Devcon Construction Inc. awarded $33.1M FAA contract for commercial building construction in California

Contract Overview

Contract Amount: $33,171,511 ($33.2M)

Contractor: Devcon Construction Incorporated

Awarding Agency: Department of Transportation

Start Date: 2010-08-17

End Date: 2012-08-31

Contract Duration: 745 days

Daily Burn Rate: $44.5K/day

Competition Type: COMPETED UNDER SAP

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: TAS::69 1304::TAS RECOVERY ACT TAS::69 1304::TAS

Place of Performance

Location: MILPITAS, SANTA CLARA County, CALIFORNIA, 95035

State: California Government Spending

Plain-Language Summary

Department of Transportation obligated $33.2 million to DEVCON CONSTRUCTION INCORPORATED for work described as: TAS::69 1304::TAS RECOVERY ACT TAS::69 1304::TAS Key points: 1. Contract value of $33.1M for construction services. 2. Awarded under Simplified Acquisition Procedures (SAP), suggesting a focus on smaller procurements. 3. Firm Fixed Price contract type indicates price certainty for the government. 4. Contract duration of 745 days. 5. The contract was competed, suggesting potential for competitive pricing. 6. The North American Industry Classification System (NAICS) code 236220 points to commercial and institutional building construction.

Value Assessment

Rating: fair

The contract value of $33.1 million for commercial and institutional building construction is a significant investment. Benchmarking this against similar FAA construction projects would provide a clearer picture of value for money. The firm fixed-price nature of the contract helps manage cost overruns, but the initial pricing assessment is crucial. Without specific details on the scope of work and comparison to market rates for similar construction projects, a definitive value assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was competed under Simplified Acquisition Procedures (SAP), which typically involves a streamlined process for procurements below a certain threshold. While the data indicates it was competed, the number of bidders (3) is on the lower side for a contract of this value. This level of competition might not fully leverage market forces to drive down prices, but it does suggest an attempt to solicit offers from multiple sources.

Taxpayer Impact: A competed award, even with a limited number of bidders, is generally favorable for taxpayers as it allows for price discovery and potentially better pricing than a sole-source award.

Public Impact

The Federal Aviation Administration (FAA) is the primary beneficiary, receiving construction services for its facilities. The contract supports the development or renovation of commercial and institutional buildings, likely for aviation-related purposes. The geographic impact is focused on California, where the construction work will take place. The contract implies a need for skilled labor in the construction sector within California.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited number of bidders (3) may indicate potential for higher prices than a more competitive environment.
SAP competition might not be as robust as full and open competition for larger contracts.
Firm Fixed Price contracts can sometimes lead to higher initial bids to account for contractor risk.

Positive Signals

The contract was competed, indicating an effort to obtain multiple offers.
Firm Fixed Price contract provides cost certainty for the government.
The award to Devcon Construction Inc. suggests they met the government's requirements for this project.

Sector Analysis

The construction sector is a significant part of the US economy, with federal contracts often supporting infrastructure and institutional development. NAICS code 236220 specifically covers the construction of non-residential buildings. Federal spending in this area is crucial for maintaining and expanding government facilities. Benchmarking against similar construction projects by agencies like the GSA or other branches of the Department of Defense could offer comparative insights into pricing and project execution.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, the primary contractor, Devcon Construction Inc., is likely a larger entity. There is no explicit information on subcontracting plans, but larger prime contractors are often encouraged or required to subcontract portions of their work to small businesses, which could have a positive impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the Federal Aviation Administration's contracting and program management offices. The firm fixed-price nature of the contract provides a degree of financial oversight by locking in costs. Transparency would be enhanced through contract award databases and reporting requirements. The Inspector General for the Department of Transportation would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Federal Aviation Administration Construction Projects
Department of Transportation Capital Improvement Projects
Commercial Building Construction Contracts
Infrastructure Development Contracts

Risk Flags

Limited competition (3 bidders) may impact price competitiveness.
Potential for cost overruns if contractor underestimated project complexity under FFP.
Need to verify contractor's past performance on similar FAA projects.

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $33.2 million to DEVCON CONSTRUCTION INCORPORATED. TAS::69 1304::TAS RECOVERY ACT TAS::69 1304::TAS

Who is the contractor on this award?

The obligated recipient is DEVCON CONSTRUCTION INCORPORATED.

Which agency awarded this contract?

Awarding agency: Department of Transportation (Federal Aviation Administration).

What is the total obligated amount?

The obligated amount is $33.2 million.

What is the period of performance?

Start: 2010-08-17. End: 2012-08-31.

What is the track record of Devcon Construction Inc. on federal contracts, particularly with the FAA?

Devcon Construction Inc. has a history of securing federal contracts, including those with the FAA. Analyzing their past performance on similar projects, such as building construction or renovation, would reveal their ability to meet deadlines, stay within budget, and adhere to quality standards. A review of their contract history might also highlight any past performance issues, disputes, or contract terminations, which are crucial indicators of reliability. Understanding their experience with firm fixed-price contracts and the specific requirements of aviation-related construction is key to assessing their suitability for this award.

How does the awarded amount of $33.1 million compare to similar FAA construction contracts for commercial buildings?

To assess the value for money, the $33.1 million award needs to be benchmarked against comparable Federal Aviation Administration (FAA) contracts for commercial and institutional building construction. This comparison should consider factors such as the size and complexity of the project, the geographic location (as construction costs vary regionally), the duration of the contract, and the specific scope of work. If similar projects of comparable scale and complexity were awarded at significantly lower prices, it might indicate that this contract's pricing is not optimal. Conversely, if the price is in line with or lower than benchmarks, it suggests fair market value was achieved.

What are the primary risks associated with this firm fixed-price construction contract?

The primary risks associated with this firm fixed-price construction contract, despite its cost certainty for the government, lie in potential contractor performance and unforeseen cost escalations that could impact the contractor. If Devcon Construction Inc. underestimated the project's complexity or encountered unexpected site conditions, they might face financial strain, potentially leading to delays or quality compromises to protect their profit margin. The government's risk is primarily related to the contractor's ability to deliver the project as specified within the agreed-upon price. Thorough pre-award risk assessments and robust contract administration are essential to mitigate these potential issues.

How effective is the Simplified Acquisition Procedures (SAP) competition in ensuring competitive pricing for contracts of this magnitude?

Simplified Acquisition Procedures (SAP) are designed for efficiency in procuring goods and services below a certain dollar threshold, aiming to reduce administrative burden. While SAP contracts are typically competed, the process may not always achieve the same level of robust competition as full and open procedures for larger contracts. With only three bidders indicated for this $33.1 million contract, the effectiveness of SAP in driving down prices might be limited. The government relies on the solicitation process within SAP to encourage sufficient competition, but the actual outcome depends on market dynamics and the number of capable contractors actively participating.

What is the historical spending pattern for commercial and institutional building construction by the FAA?

Analyzing the FAA's historical spending on commercial and institutional building construction (NAICS 236220) provides context for this $33.1 million award. Understanding the typical contract values, the frequency of such awards, and the primary contractors involved can reveal trends and potential areas of concern or efficiency. For instance, if this award represents a significant increase in spending for this category, it warrants further investigation into the underlying needs. Conversely, if it aligns with historical patterns, it suggests a consistent level of investment in facility infrastructure.

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: COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 690 GIBRALTAR DR, MILPITAS, CA, 17

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

Financial Breakdown

Contract Ceiling: $33,401,620

Exercised Options: $33,171,511

Current Obligation: $33,171,511

Timeline