GSA's $73M Moorhead Federal Building Renovation Awarded to Burchick Construction, Exceeding Initial Estimates

Contract Overview

Contract Amount: $72,978,968 ($73.0M)

Contractor: Burchick Construction CO Inc

Awarding Agency: General Services Administration

Start Date: 2004-03-15

End Date: 2011-02-18

Contract Duration: 2,531 days

Daily Burn Rate: $28.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 7

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: RENOVATION OF THE MOORHEAD FEDERAL BUILDING, PITTSBURGH, PA

Place of Performance

Location: PITTSBURGH, ALLEGHENY County, PENNSYLVANIA, 15222

State: Pennsylvania Government Spending

Plain-Language Summary

General Services Administration obligated $73.0 million to BURCHICK CONSTRUCTION CO INC for work described as: RENOVATION OF THE MOORHEAD FEDERAL BUILDING, PITTSBURGH, PA Key points: 1. Contract value significantly surpassed initial projections, indicating potential cost overruns or scope expansion. 2. The award was made under full and open competition, suggesting a robust bidding process. 3. A high number of bids (7) indicates strong market interest but may also suggest a lack of specialized contractors. 4. The contract duration of 2531 days (approx. 7 years) is exceptionally long for a renovation project, raising questions about project management and potential delays. 5. Fixed-price contract type offers cost certainty to the government but shifts risk to the contractor. 6. The project falls under Commercial and Institutional Building Construction, a sector with established benchmarks for renovation costs.

Value Assessment

Rating: fair

The contract value of $72.98 million for the renovation of the Moorhead Federal Building appears high, especially considering the duration. Without specific details on the scope of work, it's difficult to benchmark precisely. However, the length of the contract (over 7 years) suggests a complex or phased renovation, which could justify a higher overall cost. Comparing this to similar large-scale federal building renovations would be necessary for a more accurate value assessment. The firm fixed-price nature provides budget predictability.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, with seven bids received. This indicates that the General Services Administration (GSA) sought broad market participation. The relatively high number of bidders suggests that the project was attractive to a range of construction firms. However, the specific details of the bidding process, such as the range of bid prices and the evaluation criteria, are not provided, making it difficult to definitively assess the effectiveness of the competition in driving down costs.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to lower prices and better value. The presence of multiple bidders suggests that taxpayer funds were likely used efficiently in this instance.

Public Impact

The primary beneficiaries are federal agencies that will occupy the renovated Moorhead Federal Building, ensuring a modern and functional workspace. The project delivers essential infrastructure improvements and modernization for a key federal facility. The geographic impact is concentrated in Pittsburgh, Pennsylvania, supporting local economic activity through construction jobs and related services. The renovation will likely create numerous jobs in the construction sector, benefiting skilled trades and laborers in the Pittsburgh area.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The exceptionally long contract duration of over 7 years raises concerns about project management efficiency and potential for schedule slippage.
The significant contract value, without detailed scope, warrants scrutiny to ensure it aligns with the actual work performed and market rates.
Lack of specific details on the renovation scope makes it challenging to assess if the value received is commensurate with the investment.
The firm fixed-price contract, while offering budget certainty, could lead to disputes if unforeseen issues arise during the extended project timeline.

Positive Signals

Awarded under full and open competition, indicating a transparent and broad bidding process.
The receipt of seven bids suggests significant interest and a competitive marketplace for this type of construction.
The firm fixed-price contract structure provides cost certainty for the government.
The project addresses critical infrastructure needs for a federal building, ensuring its long-term utility and functionality.

Sector Analysis

The renovation of the Moorhead Federal Building falls within the Commercial and Institutional Building Construction sector. This sector is characterized by a wide range of projects, from small renovations to large-scale new constructions. Federal building renovations are a significant segment, often involving complex requirements related to security, accessibility, and energy efficiency. Benchmarking this contract's value against similar federal building renovations, considering factors like square footage, age of the building, and scope of work (e.g., HVAC, electrical, structural), would provide a clearer picture of its cost-effectiveness. The market for federal construction is competitive, with numerous firms capable of undertaking such projects.

Small Business Impact

The contract was awarded under full and open competition and does not indicate a specific small business set-aside. While the prime contractor, Burchick Construction Co Inc, is not explicitly identified as a small business in the provided data, the contract's size suggests it is likely a large business. There is no information on subcontracting plans or goals for small businesses. Therefore, the direct impact on the small business ecosystem is unclear without further details on subcontracting opportunities.

Oversight & Accountability

The General Services Administration (GSA) typically has robust oversight mechanisms for its construction projects, including the Public Buildings Service (PBS). Oversight would likely involve project managers, contracting officers, and potentially construction quality assurance specialists. Accountability measures would be tied to the firm fixed-price contract terms, performance milestones, and payment schedules. Transparency is generally maintained through contract award databases like FPDS. Inspector General oversight may be involved if specific concerns or allegations of fraud, waste, or abuse arise during the project's lifecycle.

Related Government Programs

Federal Building Renovations
Public Buildings Service Projects
General Services Administration Construction Contracts
Commercial and Institutional Building Construction

Risk Flags

Long Contract Duration
High Contract Value
Potential for Cost Overruns
Extended Oversight Requirements

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $73.0 million to BURCHICK CONSTRUCTION CO INC. RENOVATION OF THE MOORHEAD FEDERAL BUILDING, PITTSBURGH, PA

Who is the contractor on this award?

The obligated recipient is BURCHICK CONSTRUCTION CO INC.

Which agency awarded this contract?

Awarding agency: General Services Administration (Public Buildings Service).

What is the total obligated amount?

The obligated amount is $73.0 million.

What is the period of performance?

Start: 2004-03-15. End: 2011-02-18.

What was the specific scope of work for the Moorhead Federal Building renovation, and how does it justify the $73 million cost over a 7-year period?

The provided data does not detail the specific scope of work for the Moorhead Federal Building renovation. The $73 million cost over a 2531-day (approximately 7-year) period suggests a comprehensive and potentially phased renovation. This could include upgrades to HVAC systems, electrical and plumbing infrastructure, structural repairs, interior modernizations, accessibility improvements (ADA compliance), energy efficiency enhancements, and potentially asbestos abatement or hazardous material remediation. The extended duration might also account for complex phasing to maintain building occupancy or address unforeseen historical building challenges. Without a detailed scope document, it is difficult to definitively justify the cost and timeline against industry benchmarks. Further analysis would require access to the contract's SOW, architectural plans, and GSA's project justification.

How did the winning bid from Burchick Construction Co Inc compare to other bids received, and what was the government's estimate for this project?

The data indicates that seven bids were received for the Moorhead Federal Building renovation contract. However, it does not provide the specific bid amounts from each competitor or the government's independent cost estimate. Knowing the range of bids and the estimate would allow for a more thorough analysis of price reasonableness and the competitiveness of the award. A wide variance in bids could suggest differing interpretations of the scope or varying levels of risk assessment by contractors. If Burchick's bid was significantly lower or higher than the average, it would warrant further investigation into the factors influencing their pricing strategy and the government's cost expectations.

What are the potential risks associated with a firm fixed-price contract for a renovation project spanning over seven years?

A firm fixed-price (FFP) contract for a long-duration renovation project like the Moorhead Federal Building presents several risks. While FFP provides cost certainty for the government, it shifts the risk of cost overruns to the contractor. For a project extending over seven years, the potential for unforeseen conditions (e.g., discovering hazardous materials, structural issues in an older building, changes in building codes) is high. If these issues significantly increase the contractor's costs beyond what was anticipated, they may seek change orders, potentially leading to disputes and cost increases despite the FFP structure. Additionally, contractor performance can degrade over long periods if incentives are not structured effectively, and market conditions (labor, material costs) can fluctuate dramatically over seven years, impacting the contractor's profitability and potentially their motivation to complete the work efficiently.

What is the historical spending pattern for renovations of federal buildings managed by the GSA, and how does this contract compare?

The General Services Administration (GSA) manages a vast portfolio of federal buildings and undertakes numerous renovation and construction projects annually. Historical spending patterns vary widely based on the size, age, and complexity of the buildings, as well as the scope of work. GSA's spending on renovations can range from minor upgrades costing thousands to major overhauls costing tens or hundreds of millions of dollars. The $73 million awarded to Burchick Construction for the Moorhead Federal Building renovation appears to be a substantial investment, likely indicative of a major capital improvement project. To compare effectively, one would need to analyze GSA's spending on similar-sized federal building renovations in terms of square footage, building type (e.g., courthouse, office building), and the extent of modernization required. Without more specific data points on comparable projects, it's challenging to definitively state how this contract aligns with historical spending trends.

What are the implications of the 2531-day contract duration for project oversight and potential contractor performance?

A contract duration of 2531 days (approximately 7 years) for a renovation project presents significant challenges for project oversight and raises concerns about sustained contractor performance. Oversight requires consistent monitoring, regular progress reviews, and proactive issue resolution. Over such an extended period, maintaining consistent government oversight personnel and institutional knowledge can be difficult due to staff turnover. For the contractor, maintaining focus, motivation, and consistent quality over seven years can be demanding. Performance can degrade if not actively managed. The risk of scope creep, delays, and cost issues increases with duration. Effective contract management would necessitate robust milestone tracking, regular performance evaluations, and clear communication channels to ensure the project stays on track and meets its objectives despite the lengthy timeline.

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Commercial and Institutional Building Construction

Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation ID: GS03P03CDC0004

Offers Received: 7

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Address: 500 LOWRIES RUN ROAD, PITTSBURGH, PA, 90

Business Categories: Category Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $72,978,968

Exercised Options: $72,978,968

Current Obligation: $72,978,968

Contract Characteristics

Cost or Pricing Data: NOT OBTAINED - WAIVED

Timeline