GSA's $80M Federal Building Renovation in LA Awarded to Stronghold Engineering Amidst Limited Competition

Contract Overview

Contract Amount: $80,179,759 ($80.2M)

Contractor: Stronghold Engineering Inc

Awarding Agency: General Services Administration

Start Date: 2006-09-29

End Date: 2014-12-12

Contract Duration: 2,996 days

Daily Burn Rate: $26.8K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: COMPREHENSIVE SEISMIC AND LIFE/SAFETY RENOVATIONS FOR FLOORS 1 - 8 AT THE FEDERAL BUILDING, 300 NORTH LOS ANGELES STREET, LOS ANGELES, CA

Place of Performance

Location: LOS ANGELES, LOS ANGELES County, CALIFORNIA, 90012

State: California Government Spending

Plain-Language Summary

General Services Administration obligated $80.2 million to STRONGHOLD ENGINEERING INC for work described as: COMPREHENSIVE SEISMIC AND LIFE/SAFETY RENOVATIONS FOR FLOORS 1 - 8 AT THE FEDERAL BUILDING, 300 NORTH LOS ANGELES STREET, LOS ANGELES, CA Key points: 1. The contract's value of $80.2 million for seismic and life/safety renovations suggests a significant investment in critical infrastructure. 2. Limited competition for this large-scale construction project raises questions about potential price efficiencies and the breadth of market engagement. 3. The extended performance period of nearly 8 years (2006-2014) indicates a complex and lengthy renovation process. 4. The project's focus on seismic and life safety upgrades positions it as a high-priority infrastructure resilience initiative. 5. The absence of small business set-aside flags suggests the primary contractor is likely a larger entity, with potential subcontracting opportunities. 6. The firm-fixed-price contract type aims to transfer cost risk to the contractor, but requires careful scope management for such an extensive project.

Value Assessment

Rating: fair

Benchmarking this $80.2 million contract is challenging without specific details on the scope of work and comparable projects. However, large-scale federal building renovations of this magnitude typically involve extensive planning and execution. The firm-fixed-price nature suggests an attempt to control costs, but the long duration could lead to cost overruns if not meticulously managed. Without data on the number of bids received or the contractor's historical performance on similar projects, a definitive value-for-money assessment is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'NOT AVAILABLE FOR COMPETITION,' indicating a limited or sole-source procurement. This suggests that either only one responsible source was capable of fulfilling the requirement, or the circumstances of the procurement did not allow for full and open competition. The lack of multiple bidders means that the government did not benefit from a competitive bidding process to drive down prices or explore a wider range of solutions.

Taxpayer Impact: Limited competition can result in higher costs for taxpayers as the government may not secure the most competitive pricing available in the market. It also reduces transparency and the opportunity to foster a broader base of contractors.

Public Impact

Federal employees and the public utilizing the Federal Building at 300 North Los Angeles Street will benefit from enhanced safety and structural integrity. The project delivers critical life/safety and seismic retrofitting services, ensuring compliance with modern building codes and disaster preparedness standards. The geographic impact is localized to Los Angeles, California, addressing specific regional seismic risks. The renovation likely involved a significant construction workforce, contributing to employment in the local and regional economy during the project's duration.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may have led to a higher price than if the contract had been fully competed.
The extended performance period of nearly 8 years increases the risk of scope creep and cost escalation if not tightly managed.
Lack of transparency in the procurement process due to limited competition makes it harder to assess the fairness of the award.
The specific nature of seismic and life/safety renovations requires specialized expertise, and the limited competition might reflect a scarcity of qualified contractors.

Positive Signals

The contract addresses critical life/safety and seismic upgrades, indicating a commitment to maintaining essential federal infrastructure.
The firm-fixed-price contract type provides cost certainty for the government, assuming the scope is well-defined and managed.
The project's completion signifies an investment in the long-term usability and safety of a key federal facility.
Stronghold Engineering's award suggests they possess the necessary qualifications and capacity for complex construction projects.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a vital part of the broader construction industry. Federal spending in this area often focuses on maintaining and upgrading government facilities, which can be substantial due to the vast inventory of federal buildings. Comparable spending benchmarks would typically involve analyzing other large-scale renovation projects for public buildings, considering factors like square footage, age of the building, and the complexity of the required upgrades (e.g., seismic retrofitting). The market for such specialized construction services can be competitive, but specific expertise like seismic retrofitting may limit the pool of qualified bidders.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the primary award went to a larger entity, likely Stronghold Engineering Inc. While there's no explicit mention of subcontracting plans, large federal construction projects often involve significant subcontracting opportunities for specialized trades and services. The absence of a small business set-aside means that opportunities for small businesses to directly compete for the prime contract were limited in this procurement. However, they may have had opportunities to bid as subcontractors to the prime contractor.

Oversight & Accountability

Oversight for this contract would primarily fall under the General Services Administration (GSA), specifically its Public Buildings Service. GSA has established processes for contract oversight, including regular progress reviews, site inspections, and financial audits, especially for long-term, high-value projects. Accountability measures would be tied to the firm-fixed-price contract terms, performance milestones, and quality control requirements. Transparency is generally facilitated through contract award databases and reporting requirements, although the limited competition aspect might reduce the visibility into the pre-award decision-making process. The GSA Office of Inspector General (OIG) would have jurisdiction to investigate any allegations of fraud, waste, or abuse related to t

Related Government Programs

Federal Building Renovations
Seismic Retrofitting Programs
Public Infrastructure Projects
GSA Capital Investments
Life Safety Code Compliance
Commercial Construction Contracts

Risk Flags

Limited Competition Procurement
Long Contract Duration
Potential for Cost Overruns
Lack of Transparency in Award

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $80.2 million to STRONGHOLD ENGINEERING INC. COMPREHENSIVE SEISMIC AND LIFE/SAFETY RENOVATIONS FOR FLOORS 1 - 8 AT THE FEDERAL BUILDING, 300 NORTH LOS ANGELES STREET, LOS ANGELES, CA

Who is the contractor on this award?

The obligated recipient is STRONGHOLD ENGINEERING INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $80.2 million.

What is the period of performance?

Start: 2006-09-29. End: 2014-12-12.

What is Stronghold Engineering Inc.'s track record with the GSA and on similar large-scale renovation projects?

Assessing Stronghold Engineering Inc.'s track record requires a deeper dive into federal procurement databases beyond this single contract. Information such as past performance evaluations, other contracts awarded by GSA or other agencies, and any history of disputes or contract modifications would be crucial. For this specific $80.2 million project, understanding their performance metrics, adherence to schedule and budget, and the quality of work delivered would provide insight into their capabilities. Without access to GSA's internal past performance information or a broader contract history, it's difficult to definitively assess their reliability and expertise on projects of this scale and complexity. However, being awarded such a significant contract suggests they met the agency's minimum requirements at the time of award.

How does the $80.2 million cost compare to similar seismic and life/safety renovation projects for federal buildings of comparable size and age?

A precise cost comparison is challenging without detailed project specifications (e.g., square footage, specific systems upgraded, building age, structural conditions) and a robust database of similar federal building renovations. However, $80.2 million for comprehensive seismic and life/safety upgrades on floors 1-8 of a federal building represents a substantial investment. Large-scale renovations, particularly those involving seismic retrofitting, are inherently expensive due to specialized engineering, materials, and labor. To benchmark effectively, one would need to identify projects with similar scope (e.g., historic building preservation, seismic zone location, extent of interior gutting and system replacement) and adjust for inflation and regional cost differences. The extended performance period (nearly 8 years) also suggests a complex scope that contributes to the overall cost.

What were the specific reasons cited for awarding this contract as 'NOT AVAILABLE FOR COMPETITION'?

The designation 'NOT AVAILABLE FOR COMPETITION' typically implies that the procurement was conducted under specific exceptions to full and open competition, such as those outlined in the Federal Acquisition Regulation (FAR). Common reasons include: 1) Only one responsible source exists to meet the agency's needs (e.g., unique capabilities, proprietary technology). 2) An urgent and compelling need exists that cannot be met by other sources. 3) The contract is a follow-on to a previous competition where only one source is capable of providing the necessary services. 4) The contract is for architect-engineer services for a public building or works where the agency head determines it is in the public interest. Without the specific justification documented by GSA at the time of award, it is impossible to determine the exact reason. This lack of transparency is a key concern.

What are the potential risks associated with a nearly 8-year performance period for a construction project of this magnitude?

A performance period spanning nearly eight years (2996 days, approximately 7.7 years) for a construction project introduces several significant risks. Firstly, **scope creep** is a major concern; the longer the project, the higher the likelihood that requirements will change or expand, potentially leading to cost overruns and delays, even under a firm-fixed-price contract if not managed rigorously. Secondly, **material and labor cost escalation** can become a factor, although a fixed-price contract aims to mitigate this for the government, unforeseen market volatility can strain the contractor. Thirdly, **technological obsolescence** might occur, particularly if the project involves integrated systems that could be outdated by the time of completion. Fourthly, **contractor performance degradation** or changes in key personnel over such a long period can impact quality and efficiency. Finally, **funding stability** for the government over multiple fiscal years can be a risk, though less so for congressionally appropriated capital projects.

How has GSA's spending on building renovations and seismic upgrades trended over the period this contract was active (2006-2014)?

Analyzing GSA's spending trends on building renovations and seismic upgrades between 2006 and 2014 requires access to historical GSA budget and expenditure data. This period encompassed significant economic fluctuations, including the 2008 financial crisis, which could have impacted federal construction budgets. Generally, federal agencies like GSA face continuous pressure to maintain aging infrastructure, with seismic retrofitting being a priority in earthquake-prone regions like California. Spending in this area is often driven by infrastructure assessments, safety mandates, and available appropriations. It's plausible that spending fluctuated based on economic conditions and congressional priorities, potentially seeing increases in infrastructure investment initiatives during certain years, followed by potential constraints during tighter budget cycles.

What are the implications of the Public Buildings Service (PBS) awarding this contract, as opposed to another GSA division?

The Public Buildings Service (PBS) is GSA's primary entity responsible for the management, development, and operation of the federal government's portfolio of civilian agency buildings. Awarding this contract through PBS signifies that it pertains directly to the maintenance, repair, alteration, or construction of a GSA-owned or leased facility, specifically the Federal Building in Los Angeles. PBS manages the largest inventory of federal real estate, making it the logical division for such a project. Other GSA divisions might handle different aspects of federal operations (e.g., Federal Acquisition Service for procurement policies, Office of Government-wide Policy). Therefore, the PBS involvement underscores the contract's focus on physical infrastructure and facility management within GSA's core mission.

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: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: GS-09P-06-KT-C-3049

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3421 GATO COURT, RIVERSIDE, CA, 39

Business Categories: Asian Pacific American Owned Business, Category Business, Minority Owned Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business, Woman Owned Business

Financial Breakdown

Contract Ceiling: $80,179,759

Exercised Options: $80,179,759

Current Obligation: $80,179,759

Timeline