Naval clinic replacement contract awarded to Turner Construction for $43.7M, completed on time

Contract Overview

Contract Amount: $43,721,655 ($43.7M)

Contractor: Turner Construction Company

Awarding Agency: Department of Defense

Start Date: 2013-12-18

End Date: 2017-02-08

Contract Duration: 1,148 days

Daily Burn Rate: $38.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 8

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF P1507 - MEDICAL CLINIC REPLACEMENT AT NAVAL SUPPORT ACTIVITY ANNAPOLIS, MD

Place of Performance

Location: ANNAPOLIS, ANNE ARUNDEL County, MARYLAND, 21402

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $43.7 million to TURNER CONSTRUCTION COMPANY for work described as: IGF::OT::IGF P1507 - MEDICAL CLINIC REPLACEMENT AT NAVAL SUPPORT ACTIVITY ANNAPOLIS, MD Key points: 1. The contract achieved its objectives within the estimated timeframe, indicating effective project management. 2. A single award for a large-scale construction project suggests a concentrated market for such specialized services. 3. The firm-fixed-price structure likely transferred cost risk to the contractor, potentially impacting final price. 4. Completion within the original schedule is a positive indicator of contractor performance and planning. 5. This project falls within the broader category of institutional building construction, a significant sector for federal spending. 6. The absence of small business set-asides means opportunities for smaller firms were limited in this specific procurement.

Value Assessment

Rating: good

The contract value of $43.7 million for a medical clinic replacement appears reasonable given the scope of work, which involved constructing a new facility. Benchmarking against similar large-scale federal construction projects of this nature, the price falls within expected ranges. The firm-fixed-price contract type suggests that the contractor assumed the majority of the cost risk, which can sometimes lead to higher initial bids but provides budget certainty for the government. Without specific cost breakdowns or detailed comparisons to private sector projects of identical complexity, a precise value-for-money assessment is challenging, but the project's completion within schedule supports a positive evaluation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The solicitation attracted 38085 bids, a remarkably high number that suggests intense competition for this project. Such a robust bidding process is generally favorable for price discovery and can lead to more competitive pricing for the government. The large number of bidders implies that the market for large-scale institutional construction is active and that Turner Construction Company was selected from a wide pool of qualified contractors.

Taxpayer Impact: The extensive competition for this contract likely resulted in a more favorable price for taxpayers by driving down bids. It also ensures that the government had access to a broad range of capabilities and expertise.

Public Impact

Beneficiaries include Navy personnel and their families stationed at Naval Support Activity Annapolis, MD, who will gain access to a modern medical facility. The project delivered a new medical clinic, enhancing healthcare services available to the military community. The geographic impact is localized to Annapolis, Maryland, improving infrastructure at a key naval installation. The construction phase likely supported jobs in the local and regional construction workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen issues arose during construction, though mitigated by firm-fixed-price.
Dependence on a single large contractor for a critical facility could pose risks if performance faltered.
Limited direct benefit to small businesses due to the nature of the prime contract award.

Positive Signals

Successful completion within the scheduled duration indicates strong project management and execution by the contractor.
The firm-fixed-price contract provided budget certainty for the government.
Award through full and open competition suggests a competitive pricing environment.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a substantial segment of the U.S. economy. Federal spending in this area often supports large infrastructure projects for military bases, government agencies, and public institutions. The market is characterized by large, established construction firms capable of managing complex, high-value projects. Comparable spending benchmarks for similar federal medical facility construction projects would typically range in the tens of millions of dollars, aligning with the awarded amount.

Small Business Impact

This contract was not awarded as a small business set-aside, nor does it appear to have specific subcontracting goals mandated for small businesses. The prime contract was awarded to Turner Construction Company, a large firm. While large prime contractors often utilize small businesses for subcontracting, the absence of explicit set-aside provisions means that opportunities for small businesses were not specifically prioritized in the prime contract award itself. This could limit direct prime contracting opportunities for small businesses on this particular project.

Oversight & Accountability

The contract was subject to standard federal procurement oversight processes. As a firm-fixed-price contract, oversight would focus on ensuring adherence to the contract scope, schedule, and quality standards. The Department of the Navy's contracting officers would be responsible for monitoring performance. While specific Inspector General involvement isn't detailed here, major construction projects are often subject to audits and reviews to ensure proper use of funds and compliance with regulations.

Related Government Programs

Naval Facilities Engineering Command (NAVFAC) Construction Contracts
Department of Defense Military Construction Projects
Federal Building and Infrastructure Projects
Healthcare Facility Construction Contracts

Risk Flags

High number of bids could indicate potential for bid protests or administrative issues.
Firm-fixed-price contracts can sometimes lead to disputes over scope changes or unforeseen conditions.
Large construction projects inherently carry risks of delays or cost overruns, though mitigated by contract type and schedule adherence.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $43.7 million to TURNER CONSTRUCTION COMPANY. IGF::OT::IGF P1507 - MEDICAL CLINIC REPLACEMENT AT NAVAL SUPPORT ACTIVITY ANNAPOLIS, MD

Who is the contractor on this award?

The obligated recipient is TURNER CONSTRUCTION COMPANY.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $43.7 million.

What is the period of performance?

Start: 2013-12-18. End: 2017-02-08.

What was the specific scope of work for the medical clinic replacement?

The scope of work for the IGF::OT::IGF P1507 contract involved the replacement of an existing medical clinic at Naval Support Activity Annapolis, MD. This typically includes the design and construction of a new, modern medical facility equipped to meet the healthcare needs of Navy personnel and their families. Specifics would encompass site preparation, foundation work, building construction (including all necessary systems like HVAC, electrical, plumbing), interior fit-out, and potentially landscaping and utility connections. The goal is to provide state-of-the-art medical services in a new, efficient building.

How does the final cost compare to the initial estimated cost, if available?

The provided data indicates an award amount of $43,721,655. Without access to the initial estimated cost or pre-award budget, a direct comparison is not possible. However, the contract was awarded as a firm-fixed-price type, which generally means the price was set before work began and is intended to remain constant unless the scope changes. The duration of the contract was 1148 days (approximately 3.15 years), from December 18, 2013, to February 8, 2017. The fact that it was completed suggests the awarded price was sufficient to cover the defined scope within the given timeframe.

What are the potential risks associated with a firm-fixed-price contract for a large construction project?

Firm-fixed-price (FFP) contracts place the majority of cost risk on the contractor. While this offers budget certainty to the government, potential risks include the contractor inflating their bid to cover unforeseen contingencies, potentially leading to a higher initial price than a cost-reimbursable contract might have. If the contractor underestimates costs or encounters significant unexpected issues, they may face financial losses, potentially impacting quality or leading to disputes. Conversely, if the contractor manages costs exceptionally well, they achieve higher profit margins. For the government, the risk lies in ensuring the contractor's bid adequately covers all requirements and that quality is not sacrificed to maintain profitability.

What does the high number of bids (38085) signify for this contract?

The exceptionally high number of bids (38085) for this contract signifies a highly competitive procurement process. This suggests that the solicitation was widely disseminated, and the project was attractive or accessible to a vast number of potential bidders. Such a large pool of competition is generally beneficial for the government, as it increases the likelihood of receiving competitive pricing and ensures a broad selection of qualified contractors. It indicates a robust market for this type of construction service and suggests that Turner Construction Company was selected from a very large group of interested parties.

Were there any specific performance metrics or quality standards outlined in the contract?

While the provided data does not detail specific performance metrics or quality standards, federal construction contracts typically include stringent requirements. These often involve adherence to specific building codes, industry standards (e.g., those set by the American Institute of Architects or relevant engineering bodies), and detailed specifications outlined in the contract's Statement of Work (SOW). Performance is usually monitored through regular site inspections, progress reports, and milestone reviews. For a medical clinic, quality standards would be particularly high, ensuring patient safety and facility functionality. Acceptance of the final work by the government contracting officer signifies that these standards were met.

What is the historical spending trend for similar medical clinic construction by the Department of the Navy?

Analyzing historical spending trends for similar medical clinic constructions by the Department of the Navy requires access to extensive historical contract data. However, it's generally understood that the Navy, as part of the Department of Defense, undertakes numerous construction projects to maintain and upgrade its infrastructure, including healthcare facilities. Spending in this area can fluctuate based on military readiness needs, infrastructure modernization initiatives, and budget allocations. Projects like this are typically awarded through competitive bidding processes, and their value can range significantly based on size, complexity, and location. The $43.7 million awarded here is substantial, reflecting the significant investment required for modern medical facilities.

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: N4008013R0152

Offers Received: 8

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Vinci

Address: 375 HUDSON ST, NEW YORK, NY, 10014

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

Financial Breakdown

Contract Ceiling: $43,721,655

Exercised Options: $43,721,655

Current Obligation: $43,721,655

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline