Department of Defense awards $111M contract for Portsmouth Naval Shipyard facility construction

Contract Overview

Contract Amount: $111,187,747 ($111.2M)

Contractor: Methuen Construction CO Inc

Awarding Agency: Department of Defense

Start Date: 2019-09-25

End Date: 2025-02-23

Contract Duration: 1,978 days

Daily Burn Rate: $56.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: P-293 PAINT, BLAST AND RUBBER CONSOLIDATION FACILITY, PORTSMOUTH NAVAL SHIPYARD, KITTERY, ME

Place of Performance

Location: KITTERY, YORK County, MAINE, 03904

State: Maine Government Spending

Plain-Language Summary

Department of Defense obligated $111.2 million to METHUEN CONSTRUCTION CO INC for work described as: P-293 PAINT, BLAST AND RUBBER CONSOLIDATION FACILITY, PORTSMOUTH NAVAL SHIPYARD, KITTERY, ME Key points: 1. Contract awarded to Methuen Construction Co Inc for a large-scale industrial building project. 2. The contract is a firm-fixed-price definitive contract, indicating a clear scope and pricing structure. 3. The project duration is substantial, spanning over 1900 days, suggesting a complex undertaking. 4. The award was made under full and open competition, implying a competitive bidding process. 5. The contract is not set aside for small businesses, suggesting it was awarded based on best value or lowest price technically acceptable. 6. The project is located in Kittery, Maine, with implications for regional economic activity and workforce.

Value Assessment

Rating: good

The contract value of $111.2 million for industrial building construction appears to be within a reasonable range for a project of this scale and complexity, especially considering the specialized nature of naval shipyard facilities. Benchmarking against similar large-scale construction projects for government facilities would provide a more precise value-for-money assessment. The firm-fixed-price structure helps control costs, but the overall value is contingent on the final delivered product meeting all specifications.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning that all responsible sources were permitted to submit a bid. The presence of 2 bids suggests a moderate level of competition for this significant project. While two bidders participated, further details on the bidding process and the nature of the competition would be needed to fully assess its impact on price discovery and overall value.

Taxpayer Impact: Full and open competition generally benefits taxpayers by encouraging multiple companies to offer their best pricing and technical solutions, leading to potentially lower costs and higher quality outcomes.

Public Impact

The primary beneficiaries are the Department of Defense and the U.S. Navy, who will receive a consolidated facility for paint, blast, and rubber operations at Portsmouth Naval Shipyard. The project will deliver a critical infrastructure upgrade, enhancing operational efficiency and safety at the shipyard. The geographic impact is concentrated in Kittery, Maine, potentially creating local jobs and stimulating the regional economy through construction activities and associated services. The construction activities will likely involve a significant workforce, including skilled tradespeople, project managers, and support staff, contributing to employment in the area.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen construction challenges arise, despite the firm-fixed-price contract.
Dependence on the contractor's ability to meet stringent naval construction standards and timelines.
Risk of delays impacting the operational readiness of the Portsmouth Naval Shipyard.
Limited competition (2 bidders) might suggest potential for higher pricing than if more bidders were involved.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Awarded under full and open competition, suggesting a robust bidding process.
The project addresses a critical infrastructure need for the Navy.
Long contract duration allows for phased execution and management of complex tasks.

Sector Analysis

This contract falls within the Industrial Building Construction sector, a critical component of the broader construction industry. The market for specialized government facility construction is often characterized by high barriers to entry due to security requirements, specialized expertise, and bonding capacity. The value of this contract, over $111 million, places it in the large-scale project category within this sector. Comparable spending benchmarks would typically involve other major military base infrastructure projects or large industrial facility constructions.

Small Business Impact

This contract was not set aside for small businesses, and the data does not indicate any subcontracting requirements for small businesses. This suggests that the primary contractor, Methuen Construction Co Inc, will likely handle the majority of the work. The absence of small business set-asides means that opportunities for small businesses to participate in this specific contract are limited, though they may be involved as suppliers or subcontractors to the prime contractor if not explicitly mandated.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy's contracting and engineering departments, ensuring compliance with specifications and timelines. Accountability measures are embedded in the firm-fixed-price contract terms, with penalties for non-performance or delays. Transparency is generally maintained through contract award databases and public reporting, though specific project oversight details may be internal. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Naval Shipyard Infrastructure Modernization Programs
Department of Defense Facilities Construction
Industrial Facility Construction Contracts
Military Base Redevelopment Projects

Risk Flags

Potential for cost overruns
Risk of project delays
Environmental compliance challenges
Limited competition observed

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $111.2 million to METHUEN CONSTRUCTION CO INC. P-293 PAINT, BLAST AND RUBBER CONSOLIDATION FACILITY, PORTSMOUTH NAVAL SHIPYARD, KITTERY, ME

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 $111.2 million.

What is the period of performance?

Start: 2019-09-25. End: 2025-02-23.

What is the track record of Methuen Construction Co Inc with the Department of Defense?

Methuen Construction Co Inc has a history of working with government entities, including the Department of Defense. While specific details of past performance on similar large-scale industrial construction projects for the Navy are not provided in this data snippet, their ability to win a contract of this magnitude suggests they have met the necessary qualifications and demonstrated capability. A deeper dive into their contract history, including past performance reviews, safety records, and on-time delivery rates for previous government projects, would offer a more comprehensive understanding of their reliability and expertise in executing complex defense infrastructure contracts.

How does the awarded amount compare to similar naval shipyard construction projects?

The $111.2 million award for the P-293 PAINT, BLAST AND RUBBER CONSOLIDATION FACILITY at Portsmouth Naval Shipyard is a significant investment. To benchmark its value, one would need to compare it against other recent construction projects for similar specialized facilities within naval shipyards or other defense installations. Factors such as project scope (e.g., square footage, specialized equipment integration, environmental controls), geographic location (which impacts labor and material costs), and the specific year of award are crucial for a fair comparison. Without access to a database of comparable projects, it's difficult to definitively state if this represents excellent, good, or fair value, but it is substantial for a single facility construction.

What are the primary risks associated with this contract?

The primary risks associated with this contract include potential construction delays due to unforeseen site conditions, weather, or supply chain disruptions, which could impact the operational readiness of the shipyard. Given the specialized nature of paint, blast, and rubber operations, ensuring compliance with stringent environmental and safety regulations presents a significant risk. Furthermore, the firm-fixed-price nature means that cost overruns due to contractor inefficiencies or scope creep (if not managed tightly) could still occur, although the government's liability is capped. The limited competition (2 bidders) also poses a potential risk of suboptimal pricing.

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

The firm-fixed-price (FFP) contract type is generally considered effective for managing costs on projects with well-defined scopes, like the construction of a specific facility. It shifts the risk of cost overruns to the contractor, incentivizing them to control expenses and complete the work efficiently to maximize profit. For the government, an FFP contract provides a high degree of cost certainty. However, its effectiveness hinges on the accuracy of the initial cost estimates and the contractor's ability to execute the work within those parameters. If the scope is not perfectly defined or unforeseen issues arise, the contractor may face financial strain, potentially impacting quality or leading to disputes.

What is the historical spending trend for industrial building construction at the Department of the Navy?

Historical spending trends for industrial building construction at the Department of the Navy would reveal patterns in investment in infrastructure upgrades and new facilities. Analyzing data over several fiscal years would show whether spending in this category is increasing, decreasing, or remaining stable. This context is important for understanding if the $111.2 million award represents a typical investment or an outlier. Factors influencing these trends could include military readiness requirements, aging infrastructure replacement needs, and budget allocations. A comprehensive analysis would require access to historical contract databases and budget reports specific to the Navy's construction projects.

What are the implications of the contract duration (1978 days) on project management and oversight?

The contract duration of 1978 days (approximately 5.4 years) indicates a large-scale, complex construction project. This extended timeline necessitates robust project management and oversight from the Department of the Navy. Key implications include the need for sustained resource allocation for government oversight personnel, regular progress reviews, and proactive risk management throughout the project lifecycle. The long duration also increases the potential for changes in requirements, technology, or economic conditions, requiring flexibility and effective change management processes. Milestones and phased payments will be critical for tracking progress and ensuring contractor performance over this extended period.

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: N4008518R8716

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 144 MAIN ST, PLAISTOW, NH, 03865

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: $113,114,947

Exercised Options: $111,187,747

Current Obligation: $111,187,747

Actual Outlays: $-2,222,136

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline