Coast Guard construction contract awarded to M. A. Mortenson Company for over $27 million
Contract Overview
Contract Amount: $27,453,265 ($27.5M)
Contractor: M. a. Mortenson Company
Awarding Agency: Department of Homeland Security
Start Date: 2014-09-05
End Date: 2017-01-21
Contract Duration: 869 days
Daily Burn Rate: $31.6K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: FIRM FIXED PRICE
Sector: Construction
Official Description: IGF::OT::IGF RECAPITALIZE U. S. COAST GUARD STATION ATLANTIC CITY AT ATLANTIC CITY, NEW JERSEY&RECAPITALIZE U. S. COAST GUARD STATION MANASQUAN INLET AT POINT PLEASANT BEACH, NEW JERSEY
Place of Performance
Location: ATLANTIC CITY, ATLANTIC County, NEW JERSEY, 08401
Plain-Language Summary
Department of Homeland Security obligated $27.5 million to M. A. MORTENSON COMPANY for work described as: IGF::OT::IGF RECAPITALIZE U. S. COAST GUARD STATION ATLANTIC CITY AT ATLANTIC CITY, NEW JERSEY&RECAPITALIZE U. S. COAST GUARD STATION MANASQUAN INLET AT POINT PLEASANT BEACH, NEW JERSEY Key points: 1. The contract was awarded using full and open competition, suggesting a competitive bidding process. 2. The firm fixed-price contract type indicates that the contractor bears the risk of cost overruns. 3. The project involves construction for U.S. Coast Guard stations in New Jersey. 4. The duration of the contract was 869 days, spanning over two years. 5. The contract was awarded as a delivery order, implying it's part of a larger indefinite-delivery contract.
Value Assessment
Rating: fair
The total award amount of $27.45 million for the recapitalization of two Coast Guard stations appears to be within a reasonable range for significant construction projects of this nature. However, without specific details on the scope of work, square footage, or the extent of renovations required for each station, a precise value-for-money assessment is challenging. Benchmarking against similar large-scale federal building construction projects would provide a clearer picture of whether the pricing reflects competitive market rates for the services rendered.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit a bid. The data indicates there were 3 bidders for this contract. A competitive process with multiple bidders generally leads to better price discovery and can result in more favorable pricing for the government.
Taxpayer Impact: The use of full and open competition is beneficial for taxpayers as it encourages a wider range of contractors to participate, potentially driving down costs through competitive bidding and ensuring the government receives the best value.
Public Impact
The U.S. Coast Guard will benefit from modernized facilities at its Atlantic City and Manasquan Inlet stations. The project delivers essential infrastructure improvements to support Coast Guard operations in New Jersey. The geographic impact is localized to Atlantic City and Point Pleasant Beach, New Jersey. The construction activities likely created temporary employment opportunities within the local workforce.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns if the firm fixed-price contract does not adequately account for unforeseen construction challenges.
- Risk of delays in project completion impacting the operational readiness of the Coast Guard stations.
- Ensuring the quality of construction meets the stringent requirements for federal facilities.
Positive Signals
- Awarded under full and open competition, indicating a robust bidding process.
- Firm fixed-price contract shifts cost risk to the contractor.
- Delivery order structure may offer flexibility for phased execution.
Sector Analysis
This contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the broader construction industry. Federal spending in this area supports the maintenance and modernization of government facilities nationwide. Comparable spending benchmarks for similar large-scale federal construction projects, particularly those involving specialized government agencies like the Coast Guard, would be necessary for a more precise sector analysis.
Small Business Impact
The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). There is no explicit information regarding subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem is likely minimal unless the prime contractor voluntarily engages small businesses for subcontracting opportunities.
Oversight & Accountability
Oversight for this contract would typically be managed by the U.S. Coast Guard, a component of the Department of Homeland Security. The firm fixed-price nature of the contract implies a focus on adherence to scope and schedule. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- Department of Homeland Security Facilities Construction
- U.S. Coast Guard Infrastructure Projects
- Federal Building and Infrastructure Modernization
Risk Flags
- Potential for scope creep if not managed tightly.
- Risk of contractor default on a large, multi-year project.
- Dependency on specific material availability and labor markets.
Tags
construction, commercial-institutional-building, department-of-homeland-security, u.s.-coast-guard, new-jersey, firm-fixed-price, full-and-open-competition, delivery-order, large-project, infrastructure
Frequently Asked Questions
What is this federal contract paying for?
Department of Homeland Security awarded $27.5 million to M. A. MORTENSON COMPANY. IGF::OT::IGF RECAPITALIZE U. S. COAST GUARD STATION ATLANTIC CITY AT ATLANTIC CITY, NEW JERSEY&RECAPITALIZE U. S. COAST GUARD STATION MANASQUAN INLET AT POINT PLEASANT BEACH, NEW JERSEY
Who is the contractor on this award?
The obligated recipient is M. A. MORTENSON COMPANY.
Which agency awarded this contract?
Awarding agency: Department of Homeland Security (U.S. Coast Guard).
What is the total obligated amount?
The obligated amount is $27.5 million.
What is the period of performance?
Start: 2014-09-05. End: 2017-01-21.
What was the specific scope of work for the recapitalization of the U.S. Coast Guard stations?
The provided data does not detail the specific scope of work for the recapitalization of the U.S. Coast Guard stations in Atlantic City and Manasquan Inlet. Typically, 'recapitalization' in a construction context implies significant renovation, repair, or replacement of existing building systems and structures to bring them up to modern standards and ensure long-term functionality. This could include upgrades to HVAC, electrical, plumbing, roofing, structural repairs, or even partial demolition and reconstruction. Without a detailed statement of work, it is difficult to ascertain the full extent of the project's requirements and associated costs.
How does the $27.45 million award compare to similar Coast Guard station construction projects?
Comparing the $27.45 million award for two stations requires access to a database of similar Coast Guard construction projects with detailed cost breakdowns and scope of work. However, for large-scale federal construction projects involving specialized facilities, this amount is not inherently excessive. For context, major federal building projects can range from tens to hundreds of millions of dollars depending on size, complexity, and location. The fact that this was a full and open competition with three bidders suggests a degree of market validation for the price. Further analysis would involve benchmarking against projects of similar size, age, and functional requirements within the Coast Guard or other federal agencies.
What are the primary risks associated with this firm fixed-price contract?
The primary risk associated with a firm fixed-price (FFP) contract, from the government's perspective, is that the contractor bears the responsibility for any cost overruns. However, for the contractor, the risk is significant: if costs exceed the fixed price due to unforeseen issues like material price increases, labor shortages, or unexpected site conditions, the contractor's profit margin will shrink, or they may incur a loss. For the government, the main risks are ensuring the contractor has accurately estimated all costs and that the fixed price is competitive. There's also a risk that the contractor might cut corners on quality to protect their profit margin if unforeseen cost pressures arise, necessitating robust government oversight.
What does the number of bidders (3) indicate about the competition for this contract?
Having three bidders for this contract suggests a moderate level of competition. While more bidders generally indicate stronger competition, three is often considered a healthy number for complex federal construction projects, especially those that might require specialized expertise or bonding capacity. It indicates that the opportunity was visible and attractive enough to draw multiple qualified firms. This level of competition likely provided the government with a reasonable range of price and technical proposals to evaluate, contributing to a fair market price discovery process and reducing the risk of awarding the contract at an inflated cost.
What is the historical spending pattern for U.S. Coast Guard station construction or recapitalization?
The provided data focuses on a single contract award and does not offer historical spending patterns for U.S. Coast Guard station construction or recapitalization. To analyze historical spending, one would need access to contract data over several fiscal years, identifying all awards related to Coast Guard facilities, their types (new construction, renovation, recapitalization), contract values, and the agencies/districts involved. Such an analysis would reveal trends in investment, average project costs, and the frequency of major recapitalization efforts, helping to contextualize the $27.45 million award within a broader budget and infrastructure lifecycle perspective.
How does the contract duration (869 days) compare to typical federal construction project timelines?
A contract duration of 869 days, approximately 2.38 years, is a substantial timeframe and is not uncommon for significant federal construction or recapitalization projects. The complexity of the work, the size of the facilities, potential environmental reviews, and the need to minimize disruption to ongoing operations can all contribute to longer project schedules. For large institutional or specialized government facilities, timelines often extend beyond two years. This duration suggests a project of considerable scope, likely involving extensive structural work, system upgrades, and potentially phased construction to maintain partial operational capacity.
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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 3
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: M. a. Mortenson Companies, Inc. (UEI: 130731797)
Address: 700 MEADOW LN N, MINNEAPOLIS, MN, 55422
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $27,453,265
Exercised Options: $27,453,265
Current Obligation: $27,453,265
Subaward Activity
Number of Subawards: 37
Total Subaward Amount: $15,985,505
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: HSCG4710D3EFK14
IDV Type: IDC
Timeline
Start Date: 2014-09-05
Current End Date: 2017-01-21
Potential End Date: 2017-06-12 00:00:00
Last Modified: 2018-09-10
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