DoD's $25M contract for electrical capacity and cooling towers awarded to Walsh Construction Company II, LLC

Contract Overview

Contract Amount: $25,007,557 ($25.0M)

Contractor: Walsh Construction Company II, LLC

Awarding Agency: Department of Defense

Start Date: 2014-07-15

End Date: 2016-10-28

Contract Duration: 836 days

Daily Burn Rate: $29.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 12

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: ELECTRICAL CAPACITY AND COOLING TOWERS

Place of Performance

Location: BETHESDA, MONTGOMERY County, MARYLAND, 20817

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $25.0 million to WALSH CONSTRUCTION COMPANY II, LLC for work described as: ELECTRICAL CAPACITY AND COOLING TOWERS Key points: 1. The contract value of $25,007,557 represents a significant investment in critical infrastructure. 2. Awarded under full and open competition, suggesting a robust market response. 3. The firm-fixed-price contract type shifts cost risk to the contractor. 4. The duration of 836 days indicates a substantial project timeline. 5. The contract falls under the 'Plumbing, Heating, and Air-Conditioning Contractors' NAICS code. 6. The project is located in Maryland, a key state for federal contracting.

Value Assessment

Rating: good

The contract value of approximately $25 million for electrical capacity and cooling towers appears reasonable for a project of this scope and duration. Without specific benchmarks for comparable projects in Maryland or for the Department of the Navy, a precise value-for-money assessment is challenging. However, the firm-fixed-price structure suggests that the contractor assumed the primary cost risk, which can be beneficial for the government in controlling final expenditures. The number of bidders (29) also indicates a competitive environment that likely contributed to a fair price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with 29 bids received. This indicates a healthy level of interest and participation from qualified contractors in the market. The high number of bidders suggests that the government had a good selection of potential contractors, which typically leads to more competitive pricing and better terms for the government. The solicitation process likely allowed for a thorough evaluation of technical capabilities and pricing.

Taxpayer Impact: The extensive competition for this contract is beneficial for taxpayers as it likely drove down the final price through competitive bidding, ensuring that government funds were used efficiently.

Public Impact

The Department of the Navy benefits from enhanced electrical capacity and cooling systems, crucial for operational readiness. The services delivered include the installation and maintenance of essential infrastructure. The geographic impact is concentrated in Maryland, supporting federal facilities in the region. The contract supports jobs within the construction and specialized HVAC sectors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen complexities arise during the extended project duration.
Ensuring long-term reliability and maintenance of the installed systems post-contract.
The firm-fixed-price nature could incentivize cutting corners if not rigorously overseen.

Positive Signals

Awarded through full and open competition with a significant number of bidders.
Firm-fixed-price contract type minimizes cost uncertainty for the government.
The project addresses critical infrastructure needs for the Department of the Navy.
The contractor, Walsh Construction Company II, LLC, has experience in large-scale construction projects.

Sector Analysis

This contract falls within the construction and specialized contracting sector, specifically focusing on HVAC and electrical infrastructure. The market for such services is substantial, driven by ongoing needs for facility upgrades, new construction, and maintenance across government and commercial entities. The size of this contract, at $25 million, positions it as a significant project within the regional construction market in Maryland. Comparable spending benchmarks would typically involve other large-scale federal or state infrastructure projects requiring similar specialized contracting services.

Small Business Impact

There is no indication that this contract included a small business set-aside. Given the large contract value and specialized nature of the work, it is likely that larger, established firms were the primary participants. Subcontracting opportunities may exist for smaller businesses specializing in specific components or services, but the primary award went to a larger entity. The impact on the small business ecosystem is likely indirect, through potential subcontracting, rather than direct set-aside benefits.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and their representatives within the Department of the Navy. The firm-fixed-price nature necessitates close monitoring of performance, quality control, and adherence to the schedule to ensure successful project completion. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Department of Defense Facilities Modernization Programs
Naval Facilities Engineering Command Contracts
Federal Building and Infrastructure Projects
HVAC and Electrical Systems Procurement

Risk Flags

Potential for scope creep given the project's duration.
Need for rigorous quality assurance to ensure long-term system performance.
Contractor's ability to manage complex supply chains for specialized equipment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $25.0 million to WALSH CONSTRUCTION COMPANY II, LLC. ELECTRICAL CAPACITY AND COOLING TOWERS

Who is the contractor on this award?

The obligated recipient is WALSH CONSTRUCTION COMPANY II, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $25.0 million.

What is the period of performance?

Start: 2014-07-15. End: 2016-10-28.

What is the track record of Walsh Construction Company II, LLC on similar federal contracts?

Walsh Construction Company II, LLC has a history of performing large-scale construction projects for various federal agencies. While specific details on past performance for electrical capacity and cooling tower projects for the Department of the Navy are not provided in this data, their general experience suggests a capability to handle complex infrastructure work. A deeper dive into their contract history, including past performance reviews and any reported issues on previous government contracts, would be necessary for a comprehensive assessment. This would involve examining contract close-out data, any disputes, or performance deficiencies reported by agencies.

How does the awarded price compare to similar projects or market rates for electrical capacity and cooling towers?

Benchmarking this $25 million contract against similar projects is challenging without access to a broader dataset of comparable federal or private sector contracts for electrical capacity and cooling towers. Factors such as project scope, specific technical requirements, geographic location (which influences labor and material costs), and the prevailing market conditions at the time of award significantly impact pricing. The firm-fixed-price structure and the 29 bids received suggest competitive pricing, but a definitive comparison would require detailed cost breakdowns and access to market analysis reports for similar infrastructure projects.

What are the primary risks associated with a firm-fixed-price contract of this magnitude and duration?

The primary risks associated with a firm-fixed-price contract of this magnitude ($25 million) and duration (836 days) for the government are minimal in terms of cost escalation, as the price is fixed. However, risks can emerge if the scope of work is not clearly defined, leading to change orders that increase the total cost. For the contractor, the risk lies in underestimating costs, encountering unforeseen site conditions, or experiencing material price increases, which could lead to reduced profit margins or even losses. Robust oversight is crucial to ensure the contractor meets quality standards and avoids shortcuts to maintain profitability.

How effective are the competition levels in ensuring value for money for this type of infrastructure contract?

The high level of competition, with 29 bidders for this contract, is generally very effective in ensuring value for money for infrastructure projects. A competitive bidding process incentivizes contractors to offer their best pricing and most efficient solutions to win the contract. It also provides the government with a range of options to choose from, allowing for selection based on a combination of price, technical merit, and past performance. This scenario typically leads to a fair market price and reduces the likelihood of overpayment compared to sole-source or limited competition awards.

What are the historical spending patterns for electrical capacity and cooling towers by the Department of the Navy?

Historical spending patterns for electrical capacity and cooling towers by the Department of the Navy would likely show consistent investment in these areas due to the critical nature of naval facilities. Spending would fluctuate based on modernization initiatives, new construction projects, and the aging of existing infrastructure. Analyzing past contracts within the 'Plumbing, Heating, and Air-Conditioning Contractors' NAICS code (238220) and related infrastructure categories would reveal trends in contract values, durations, and types of competition. This specific $25 million contract represents a significant, but likely not anomalous, investment within the broader context of the Navy's ongoing infrastructure maintenance and upgrade requirements.

What are the potential long-term implications of this contract on the operational readiness of the facilities it serves?

The long-term implications of this contract on operational readiness are expected to be positive. By upgrading or expanding electrical capacity and cooling towers, the contract directly addresses critical infrastructure needs. Enhanced capacity ensures that facilities can support current and future operational demands, including power-intensive equipment and climate control systems essential for sensitive operations. Reliable cooling systems prevent equipment overheating and downtime, while adequate electrical capacity supports the full range of mission requirements. This investment contributes to the overall resilience and efficiency of the naval facilities.

Industry Classification

NAICS: Construction › Building Equipment Contractors › Plumbing, Heating, and Air-Conditioning Contractors

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: TWO STEP

Solicitation ID: N4008013R1101

Offers Received: 12

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Walsh Group Ltd., the (UEI: 121476675)

Address: 929 W ADAMS ST, CHICAGO, IL, 60607

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

Financial Breakdown

Contract Ceiling: $25,007,557

Exercised Options: $25,007,557

Current Obligation: $25,007,557

Subaward Activity

Number of Subawards: 276

Total Subaward Amount: $360,072,220

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline