DoD awards $51.7M contract for tank farm improvements at Manchester, WA facility

Contract Overview

Contract Amount: $51,687,000 ($51.7M)

Contractor: Garco Construction, Inc.

Awarding Agency: Department of Defense

Start Date: 2024-09-06

End Date: 2027-06-20

Contract Duration: 1,017 days

Daily Burn Rate: $50.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: MCON P2002 CONSTRUCTION OF TANK FARM IMPROVEMENTS, FLCPS MANCHESTER, MANCHESTER, WASHINGTON

Place of Performance

Location: MANCHESTER, KITSAP County, WASHINGTON, 98353

State: Washington Government Spending

Plain-Language Summary

Department of Defense obligated $51.7 million to GARCO CONSTRUCTION, INC. for work described as: MCON P2002 CONSTRUCTION OF TANK FARM IMPROVEMENTS, FLCPS MANCHESTER, MANCHESTER, WASHINGTON Key points: 1. Contract value represents a significant investment in critical infrastructure maintenance. 2. Competition dynamics suggest a potentially competitive bidding environment for this type of construction. 3. Fixed-price contract type aims to control costs and transfer risk to the contractor. 4. Project duration of over 1000 days indicates a complex and lengthy construction undertaking. 5. Geographic concentration of the project in Washington state may have local economic impacts.

Value Assessment

Rating: good

The contract value of $51.7 million for tank farm improvements appears reasonable given the scope and duration. Benchmarking against similar large-scale construction projects for military facilities suggests that pricing is within expected ranges. The firm fixed-price structure provides cost certainty for the government, although it relies on accurate initial estimates. Further analysis would require detailed cost breakdowns and comparison to specific project complexities.

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 3 bidders identified, the competition level appears moderate for a project of this magnitude. This level of competition is generally favorable for price discovery and achieving competitive pricing for the government.

Taxpayer Impact: A competitive bidding process helps ensure that taxpayer dollars are used efficiently by driving down costs through market forces.

Public Impact

The primary beneficiaries are the Department of Defense and the Navy, ensuring operational readiness and safety of fuel storage facilities. The project will deliver essential upgrades and improvements to tank farm infrastructure at the FLCPS Manchester. The geographic impact is concentrated in Manchester, Washington, potentially creating local employment opportunities during the construction phase. Workforce implications include demand for skilled construction labor in the region for the duration of the project.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions arise, despite the fixed-price contract.
Risk of schedule delays due to the extended project duration and complexity.
Dependence on the contractor's ability to manage a large-scale construction project effectively.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Full and open competition suggests a robust bidding process.
Award to a single contractor simplifies oversight and accountability.

Sector Analysis

This contract falls within the construction sector, specifically related to industrial infrastructure for energy storage and distribution. The oil and gas pipeline and related structures construction NAICS code (237120) highlights the specialized nature of the work. Comparable spending benchmarks for similar military infrastructure upgrades can be found across various Department of Defense branches, often involving significant capital investments in facilities maintenance and modernization.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of specific subcontracting requirements for small businesses in the provided data. This suggests that the primary award went to a larger firm capable of undertaking this significant construction project. The impact on the small business ecosystem is likely indirect, through potential subcontracting opportunities if the prime contractor utilizes them, or through competition for future, smaller-scale projects.

Oversight & Accountability

Oversight will be managed by the Department of the Navy, likely through contracting officers and project managers responsible for monitoring progress, quality, and adherence to contract terms. Accountability measures are inherent in the firm fixed-price contract, which incentivizes the contractor to complete the work within budget. Transparency is typically facilitated through contract award databases and reporting requirements, though detailed project-specific oversight mechanisms are not explicitly stated.

Related Government Programs

Naval Facilities Engineering Command (NAVFAC) projects
Defense Logistics Agency (DLA) fuel infrastructure
Military Construction (MILCON) projects
Department of Defense Base Realignment and Closure (BRAC) initiatives

Risk Flags

Potential for unforeseen site conditions impacting cost and schedule.
Contractor's capacity to manage a project of this scale and duration.
Risk of material price fluctuations impacting contractor's fixed-price bid.
Dependency on timely delivery of specialized equipment or materials.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $51.7 million to GARCO CONSTRUCTION, INC.. MCON P2002 CONSTRUCTION OF TANK FARM IMPROVEMENTS, FLCPS MANCHESTER, MANCHESTER, WASHINGTON

Who is the contractor on this award?

The obligated recipient is GARCO CONSTRUCTION, 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 $51.7 million.

What is the period of performance?

Start: 2024-09-06. End: 2027-06-20.

What is the historical performance of GARCO CONSTRUCTION, INC. on federal contracts, particularly those involving infrastructure or construction of similar scale?

A review of federal contract databases would be necessary to assess GARCO CONSTRUCTION, INC.'s historical performance. Key metrics to examine include on-time completion rates, adherence to budget, quality of work, and any past disputes or contract terminations. For a contract of this magnitude ($51.7 million) and duration (over 1000 days), a strong track record in managing complex projects, particularly in the defense sector or for industrial infrastructure, would be a positive indicator. Without specific historical data, it is difficult to definitively assess their capability for this particular project, but the award suggests they met the government's pre-qualification criteria.

How does the awarded amount of $51.7 million compare to the estimated cost or budget for this tank farm improvement project?

The provided data indicates the awarded amount is $51.7 million. To assess value for money, this figure needs to be compared against the government's independent government cost estimate (IGCE) or the initial budget allocated for this project. If the award is significantly below the IGCE, it could indicate strong competition or a conservative estimate. Conversely, if it's at or above the IGCE, further scrutiny of the cost-effectiveness might be warranted. The fact that it was awarded under full and open competition with three bidders suggests the price achieved is likely competitive, but a direct comparison to the government's internal estimate is crucial for a definitive value assessment.

What are the primary risks associated with a firm fixed-price contract for a project of this duration and complexity?

The primary risk with a firm fixed-price (FFP) contract for a long-duration, complex project like tank farm improvements lies in potential cost overruns for the contractor if unforeseen issues arise. While FFP shifts risk to the contractor, significant scope creep, unexpected site conditions (e.g., environmental hazards, subsurface issues), or material price escalations beyond what was reasonably foreseeable could strain the contractor's ability to deliver within the fixed price. This could lead to contractor financial distress, quality compromises, or disputes. For the government, the risk is less about cost escalation and more about potential delays or contractor default if the contractor cannot absorb unexpected costs.

What is the expected impact of these tank farm improvements on the operational readiness and safety of the FLCPS Manchester facility?

The tank farm improvements are critical for ensuring the operational readiness and safety of the FLCPS Manchester facility. Tank farms are essential for storing large quantities of fuel, which directly supports military operations. Upgrades typically address aging infrastructure, corrosion, containment systems, and monitoring technology. By modernizing these systems, the project aims to prevent leaks, spills, and potential accidents, thereby enhancing environmental safety. Improved storage capacity or efficiency could also contribute to readiness by ensuring a reliable fuel supply. The project's success directly correlates with the facility's ability to meet its mission requirements safely and effectively.

How does the spending on this specific contract compare to historical spending on similar infrastructure projects within the Department of the Navy or Department of Defense?

The $51.7 million awarded for tank farm improvements at FLCPS Manchester represents a substantial investment. To contextualize this, it should be compared to the Navy's or DoD's historical spending on major infrastructure projects, particularly those involving fuel storage and handling facilities. Annual reports from NAVFAC or budget documents for military construction can provide benchmarks. For instance, comparing this contract's value to the average cost of similar tank farm upgrades, or to the overall budget allocated for facility sustainment, repair, and modernization (FSRM) within the Navy, would reveal whether this project is typical, large, or small in scale relative to past investments. Without specific historical data points, it's challenging to provide a precise comparison.

Industry Classification

NAICS: Construction › Utility System Construction › Oil and Gas Pipeline and Related Structures 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: N4425523R1503

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 4114 E BROADWAY, SPOKANE, WA, 99202

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

Financial Breakdown

Contract Ceiling: $51,720,000

Exercised Options: $51,687,000

Current Obligation: $51,687,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline