DoD's $25.5M mechanical repair contract awarded to RQ CONSTRUCTION, LLC for 1455 days

Contract Overview

Contract Amount: $25,514,405 ($25.5M)

Contractor: RQ Construction, LLC

Awarding Agency: Department of Defense

Start Date: 2023-07-14

End Date: 2027-07-08

Contract Duration: 1,455 days

Daily Burn Rate: $17.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: X008 MECHANICAL REPAIRS FOR WC145 (200084)

Place of Performance

Location: CAMP LEJEUNE, ONSLOW County, NORTH CAROLINA, 28547

State: North Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $25.5 million to RQ CONSTRUCTION, LLC for work described as: X008 MECHANICAL REPAIRS FOR WC145 (200084) Key points: 1. Value for money assessed through firm-fixed-price structure and competition. 2. Competition dynamics indicate a full and open process with 3 bidders. 3. Risk indicators include contract duration and fixed-price nature. 4. Performance context is mechanical repairs for a specific facility (WC145). 5. Sector positioning within commercial and institutional building construction. 6. Spending context is a single delivery order under a larger contract vehicle.

Value Assessment

Rating: good

The contract's firm-fixed-price structure provides cost certainty for the government. With 3 bidders, the pricing is likely competitive, though a direct benchmark against similar mechanical repair contracts is needed for a definitive value assessment. The total award amount of $25.5 million over approximately four years suggests a significant but potentially reasonable investment for facility maintenance.

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. Three bids were received, suggesting a moderate level of competition. While more bidders could potentially drive prices lower, three offers generally provide a basis for price discovery and selection of the most advantageous offer.

Taxpayer Impact: The full and open competition with multiple bidders is beneficial for taxpayers as it encourages competitive pricing and ensures the government receives a fair market value for the services.

Public Impact

The Department of Defense benefits from the maintenance of critical infrastructure. Services delivered include mechanical repairs essential for facility operations. Geographic impact is concentrated in North Carolina. Workforce implications include employment opportunities for skilled trades in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (1455 days) could lead to potential cost overruns if market conditions change significantly.
Fixed-price contract may limit flexibility if unforeseen repair complexities arise.
Reliance on a single contractor for mechanical repairs could create dependency.

Positive Signals

Firm-fixed-price contract provides budget certainty.
Full and open competition suggests a competitive bidding process.
Award to an established entity (RQ CONSTRUCTION, LLC) may indicate a track record of performance.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, specifically focusing on mechanical systems. The market for such services is substantial, driven by the ongoing need for maintenance and repair of government facilities. Benchmarking this spending against similar large-scale facility maintenance contracts for federal agencies would provide further context on its relative cost-effectiveness.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a set-aside provision. However, the prime contractor, RQ CONSTRUCTION, LLC, may engage small businesses as subcontractors, which would be detailed in their subcontracting plan, if applicable.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant Department of the Navy program office. Accountability measures are embedded in the firm-fixed-price contract terms, requiring delivery of specified services. Transparency is generally maintained through contract award databases, though specific performance details may be less public.

Related Government Programs

Department of Defense Facilities Maintenance
Naval Facilities Engineering Command Contracts
Commercial Building Mechanical Systems Repair
Long-Term Construction Service Contracts

Risk Flags

Long contract duration may increase risk of cost escalation or performance issues.
Fixed-price nature could lead to contractor bearing significant risk for unforeseen issues.
Scope definition critical for ensuring value in a fixed-price mechanical repair contract.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $25.5 million to RQ CONSTRUCTION, LLC. X008 MECHANICAL REPAIRS FOR WC145 (200084)

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 $25.5 million.

What is the period of performance?

Start: 2023-07-14. End: 2027-07-08.

What is the historical spending pattern for mechanical repairs at WC145 by the Department of Defense?

Historical spending data for mechanical repairs specifically at facility WC145 by the Department of Defense is not directly available in the provided data. However, the current award of $25.5 million over approximately four years (1455 days) suggests a significant and ongoing need for such services. To understand historical patterns, one would need to access past contract awards for this specific facility or similar facilities managed by the Department of the Navy in North Carolina. Analyzing prior contract values, durations, and the number of bidders for similar repair work would reveal trends in spending, contractor selection, and potential cost fluctuations over time.

How does the per-unit cost of mechanical repairs under this contract compare to industry benchmarks?

A precise per-unit cost benchmark for this contract is not feasible with the provided data, as 'per-unit' is not defined (e.g., per HVAC unit, per square foot, per hour of labor). The contract is a firm-fixed-price award for a broad scope of mechanical repairs. To establish a benchmark, one would need to break down the contract's scope into specific services or components and compare their estimated costs against industry standards for commercial and institutional building construction in North Carolina. Factors like labor rates, material costs, and complexity of repairs would influence these benchmarks. The total award amount of $25.5 million for 1455 days averages roughly $17,500 per day, which serves as a very high-level indicator but lacks granular detail for true benchmarking.

What is RQ CONSTRUCTION, LLC's track record with similar government contracts?

Information regarding RQ CONSTRUCTION, LLC's specific track record with government contracts, particularly those involving mechanical repairs for facilities of this scale, is not detailed in the provided data. A comprehensive assessment would require reviewing their past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), other awarded federal contracts, and any reported issues or successes. Given this is a $25.5 million award, it suggests the company has likely demonstrated capability and capacity to handle large projects. Further investigation into their contract history with the Department of Defense or other agencies would be necessary to fully evaluate their reliability and expertise in this domain.

What are the primary risks associated with this firm-fixed-price contract for mechanical repairs?

The primary risks associated with this firm-fixed-price contract revolve around scope definition and potential unforeseen issues. If the scope of 'mechanical repairs' is not meticulously defined, the contractor might face unexpected complexities or additional work not adequately priced. For the government, the risk is that the fixed price might be higher than the actual cost incurred by the contractor, leading to reduced value for money if the contractor is highly efficient or if the initial cost estimates were conservative. Conversely, if unforeseen major issues arise (e.g., catastrophic system failure requiring extensive replacement beyond typical repairs), the contractor might incur losses, potentially impacting their ability or willingness to perform optimally throughout the contract duration. The long duration (1455 days) also introduces risks related to material price escalation and potential obsolescence of specified components.

How does the competition level (3 bidders) impact the overall value and taxpayer cost?

A competition level of three bidders for this $25.5 million contract suggests a moderately competitive environment. While more bidders could potentially drive prices down further, three offers generally provide sufficient market visibility to ensure the government is not overpaying significantly. This level of competition likely led to a price that reflects a reasonable balance between the contractor's need for profit and the government's objective of obtaining quality services at a fair price. It indicates that the market has at least a few capable providers for this type of work. However, without knowing the specific nature of the mechanical repairs and the uniqueness of the facility's systems, it's difficult to definitively state if three bidders represent the optimal level of competition for maximizing taxpayer savings.

What is the significance of the contract type (Firm Fixed Price) in the context of mechanical repairs?

The Firm Fixed Price (FFP) contract type is significant because it places the majority of the risk on the contractor regarding cost overruns. For mechanical repairs, which can sometimes involve unforeseen complexities or discoveries once work begins, an FFP contract provides the government with the highest degree of cost certainty. The price is set, and the contractor is obligated to complete the work for that amount, regardless of their actual costs. This is advantageous for the government's budgeting and financial planning. However, it can also mean that the initial price might be higher than a cost-reimbursable contract to compensate the contractor for taking on that risk. For the government, the key is ensuring the initial scope is well-defined to prevent disputes over what is included in the fixed price.

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Commercial and Institutional Building Construction

Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR NONBUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N4008519R9048

Offers Received: 3

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, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $25,514,405

Exercised Options: $25,514,405

Current Obligation: $25,514,405

Subaward Activity

Number of Subawards: 13

Total Subaward Amount: $5,842,417

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N4008520D0034

IDV Type: IDC

Timeline