DoD's $73.7M Norfolk Naval Shipyard training facility contract awarded to RQ Construction, LLC

Contract Overview

Contract Amount: $73,736,555 ($73.7M)

Contractor: RQ Construction, LLC

Awarding Agency: Department of Defense

Start Date: 2018-09-17

End Date: 2022-08-31

Contract Duration: 1,444 days

Daily Burn Rate: $51.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 10

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: P-257 SHIP REPAIR TRAINING FACILTY, NORFOLK NAVAL SHIPYARD, PORTSMOUTH, VIRGINIA

Place of Performance

Location: PORTSMOUTH, PORTSMOUTH CITY County, VIRGINIA, 23709

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $73.7 million to RQ CONSTRUCTION, LLC for work described as: P-257 SHIP REPAIR TRAINING FACILTY, NORFOLK NAVAL SHIPYARD, PORTSMOUTH, VIRGINIA Key points: 1. Contract value represents a significant investment in naval infrastructure and workforce development. 2. Full and open competition suggests a potentially competitive bidding process. 3. Contract duration of over three years indicates a complex, long-term project. 4. Fixed-price contract type shifts performance risk to the contractor. 5. Project located in Portsmouth, Virginia, impacting regional construction and training sectors. 6. The contract falls under the Commercial and Institutional Building Construction NAICS code.

Value Assessment

Rating: fair

The contract's total value of $73.7 million for a training facility appears substantial. Benchmarking against similar large-scale construction projects for military installations is necessary to determine value for money. Without specific details on the facility's scope and complexity, a precise comparison is difficult. However, the fixed-price nature of the contract suggests that the contractor bears the risk of cost overruns, which can be a positive indicator if the price was competitive.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. With 10 bids received, the competition level appears robust, suggesting that the government likely received a range of pricing and technical proposals. This level of competition is generally favorable for price discovery and achieving a fair market price.

Taxpayer Impact: A competitive bidding process helps ensure that taxpayer dollars are used efficiently by driving down costs and encouraging contractors to offer their best value.

Public Impact

Naval personnel at Norfolk Naval Shipyard will benefit from enhanced training capabilities. The project delivers a critical infrastructure asset for the Department of the Navy. Geographic impact is concentrated in Portsmouth, Virginia, supporting local construction jobs and businesses. Workforce implications include employment opportunities for construction workers and specialized trades during the project's duration.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the fixed-price contract did not adequately account for all project complexities.
Risk of schedule delays impacting the operational readiness of the training facility.
Ensuring the quality of construction meets the rigorous standards required for naval training facilities.

Positive Signals

Full and open competition likely resulted in a competitive price.
Fixed-price contract shifts cost risk to the contractor.
Long-term investment in critical naval infrastructure.
Project located in a region with established construction expertise.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the construction industry. The market for large-scale government construction projects, particularly for defense infrastructure, is substantial. This project represents a specific investment in specialized training facilities, which are crucial for maintaining a skilled military workforce. Comparable spending benchmarks would involve analyzing other large military construction or renovation projects awarded by the Department of Defense or other federal agencies.

Small Business Impact

The contract data indicates that small business participation was not a specific set-aside requirement (ss: false, sb: false). While the prime contractor is RQ Construction, LLC, there is no explicit information on subcontracting plans for small businesses within this data. Further analysis would be needed to determine if small businesses were utilized in the subcontracting chain and what their overall impact on the small business ecosystem might be.

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 fixed-price contract terms, requiring the contractor to deliver the facility as specified. Transparency is generally facilitated through contract award databases and public reporting, though specific oversight activities and Inspector General involvement would depend on project milestones and any reported issues.

Related Government Programs

Naval Shipyard Infrastructure Projects
Military Training Facility Construction
Department of Defense Construction Contracts
Commercial and Institutional Building Construction

Risk Flags

Potential for cost overruns
Risk of schedule delays
Quality assurance concerns
Contractor financial stability

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $73.7 million to RQ CONSTRUCTION, LLC. P-257 SHIP REPAIR TRAINING FACILTY, NORFOLK NAVAL SHIPYARD, PORTSMOUTH, VIRGINIA

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 $73.7 million.

What is the period of performance?

Start: 2018-09-17. End: 2022-08-31.

What is the track record of RQ Construction, LLC with federal contracts, particularly within the Department of Defense?

RQ Construction, LLC has a history of securing federal contracts, primarily with the Department of Defense. Their portfolio includes various construction projects, often involving military installations and infrastructure. Analyzing their past performance on similar-sized projects, adherence to schedules, and quality of work would provide a clearer picture of their reliability. Specific data on past contract awards, completion rates, and any documented performance issues or commendations would be crucial for a comprehensive assessment of their track record.

How does the per-square-foot cost of this training facility compare to similar government-funded construction projects?

To compare the per-square-foot cost, detailed information on the facility's total square footage is required, which is not provided in the current data. Assuming this information were available, it would be benchmarked against data from similar projects, such as other training facilities, barracks, or administrative buildings constructed for federal agencies. Factors like geographic location (affecting labor and material costs), specific construction materials, and the complexity of internal systems (e.g., specialized labs, simulation rooms) would need to be considered for a fair comparison. A significantly higher or lower cost per square foot than the benchmark could indicate potential issues with pricing or scope.

What are the primary risks associated with a large, fixed-price construction contract of this duration?

The primary risks associated with a large, fixed-price construction contract of this duration (1444 days) include potential cost overruns for the contractor if initial estimates were inaccurate or unforeseen issues arise (e.g., material price volatility, labor shortages, unexpected site conditions). Schedule delays are another significant risk, which can impact the operational readiness of the facility and potentially incur penalties for the contractor. For the government, the risk lies in the contractor's potential inability to deliver the project to the required specifications or quality standards, or in the contractor facing financial distress, which could lead to project abandonment. Robust oversight and clear contract terms are crucial to mitigate these risks.

How effective is the Norfolk Naval Shipyard in managing and overseeing large construction projects of this magnitude?

The effectiveness of the Norfolk Naval Shipyard in managing and overseeing large construction projects is generally assessed through project outcomes: on-time completion, within-budget delivery, and adherence to quality standards. While this specific contract's data doesn't detail its management effectiveness, naval shipyards typically have established project management frameworks and experienced personnel. However, the success of any large project is contingent on adequate resourcing, clear communication channels, proactive risk management, and strong contractor collaboration. Independent reviews or Inspector General reports related to past projects at the shipyard could offer more specific insights into their oversight capabilities.

What has been the historical spending trend for similar training facility construction at naval shipyards over the past five years?

To analyze historical spending trends for similar training facility construction at naval shipyards, data from the past five years would need to be aggregated and analyzed. This would involve identifying contracts with similar NAICS codes (e.g., 236220) and project types (training facilities, educational buildings) awarded to naval shipyards. Trends could reveal whether spending in this category is increasing, decreasing, or remaining stable, and whether contract values are generally rising due to inflation or increased demand. Such analysis would provide context for the $73.7 million award, indicating if it is an outlier or in line with historical investment patterns.

What are the potential long-term maintenance and operational costs associated with this new training facility?

The provided contract data does not include information on the long-term maintenance and operational (O&M) costs of the training facility. These costs are typically budgeted separately from the initial construction contract and are borne by the end-user agency (in this case, the Department of the Navy). Factors influencing O&M costs include the facility's size, materials used, complexity of systems (HVAC, electrical, IT), and the intensity of its use. A comprehensive lifecycle cost analysis, which would project these future expenses, is essential for fully understanding the total cost of ownership beyond the initial construction investment.

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: TWO STEP

Solicitation ID: N4008518R1107

Offers Received: 10

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: $73,736,555

Exercised Options: $73,736,555

Current Obligation: $73,736,555

Subaward Activity

Number of Subawards: 40

Total Subaward Amount: $54,916,178

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline