GSA Awards $25.3M for Courthouse Renovation, Facing Potential Cost Overruns

Contract Overview

Contract Amount: $25,286,945 ($25.3M)

Contractor: Berglund Construction CO

Awarding Agency: General Services Administration

Start Date: 2009-12-15

End Date: 2014-09-30

Contract Duration: 1,750 days

Daily Burn Rate: $14.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: TAS::47 4543::TAS CONTRACTING OFFICE ID: SL000 RECOVERY- CMC PRE-CONSTRUCTION SERVICES FOR THE BUILDING SYSTEMS REPLACEMENT AND FACADE RESTORATION PROJECT AT THE KINNEARY COURTHOUSE, 85 MARCONI BLVD., COLUMBUS, OHIO.

Place of Performance

Location: COLUMBUS, FRANKLIN County, OHIO, 43215, UNITED STATES OF AMERICA

State: Ohio Government Spending

Plain-Language Summary

General Services Administration obligated $25.3 million to BERGLUND CONSTRUCTION CO for work described as: TAS::47 4543::TAS CONTRACTING OFFICE ID: SL000 RECOVERY- CMC PRE-CONSTRUCTION SERVICES FOR THE BUILDING SYSTEMS REPLACEMENT AND FACADE RESTORATION PROJECT AT THE KINNEARY COURTHOUSE, 85 MARCONI BLVD., COLUMBUS, OHIO. Key points: 1. Significant contract value for a large-scale public building project. 2. Competition was full and open, suggesting a competitive bidding process. 3. Potential risk of cost overruns indicated by the difference between awarded and estimated costs. 4. Construction sector spending, with a focus on institutional buildings.

Value Assessment

Rating: questionable

The awarded amount of $25.3M significantly exceeds the initial estimated cost of $14.45M. This substantial difference raises concerns about initial budgeting accuracy and potential for cost escalation during the project lifecycle.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which typically fosters competitive pricing. However, the large discrepancy between the estimated and awarded costs suggests that the initial price discovery may have been flawed or market conditions changed significantly.

Taxpayer Impact: The significant increase in project cost from estimate to award represents a substantial taxpayer investment, with potential for further increases if cost overruns occur.

Public Impact

Public access to the Kineary Courthouse may be impacted during the extensive renovation period. The project aims to improve the structural integrity and functionality of a key government facility. Taxpayers are funding a major infrastructure upgrade with potential for cost overruns.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Overrun Risk
Budgetary Accuracy Concerns
Potential Schedule Delays

Positive Signals

Full and Open Competition
Modernization of Public Infrastructure

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector. Benchmarks for similar large-scale public building renovations vary widely, but a nearly 75% increase from estimated to awarded cost is notable.

Small Business Impact

The data does not indicate any specific set-asides for small businesses. The prime contractor, Berglund Construction Co., is not identified as a small business in this context, suggesting limited direct participation for small businesses in this prime contract.

Oversight & Accountability

The General Services Administration (GSA) is responsible for overseeing this project. Robust oversight will be crucial to manage costs and ensure the project stays on track and within budget, especially given the initial cost discrepancies.

Related Government Programs

Commercial and Institutional Building Construction
General Services Administration Contracting
Public Buildings Service Programs

Risk Flags

Significant cost increase from estimate to award
Potential for budget overruns
Lack of small business participation noted
Long project duration (1750 days)

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $25.3 million to BERGLUND CONSTRUCTION CO. TAS::47 4543::TAS CONTRACTING OFFICE ID: SL000 RECOVERY- CMC PRE-CONSTRUCTION SERVICES FOR THE BUILDING SYSTEMS REPLACEMENT AND FACADE RESTORATION PROJECT AT THE KINNEARY COURTHOUSE, 85 MARCONI BLVD., COLUMBUS, OHIO.

Who is the contractor on this award?

The obligated recipient is BERGLUND CONSTRUCTION CO.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $25.3 million.

What is the period of performance?

Start: 2009-12-15. End: 2014-09-30.

What factors contributed to the significant increase between the estimated and awarded contract price?

The substantial difference between the estimated cost ($14.45M) and the awarded contract price ($25.3M) could be attributed to several factors. These may include underestimation of project complexity, unforeseen site conditions, changes in material costs, or a more aggressive bidding strategy by the winning contractor. Further investigation into the bidding process and project scope is needed to pinpoint the exact reasons.

What is the risk of further cost overruns beyond the awarded amount?

The risk of further cost overruns is elevated due to the significant initial jump from estimate to award. This suggests potential issues with initial budgeting or scope definition. The firm fixed-price contract type offers some protection, but change orders for unforeseen circumstances could still lead to increased costs. Close monitoring by the GSA is essential.

How effectively will the renovation improve the building's long-term value and operational efficiency?

The effectiveness of the renovation in improving long-term value and efficiency hinges on the quality of execution and the specific upgrades included. Replacing building systems and restoring the facade are critical for longevity and reduced maintenance. If the project addresses deferred maintenance and incorporates modern, energy-efficient systems, it should yield significant operational benefits and extend the building's useful life.

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 Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 8410 S SOUTH CHICAGO AVE, CHICAGO, IL, 60617

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

Financial Breakdown

Contract Ceiling: $25,286,945

Exercised Options: $25,286,945

Current Obligation: $25,286,945

Parent Contract

Parent Award PIID: GS05P09GBD0034

IDV Type: IDC

Timeline