DoD's $85.4M Camp Lejeune construction contract awarded to RQ Construction, LLC, faced full and open competition

Contract Overview

Contract Amount: $85,396,834 ($85.4M)

Contractor: RQ Construction, LLC

Awarding Agency: Department of Defense

Start Date: 2017-12-28

End Date: 2022-03-31

Contract Duration: 1,554 days

Daily Burn Rate: $55.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF P1219 DBB MARINE BATTALION COMPLEX AND P1288 DBB COMBAT SERVICES SUPPORT FACILITY, MARINE CORPS BASE, CAMP LEJEUNE, NORTH CAROLINA

Place of Performance

Location: CAMP LEJEUNE, ONSLOW County, NORTH CAROLINA, 28542

State: North Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $85.4 million to RQ CONSTRUCTION, LLC for work described as: IGF::OT::IGF P1219 DBB MARINE BATTALION COMPLEX AND P1288 DBB COMBAT SERVICES SUPPORT FACILITY, MARINE CORPS BASE, CAMP LEJEUNE, NORTH CAROLINA Key points: 1. The contract's value of $85.4 million represents a significant investment in military infrastructure. 2. Full and open competition suggests a robust bidding process, potentially leading to better pricing. 3. The duration of 1554 days indicates a large-scale, complex construction project. 4. Awarded to RQ Construction, LLC, the contract falls under the broad category of Commercial and Institutional Building Construction. 5. The project's location at Marine Corps Base, Camp Lejeune, North Carolina, highlights its strategic importance for military readiness. 6. Fixed-price contract type aims to control costs and provide predictability for the government. 7. The absence of small business set-asides warrants further investigation into subcontracting opportunities.

Value Assessment

Rating: good

The contract's total award of $85.4 million for the Marine Battalion Complex and Combat Services Support Facility at Camp Lejeune appears reasonable given the scale and complexity of military construction projects. Benchmarking against similar large-scale military construction contracts would provide a more precise value-for-money assessment. The firm fixed-price structure suggests that cost overruns are primarily the contractor's responsibility, which is a positive indicator for the government.

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 presence of 5 bidders suggests a healthy level of competition for this significant construction project. This competitive environment is generally favorable for price discovery and achieving a fair market price for the government.

Taxpayer Impact: The full and open competition process likely resulted in a more competitive bid, potentially saving taxpayer dollars compared to a sole-source or limited competition award.

Public Impact

Military personnel at Marine Corps Base, Camp Lejeune, will benefit from improved facilities, enhancing operational readiness and quality of life. The project delivers essential infrastructure, including a Marine Battalion Complex and Combat Services Support Facility. The geographic impact is concentrated at Camp Lejeune, North Carolina, supporting a key military installation. The construction activities will likely create numerous jobs for skilled trades and support personnel in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the fixed-price contract does not adequately account for unforeseen construction challenges.
Ensuring timely completion within the 1554-day duration is critical to avoid impacting military operations.
The lack of explicit small business set-aside information raises questions about opportunities for smaller firms in the subcontracting process.

Positive Signals

The firm fixed-price contract type provides cost certainty for the government.
Full and open competition suggests a competitive bidding process that should yield a fair price.
The project's focus on essential military infrastructure supports the core mission of the Marine Corps.

Sector Analysis

This contract falls within the construction sector, specifically Commercial and Institutional Building Construction. The market for large-scale military construction is substantial, driven by the Department of Defense's continuous need to modernize and maintain its facilities. Comparable spending benchmarks would involve analyzing other major construction projects awarded to military branches for barracks, training facilities, and support buildings, often in the tens to hundreds of millions of dollars.

Small Business Impact

The contract was not awarded as a small business set-aside, and the data does not indicate specific subcontracting goals for small businesses. This suggests that opportunities for small businesses may be limited to those that can secure subcontracts from the prime contractor, RQ Construction, LLC. Further review of subcontracting plans would be necessary to assess the full impact on the small business ecosystem.

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, which places cost risk on the contractor. Transparency is generally maintained through contract award databases and reporting requirements, though specific project oversight details may not be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Military Construction, Navy and Marine Corps
Facilities Sustainment, Restoration and Modernization
Base Realignment and Closure (BRAC) Construction Projects
Department of Defense Construction Contracts
Marine Corps Infrastructure Development

Risk Flags

Potential for cost overruns due to change orders
Risk of schedule delays impacting military readiness
Uncertainty regarding small business subcontracting opportunities
Dependence on contractor's performance for quality and timely delivery

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $85.4 million to RQ CONSTRUCTION, LLC. IGF::OT::IGF P1219 DBB MARINE BATTALION COMPLEX AND P1288 DBB COMBAT SERVICES SUPPORT FACILITY, MARINE CORPS BASE, CAMP LEJEUNE, NORTH CAROLINA

Who is the contractor on this award?

The obligated recipient is RQ CONSTRUCTION, 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 $85.4 million.

What is the period of performance?

Start: 2017-12-28. End: 2022-03-31.

What is the track record of RQ Construction, LLC in completing large-scale military construction projects on time and within budget?

RQ Construction, LLC has a history of undertaking significant construction projects, including those for military clients. Assessing their specific track record for projects of similar scale and complexity to the Camp Lejeune contract requires a detailed review of past performance data, including on-time delivery rates and adherence to budget. Publicly available contract databases and performance evaluations can provide insights into their reliability and ability to manage complex projects. While this specific contract was awarded in 2017 and completed in 2022, understanding their performance on other concurrent or prior projects is crucial for a comprehensive assessment of their capabilities and risk profile.

How does the awarded price of $85.4 million compare to similar military construction projects in the same geographic region or for similar facility types?

Benchmarking the $85.4 million award against similar military construction projects is essential for evaluating value for money. This comparison should consider projects of comparable size, scope (e.g., barracks, training facilities, support complexes), and location. Factors such as prevailing labor costs, material prices, and site-specific conditions in North Carolina during the contract period (2017-2022) must be taken into account. Without access to a detailed database of comparable construction projects with cost breakdowns, a precise comparison is challenging. However, the scale of the award suggests a substantial undertaking, and its competitiveness is bolstered by the full and open competition.

What are the primary risk indicators associated with this firm fixed-price construction contract?

The primary risk indicator for a firm fixed-price contract, even with full and open competition, is the potential for scope creep or unforeseen site conditions that could lead to change orders, increasing the overall cost beyond the initial $85.4 million. While the contractor bears the brunt of cost overruns, significant change orders can still impact project timelines and require extensive negotiation. Another risk is the contractor's capacity to manage a project of this magnitude over a 1554-day period, including potential labor shortages, material price volatility, or subcontractor performance issues. Ensuring robust project management and oversight from the government side is crucial to mitigate these risks.

How effective is the firm fixed-price contract type in ensuring program effectiveness for military infrastructure development?

The firm fixed-price (FFP) contract type is generally effective in ensuring program effectiveness for military infrastructure development by providing cost certainty and incentivizing the contractor to complete the project efficiently. For the government, the FFP structure locks in the price, making budgeting more predictable and reducing the risk of cost overruns. This encourages the contractor to manage resources effectively and minimize waste to maximize profit. However, effectiveness can be diminished if the initial scope is poorly defined, leading to numerous change orders that negate the fixed-price benefit, or if the contractor cuts corners on quality to meet the fixed price, which would require stringent government quality assurance.

What are the historical spending patterns for similar construction projects at Marine Corps Base, Camp Lejeune, over the past decade?

Analyzing historical spending patterns for similar construction projects at Marine Corps Base, Camp Lejeune, over the past decade would provide valuable context for the $85.4 million award. This would involve examining the frequency, size, and types of construction contracts awarded to the base. Understanding whether this contract represents a typical investment, an increase, or a decrease in spending on infrastructure can inform future budget allocations and identify trends in construction costs and project durations. Data on previous projects would also reveal the typical contracting methods used (e.g., competition levels) and the performance of awarded contractors.

What is the potential impact of the 5-bidder competition on the long-term maintenance and operational costs of the new facilities?

A robust competition with 5 bidders for the initial construction contract suggests that the government likely secured a competitive price for the construction itself. However, the direct impact of this competition on long-term maintenance and operational costs is less direct. The quality of construction, materials used, and design choices made during the project, influenced by the competitive bidding process and subsequent contract execution, will ultimately affect these long-term costs. A well-executed, high-quality build resulting from strong competition should lead to lower maintenance needs and more efficient operations over the facility's lifecycle. Conversely, if the competition led to aggressive cost-cutting by the winning contractor that compromised quality, long-term costs could be higher.

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: N4008517R8314

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3194 LIONSHEAD AVE, CARLSBAD, CA, 92010

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

Financial Breakdown

Contract Ceiling: $85,396,834

Exercised Options: $85,396,834

Current Obligation: $85,396,834

Actual Outlays: $980,515

Subaward Activity

Number of Subawards: 59

Total Subaward Amount: $72,130,228

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline