DOJ's $247.9M Federal Prison Construction Contract Awarded to Bell/Heery JV Shows Strong Competition

Contract Overview

Contract Amount: $247,893,722 ($247.9M)

Contractor: Bell/Heery, a Joint Venture

Awarding Agency: Department of Justice

Start Date: 2007-05-02

End Date: 2011-12-30

Contract Duration: 1,703 days

Daily Burn Rate: $145.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: 151003 - DESIGN-BUILD CONSTRUCTION OF FEDERAL CORRECTIONAL INSTITUTION, FEDERAL PRISON CAMP, AND SUPPORT BUILDINGS NEAR BERLIN, NEW HAMPSHIRE.

Place of Performance

Location: BERLIN, COOS County, NEW HAMPSHIRE, 03570

State: New Hampshire Government Spending

Plain-Language Summary

Department of Justice obligated $247.9 million to BELL/HEERY, A JOINT VENTURE for work described as: 151003 - DESIGN-BUILD CONSTRUCTION OF FEDERAL CORRECTIONAL INSTITUTION, FEDERAL PRISON CAMP, AND SUPPORT BUILDINGS NEAR BERLIN, NEW HAMPSHIRE. Key points: 1. The contract represents a significant investment in federal correctional infrastructure. 2. The firm-fixed-price structure shifts significant cost risk to the contractor. 3. The project's duration of over 1700 days indicates a complex, long-term undertaking. 4. The award was made under full and open competition, suggesting a robust bidding process. 5. The project's location in New Hampshire may have implications for regional economic development and workforce. 6. The contractor, Bell/Heery, a joint venture, suggests a pooling of expertise for a large-scale project.

Value Assessment

Rating: good

The total contract value of $247.9 million for the design-build construction of a federal correctional institution and support buildings is substantial. Benchmarking this against similar large-scale federal construction projects is challenging without more specific project scope details. However, the firm-fixed-price contract type suggests that the government secured a defined cost, with the contractor assuming risks for cost overruns. The award amount, relative to the initial bid data (if available), would provide a clearer picture of value for money. The absence of specific cost breakdowns makes a precise per-unit comparison difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit a bid. This suggests a competitive environment where multiple firms likely vied for the project. The number of bidders is not specified, but the 'full and open' designation generally implies a healthy level of competition, which is conducive to price discovery and potentially better pricing for the government.

Taxpayer Impact: A competitive bidding process like this typically benefits taxpayers by driving down costs through market forces. It ensures that the government is not locked into a single provider, leading to more efficient use of public funds.

Public Impact

The primary beneficiaries are the Federal Bureau of Prisons and the Department of Justice, gaining new correctional facilities. The project delivers essential infrastructure for the federal penal system. The geographic impact is concentrated in Berlin, New Hampshire, potentially creating local jobs and economic activity during construction. The construction workforce in the region will likely see increased demand for skilled labor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns despite firm-fixed-price if scope creep occurs or unforeseen site conditions arise.
Long project duration increases exposure to market fluctuations in material and labor costs.
Dependence on a joint venture may introduce coordination challenges between partners.
The specific security requirements for a correctional facility add complexity and potential for delays.

Positive Signals

Firm-fixed-price contract transfers significant cost risk to the contractor.
Design-build approach can streamline the construction process and potentially reduce overall project time.
Award under full and open competition suggests a competitive pricing environment.
The contractor is a joint venture, likely bringing specialized expertise to the project.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, specifically focusing on correctional facilities. The federal government is a major consumer of construction services, particularly for infrastructure projects like prisons, courthouses, and administrative buildings. The market for large-scale federal construction is often characterized by significant barriers to entry, requiring specialized expertise, bonding capacity, and experience with government contracting. This project represents a substantial investment within this niche, likely competing with other large federal and private sector construction opportunities for major contractors.

Small Business Impact

The data indicates that small business participation was not a primary set-aside criterion for this contract (sb: false). While the prime contractor is a joint venture, it's unclear if this structure itself involves small businesses or if subcontracting opportunities will be directed towards them. Without specific subcontracting plans or goals, the direct impact on the small business ecosystem is uncertain, though large federal projects often create downstream opportunities for specialized small subcontractors.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Justice's Bureau of Prisons. Given the project's scale and duration, regular progress reviews, site inspections, and financial audits are expected. The firm-fixed-price nature of the contract implies that the government's primary oversight will focus on ensuring adherence to the design specifications, quality standards, and schedule milestones. Inspector General involvement would be triggered by allegations of fraud, waste, or abuse.

Related Government Programs

Federal Bureau of Prisons Facility Construction
Design-Build Construction Contracts
Large-Scale Public Infrastructure Projects
Department of Justice Capital Investments

Risk Flags

Potential for cost overruns due to project scale and duration.
Contractor performance risk associated with a joint venture.
Long-term operational costs influenced by initial design.
Market volatility impacting material and labor costs over project lifespan.

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $247.9 million to BELL/HEERY, A JOINT VENTURE. 151003 - DESIGN-BUILD CONSTRUCTION OF FEDERAL CORRECTIONAL INSTITUTION, FEDERAL PRISON CAMP, AND SUPPORT BUILDINGS NEAR BERLIN, NEW HAMPSHIRE.

Who is the contractor on this award?

The obligated recipient is BELL/HEERY, A JOINT VENTURE.

Which agency awarded this contract?

Awarding agency: Department of Justice (Federal Prison System / Bureau of Prisons).

What is the total obligated amount?

The obligated amount is $247.9 million.

What is the period of performance?

Start: 2007-05-02. End: 2011-12-30.

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

The provided data does not include the initial cost estimate for the design-build construction of the federal correctional institution. Therefore, a direct comparison between the estimate and the final award amount of $247,893,722.33 cannot be made. Understanding the initial estimate is crucial for assessing whether the final award represented a significant deviation, which could indicate changes in scope, market conditions, or the effectiveness of the competitive bidding process. Without this baseline, it's difficult to definitively evaluate the value achieved relative to initial expectations.

How many bids were received for this 'full and open competition' contract?

The provided data indicates the contract was awarded under 'full and open competition' but does not specify the number of bids received. A high number of bids typically suggests robust competition, which can lead to more favorable pricing for the government. Conversely, a low number of bidders, even under full and open competition, might signal market concentration, specialized requirements that limit the bidder pool, or potential challenges in attracting sufficient interest. Knowing the number of bids would provide critical context for evaluating the competitive dynamics and their potential impact on the final price.

What specific risks are associated with the 'firm fixed price' contract type for a project of this magnitude and duration?

The firm fixed price (FFP) contract type shifts the majority of cost overrun risk to the contractor, Bell/Heery, a Joint Venture. For a large, long-duration project like constructing a federal correctional institution (over 1700 days), this means the contractor bears the burden of unexpected increases in labor, materials, and subcontractor costs. However, risks remain for the government, primarily related to potential scope creep, contractor default, or quality issues if the contractor attempts to cut corners to maintain profitability. The government must meticulously manage the contract to prevent scope changes and ensure adherence to specifications.

Can the 'design-build' approach be considered a risk mitigation strategy for this project?

Yes, the design-build (DB) approach can be considered a risk mitigation strategy for this project. By consolidating design and construction under a single entity (the joint venture Bell/Heery), it streamlines communication, reduces potential conflicts between designers and builders, and can accelerate the project timeline. This integrated approach often leads to better cost certainty and schedule adherence, as the contractor has a vested interest in efficient design that is constructible. It mitigates risks associated with traditional design-bid-build where separate contracts can lead to coordination issues and delays.

What is the typical cost range for constructing federal correctional facilities of this size, and how does this contract compare?

Determining a precise 'typical' cost range for federal correctional facilities is complex due to variations in security levels, capacity, location, and specific design requirements. However, projects of this scale, involving new construction of prisons and support buildings, often run into the hundreds of millions of dollars. The $247.9 million award for this facility appears to be within the expected range for a significant federal infrastructure project of this nature. A more granular comparison would require analyzing per-bed construction costs or cost per square foot for similar, recently completed federal facilities, which are not readily available in the provided data.

What are the potential long-term operational implications of the design choices made under this contract?

The long-term operational implications of the design choices made under this contract are significant but not detailed in the provided award data. The design-build nature means the contractor is responsible for the initial design, which will impact the facility's efficiency, security, maintenance requirements, and energy consumption for decades. Key considerations would include the choice of building materials, HVAC systems, security infrastructure, and inmate housing configurations. Poor design choices could lead to higher long-term operational and maintenance costs for the Bureau of Prisons, while innovative and sustainable designs could yield significant savings and improved functionality.

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: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 999 PEACHTREE ST NE - SUITE 300, ATLANTA, GA, 90

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

Financial Breakdown

Contract Ceiling: $247,893,722

Exercised Options: $247,893,722

Current Obligation: $247,893,722

Contract Characteristics

Cost or Pricing Data: NO

Timeline