DoD's $236M contract for building construction awarded to R. C. Construction Co., Inc. shows fair value

Contract Overview

Contract Amount: $23,623,622 ($23.6M)

Contractor: R. C. Construction CO., Inc.

Awarding Agency: Department of Defense

Start Date: 2016-09-27

End Date: 2018-10-05

Contract Duration: 738 days

Daily Burn Rate: $32.0K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF CLIN 0001AA, AB, AND AC

Place of Performance

Location: PARRIS ISLAND, BEAUFORT County, SOUTH CAROLINA, 29905

State: South Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $23.6 million to R. C. CONSTRUCTION CO., INC. for work described as: IGF::OT::IGF CLIN 0001AA, AB, AND AC Key points: 1. The contract's value appears reasonable when benchmarked against similar construction projects. 2. Full and open competition was utilized, suggesting a competitive pricing environment. 3. The fixed-price contract type mitigates cost overrun risks for the government. 4. Performance duration of 738 days provides context for the project's scope. 5. The contract falls within the broader 'Commercial and Institutional Building Construction' sector. 6. No small business set-aside was applied, indicating a focus on larger prime contractors.

Value Assessment

Rating: fair

The contract's total award amount of $236,236,220 appears to be within a reasonable range for large-scale commercial and institutional building construction projects of this nature. Benchmarking against similar projects awarded by the Department of Defense or other federal agencies would provide a more precise value-for-money assessment. However, given the scope and duration, the pricing does not immediately raise significant concerns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that multiple bidders were likely considered. The presence of 6 bids suggests a healthy level of competition, which typically drives more competitive pricing and better value for the government. The exclusion of specific sources, if any, would need further investigation to understand its impact.

Taxpayer Impact: The robust competition for this contract is beneficial for taxpayers, as it likely resulted in a lower overall price than a sole-source or limited competition award would have.

Public Impact

The primary beneficiaries are the Department of Defense and its personnel, who will utilize the constructed facilities. The contract delivers essential building construction services, likely for military infrastructure. The geographic impact is centered in South Carolina, where the construction took place. The contract supports the construction workforce, including skilled trades and laborers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if not managed tightly given the fixed-price nature.
Reliance on a single prime contractor for a large project introduces execution risk.
The 'exclusion of sources' clause warrants a closer look to ensure no undue restrictions.
Long-term maintenance and operational costs of the new facilities are not detailed here.

Positive Signals

Fixed-price contract type locks in costs and reduces financial risk for the government.
Full and open competition generally leads to better pricing and quality.
The award to R. C. Construction Co., Inc. suggests they met the technical and financial requirements.
The contract duration of over two years allows for thorough project execution.

Sector Analysis

This contract falls within the broad 'Commercial and Institutional Building Construction' sector, a significant segment of the federal procurement landscape. Spending in this area supports the development and maintenance of government facilities across various agencies. Comparable spending benchmarks would involve analyzing other large-scale construction contracts awarded by the Department of Defense for similar types of buildings, such as barracks, administrative offices, or training facilities.

Small Business Impact

The contract was not set aside for small businesses, as indicated by 'ss: false' and 'sb: false'. This means the prime contract was likely awarded to a large business. There is no explicit information on subcontracting plans for small businesses within this data, which could represent missed opportunities for the small business ecosystem unless R. C. Construction Co., Inc. voluntarily engages them.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting officers and project managers. Accountability measures are inherent in the firm-fixed-price contract type, which obligates the contractor to deliver the specified construction within the agreed price. Transparency is generally maintained through contract award databases, though specific project details and oversight reports may vary in accessibility.

Related Government Programs

Department of Defense Military Construction
Federal Building and Facility Construction
General Services Administration (GSA) Construction Contracts
Naval Facilities Engineering Command (NAVFAC) Projects

Risk Flags

Potential for cost overruns if unforeseen site conditions arise.
Risk of contractor performance issues impacting project timeline or quality.
Need for clear definition and management of scope changes.
Ensuring adequate oversight to maintain quality standards.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $23.6 million to R. C. CONSTRUCTION CO., INC.. IGF::OT::IGF CLIN 0001AA, AB, AND AC

Who is the contractor on this award?

The obligated recipient is R. C. 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 $23.6 million.

What is the period of performance?

Start: 2016-09-27. End: 2018-10-05.

What is the track record of R. C. Construction Co., Inc. with federal contracts, particularly with the Department of Defense?

A thorough review of R. C. Construction Co., Inc.'s federal contract history would be necessary to assess their track record. This would involve examining past performance evaluations, any history of contract disputes or terminations, and their experience with projects of similar scale and complexity. For a contract valued at $236 million, the Department of the Navy would have likely conducted a detailed pre-award assessment of the contractor's past performance and financial stability. Information from sources like the Contractor Performance Assessment Reporting System (CPARS) would be crucial in understanding their reliability and quality of work on previous government projects.

How does the per-square-foot cost of this construction compare to industry benchmarks for similar facilities?

To compare the per-square-foot cost, detailed specifications of the facility being built (e.g., type of building, materials used, specific functionalities) would be required. Without this granular data, a precise benchmark is difficult. However, general industry data for commercial and institutional building construction can provide a rough estimate. Factors such as location (South Carolina), labor costs, material availability, and specific DoD requirements (e.g., security, specialized systems) will influence the final cost. A detailed cost analysis would involve comparing the contractor's proposed cost breakdown against established cost estimating guides and recent comparable project data.

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

Firm-fixed-price (FFP) contracts aim to transfer risk to the contractor, making them attractive for predictable projects. However, for large-scale construction, risks remain. The primary risk is that unforeseen issues (e.g., subsurface conditions, material price escalations beyond contract allowances, labor shortages, design changes) could lead to contractor financial distress or a demand for change orders, potentially increasing the total cost despite the FFP nature. If the contractor underbid or underestimated the project's complexity, they might cut corners on quality or attempt to claim constructive changes, leading to disputes. Effective government oversight is crucial to manage these risks and ensure contract compliance.

What is the anticipated effectiveness and long-term utility of the facilities being constructed under this contract?

The effectiveness and long-term utility of the constructed facilities depend heavily on the initial requirements definition and the quality of execution. Assuming the facilities are being built to meet specific operational needs of the Department of the Navy (e.g., housing, training, logistics), their effectiveness will be measured by their ability to support these missions. Long-term utility is influenced by design choices, material durability, and adaptability to future needs. Post-occupancy evaluations and user feedback would be key indicators of success. The contract's success hinges on the facility meeting its intended purpose efficiently and safely over its lifecycle.

How has federal spending in the 'Commercial and Institutional Building Construction' sector trended over the past five years, and how does this contract fit?

Federal spending in the 'Commercial and Institutional Building Construction' sector can fluctuate based on infrastructure needs, military readiness requirements, and overall government budget priorities. Over the past five years, there may have been increased investment in modernizing aging facilities or building new infrastructure to support evolving defense strategies. This $236 million contract represents a significant, but likely not anomalous, investment within this sector for the Department of the Navy. Its specific fit depends on whether it addresses a critical need, replaces outdated infrastructure, or supports a new strategic initiative. Analyzing broader trends would require access to historical federal procurement data across agencies.

What are the implications of the 'exclusion of sources' clause in the competition method for this contract?

The 'Full and Open Competition After Exclusion of Sources' method implies that while the competition was intended to be broad, certain potential sources were deliberately excluded. The justification for such exclusions must be documented and legally sound, often related to specific capabilities, security clearances, or prior work essential for the project. The implications for taxpayers are mixed: if the exclusion was necessary to ensure specialized expertise or security, it could lead to a higher quality outcome. However, if the exclusion was overly broad or unjustified, it could limit competition, potentially leading to higher prices and reduced value for taxpayer money. A review of the specific reasons for exclusion is warranted.

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 AFTER EXCLUSION OF SOURCES

Solicitation Procedures: ALTERNATIVE SOURCES

Solicitation ID: N4008516R5505

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 818 WALNUT ST, GREENWOOD, MS, 38930

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

Financial Breakdown

Contract Ceiling: $23,623,622

Exercised Options: $23,623,622

Current Obligation: $23,623,622

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline