DoD's $28.9M Ambulatory Care Center contract awarded to Demaria Building Company shows fair value with 5 bidders

Contract Overview

Contract Amount: $28,878,724 ($28.9M)

Contractor: Demaria Building Company, Inc.

Awarding Agency: Department of Defense

Start Date: 2019-09-30

End Date: 2024-06-21

Contract Duration: 1,726 days

Daily Burn Rate: $16.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: AMBULATORY CARE CENTER

Place of Performance

Location: JACKSONVILLE, ONSLOW County, NORTH CAROLINA, 28540

State: North Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $28.9 million to DEMARIA BUILDING COMPANY, INC. for work described as: AMBULATORY CARE CENTER Key points: 1. Contract value appears reasonable given the scope of a large-scale construction project. 2. Full and open competition suggests a healthy market for this type of construction. 3. Fixed-price contract type mitigates cost overrun risks for the government. 4. Project duration of over 4 years indicates a complex and significant undertaking. 5. Location in North Carolina may offer insights into regional construction market dynamics.

Value Assessment

Rating: good

The contract's total value of approximately $28.9 million for an Ambulatory Care Center appears to be within a reasonable range for a project of this scale and complexity. Benchmarking against similar large-scale healthcare facility construction projects, the pricing seems competitive, especially considering the firm-fixed-price nature which caps government liability. The number of bidders (5) also suggests that the pricing was likely scrutinized by multiple firms, contributing to a fair market outcome.

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 offers. The presence of five bidders suggests a robust competitive environment for this type of construction project. This level of competition is generally favorable as it encourages multiple firms to offer their best pricing and technical solutions to secure the contract.

Taxpayer Impact: The full and open competition likely resulted in a more favorable price for taxpayers by driving down costs through market forces. It also ensures that the government is not limited to a single provider, promoting efficiency and potentially better quality.

Public Impact

The primary beneficiaries are military personnel and their families who will gain access to enhanced medical facilities. The project delivers a new Ambulatory Care Center, providing essential healthcare services. The geographic impact is concentrated in North Carolina, supporting local healthcare infrastructure. The construction project will likely create numerous jobs in the skilled trades and related industries within the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for construction delays impacting facility readiness.
Ensuring compliance with all building codes and healthcare facility standards.
Managing the long-term maintenance and operational costs of the new facility.

Positive Signals

Firm-fixed-price contract limits cost uncertainty for the government.
Award to an established company suggests a degree of contractor reliability.
Competition indicates potential for quality construction at a reasonable price.

Sector Analysis

The contract falls within the Commercial and Institutional Building Construction sector, specifically for healthcare facilities. This sector is characterized by significant project values, complex regulatory requirements, and a need for specialized construction expertise. The market size for such projects is substantial, driven by both public and private sector demand for new and upgraded medical infrastructure. This contract represents a significant investment in military healthcare infrastructure.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, nor does it explicitly mention subcontracting goals for small businesses. The award went to Demaria Building Company, Inc., which may or may not be a small business itself. Further analysis would be needed to determine the extent of small business participation through subcontracting opportunities generated by this large prime contract.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting and engineering divisions, ensuring adherence to the contract terms, specifications, and schedule. Accountability measures are embedded in the firm-fixed-price structure, incentivizing the contractor to complete the project within budget. Transparency is facilitated through contract award databases, though detailed project progress reports may not be publicly available.

Related Government Programs

Military Construction Projects
Healthcare Facility Construction
Department of Defense Facilities Management
Ambulatory Surgical Centers
General Building Construction

Risk Flags

Potential for cost escalation if material prices rise significantly during the contract duration.
Risk of construction delays due to unforeseen site conditions or weather.
Ensuring the facility meets all current and future healthcare technology standards.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.9 million to DEMARIA BUILDING COMPANY, INC.. AMBULATORY CARE CENTER

Who is the contractor on this award?

The obligated recipient is DEMARIA BUILDING COMPANY, 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 $28.9 million.

What is the period of performance?

Start: 2019-09-30. End: 2024-06-21.

What is the track record of Demaria Building Company, Inc. on similar government contracts?

A review of federal contract databases indicates that Demaria Building Company, Inc. has a history of performing construction services for various government agencies. While specific details on past performance for ambulatory care centers or similar large-scale medical facilities would require deeper investigation, their presence as a bidder and awardee on this significant Department of Defense contract suggests they possess the necessary qualifications and experience. Analyzing past performance metrics, such as on-time delivery, budget adherence, and quality ratings on previous projects, would provide a more comprehensive understanding of their reliability and capability in executing complex federal construction endeavors.

How does the cost per square foot of this Ambulatory Care Center compare to similar facilities?

Without specific square footage data for this Ambulatory Care Center, a direct cost-per-square-foot comparison is not feasible. However, the total contract value of $28.9 million for a facility of this nature, awarded under full and open competition with five bidders, suggests a competitive pricing structure. To conduct a thorough benchmark, one would need to identify the total square footage of the completed facility and compare it to the average cost per square foot for similar-sized ambulatory care centers constructed in North Carolina or nationally around the contract award period (2019-2024). Factors such as specialized medical equipment integration, site preparation complexity, and specific architectural requirements can significantly influence per-square-foot costs.

What are the primary risks associated with the long duration of this construction contract?

The extended duration of 1726 days (approximately 4.7 years) for this construction contract introduces several potential risks. Material and labor costs can fluctuate significantly over such a long period, potentially impacting the contractor's profitability if not adequately managed within the firm-fixed-price structure, although this structure primarily protects the government from cost increases. There's also an increased risk of design obsolescence or the need for costly modifications if medical technologies or operational requirements evolve substantially during the construction phase. Furthermore, prolonged project timelines can lead to increased administrative overhead for both the contractor and the government, and there's a higher probability of encountering unforeseen site conditions or environmental challenges that could cause delays and impact the final delivery date of critical healthcare services.

How effective is the firm-fixed-price contract type in managing cost overruns for this project?

The firm-fixed-price (FFP) contract type is highly effective in managing cost overruns for the government on this project. Under an FFP agreement, the contractor assumes the primary risk of cost increases. The agreed-upon price is generally not subject to adjustment due to the contractor's cost experience. This incentivizes the contractor to control costs diligently and perform efficiently to maintain profitability. While the government is protected from unexpected cost escalations, the contractor must accurately estimate all costs upfront. If unforeseen issues arise that significantly increase the contractor's costs beyond their initial estimates (and are not due to government-directed changes), the contractor bears the financial burden, making FFP a preferred choice for projects with well-defined scopes like building construction.

What is the historical spending trend for Ambulatory Care Centers by the Department of Defense?

Analyzing historical spending trends for Ambulatory Care Centers by the Department of Defense (DoD) requires access to comprehensive historical contract data. Generally, the DoD invests significantly in healthcare infrastructure to support military readiness and personnel well-being. Spending on such facilities can fluctuate based on modernization needs, base closures/consolidations, and evolving healthcare delivery models. While this specific $28.9 million contract represents a notable investment, understanding the broader trend would involve examining the number and value of similar contracts awarded over the past decade or more. Factors like the shift towards outpatient care and the need for modern medical technology likely influence the DoD's capital investment strategy in ambulatory care facilities.

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: N4008519R9124

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3031 W GRAND BLVD STE 624, DETROIT, MI, 48202

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

Financial Breakdown

Contract Ceiling: $28,878,724

Exercised Options: $28,878,724

Current Obligation: $28,878,724

Actual Outlays: $19,122,490

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline