HHS Awards $140M for NIH Building Renovation, Highlighting Construction Sector Spending

Contract Overview

Contract Amount: $139,895,226 ($139.9M)

Contractor: Gilbane Building Company

Awarding Agency: Department of Health and Human Services

Start Date: 2010-07-30

End Date: 2018-04-30

Contract Duration: 2,831 days

Daily Burn Rate: $49.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: ARRA::YES::ARRA TAS::75 0839::TAS -- RECOVERY ACT -- CMC@RISK SERVICES TO RENOVATE OF BUILDING 10 WINGS E AND F.

Place of Performance

Location: BETHESDA, MONTGOMERY County, MARYLAND, 20892

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $139.9 million to GILBANE BUILDING COMPANY for work described as: ARRA::YES::ARRA TAS::75 0839::TAS -- RECOVERY ACT -- CMC@RISK SERVICES TO RENOVATE OF BUILDING 10 WINGS E AND F. Key points: 1. The contract value of $139.9M falls within the typical range for large-scale institutional building renovations. 2. Competition was full and open, suggesting a competitive bidding process and potentially favorable pricing. 3. The project's duration of 2831 days (approx. 7.7 years) is substantial, indicating a complex and lengthy undertaking. 4. The firm fixed-price contract type shifts risk to the contractor, which can be beneficial for the government if managed effectively.

Value Assessment

Rating: good

The contract value of $139.9M for renovating two wings of a major NIH building appears reasonable given the scope and duration. Benchmarking against similar large-scale construction projects would provide a more precise assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. This method generally promotes price discovery and can lead to more competitive pricing.

Taxpayer Impact: The competitive nature of the award suggests that taxpayer funds were likely used efficiently, as the government sought the best value through a broad solicitation.

Public Impact

Renovation of critical NIH facilities ensures continued research and healthcare operations. The project supports jobs in the construction sector within Maryland. Long-term infrastructure improvements at a major federal research institution. Potential for disruption to ongoing NIH activities during the extensive renovation period.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Extended project duration raises concerns about potential cost overruns and delays.
Firm fixed-price contracts can lead to disputes if unforeseen issues arise during construction.

Positive Signals

Full and open competition suggests a robust bidding process.
Renovation of vital research facilities is a positive investment in scientific advancement.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector. Spending in this sector can fluctuate based on federal infrastructure needs and economic conditions. The value is significant for a single project.

Small Business Impact

The data indicates that small businesses were not directly awarded this contract, as the prime contractor is Gilbane Building Company. Opportunities for small businesses may exist as subcontractors.

Oversight & Accountability

The long duration of the contract necessitates ongoing oversight to monitor progress, manage risks, and ensure compliance with contract terms and quality standards.

Related Government Programs

Commercial and Institutional Building Construction
Department of Health and Human Services Contracting
National Institutes of Health Programs

Risk Flags

Extended project duration increases risk of cost escalation and delays.
Potential for unforeseen site conditions in older buildings.
Coordination challenges with ongoing NIH operations.
Contractor performance monitoring over a long contract term.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $139.9 million to GILBANE BUILDING COMPANY. ARRA::YES::ARRA TAS::75 0839::TAS -- RECOVERY ACT -- CMC@RISK SERVICES TO RENOVATE OF BUILDING 10 WINGS E AND F.

Who is the contractor on this award?

The obligated recipient is GILBANE BUILDING COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (National Institutes of Health).

What is the total obligated amount?

The obligated amount is $139.9 million.

What is the period of performance?

Start: 2010-07-30. End: 2018-04-30.

What specific factors contributed to the 7.7-year duration of this renovation project?

The extended duration likely stems from the complexity of renovating occupied building wings, phased construction to minimize disruption to NIH operations, potential scope changes, and the sheer scale of the E and F wings. Detailed project management plans and coordination with NIH stakeholders would be crucial throughout this lengthy period.

How effectively did the firm fixed-price contract mitigate financial risk for the government given the project's length?

A firm fixed-price contract shifts most cost risk to the contractor, which is generally advantageous for the government. However, for a project of this magnitude and duration, the risk of contractor claims for unforeseen conditions or scope adjustments remains. Robust contract administration and change order management are essential to control costs.

What is the anticipated impact of this renovation on the NIH's research capabilities and operational continuity?

The renovation is intended to modernize and improve critical research infrastructure, ultimately enhancing NIH's capabilities. However, the multi-year construction process will likely require careful planning and execution to minimize disruption to ongoing research and ensure continuity of essential services within Buildings 10, Wings E and F.

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: NIHOF2010208

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Gilbane, Inc. (UEI: 022726165)

Address: 7901 SANDY SPRING RD, LAUREL, MD, 20707

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

Financial Breakdown

Contract Ceiling: $139,895,226

Exercised Options: $139,895,226

Current Obligation: $139,895,226

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline