Department of Defense awards $32.5M construction contract to Grunley Construction for Washington D.C. facilities

Contract Overview

Contract Amount: $32,544,464 ($32.5M)

Contractor: Grunley Construction CO., Inc.

Awarding Agency: Department of Defense

Start Date: 2016-12-23

End Date: 2020-11-20

Contract Duration: 1,428 days

Daily Burn Rate: $22.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF AFIR MILCON

Place of Performance

Location: FAIRFIELD, ADAMS County, PENNSYLVANIA, 17320

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $32.5 million to GRUNLEY CONSTRUCTION CO., INC. for work described as: IGF::OT::IGF AFIR MILCON Key points: 1. Contract value represents a significant investment in facility maintenance and upgrades. 2. Full and open competition suggests a potentially competitive bidding process. 3. Contract duration of 1428 days indicates a long-term project with substantial scope. 4. Fixed-price contract type may offer cost certainty but limits flexibility for scope changes. 5. The project falls under commercial and institutional building construction, a broad category. 6. Awarded by Washington Headquarters Services, indicating a focus on administrative and support facilities.

Value Assessment

Rating: fair

The contract value of $32.5 million for commercial and institutional building construction appears within a reasonable range for a multi-year project of this nature. However, without specific details on the scope of work (e.g., square footage, type of renovations, new construction), a precise value-for-money assessment is challenging. Benchmarking against similar large-scale federal construction projects in the Washington D.C. area would provide a clearer picture of whether the pricing is competitive. The firm fixed-price structure suggests an attempt to control costs, but potential change orders could impact the final expenditure.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. With three bidders participating, the competition level appears moderate. This suggests that while multiple companies were interested, the market may not be exceptionally crowded for this specific type of large-scale construction project. The presence of multiple bidders generally supports price discovery and can lead to more competitive pricing for the government.

Taxpayer Impact: A competitive bidding process helps ensure that taxpayer dollars are used efficiently by driving down costs through market forces. Moderate competition suggests a reasonable balance between attracting qualified bidders and avoiding excessive administrative burden.

Public Impact

The primary beneficiaries are likely federal agencies and personnel located in Washington D.C. who will utilize the improved or newly constructed facilities. The contract delivers essential construction and renovation services, contributing to the upkeep and modernization of critical government infrastructure. Geographic impact is concentrated within Washington D.C., supporting the operational needs of federal entities in the capital. The project will likely involve a significant number of construction workers, providing employment opportunities within the skilled trades sector in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if scope creep occurs under the firm fixed-price contract.
Dependence on a single contractor for an extended period could lead to performance issues if not closely monitored.
The broad nature of 'Commercial and Institutional Building Construction' might obscure specific risks related to the actual work performed.

Positive Signals

Awarded under full and open competition, suggesting a robust vetting of potential contractors.
Firm fixed-price contract type provides cost certainty for the government, assuming scope is well-defined.
The contract is managed by Washington Headquarters Services, an entity focused on supporting federal operations, implying a clear need and oversight structure.

Sector Analysis

The construction sector is a vital component of the federal spending landscape, encompassing a wide range of projects from infrastructure development to facility maintenance. This contract falls under Commercial and Institutional Building Construction, a broad category that includes the building of non-residential structures. Federal spending in this area is often driven by the need to maintain aging facilities, expand capacity, or modernize infrastructure to meet evolving operational requirements. Comparable spending benchmarks would typically involve analyzing the cost per square foot or per project for similar government construction projects in major metropolitan areas.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses explicitly mentioned in the provided data. The award to a large construction company suggests that the primary contractor will likely manage the project, potentially utilizing a mix of its own workforce and subcontractors. The impact on the small business ecosystem would depend on whether Grunley Construction actively seeks out and engages small businesses for specialized services or material supply, which is not detailed here.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the contract administration team within the Washington Headquarters Services. Accountability measures are inherent in the firm fixed-price contract type, which penalizes the contractor for cost overruns. Transparency is generally facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arise during the contract's performance.

Related Government Programs

Military Construction
Federal Building and Facilities Maintenance
General Services Administration (GSA) Construction Contracts
Department of Defense Facilities Management

Risk Flags

Long contract duration increases risk of cost escalation or scope creep.
Firm fixed-price contract may not accommodate unforeseen site conditions or design changes without significant modification costs.
Lack of specific small business subcontracting goals may limit direct benefit to small businesses.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $32.5 million to GRUNLEY CONSTRUCTION CO., INC.. IGF::OT::IGF AFIR MILCON

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 $32.5 million.

What is the period of performance?

Start: 2016-12-23. End: 2020-11-20.

What is the specific scope of work for this $32.5 million construction contract?

The provided data indicates the contract falls under the North American Industry Classification System (NAICS) code 236220, which is 'Commercial and Institutional Building Construction.' However, the specific scope of work is not detailed. This could encompass a wide range of activities, such as new building construction, major renovations, repairs, or upgrades to existing federal facilities managed by the Washington Headquarters Services. Without further documentation, it is impossible to ascertain the precise nature of the construction, such as whether it involves office spaces, laboratories, administrative buildings, or other types of institutional structures. The duration of 1428 days (approximately 4 years) suggests a substantial project, likely involving significant structural work or extensive modernization efforts rather than minor repairs.

How does the awarded amount of $32.5 million compare to similar federal construction projects in the Washington D.C. area?

Benchmarking the $32.5 million award requires comparing it to similar federal construction projects within the Washington D.C. metropolitan area, considering factors like project type, size (square footage), and complexity. Large-scale federal construction and renovation projects in this region often range from tens to hundreds of millions of dollars. For instance, major renovations of federal buildings or the construction of new agency headquarters can easily exceed this amount. However, for specific types of institutional building construction or significant upgrades, $32.5 million could represent a substantial but not necessarily outlier figure. A detailed comparison would necessitate access to project-specific data for comparable contracts awarded by agencies like GSA or other DoD entities in the same geographic area.

What are the potential risks associated with a firm fixed-price contract for a project of this duration?

A firm fixed-price (FFP) contract aims to provide cost certainty for the government by establishing a set price for the work. However, for a project spanning 1428 days (nearly four years), significant risks can emerge. The primary risk is that the contractor may underestimate costs, leading to reduced profit margins or potential quality compromises to maintain profitability. Conversely, if the scope of work is not meticulously defined and changes are required, the government may face substantial change order costs, negating the intended cost certainty of the FFP structure. Furthermore, unforeseen market fluctuations in material costs or labor availability over such a long period can impact the contractor's ability to deliver within the fixed price without compromising quality or schedule. Robust contract management and clear scope definition are crucial to mitigate these risks.

What does the participation of three bidders imply about the competition for this contract?

The fact that three bidders participated in this full and open competition suggests a moderate level of market interest and capacity for this specific construction project. While more bidders generally indicate greater competition and potentially better pricing for the government, three bidders still represent a competitive environment. It implies that the project was sufficiently attractive or feasible for multiple firms to invest resources in preparing a bid. This number is often considered a healthy minimum for ensuring that the government receives competitive proposals. It suggests that the market is not so specialized or limited that only one or two firms could realistically bid, nor so saturated that intense price wars might lead to concerns about contractor viability or quality.

How might this contract impact the small business ecosystem in the Washington D.C. area?

As this contract was not a small business set-aside and no specific subcontracting goals are indicated, its direct impact on the small business ecosystem is uncertain and depends heavily on the prime contractor's practices. Grunley Construction Co., Inc., as a large entity, may choose to subcontract portions of the work to small businesses, providing them with opportunities for revenue and experience. This could include specialized trades, material supply, or support services. However, without explicit requirements or a stated commitment from the prime contractor, small businesses might not see significant direct benefits. The indirect impact could be positive if the overall economic activity generated by the project leads to increased demand for services that small businesses provide within the broader construction supply chain.

What is the historical spending pattern for commercial and institutional building construction by the Washington Headquarters Services?

Analyzing historical spending patterns for commercial and institutional building construction by the Washington Headquarters Services (WHS) would require accessing detailed contract databases over several fiscal years. WHS is responsible for providing a wide range of support services to the Department of Defense, including facilities management and infrastructure. Therefore, it is reasonable to expect consistent spending in this category to maintain and upgrade the facilities under its purview. The $32.5 million award represents a significant single contract, but WHS likely awards numerous smaller contracts for maintenance, repairs, and smaller construction projects annually. Understanding the historical trend would involve looking at the aggregate spending on NAICS 236220 and related codes by WHS, the frequency of large-scale awards, and the average contract values to contextualize this specific $32.5 million award within their overall budget and project execution strategy.

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: HQ003416R0211

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, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $32,544,773

Exercised Options: $32,544,464

Current Obligation: $32,544,464

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline