Department of the Navy awards $70M firm-fixed-price contract for Camp Lejeune construction, highlighting significant infrastructure investment

Contract Overview

Contract Amount: $69,817,346 ($69.8M)

Contractor: Caddell Construction CO., Inc.

Awarding Agency: Department of Defense

Start Date: 2008-08-04

End Date: 2011-02-15

Contract Duration: 925 days

Daily Burn Rate: $75.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: BASE BID FOR DESIGN AND BUILD P634 BEQ, NEW RIVER, CAMP LEJEUNE, NC

Place of Performance

Location: CAMP LEJEUNE, ONSLOW County, NORTH CAROLINA, 28547

State: North Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $69.8 million to CADDELL CONSTRUCTION CO., INC. for work described as: BASE BID FOR DESIGN AND BUILD P634 BEQ, NEW RIVER, CAMP LEJEUNE, NC Key points: 1. The contract value of $69.8 million represents a substantial investment in military infrastructure. 2. Awarded under full and open competition, suggesting a competitive bidding process. 3. The firm-fixed-price structure shifts cost risk to the contractor, potentially stabilizing project expenses. 4. The project's duration of 925 days indicates a complex and lengthy construction undertaking. 5. The geographic focus on Camp Lejeune, North Carolina, points to specific regional military needs. 6. The absence of small business set-aside flags suggests a focus on large-scale construction capabilities.

Value Assessment

Rating: good

The contract's base bid of $69.8 million for the P634 BEQ at Camp Lejeune appears reasonable for a large-scale construction project of this nature. Benchmarking against similar barracks construction projects within the Department of Defense would provide a more precise value-for-money assessment. The firm-fixed-price contract type generally offers good value by capping costs for the government, provided the initial bid accurately reflects the scope of work. However, without detailed cost breakdowns or comparisons to independent cost estimates, a definitive assessment of exceptional value is difficult.

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 presence of 5 bidders suggests a healthy level of competition for this significant construction project. A competitive environment like this typically drives down prices and encourages contractors to offer their best value propositions to secure the award. The number of bidders provides a good indication that the government received a range of pricing and technical approaches.

Taxpayer Impact: The full and open competition for this contract is beneficial for taxpayers as it likely resulted in a more competitive price than a sole-source or limited competition award. This process helps ensure that taxpayer funds are used efficiently by leveraging market forces to achieve a fair price.

Public Impact

Service members at Camp Lejeune will benefit from improved barracks facilities, enhancing quality of life and readiness. The construction project will create numerous jobs in the North Carolina region, supporting the local economy. The project directly supports the operational capabilities and infrastructure needs of the Department of the Navy. The delivery of new or renovated barracks is crucial for troop housing and morale.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions or design changes occur, despite the fixed-price nature.
Contractor performance risk associated with a project of this scale and duration.
Dependency on timely delivery of materials and skilled labor in the construction market.

Positive Signals

Firm-fixed-price contract structure limits the government's exposure to cost increases.
Awarded under full and open competition, suggesting a competitive price was likely achieved.
The contractor, Caddell Construction Co., Inc., has a track record in large-scale federal construction projects.
The project addresses a clear need for improved military housing infrastructure.

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 often supports critical infrastructure for government operations, including military bases. The market for large-scale military construction is typically dominated by a few large, experienced firms capable of handling complex projects with stringent requirements. Benchmarks for similar barracks construction projects within the DoD can vary widely based on location, size, and specific amenities required.

Small Business Impact

The contract was not awarded as a small business set-aside, and the 'sb' field is false, indicating no specific small business preference was applied in the award. This suggests the project's scale and complexity likely favored larger construction firms. There is no explicit information provided regarding subcontracting plans for small businesses, which is a common requirement for larger federal contracts to ensure small business participation in the supply chain.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting and project management offices. Accountability measures are inherent in the firm-fixed-price contract, requiring the contractor to deliver the specified work within the agreed-upon price. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

Military Construction, Navy
Barracks Construction Projects
Department of Defense Facilities Management
Camp Lejeune Infrastructure Projects

Risk Flags

Potential for cost growth if scope changes significantly.
Risk of contractor performance issues on a long-duration project.
Dependency on stable material and labor markets.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $69.8 million to CADDELL CONSTRUCTION CO., INC.. BASE BID FOR DESIGN AND BUILD P634 BEQ, NEW RIVER, CAMP LEJEUNE, NC

Who is the contractor on this award?

The obligated recipient is CADDELL CONSTRUCTION CO., 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 $69.8 million.

What is the period of performance?

Start: 2008-08-04. End: 2011-02-15.

What is Caddell Construction Co., Inc.'s track record with the Department of the Navy and similar large-scale construction projects?

Caddell Construction Co., Inc. has a significant history of performing large-scale construction projects for the Department of Defense and other federal agencies. Their portfolio often includes military barracks, training facilities, and other critical infrastructure. Reviewing their past performance on similar firm-fixed-price contracts, particularly those involving barracks construction at military installations, would provide insight into their ability to manage scope, schedule, and budget effectively. Their experience suggests a capacity to handle the complexities of the Camp Lejeune project, but a detailed review of past performance metrics, including any past issues or successes, is necessary for a complete assessment.

How does the awarded price of $69.8 million compare to industry benchmarks for similar barracks construction projects?

Benchmarking the $69.8 million award against industry standards for barracks construction requires detailed project specifications (e.g., square footage per service member, amenities, material quality, site conditions). Generally, firm-fixed-price contracts awarded under full and open competition aim to achieve competitive pricing. However, without specific cost-per-square-foot or cost-per-bed data for this project and comparable projects, a precise comparison is challenging. Factors like geographic location (labor and material costs in North Carolina), the specific design requirements for P634 BEQ, and the overall economic climate at the time of bidding significantly influence costs. A thorough analysis would involve comparing this contract's unit costs to similar DoD or commercial projects completed within a similar timeframe and region.

What are the primary risks associated with this firm-fixed-price contract for the Department of the Navy?

The primary risk for the Department of the Navy with a firm-fixed-price (FFP) contract is that the contractor may cut corners on quality or scope to maintain profitability if unforeseen issues arise or costs escalate beyond their initial estimates. While FFP shifts cost risk to the contractor, the government still bears the risk of non-performance or substandard work. Ensuring robust quality assurance and inspection protocols are in place is crucial. Additionally, if the initial bid was unrealistically low due to intense competition, the contractor might face financial distress, potentially leading to delays or disputes. The long duration (925 days) also increases the risk of market fluctuations impacting material availability and cost, which the contractor must absorb.

How effective is the 'full and open competition' strategy likely to be in ensuring value for this specific construction project?

The 'full and open competition' strategy is generally highly effective in ensuring value for large construction projects like this one. By allowing all qualified contractors to bid, the government maximizes the pool of potential offerors, fostering robust competition. This competitive pressure typically drives down prices and encourages contractors to submit their most competitive technical solutions and pricing. The fact that five bids were received suggests sufficient market interest and a competitive environment. This approach increases the likelihood that the Department of the Navy will receive a fair market price and a high-quality outcome, as contractors are motivated to win the bid and perform well to maintain their reputation.

What are the potential workforce implications of this $69.8 million construction contract in the Camp Lejeune area?

A contract of this magnitude ($69.8 million) for a project with a 925-day duration is likely to have significant positive workforce implications for the Camp Lejeune region and surrounding areas in North Carolina. It will generate demand for a variety of skilled construction trades, including electricians, plumbers, carpenters, heavy equipment operators, and general laborers. Additionally, indirect employment opportunities will likely arise in supporting industries such as material supply, logistics, engineering, and project management. The project could provide stable, long-term employment for a considerable number of workers throughout its duration, contributing to the local economy. However, the availability of skilled labor in the region could also become a constraint, potentially driving up wages or leading to project delays if not adequately managed.

What historical spending patterns exist for similar construction projects at Camp Lejeune or within the Department of the Navy?

Historical spending patterns for similar construction projects at Camp Lejeune and within the Department of the Navy reveal a consistent and substantial investment in infrastructure modernization and expansion. Projects often involve barracks, training facilities, administrative buildings, and operational support structures. Spending levels can fluctuate based on military readiness requirements, budget allocations, and specific modernization initiatives. Contracts for new barracks construction, like the P634 BEQ, typically range from tens to hundreds of millions of dollars, depending on scale and complexity. Analyzing past awards for similar projects can help establish cost baselines and identify trends in contract types, competition levels, and contractor performance, providing context for the current $69.8 million award.

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: N4008508R1411

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2700 LAGOON PARK DR, MONTGOMERY, AL, 36109

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

Financial Breakdown

Contract Ceiling: $72,060,676

Exercised Options: $69,817,346

Current Obligation: $69,817,346

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline