DoD's $49M WPP Modernization contract awarded to Grunley Construction shows fair value with 3 bidders

Contract Overview

Contract Amount: $49,009,531 ($49.0M)

Contractor: Grunley Construction CO., Inc.

Awarding Agency: Department of Defense

Start Date: 2013-04-08

End Date: 2018-07-02

Contract Duration: 1,911 days

Daily Burn Rate: $25.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: RRMC WPP MODERNIZATION

Place of Performance

Location: FAIRFIELD, ADAMS County, PENNSYLVANIA, 17320

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $49.0 million to GRUNLEY CONSTRUCTION CO., INC. for work described as: RRMC WPP MODERNIZATION Key points: 1. The contract achieved a competitive outcome with three bids, suggesting reasonable price discovery. 2. The firm-fixed-price structure aligns incentives for cost control by the contractor. 3. Performance was managed by Washington Headquarters Services, indicating a focus on critical infrastructure. 4. The contract duration of 1911 days suggests a significant, multi-year project. 5. The North American Industry Classification System (NAICS) code 237130 points to specialized construction services.

Value Assessment

Rating: good

The contract's value appears reasonable given the scope of power and communication line construction. While specific benchmarking data for this exact project type is limited, the presence of three bidders in a full and open competition suggests that the pricing was likely competitive. The firm-fixed-price award type generally indicates that the government secured a defined price for the work, which is a positive indicator for value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with three bids received. This level of competition is generally considered healthy and suggests that multiple qualified contractors had the opportunity to bid. The presence of three bidders indicates that the market was sufficiently robust to support multiple offers, which typically leads to more competitive pricing and better value for the government.

Taxpayer Impact: A competitive bidding process with multiple offers ensures that taxpayer dollars are used efficiently by driving down costs through market forces.

Public Impact

The primary beneficiaries are the Department of Defense facilities that will receive modernized power and communication infrastructure. The services delivered include the construction of power and communication lines and related structures. The contract's geographic impact is likely concentrated around the facilities managed by Washington Headquarters Services, potentially in the Washington D.C. metropolitan area. The project would have implications for the construction workforce, requiring skilled labor in line construction and related trades.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions arise, though mitigated by firm-fixed-price.
Risk of schedule delays due to the complexity of infrastructure projects and potential permitting issues.

Positive Signals

Firm-fixed-price contract type incentivizes contractor efficiency and cost control.
Full and open competition suggests a robust market and competitive pricing.
Awarded to a contractor with experience in construction, indicated by the NAICS code.

Sector Analysis

This contract falls within the construction sector, specifically focusing on utility infrastructure. The NAICS code 237130 covers Power and Communication Line and Related Structures Construction. This is a specialized area within the broader construction market, often involving significant planning, engineering, and adherence to strict safety and regulatory standards. Comparable spending benchmarks would typically be found within government infrastructure modernization programs or large-scale utility projects.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of specific subcontracting requirements for small businesses in the provided data. This suggests that the primary award went to a large business, and the impact on the small business ecosystem would depend on whether the prime contractor engages small businesses for subcontracting opportunities, which is not explicitly detailed here.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program office within the Department of Defense, specifically Washington Headquarters Services. Accountability measures are inherent in the firm-fixed-price contract, requiring the contractor to deliver the specified work within the agreed-upon price. Transparency is generally facilitated through contract award databases, though detailed project-specific oversight mechanisms are not explicitly provided.

Related Government Programs

Department of Defense Infrastructure Modernization Programs
Federal Utility Infrastructure Contracts
Washington Headquarters Services Construction Projects

Risk Flags

Potential for schedule delays
Risk of unforeseen site conditions impacting cost
Need for robust quality assurance during construction

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $49.0 million to GRUNLEY CONSTRUCTION CO., INC.. RRMC WPP MODERNIZATION

Who is the contractor on this award?

The obligated recipient is GRUNLEY CONSTRUCTION CO., INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Washington Headquarters Services).

What is the total obligated amount?

The obligated amount is $49.0 million.

What is the period of performance?

Start: 2013-04-08. End: 2018-07-02.

What is the track record of Grunley Construction Co., Inc. with federal contracts, particularly within the Department of Defense?

Grunley Construction Co., Inc. has a significant history of federal contracting, including numerous awards with the Department of Defense and other federal agencies. Their portfolio often includes large-scale construction and renovation projects, demonstrating experience with complex requirements and government oversight. While this specific contract for WPP Modernization is a notable award, their broader federal contracting history suggests a capacity to handle substantial projects. Further analysis would involve examining their performance ratings on past contracts, any past performance issues or disputes, and the types of services they have provided to the government to assess their overall reliability and expertise in executing similar projects.

How does the awarded price of approximately $49 million compare to similar power and communication line construction projects undertaken by the federal government?

Benchmarking the $49 million award for power and communication line construction requires comparing it to projects of similar scope, complexity, and geographic location. Without specific project details like linear feet of cable laid, number of substations upgraded, or specific technological components, a precise comparison is challenging. However, given the duration (over 5 years) and the nature of modernization, this figure appears within a reasonable range for large-scale federal infrastructure projects. Factors influencing cost include labor rates, material costs, site accessibility, and regulatory compliance. The presence of three bidders in a full and open competition suggests the price was deemed competitive by the market, implying it was not excessively high relative to the expected work.

What are the primary risks associated with a contract of this magnitude and duration for infrastructure modernization?

Contracts for large-scale infrastructure modernization, like the $49 million WPP Modernization project, carry several inherent risks. These include potential cost overruns due to unforeseen site conditions (e.g., underground obstructions, environmental hazards), material price fluctuations, and labor shortages. Schedule delays are also a significant risk, stemming from complex permitting processes, weather impacts, coordination issues with other ongoing facility operations, and contractor performance issues. Technological obsolescence can be a risk if the modernization plan does not adequately account for future needs or standards. Furthermore, security risks related to critical infrastructure upgrades must be managed diligently. The firm-fixed-price nature of this contract helps mitigate cost overrun risks for the government, but schedule and performance risks remain.

How effective is the firm-fixed-price contract type in ensuring value for money on infrastructure projects like this?

The firm-fixed-price (FFP) contract type is generally considered effective in ensuring value for money on infrastructure projects when the scope of work is well-defined and risks are understood. For the $49 million WPP Modernization contract, FFP incentivizes the contractor, Grunley Construction, to manage costs efficiently and complete the work within the agreed-upon budget. The contractor assumes most of the risk for cost overruns, which encourages careful planning and execution. This structure provides cost certainty for the government. However, if the scope is not precisely defined or unforeseen issues arise, contractors may build in higher contingencies, potentially increasing the initial price. Effective oversight is still crucial to ensure the contractor meets quality standards and avoids cutting corners to stay within budget.

What does the competition level (3 bidders) indicate about the market for power and communication line construction services for the federal government?

The fact that this $49 million contract attracted three bids under full and open competition suggests a moderately competitive market for specialized power and communication line construction services relevant to federal agencies. Three bidders indicate that there are multiple capable firms interested in and able to perform this type of work for the government. This level of competition is generally sufficient to promote price discovery and encourage competitive bidding, leading to a reasonable price for the government. A higher number of bidders might suggest even more intense competition and potentially lower prices, while fewer bidders could indicate market concentration or barriers to entry. Overall, three bidders represent a healthy, albeit not hyper-competitive, scenario.

What is the historical spending pattern for NAICS code 237130 (Power and Communication Line Construction) by the Department of Defense?

Historical spending by the Department of Defense (DoD) on NAICS code 237130, Power and Communication Line and Related Structures Construction, reflects a consistent need for maintaining and upgrading critical infrastructure. While specific aggregate figures fluctuate annually based on modernization initiatives and infrastructure condition assessments, the DoD is a significant investor in this area due to its vast network of installations. Spending in this category typically supports projects ranging from upgrading local power grids at bases to installing new communication conduits and fiber optic networks. The $49 million awarded to Grunley Construction for WPP Modernization is a substantial single award within this category, indicative of the scale of projects the DoD undertakes to ensure reliable utility services for its operations.

Industry Classification

NAICS: Construction › Utility System Construction › Power and Communication Line and Related Structures Construction

Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCTION OF BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: TWO STEP

Solicitation ID: HQ003412R0004

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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

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

Financial Breakdown

Contract Ceiling: $49,009,531

Exercised Options: $49,009,531

Current Obligation: $49,009,531

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline