DoD's $73M construction contract awarded to Caddell Construction shows fair value with 5 bidders

Contract Overview

Contract Amount: $73,083,276 ($73.1M)

Contractor: Caddell Construction CO., Inc.

Awarding Agency: Department of Defense

Start Date: 1999-10-19

End Date: 2003-09-23

Contract Duration: 1,435 days

Daily Burn Rate: $50.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Place of Performance

Location: FORT BRAGG, CUMBERLAND County, NORTH CAROLINA, 28307

State: North Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $73.1 million to CADDELL CONSTRUCTION CO., INC. for work described as: Key points: 1. The contract demonstrates a competitive award process, indicating potential for good value. 2. Pricing appears reasonable when benchmarked against similar construction projects. 3. The firm fixed-price structure transfers risk to the contractor, a positive sign. 4. The project's duration and scope align with typical large-scale military construction. 5. This award positions Caddell Construction as a significant player in federal infrastructure. 6. The number of bidders suggests a healthy market for this type of construction service.

Value Assessment

Rating: good

The contract's value of $73,083,276 appears reasonable for a large-scale construction project of this nature. Benchmarking against similar Department of Defense construction contracts awarded around the same period suggests that the pricing was competitive. The firm fixed-price contract type also indicates that the contractor assumed the majority of the cost risk, which is generally favorable for the government. The duration of the contract (1435 days) is substantial, reflecting the complexity and scale of the work, and the award amount seems proportionate to the expected deliverables.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with five bids received. The presence of multiple bidders suggests a robust competitive environment for this type of construction service. A competitive process like this typically drives down prices and encourages contractors to offer their best value propositions. The agency received a sufficient number of proposals to make an informed selection, indicating that the market was adequately engaged.

Taxpayer Impact: The full and open competition ensures that taxpayer dollars are likely being used efficiently, as multiple companies vied to provide the best price and quality. This process helps prevent overpayment and promotes a fair market price for construction services.

Public Impact

The primary beneficiaries are the Department of Defense and its personnel, who will receive improved or new facilities. The contract delivers essential construction services for military infrastructure. The geographic impact is localized to North Carolina, where the construction will take place. The project will likely create or sustain jobs in the construction sector within the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen issues arise, though mitigated by firm-fixed-price.
Contractor performance risks, including delays or quality issues, are inherent in large construction projects.

Positive Signals

Awarded under full and open competition, indicating a competitive market.
Firm fixed-price contract transfers cost risk to the contractor.
The contractor, Caddell Construction, has a track record in federal construction.
The project duration is substantial, allowing for thorough execution.

Sector Analysis

This contract falls within the broader construction and facilities management sector, a critical component of federal spending, particularly for agencies like the Department of Defense. The market for large-scale military construction is often characterized by a mix of large, established firms and specialized subcontractors. Spending in this sector is influenced by geopolitical factors, military readiness needs, and infrastructure modernization initiatives. Comparable benchmarks for similar military construction projects indicate that this award amount is within the expected range for projects of this scale and complexity.

Small Business Impact

While this contract was awarded to Caddell Construction Co., Inc. and does not appear to have a specific small business set-aside, large federal construction contracts often have subcontracting requirements. It is probable that Caddell Construction will engage small businesses for various specialized services, contributing to the small business ecosystem. Further analysis would be needed to determine the extent of small business subcontracting participation.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Army contracting officers and project managers. The firm fixed-price nature of the contract provides a degree of accountability by placing cost control responsibility on the contractor. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Military Construction Program
Department of Defense Facilities Sustainment, Restoration, and Modernization
General Services Administration (GSA) Public Buildings Service

Risk Flags

Potential for cost overruns if unforeseen issues arise.
Contractor performance risks (delays, quality).

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $73.1 million to CADDELL CONSTRUCTION CO., INC.. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is CADDELL CONSTRUCTION CO., INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $73.1 million.

What is the period of performance?

Start: 1999-10-19. End: 2003-09-23.

What is Caddell Construction Co., Inc.'s track record with federal contracts, particularly with the Department of Defense?

Caddell Construction Co., Inc. has a significant history of performing federal construction contracts, including numerous awards from the Department of Defense and other military branches. Their portfolio often includes large-scale projects such as barracks, training facilities, and infrastructure upgrades. A review of federal procurement data indicates they have been awarded multiple contracts over the years, suggesting a sustained capacity and experience in meeting the requirements of military construction. Their past performance is a key factor considered during the source selection process for new awards, and their continued success in winning bids points to a generally positive track record in delivering projects for federal agencies.

How does the awarded amount of $73,083,276 compare to similar military construction projects awarded around the same time?

The awarded amount of approximately $73 million for this Department of Defense construction project appears to be within the typical range for large-scale military infrastructure development. Benchmarking against similar projects, such as the construction of barracks, administrative buildings, or specialized training facilities awarded by the Army, Navy, or Air Force between 1999 and 2003, reveals comparable contract values. Factors influencing the cost include project scope, complexity, location, and specific facility requirements. Given the firm fixed-price nature and the competitive bidding process involving five offers, this value suggests a fair market price was achieved for the services rendered.

What are the primary risks associated with this firm fixed-price contract, and how are they mitigated?

The primary risk with a firm fixed-price (FFP) contract is that the contractor bears the burden of any cost overruns. If Caddell Construction encounters unexpected material price increases, labor shortages, or unforeseen site conditions, they are responsible for absorbing those additional costs, which could impact their profit margin or even lead to financial losses. Mitigation strategies employed by the government include thorough pre-award evaluations of the contractor's technical proposal and financial stability, detailed scope of work definition to minimize ambiguity, and robust project oversight to ensure compliance with specifications. The government's risk is primarily related to potential contractor default or substandard performance, which are addressed through contract administration and performance monitoring.

What does the level of competition (5 bidders) indicate about the market for this type of construction service?

Receiving five bids for this full and open competition contract indicates a healthy and competitive market for large-scale military construction services. This level of competition suggests that multiple qualified contractors were interested and capable of undertaking the project. A robust bidding process generally leads to better price discovery, encouraging contractors to submit competitive offers to secure the award. It also provides the awarding agency with a sufficient pool of options to select the best value proposal based on technical merit, past performance, and price. The presence of five bidders implies that the market is not overly concentrated and that opportunities are accessible to established firms in the sector.

What are the potential implications of this contract award on small businesses, considering it's not a small business set-aside?

While this contract was not set aside for small businesses, its award to a large prime contractor like Caddell Construction likely has implications for the small business sector through subcontracting opportunities. Federal regulations often require prime contractors on large projects to make good-faith efforts to subcontract portions of the work to small businesses, including those owned by women, veterans, or disadvantaged individuals. The specific subcontracting plan negotiated as part of this contract would detail the extent to which small businesses are expected to participate. Successful completion of such projects by prime contractors often relies on the specialized skills and services provided by numerous small business subcontractors.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Address: 2700 LAGOON PARK DR, MONTGOMERY, AL, 02

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline