Department of the Navy awards $42.2M industrial building construction contract to Methuen Construction Co. Inc

Contract Overview

Contract Amount: $42,213,360 ($42.2M)

Contractor: Methuen Construction CO Inc

Awarding Agency: Department of Defense

Start Date: 2015-08-17

End Date: 2019-01-31

Contract Duration: 1,263 days

Daily Burn Rate: $33.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF P-266 STRUCTURAL SHOPS CONSOLIDATION

Place of Performance

Location: KITTERY, YORK County, MAINE, 03904

State: Maine Government Spending

Plain-Language Summary

Department of Defense obligated $42.2 million to METHUEN CONSTRUCTION CO INC for work described as: IGF::OT::IGF P-266 STRUCTURAL SHOPS CONSOLIDATION Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract type is a firm fixed price, which shifts cost risk to the contractor. 3. Performance period spans over three years, indicating a significant project duration. 4. The contract was awarded to a single contractor, Methuen Construction Co. Inc. 5. The North American Industry Classification System (NAICS) code is 236210 for Industrial Building Construction. 6. The contract was awarded by the Department of the Navy, a component of the Department of Defense. 7. The contract was awarded in August 2015 and completed in January 2019.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific details on the scope of work and market conditions at the time of award. However, a $42.2 million contract for industrial building construction over three years suggests a substantial project. The firm fixed price nature of the contract implies that the contractor bore the risk of cost overruns, which can sometimes lead to higher initial bids to compensate for that risk. Without comparable contract data for similar industrial facilities in Maine during that period, a precise value-for-money assessment 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 a bid. The number of bids received is not explicitly stated in the provided data, but the designation implies a robust competitive process. A competitive bidding environment generally leads to better price discovery and can result in more favorable pricing for the government.

Taxpayer Impact: Taxpayers benefit from a competitive process as it is intended to drive down costs and ensure the government receives the best possible value for its investment in construction services.

Public Impact

The primary beneficiaries are the Department of the Navy and its personnel, who will utilize the constructed industrial facilities. The contract delivered industrial building construction services, likely involving the erection or renovation of facilities for operational or logistical purposes. The geographic impact is localized to Maine (ME), where the construction took place. The contract supported the construction workforce in Maine, providing employment opportunities for skilled laborers and tradespeople.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the fixed-price contract did not adequately account for unforeseen site conditions or material price fluctuations.
Dependence on a single contractor for the duration of the project could lead to performance issues if the contractor faces financial or operational difficulties.

Positive Signals

Firm fixed price contract shifts cost risk to the contractor, potentially leading to cost savings for the government if managed efficiently.
Awarded under full and open competition, suggesting a competitive environment that should have driven a fair price.
The contract was completed within its performance period, indicating successful project execution by the contractor.

Sector Analysis

Industrial building construction falls under the broader construction sector, specifically focusing on facilities used for manufacturing, processing, storage, and other industrial activities. The market for such construction is influenced by government infrastructure spending, private sector industrial development, and economic conditions. This contract represents a portion of the Department of Defense's significant investment in maintaining and expanding its facilities, which often requires specialized construction capabilities.

Small Business Impact

The provided data indicates that small business participation was not a specific set-aside for this contract (sb: false). There is no information on subcontracting plans. Therefore, the direct impact on the small business ecosystem is likely minimal unless Methuen Construction Co. Inc. voluntarily engaged small businesses as subcontractors.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the contracting officer's representative (COR) within the Department of the Navy. Accountability measures are inherent in the firm fixed price contract, where the contractor is responsible for delivering the specified construction within the agreed-upon price. Transparency is generally maintained through contract award databases, though detailed project-specific oversight reports are not always publicly available.

Related Government Programs

Department of Defense Military Construction
Naval Facilities Engineering Command Contracts
Industrial Facility Construction
Government Fixed-Price Contracts

Risk Flags

Potential for cost overruns due to fixed-price nature and project duration.
Contractor performance risk on a large-scale construction project.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $42.2 million to METHUEN CONSTRUCTION CO INC. IGF::OT::IGF P-266 STRUCTURAL SHOPS CONSOLIDATION

Who is the contractor on this award?

The obligated recipient is METHUEN 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 $42.2 million.

What is the period of performance?

Start: 2015-08-17. End: 2019-01-31.

What was the specific scope of work for this industrial building construction contract?

The provided data identifies the contract as 'P-266 STRUCTURAL SHOPS CONSOLIDATION' awarded to METHUEN CONSTRUCTION CO INC. While the NAICS code 236210 indicates 'Industrial Building Construction,' the exact nature of the 'structural shops consolidation' is not detailed. This likely involved the construction or renovation of facilities intended to consolidate or improve existing structural shop operations for the Department of the Navy. Such projects could include building new structures, modifying existing ones, or integrating different operational areas to enhance efficiency and capability within a naval facility. The firm fixed price nature suggests a well-defined scope was established prior to bidding.

How does the $42.2 million award compare to similar industrial construction contracts awarded by the Navy around 2015?

Comparing the $42.2 million award to similar contracts requires access to a comprehensive database of federal contract awards from that period, filtered by agency (Department of the Navy), NAICS code (236210), and contract value range. Without such specific comparative data, it's difficult to definitively state whether this award was high, low, or average. However, $42.2 million for a multi-year industrial construction project is a significant sum, suggesting a substantial undertaking. The firm fixed price and full and open competition suggest an effort to secure competitive pricing for this significant investment.

What were the primary risks associated with this firm fixed-price contract for industrial building construction?

For a firm fixed-price contract of this magnitude, key risks for the contractor (and indirectly for the government if the contractor struggles) include unforeseen site conditions (e.g., soil issues, hazardous materials), fluctuations in material costs (especially for long-duration projects), labor availability and cost, and potential design ambiguities or changes. If the contractor underestimated these risks or bid too aggressively to win the contract, they could face financial losses. The government's primary risk is the contractor's potential default or substandard performance due to financial distress, though the firm fixed price shifts the primary cost risk to the contractor.

What does the completion of this contract imply about the contractor's performance?

The fact that the contract was awarded in August 2015 and completed by its end date of January 31, 2019, suggests that Methuen Construction Co. Inc. successfully executed the project within the agreed-upon timeframe. Completing a $42.2 million construction project on schedule, especially under a firm fixed-price agreement, generally indicates competent project management, adequate resource allocation, and effective coordination. While this doesn't preclude minor issues or disputes that may have been resolved, on-time completion is a positive indicator of performance.

How has federal spending on industrial building construction (NAICS 236210) trended historically, and where does this contract fit?

Federal spending on industrial building construction (NAICS 236210) can fluctuate based on defense needs, infrastructure initiatives, and overall economic conditions. Historically, the Department of Defense is a significant contributor to this spending category due to its vast real estate and operational facility requirements. A $42.2 million contract awarded in 2015 represents a notable single award within this sector. Analyzing historical spending trends would involve examining annual outlays for NAICS 236210 across all federal agencies to understand the typical volume and value of such contracts and to contextualize this specific award within the broader federal procurement landscape.

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Industrial 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: N4008514R3507

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 40 LOWELL RD STE 2, SALEM, NH, 03079

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

Financial Breakdown

Contract Ceiling: $42,963,360

Exercised Options: $42,213,360

Current Obligation: $42,213,360

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline