GSA's $341M Herbert C. Hoover Building modernization contract awarded to Gilbane-Grunley JV, spanning over 14 years

Contract Overview

Contract Amount: $341,463,680 ($341.5M)

Contractor: Gilbane-Grunley JV

Awarding Agency: General Services Administration

Start Date: 2007-11-26

End Date: 2022-08-31

Contract Duration: 5,392 days

Daily Burn Rate: $63.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: CONSTRUCTION MANAGER AS CONSTRUCTOR (CMC) SERVICES FOR THE MODERNIZATION OF THE HERBERT C HOOVER BUILDING, WASHINGTON, DC

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20407

State: District of Columbia Government Spending

Plain-Language Summary

General Services Administration obligated $341.5 million to GILBANE-GRUNLEY JV for work described as: CONSTRUCTION MANAGER AS CONSTRUCTOR (CMC) SERVICES FOR THE MODERNIZATION OF THE HERBERT C HOOVER BUILDING, WASHINGTON, DC Key points: 1. The contract's extended duration suggests a complex, multi-phase project requiring sustained management. 2. A firm-fixed-price structure indicates that the contractor bears the primary risk for cost overruns. 3. The award to a joint venture may reflect the scale and specialized expertise required for the project. 4. The project's location in Washington, D.C. implies significant public visibility and stakeholder engagement. 5. The absence of small business set-aside flags suggests the primary contract was not specifically targeted for small businesses.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without detailed cost breakdowns and scope of work. The total award amount of over $341 million for construction management services over a 14-year period indicates a substantial investment. However, without comparable projects of similar scale and complexity, assessing whether this represents excellent value for money is difficult. The firm-fixed-price nature of the contract shifts cost risk to the contractor, which can be a positive indicator for the government if managed effectively.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting a robust bidding process. With 3 bids received, the competition level appears moderate. While more bidders could potentially drive prices lower, three offers indicate that multiple qualified firms were interested and capable of undertaking this significant project. This level of competition generally allows for price discovery and selection of a technically sound and cost-effective solution.

Taxpayer Impact: Full and open competition helps ensure that taxpayer dollars are used efficiently by fostering a competitive environment that can lead to better pricing and service quality.

Public Impact

The primary beneficiaries are federal agencies housed within the Herbert C. Hoover Building, who will gain modernized facilities. The project delivers essential construction management services for the modernization of a major federal building. The geographic impact is concentrated in Washington, D.C., specifically impacting the federal district. The project likely supports a significant construction workforce, including skilled trades, project managers, and support staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Extended contract duration of over 14 years could lead to potential scope creep or unforeseen cost increases if not meticulously managed.
The large contract value necessitates robust oversight to ensure adherence to budget and quality standards.
Reliance on a single joint venture for such a long-term, critical project may limit flexibility in adapting to future needs or technologies.

Positive Signals

Firm-fixed-price contract structure places cost risk on the contractor, potentially protecting the government from budget overruns.
Awarded through full and open competition, indicating a competitive process that likely yielded a qualified contractor.
The project aims to modernize a significant federal building, ensuring its long-term utility and safety.

Sector Analysis

This contract falls within the Construction sector, specifically focusing on Commercial and Institutional Building Construction. The General Services Administration (GSA) is a major player in federal construction and real estate management. The modernization of large, historic federal buildings like the Herbert C. Hoover Building is a common undertaking for GSA, often involving significant capital investment and complex project management. Comparable spending benchmarks would typically involve other large-scale federal building renovations or new constructions managed by GSA or other agencies.

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 contract was awarded based on full and open competition without specific small business participation goals. While there might be subcontracting opportunities for small businesses within the larger project, the prime contract itself was not a small business set-aside. The impact on the small business ecosystem would depend on the subcontracting plans of the prime contractor, Gilbane-Grunley JV.

Oversight & Accountability

Oversight for this contract would primarily fall under the General Services Administration (GSA), specifically its Public Buildings Service. As a definitive contract awarded through full and open competition, it is subject to standard federal procurement regulations and oversight mechanisms. Transparency is generally maintained through contract award databases and reporting. The Inspector General of the GSA would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Federal Building Modernization Programs
GSA Capital Investments
Construction Management Services
Public Buildings Service Contracts

Risk Flags

Long contract duration may increase risk of cost escalation or scope creep.
Complexity of modernizing a large, potentially historic federal building.
Potential for unforeseen site conditions or regulatory changes over 14 years.

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $341.5 million to GILBANE-GRUNLEY JV. CONSTRUCTION MANAGER AS CONSTRUCTOR (CMC) SERVICES FOR THE MODERNIZATION OF THE HERBERT C HOOVER BUILDING, WASHINGTON, DC

Who is the contractor on this award?

The obligated recipient is GILBANE-GRUNLEY JV.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $341.5 million.

What is the period of performance?

Start: 2007-11-26. End: 2022-08-31.

What was the specific scope of work for the modernization of the Herbert C. Hoover Building?

The provided data does not detail the specific scope of work for the modernization of the Herbert C. Hoover Building. It identifies the contract as 'CONSTRUCTION MANAGER AS CONSTRUCTOR (CMC) SERVICES FOR THE MODERNIZATION OF THE HERBERT C HOOVER BUILDING, WASHINGTON, DC'. This suggests the contractor, Gilbane-Grunley JV, was responsible for managing and executing the construction aspects of the modernization. A comprehensive scope would typically include architectural and engineering design coordination, procurement of materials and subcontractors, on-site construction supervision, quality control, safety management, and project closeout. The modernization likely encompassed structural, mechanical, electrical, plumbing, and interior upgrades to bring the building up to current standards and potentially improve energy efficiency and accessibility.

How does the $341 million cost compare to similar federal building modernization projects managed by GSA?

Comparing the $341 million cost of the Herbert C. Hoover Building modernization to similar federal projects requires access to a broader dataset of GSA capital projects. However, for a major, multi-year modernization of a significant federal facility in a high-cost urban area like Washington, D.C., this figure is substantial but not necessarily outside the expected range. GSA manages a vast portfolio of buildings, and modernization costs can vary significantly based on building size, age, historical significance, complexity of required upgrades (e.g., seismic retrofitting, HVAC overhauls), and prevailing labor and material costs. Without specific comparable project data, it's difficult to definitively benchmark this cost, but its scale suggests a comprehensive and lengthy renovation.

What are the key risks associated with a 14-year contract duration for construction management?

A 14-year contract duration for construction management presents several key risks. Firstly, there's the risk of 'contractor drift' or complacency, where the contractor may become less incentivized to innovate or maintain peak performance over such an extended period. Secondly, the long duration increases the likelihood of unforeseen site conditions, material price volatility, and changes in building codes or regulations that could necessitate contract modifications and potentially increase costs, despite the firm-fixed-price structure. Thirdly, managing a single contractor for such a prolonged phase can limit the government's ability to incorporate new technologies or best practices that emerge during the project lifecycle. Finally, maintaining consistent oversight and stakeholder engagement over such a long timeframe requires sustained institutional commitment and resources.

What is the significance of the 'Construction Manager as Constructor (CMC)' contract type?

The 'Construction Manager as Constructor (CMC)' (NAICS 236220) contract type signifies a specific delivery method where the construction manager takes on the role of the constructor. This means the CMC is not just managing the project but is also directly responsible for performing a significant portion of the construction work themselves and/or acting as the prime contractor responsible for all construction activities, including hiring and managing subcontractors. This approach often involves early contractor involvement in the design phase, allowing for constructability reviews and value engineering. For the government, it can streamline project delivery and potentially improve cost control by having a single entity responsible for both management and execution, especially for complex projects like building modernizations.

How has GSA's spending on construction management services evolved over the period this contract was active (2007-2022)?

The provided data focuses on a single contract and does not offer insights into GSA's overall spending evolution on construction management services between 2007 and 2022. To analyze this trend, one would need access to GSA's historical contract spending data across all its projects and contract types. Factors influencing GSA's spending would include federal budget appropriations, infrastructure investment priorities, the condition of the federal building portfolio, and economic conditions. The period from 2007 to 2022 encompassed economic fluctuations, including the 2008 recession and subsequent recovery, as well as periods of increased focus on federal facility upgrades, which would likely have influenced GSA's contracting activities.

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

Solicitation ID: GS-11P-06-MK-C-0030

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Covant Management, Inc.

Address: 15020 SHADY GROVE RD STE 500, ROCKVILLE, MD, 20850

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $345,080,558

Exercised Options: $345,080,558

Current Obligation: $341,463,680

Actual Outlays: $862,554

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Timeline