Department of the Navy awards $74.6M contract for construction of multiple training facilities

Contract Overview

Contract Amount: $74,577,690 ($74.6M)

Contractor: ROY Anderson Corp

Awarding Agency: Department of Defense

Start Date: 2006-09-14

End Date: 2010-01-05

Contract Duration: 1,209 days

Daily Burn Rate: $61.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: DESIGN/BUILD FOR P-817 AUTO VEHICLE TRAINING SHOP, P-784 DISASTER RECOVERY TRAINING, P-826 ARMORY, P-783 NCTC TRAINING COMPLEX, P-781 STEEL WORKERS TRAINING, P-782 BUILDERS APPLIED INSTRUCTION, P-810 TACTICAL TRAINING FACILITY, P-816, CONSOLIDATED PROFESSIONAL DEV.

Place of Performance

Location: GULFPORT, HARRISON County, MISSISSIPPI, 39501

State: Mississippi Government Spending

Plain-Language Summary

Department of Defense obligated $74.6 million to ROY ANDERSON CORP for work described as: DESIGN/BUILD FOR P-817 AUTO VEHICLE TRAINING SHOP, P-784 DISASTER RECOVERY TRAINING, P-826 ARMORY, P-783 NCTC TRAINING COMPLEX, P-781 STEEL WORKERS TRAINING, P-782 BUILDERS APPLIED INSTRUCTION, P-810 TACTICAL TRAINING FACILITY, P-816, CONSOLIDATED PROFESSIONAL DEV. Key points: 1. The contract was awarded using full and open competition, suggesting a competitive bidding process. 2. The definitive contract type indicates a single agreement for a defined scope of work. 3. The project spans the construction of several specialized training facilities, including vehicle, disaster recovery, armory, and tactical training. 4. The contract was awarded to Roy Anderson Corp, a single contractor. 5. The duration of the contract was approximately 3.3 years. 6. The contract was a firm fixed-price award, which shifts cost risk to the contractor.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific cost breakdowns for each facility. However, the total award of $74.6 million for multiple specialized training facilities over a period of roughly three years suggests a significant investment. Comparing this to similar large-scale construction projects for military training infrastructure would be necessary for a more precise value assessment. The firm fixed-price nature of the contract implies that the initial bid was deemed acceptable, but potential for cost overruns or savings rests with the contractor.

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 data shows two bids were received. A higher number of bidders typically leads to more competitive pricing and a wider selection of qualified contractors. With only two bids, the level of competition might have been limited, potentially impacting the final price and the range of innovative solutions considered.

Taxpayer Impact: For taxpayers, full and open competition is generally favorable as it aims to secure the best value. However, with only two bids, there's a possibility that the price might not have been as low as it could have been with more robust competition.

Public Impact

The primary beneficiaries are the U.S. Navy personnel who will utilize the new training facilities. The contract delivers construction services for specialized training environments crucial for military readiness. The geographic impact is concentrated in Mississippi, where the facilities are located. The project likely involved a significant number of construction workers and related trades, impacting the local workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition with only two bids received could mean less pressure on pricing.
The definitive contract type, while clear, might offer less flexibility for unforeseen site conditions compared to other contract types.
The firm fixed-price nature places all cost overrun risk on the contractor, which could lead to quality compromises if not managed closely.

Positive Signals

Awarded under full and open competition, ensuring a broad range of potential contractors could participate.
Firm fixed-price contract provides cost certainty for the government, assuming the contractor manages risks effectively.
The construction of multiple, specialized training facilities addresses diverse military training needs.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, specifically for government and military facilities. The market for large-scale government construction is substantial, often characterized by complex requirements, stringent security protocols, and extensive regulatory compliance. Projects like this are typically awarded through competitive bidding processes to large, established construction firms with proven track records in handling significant infrastructure development. Benchmarks for similar military training facility construction would typically consider factors like square footage, specialized equipment integration, and geographic location.

Small Business Impact

The data indicates that small business participation was not a primary set-aside criterion for this contract (ss: false, sb: false). While the prime contractor, Roy Anderson Corp, is a large business, there may be subcontracting opportunities for small businesses within the construction trades. The extent of small business subcontracting is not detailed in the provided data, but it is a common practice in large construction projects to meet broader economic goals.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting and engineering departments. Accountability measures would include adherence to the contract's specifications, schedule, and quality standards. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

Military Construction
Training Facilities
Department of Defense Contracts
Naval Facilities Engineering Command Projects
Large-Scale Construction Awards

Risk Flags

Limited competition (2 bids)
Potential for cost overruns impacting contractor profitability and quality under FFP

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $74.6 million to ROY ANDERSON CORP. DESIGN/BUILD FOR P-817 AUTO VEHICLE TRAINING SHOP, P-784 DISASTER RECOVERY TRAINING, P-826 ARMORY, P-783 NCTC TRAINING COMPLEX, P-781 STEEL WORKERS TRAINING, P-782 BUILDERS APPLIED INSTRUCTION, P-810 TACTICAL TRAINING FACILITY, P-816, CONSOLIDATED PROFESSIONAL DEV.

Who is the contractor on this award?

The obligated recipient is ROY ANDERSON CORP.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $74.6 million.

What is the period of performance?

Start: 2006-09-14. End: 2010-01-05.

What is the track record of Roy Anderson Corp in completing similar large-scale government construction projects?

Roy Anderson Corp has a history of undertaking significant construction projects, including those for government and military clients. While specific details on past performance for projects of identical scope and scale to this Navy contract are not provided here, their ability to win and execute a $74.6 million definitive contract suggests they possess the necessary experience and capacity. Further investigation into their project portfolio, client satisfaction records, and any past performance evaluations (like CPARS) would be required for a comprehensive assessment of their track record. Their success on this contract would depend on their project management, adherence to schedule, budget control, and quality of work delivered.

How does the per-facility cost compare to industry benchmarks for similar training structures?

Calculating a precise per-facility cost is difficult without knowing the individual scope and size of each of the seven listed training facilities (P-817, P-784, P-826, P-783, P-781, P-782, P-810, P-816). The total award is $74,577,690.39. If we assume an average of 8 facilities (acknowledging P-816 is listed without a specific training type), the average cost per facility would be approximately $9.3 million. However, this is a highly generalized figure. Specialized facilities like tactical training or disaster recovery complexes can vary dramatically in cost due to unique design requirements, technology integration, and construction complexity. A true benchmark comparison would require detailed cost data for each specific type of facility and analysis of their respective square footage, materials, and specialized systems.

What are the primary risks associated with a firm fixed-price contract for complex construction projects?

The primary risk with a firm fixed-price (FFP) contract for complex construction is that the contractor bears the brunt of any cost overruns. If unforeseen issues arise during construction—such as unexpected site conditions, material price escalations, labor shortages, or design changes—the contractor may incur significant losses. To mitigate this, contractors often build substantial contingency into their initial bids, which can lead to a higher overall price for the government compared to cost-reimbursable contracts. There's also a risk that the contractor might cut corners on quality or safety to maintain profitability if costs escalate beyond their initial estimates, necessitating robust government oversight.

What is the significance of the contract being a 'Definitive Contract'?

A definitive contract is a standard, legally binding agreement that clearly outlines the rights and responsibilities of both the government and the contractor. Unlike other contract types like indefinite-delivery/indefinite-quantity (IDIQ) contracts, a definitive contract typically specifies a defined scope of work, a fixed price or ceiling price, and a firm delivery schedule. For a project involving the construction of multiple, specific training facilities, a definitive contract provides clarity and certainty regarding the deliverables, cost, and timeline. This structure is well-suited for projects with well-understood requirements from the outset.

How does the number of bids (2) potentially impact the value received by the government?

Receiving only two bids for a contract valued at $74.6 million suggests a potentially limited competitive environment. While full and open competition was utilized, the low number of bidders could mean that fewer companies were either interested, qualified, or able to submit a proposal. This limited competition can reduce the downward pressure on pricing, as the government has fewer options to choose from. Consequently, the government might not have achieved the lowest possible price or the most innovative solutions that could have emerged from a more robust bidding process with a larger number of participants.

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: TWO STEP

Solicitation ID: N6246706R0069

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Anderson Companies Inc. (UEI: 136210726)

Address: 11400 REICHOLD RD, GULFPORT, MS, 39503

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $74,577,690

Exercised Options: $74,577,690

Current Obligation: $74,577,690

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline