DoD's $40.6M contract for building renovation awarded to CH2M HILL CONSTRUCTORS, INC. for 1375 days

Contract Overview

Contract Amount: $40,647,599 ($40.6M)

Contractor: CH2M Hill Constructors, Inc.

Awarding Agency: Department of Defense

Start Date: 2022-09-09

End Date: 2026-06-15

Contract Duration: 1,375 days

Daily Burn Rate: $29.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: RENOVATE NAS II, BLDG. 639

Plain-Language Summary

Department of Defense obligated $40.6 million to CH2M HILL CONSTRUCTORS, INC. for work described as: RENOVATE NAS II, BLDG. 639 Key points: 1. The contract value of $40.6 million represents a significant investment in infrastructure. 2. Awarded under full and open competition, suggesting a robust bidding process. 3. The firm-fixed-price contract type shifts cost risk to the contractor. 4. The duration of 1375 days indicates a long-term, complex project. 5. The North American Industry Classification System (NAICS) code 236220 points to commercial and institutional building construction. 6. The contract is a delivery order, implying it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract.

Value Assessment

Rating: good

The contract value of $40.6 million for a building renovation over approximately 3.8 years appears reasonable given the scope. Benchmarking against similar large-scale construction projects within the Department of Defense would provide a more precise value-for-money assessment. The firm-fixed-price structure is generally favorable for the government in managing cost overruns, provided the initial pricing was competitive.

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. This typically leads to a wider range of proposals and potentially more competitive pricing. The number of bidders is not specified, but the open competition suggests a healthy market engagement.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down costs and improve the quality of services received.

Public Impact

The primary beneficiaries are the Department of Defense and the Navy, receiving upgraded facilities. The services delivered include the renovation of NAS II, Building 639. The geographic impact is localized to the naval facility where the renovation is taking place. The project will likely involve a workforce of construction professionals, tradespeople, and project managers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if initial estimates are inaccurate, despite fixed-price contract.
Delays in project completion could impact facility readiness.
Scope creep could increase the overall cost if not managed tightly.

Positive Signals

Firm-fixed-price contract mitigates cost escalation risk for the government.
Full and open competition suggests a competitive bidding process, potentially leading to better pricing.
Long project duration allows for thorough planning and execution of complex renovation tasks.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a vital part of the construction industry. The federal government is a significant consumer of construction services for maintaining and upgrading its vast real estate portfolio. Spending in this sector is influenced by infrastructure needs, modernization efforts, and national security requirements. Comparable spending benchmarks would involve analyzing other large-scale federal building renovation or construction contracts.

Small Business Impact

The data indicates that small business participation was not a specific set-aside for this contract (ss: false, sb: false). While CH2M HILL CONSTRUCTORS, INC. may engage small businesses as subcontractors, there is no explicit requirement or preference noted in the provided data. Further analysis of subcontracting plans would be needed to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer's representative (COR) from the Department of the Navy. Accountability measures are embedded in the firm-fixed-price contract terms, requiring the contractor to deliver the specified renovation within the agreed-upon price. Transparency is generally facilitated through contract award databases, though specific project oversight details may not be publicly available.

Related Government Programs

Military Construction
Base Realignment and Closure (BRAC) projects
Federal Building Renovations
Department of Defense Infrastructure Modernization

Risk Flags

Long project duration increases exposure to market fluctuations and potential contractor performance issues.
Firm-fixed-price contracts can lead to quality compromises if contractor faces cost pressures.
Potential for scope creep if not rigorously managed through change control processes.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $40.6 million to CH2M HILL CONSTRUCTORS, INC.. RENOVATE NAS II, BLDG. 639

Who is the contractor on this award?

The obligated recipient is CH2M HILL CONSTRUCTORS, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $40.6 million.

What is the period of performance?

Start: 2022-09-09. End: 2026-06-15.

What is the track record of CH2M HILL CONSTRUCTORS, INC. with the Department of Defense for similar construction projects?

CH2M HILL CONSTRUCTORS, INC. has a history of performing large-scale engineering and construction projects, including for government entities. Their experience often spans infrastructure, environmental services, and facilities management. For the Department of Defense, they have likely been involved in various construction and renovation efforts, potentially including military bases and other federal facilities. A detailed review of their past performance on similar DoD contracts, including contract values, project durations, and any reported performance issues or awards, would be necessary to fully assess their suitability and track record for this specific renovation project. This would involve examining contract databases and performance reports.

How does the awarded price of $40.6 million compare to similar building renovation projects within the Department of Defense?

Benchmarking the $40.6 million award against similar Department of Defense building renovation projects requires access to a comparable dataset. Factors such as the size of the building, the extent of the renovation (e.g., structural, MEP, finishes), the specific location, and the prevailing market conditions at the time of award all influence cost. Without specific data on comparable projects (e.g., square footage renovated, scope of work, and cost per square foot), it is difficult to definitively state whether this contract represents excellent, good, or fair value. However, for large-scale institutional renovations, a cost in the tens of millions is not uncommon, especially if significant upgrades to systems or structures are involved.

What are the primary risks associated with a firm-fixed-price contract for a multi-year renovation project?

While firm-fixed-price (FFP) contracts are generally favored for shifting cost risk to the contractor, they are not without risks, especially for long-duration projects like this 1375-day renovation. The primary risk is that the contractor may have underestimated the costs, leading to potential quality compromises or contractor default if they cannot absorb the losses. Conversely, if the contractor significantly overestimated costs, the government may have overpaid. For the government, the risk lies in ensuring the contractor has the financial stability and technical expertise to complete the project successfully within the fixed price. Scope creep, if not managed through formal change orders, can also erode the benefits of the FFP structure.

What is the expected impact of this renovation on the operational capabilities of NAS II?

The renovation of Building 639 at NAS II is expected to enhance or maintain the operational capabilities of the facility. Renovations typically aim to modernize infrastructure, improve energy efficiency, ensure compliance with current building codes and safety standards, and extend the lifespan of the facility. Depending on the specific nature of Building 639's function (e.g., administrative, operational support, housing), the renovation could lead to improved working conditions, increased reliability of essential systems, enhanced security, or greater capacity. The precise impact will depend on the scope of work detailed in the contract's statement of work.

How has federal spending on commercial and institutional building construction (NAICS 236220) trended in recent years?

Federal spending on commercial and institutional building construction, categorized under NAICS code 236220, has generally been substantial, reflecting the government's ongoing need to maintain and upgrade its vast portfolio of facilities. Trends can be influenced by factors such as infrastructure investment initiatives, defense spending priorities, and the lifecycle of existing federal buildings. While specific year-over-year data requires detailed analysis of federal procurement databases, it's common to see significant annual outlays in this category, particularly for agencies like the Department of Defense, Department of Veterans Affairs, and General Services Administration, which manage extensive real property assets.

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Commercial and Institutional Building Construction

Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR NONBUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Jacobs Engineering Group Inc.

Address: 9189 S JAMAICA ST, ENGLEWOOD, CO, 80112

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

Financial Breakdown

Contract Ceiling: $40,647,599

Exercised Options: $40,647,599

Current Obligation: $40,647,599

Subaward Activity

Number of Subawards: 8

Total Subaward Amount: $32,498,249

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N6247019D8024

IDV Type: IDC

Timeline