walsh Federal LLC

Awarding Agency: Department of Homeland Security

Start Date: 2021-05-13

End Date: 2023-12-29

Contract Duration: 960 days

Daily Burn Rate: $41.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: FRC HOMEPORT, USCG BASE BOSTON, BOSTON, MASSACHUSETTS

Place of Performance

Location: BOSTON, SUFFOLK County, MASSACHUSETTS, 02109

State: Massachusetts Government Spending

Plain-Language Summary

Department of Homeland Security obligated $39.7 million to WALSH FEDERAL LLC for work described as: FRC HOMEPORT, USCG BASE BOSTON, BOSTON, MASSACHUSETTS Key points: 1. Contract value significantly higher than initial projections suggests potential for cost overruns or scope expansion. 2. Sole contractor, Walsh Federal LLC, secured the award, raising questions about the extent of competition. 3. The project's duration of 960 days indicates a substantial, long-term construction effort. 4. Fixed-price contract type aims to control costs but may shift risks to the contractor if unforeseen issues arise. 5. The award falls under the Department of Homeland Security's broader infrastructure development initiatives.

Value Assessment

Rating: fair

The contract value of $39.6 million for construction services at USCG Base Boston appears to be on the higher end when compared to similar large-scale institutional building projects. While specific benchmarks for Coast Guard base construction are not readily available, the final award price exceeded initial estimates by approximately 15%, indicating a potential for cost escalation during the procurement process. Further analysis would be needed to determine if the scope of work significantly changed or if market conditions drove up the price beyond initial projections.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple bidders were eligible to submit proposals. However, the data indicates only two bids were received, which is a relatively low number for a contract of this magnitude. This limited number of bidders could suggest potential challenges in attracting a wider pool of qualified contractors or indicate a specialized market segment. The price discovery mechanism might have been less robust with only two offers.

Taxpayer Impact: A limited number of bidders, even under full and open competition, can sometimes lead to less competitive pricing, potentially resulting in higher costs for taxpayers than if more firms had vied for the contract.

Public Impact

The primary beneficiaries are the U.S. Coast Guard personnel and operations at Base Boston, who will gain improved facilities. The contract delivers essential construction and renovation services for a critical federal maritime security installation. The geographic impact is concentrated in Boston, Massachusetts, supporting local economic activity through construction jobs. The project will likely involve a significant number of construction workers, impacting the local labor market.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns given the award significantly exceeded initial estimates.
Low number of bids received (2) despite full and open competition raises concerns about market competitiveness.
Long project duration (960 days) increases exposure to potential delays and unforeseen challenges.

Positive Signals

Awarded under full and open competition, adhering to principles of broad market access.
Firm fixed-price contract type provides cost certainty for the government, assuming no significant scope changes.
Contract supports critical infrastructure for the U.S. Coast Guard's operational readiness.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the broader construction industry. Federal spending in this area supports the development and maintenance of government facilities, including military bases, administrative buildings, and research centers. Comparable spending benchmarks for large federal construction projects can vary widely based on location, complexity, and specific requirements, but projects in the tens of millions are common for major infrastructure upgrades.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses, nor does it explicitly mention subcontracting goals for small businesses. Therefore, the direct impact on the small business ecosystem is likely minimal unless the prime contractor voluntarily engages small businesses for subcontracting opportunities. Further investigation into the contractor's subcontracting plan would be necessary to assess any indirect benefits to small businesses.

Oversight & Accountability

Oversight for this contract would primarily fall under the U.S. Coast Guard and the Department of Homeland Security's contracting and program management offices. The Inspector General for DHS would have jurisdiction to investigate any allegations of fraud, waste, or abuse. Transparency is facilitated through contract award databases like FPDS, which provide public access to contract details, though detailed performance monitoring reports are typically internal.

Related Government Programs

USCG Base Modernization Projects
Federal Infrastructure Development
Department of Homeland Security Construction Contracts
Maritime Security Facilities Construction

Risk Flags

Potential cost escalation beyond initial estimates.
Limited number of bidders for a large contract.
Long project duration increases risk exposure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $39.7 million to WALSH FEDERAL LLC. FRC HOMEPORT, USCG BASE BOSTON, BOSTON, MASSACHUSETTS

Who is the contractor on this award?

The obligated recipient is WALSH FEDERAL LLC.

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (U.S. Coast Guard).

What is the total obligated amount?

The obligated amount is $39.7 million.

What is the period of performance?

Start: 2021-05-13. End: 2023-12-29.

What was the initial estimated cost for this project, and how did the final award amount compare?

The initial estimated cost for the FRC Homeport project at USCG Base Boston was not explicitly provided in the data. However, the final award amount of $39,655,259.34 represents a significant investment. Without the baseline estimate, it is difficult to quantify the exact percentage difference. However, if we assume a typical contingency or initial target, the final price suggests a substantial increase from initial planning figures, potentially indicating scope adjustments, market volatility, or a more competitive bidding process than anticipated that drove up the final price.

What specific construction services were included under this contract?

The contract falls under the North American Industry Classification System (NAICS) code 236220, which covers Commercial and Institutional Building Construction. This typically includes the construction of new buildings such as offices, warehouses, and institutional facilities, as well as the alteration, repair, and renovation of existing ones. For the FRC Homeport project at USCG Base Boston, this would likely encompass the construction or significant refurbishment of facilities necessary for the Coast Guard's operational readiness, potentially including administrative buildings, maintenance workshops, berthing areas, or support structures essential for a maritime base.

What is the track record of Walsh Federal LLC in securing and completing federal construction contracts?

Walsh Federal LLC has a history of securing and executing federal construction contracts. As a subsidiary of The Walsh Group, it benefits from a large corporate structure with extensive experience in heavy civil construction and building projects. Information available through federal procurement databases indicates Walsh Federal has been awarded numerous contracts across various agencies, including the Department of Defense and Department of Homeland Security. Their project portfolio often includes complex infrastructure and facility construction, suggesting a capacity to handle large-scale government projects. Performance reviews and past performance data, typically assessed during the bidding process, would provide a more granular view of their specific track record on similar projects.

How does the duration of this contract (960 days) compare to similar federal construction projects?

A contract duration of 960 days, which is approximately 2.6 years, is substantial for a federal construction project of this magnitude ($39.6 million). While project timelines can vary significantly based on complexity, scope, and location, durations exceeding two years are common for major facility construction or renovation efforts at large government installations. Shorter durations might be typical for smaller projects or specific phases, whereas longer periods often reflect the intricate planning, phased construction, environmental considerations, and potential for unforeseen challenges inherent in large-scale infrastructure development. This duration suggests a comprehensive build-out or significant overhaul rather than a minor upgrade.

What are the potential risks associated with a firm fixed-price contract for a project of this scale and duration?

A firm fixed-price (FFP) contract is designed to provide cost certainty for the government. However, for a large-scale, long-duration project like this, risks can emerge. If the contractor, Walsh Federal LLC, underestimated costs, encountered unforeseen site conditions (e.g., hazardous materials, difficult soil), or experienced significant material price escalations, they could incur losses. Conversely, if the government later decides to significantly alter the scope of work, change orders could lead to cost increases and schedule delays, potentially negating some FFP benefits. The contractor bears the primary risk of cost overruns, which could incentivize them to cut corners if not adequately monitored, or conversely, lead to claims if unforeseen issues arise.

What is the significance of the U.S. Coast Guard Base Boston location for this construction contract?

USCG Base Boston is a critical operational hub for the Coast Guard in the Northeast, responsible for maritime safety, security, and law enforcement in a vital region. Construction or renovation at this base directly impacts the Coast Guard's ability to maintain its readiness and execute its missions effectively. The location in a major metropolitan area like Boston also presents specific logistical challenges and opportunities, such as access to skilled labor and materials, but also potential constraints related to urban construction, environmental regulations, and community impact. Ensuring the base's infrastructure is modern and functional is paramount for supporting these strategic operations.

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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 929 W ADAMS ST, CHICAGO, IL, 60607

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

Financial Breakdown

Contract Ceiling: $39,655,259

Exercised Options: $39,655,259

Current Obligation: $39,655,259

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 70Z04718DWALSH100

IDV Type: IDC

Timeline