Navy awards $33M contract for substation replacements at NSA Hampton Roads, Virginia

Contract Overview

Contract Amount: $33,072,861 ($33.1M)

Contractor: RQ Construction, LLC

Awarding Agency: Department of Defense

Start Date: 2022-09-26

End Date: 2025-12-09

Contract Duration: 1,170 days

Daily Burn Rate: $28.3K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: X001 NH-95, REPLACE SUBSTATIONS A THROUGH L, NSA HAMPTON ROADS, N

Place of Performance

Location: NORFOLK, NORFOLK CITY County, VIRGINIA, 23511

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $33.1 million to RQ CONSTRUCTION, LLC for work described as: X001 NH-95, REPLACE SUBSTATIONS A THROUGH L, NSA HAMPTON ROADS, N Key points: 1. Contract value appears reasonable given the scope of replacing multiple substations. 2. Full and open competition suggests a competitive bidding process. 3. Fixed-price contract type may limit cost overruns for the government. 4. Project duration of nearly four years indicates a significant undertaking. 5. Location in Virginia places the project within a key naval hub. 6. Contractor RQ CONSTRUCTION, LLC has experience in commercial and institutional building construction.

Value Assessment

Rating: good

The contract value of approximately $33 million for replacing multiple substations across NSA Hampton Roads seems aligned with the scale of such infrastructure projects. Benchmarking against similar large-scale construction contracts for military bases would provide a more precise value-for-money assessment. The firm-fixed-price structure is generally favorable for controlling costs on projects with well-defined scopes, suggesting good value if the contractor manages execution effectively. The duration of the contract, spanning over three years, also indicates a substantial and complex project.

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 bids. The specific number of bidders is not provided, but this procurement method generally fosters a competitive environment, which is expected to drive down prices and improve the quality of proposals. The Navy's decision to use full and open competition suggests confidence in the market's ability to meet the requirements.

Taxpayer Impact: Full and open competition is the most advantageous for taxpayers as it maximizes the potential for receiving the best value through a wide range of offers and encourages competitive pricing.

Public Impact

Naval Station (NSA) Hampton Roads and its tenant commands will benefit from modernized and reliable electrical infrastructure. The project will deliver essential upgrades to critical power distribution systems, enhancing operational resilience. The geographic impact is concentrated at NSA Hampton Roads, Virginia, supporting naval operations in the region. The construction activities will likely involve a workforce of skilled tradespeople and project managers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for schedule delays given the multi-year duration and complexity of substation replacement.
Ensuring consistent quality across all replaced substations will require robust oversight.
Coordination with ongoing base operations to minimize disruption is critical.

Positive Signals

Firm-fixed-price contract helps mitigate cost escalation risks for the government.
Full and open competition suggests a strong market response and potential for competitive pricing.
The contractor's experience in commercial and institutional building construction is a positive indicator.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, specifically focusing on critical infrastructure upgrades for a federal facility. The market for large-scale construction and renovation projects, particularly for government and military installations, is substantial. This project represents a significant investment in maintaining and modernizing essential power systems, a common requirement for large federal sites. Comparable spending benchmarks would typically involve other major base infrastructure renovation projects.

Small Business Impact

The contract was awarded under full and open competition and does not indicate any specific small business set-aside. Therefore, the direct impact on small business set-asides is likely minimal unless the prime contractor, RQ CONSTRUCTION, LLC, engages small businesses for subcontracting opportunities. Analysis of subcontracting plans would be necessary to determine the extent of small business participation.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy's contracting and engineering departments, ensuring compliance with contract terms and specifications. Accountability measures are inherent in the firm-fixed-price contract type, which places the onus on the contractor to deliver within the agreed-upon price. Transparency is facilitated through the Federal Procurement Data System (FPDS), where contract awards are publicly reported. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Military Base Infrastructure Modernization
Naval Facilities Engineering Command (NAVFAC) Contracts
Electrical Infrastructure Upgrades
Department of Defense Construction Projects

Risk Flags

Potential for schedule delays
Ensuring quality of work across multiple substations
Minimizing disruption to base operations

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $33.1 million to RQ CONSTRUCTION, LLC. X001 NH-95, REPLACE SUBSTATIONS A THROUGH L, NSA HAMPTON ROADS, N

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 $33.1 million.

What is the period of performance?

Start: 2022-09-26. End: 2025-12-09.

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

Information on RQ CONSTRUCTION, LLC's specific track record with federal contracts, especially within the Department of Defense, is not detailed in the provided data. A thorough review of their past performance, including contract history, past performance evaluations, and any reported issues or successes on similar projects, would be necessary for a comprehensive assessment. This would involve searching federal contract databases and potentially agency-specific performance records to gauge their reliability and capability in executing large-scale construction projects for the government.

How does the awarded amount of $33 million compare to similar substation replacement projects at other naval installations?

Without specific data on comparable substation replacement projects at other naval installations, a direct comparison of the $33 million award is challenging. However, the scope of replacing multiple substations (A through L) at a major installation like NSA Hampton Roads suggests a significant undertaking. Factors influencing cost include the age and condition of existing infrastructure, the complexity of the new systems, site-specific challenges, and prevailing market rates for labor and materials. A detailed benchmark analysis would require identifying projects with similar scale, complexity, and geographic location.

What are the primary risks associated with a multi-year construction project of this nature, and how are they being mitigated?

Primary risks for this multi-year substation replacement project include potential schedule delays due to unforeseen site conditions, weather, supply chain disruptions, or labor shortages. Cost overruns are a risk, though mitigated by the firm-fixed-price contract type. Operational disruptions to base activities are also a concern. Mitigation strategies likely involve detailed project planning, robust contractor oversight, contingency planning for unforeseen issues, and close coordination with base operations to minimize impact. The contract's duration itself necessitates careful management of these risks over an extended period.

What is the expected impact of these substation upgrades on the operational effectiveness and energy resilience of NSA Hampton Roads?

The replacement of substations A through L is expected to significantly enhance the operational effectiveness and energy resilience of NSA Hampton Roads. Modernized substations will provide more reliable power distribution, reducing the risk of outages that could disrupt critical naval operations, training, and support functions. Improved energy efficiency and capacity may also support future base expansion and technological upgrades. This infrastructure investment is crucial for ensuring the base can maintain its mission readiness and adapt to evolving energy demands and security requirements.

What has been the historical spending trend for infrastructure maintenance and upgrades at NSA Hampton Roads or similar naval facilities?

Historical spending trends for infrastructure maintenance and upgrades at NSA Hampton Roads or similar naval facilities are not provided in the current data. However, such projects are typically funded through specific military construction (MILCON) appropriations or operations and maintenance (O&M) budgets. Consistent investment in aging infrastructure is crucial for maintaining operational readiness. Analyzing past budgets and contract awards for similar facilities would reveal patterns in spending priorities and the scale of investment in critical infrastructure over time.

Are there any specific performance metrics or key performance indicators (KPIs) defined in the contract to measure success?

The provided data does not specify the performance metrics or Key Performance Indicators (KPIs) included in the contract. Typically, for construction projects of this magnitude, contracts will outline specific requirements related to quality of work, adherence to schedule, safety compliance, and final acceptance criteria. These are often detailed in the contract's Statement of Work (SOW) or Performance Work Statement (PWS). The government would monitor these aspects through regular inspections, progress reports, and milestone reviews to ensure the contractor meets all contractual obligations.

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: N4008521R2507

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1620 FARADAY AVE, CARLSBAD, CA, 92008

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

Financial Breakdown

Contract Ceiling: $33,072,861

Exercised Options: $33,072,861

Current Obligation: $33,072,861

Actual Outlays: $395,848

Subaward Activity

Number of Subawards: 23

Total Subaward Amount: $13,498,172

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N4008521D0081

IDV Type: IDC

Timeline