DoD's $50.6M construction contract for P450 GCC MILCON awarded to URS GROUP, INC. shows fair value

Contract Overview

Contract Amount: $50,579,024 ($50.6M)

Contractor: URS Group, Inc.

Awarding Agency: Department of Defense

Start Date: 2018-09-05

End Date: 2023-06-30

Contract Duration: 1,759 days

Daily Burn Rate: $28.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: P450 GCC MILCON

Place of Performance

Location: CORPUS CHRISTI, NUECES County, TEXAS, 78419

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $50.6 million to URS GROUP, INC. for work described as: P450 GCC MILCON Key points: 1. The contract's final value of $50.6 million appears reasonable given the scope of military construction. 2. Competition dynamics were favorable, with a full and open process indicating potential for competitive pricing. 3. Risk indicators are moderate, typical for large-scale construction projects with fixed-price terms. 4. Performance context suggests a lengthy execution period of 1759 days, common for MILCON projects. 5. This contract fits within the broader Defense sector's significant spending on infrastructure and facilities. 6. The firm fixed-price structure shifts cost overrun risk to the contractor.

Value Assessment

Rating: good

The final award amount of $50.6 million for the P450 GCC MILCON project is within expected ranges for large-scale military construction. Benchmarking against similar Department of Defense construction contracts of comparable size and complexity suggests that the pricing achieved through full and open competition was likely competitive. The firm fixed-price contract type also indicates a degree of price certainty for the government, although it necessitates careful initial estimation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, suggesting that multiple bidders were likely invited to submit proposals. The presence of 3 bids indicates a reasonable level of competition, which generally helps in achieving better pricing and value for the government. A robust competitive process allows for a wider range of solutions and potentially more innovative approaches from the market.

Taxpayer Impact: A full and open competition is beneficial for taxpayers as it increases the likelihood of receiving the most cost-effective solution and prevents potential price inflation that can occur with limited or sole-source procurements.

Public Impact

The primary beneficiaries are the Department of Defense and its personnel, who will utilize the improved facilities. The contract delivers essential construction services for military infrastructure, enhancing operational capabilities. The geographic impact is localized to Texas, where the construction project is situated. Workforce implications include job creation in the construction sector, particularly for skilled trades in Texas.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for schedule delays inherent in large construction projects.
Ensuring quality control and adherence to military construction standards throughout the project lifecycle.
Managing the complexity of firm-fixed-price contracts over a long duration.

Positive Signals

Awarded under full and open competition, suggesting a competitive pricing environment.
Firm fixed-price contract provides cost certainty for the government.
Project located in Texas, potentially leveraging local construction expertise.

Sector Analysis

The Commercial and Institutional Building Construction sector is a significant part of the broader construction industry, encompassing a wide range of projects from office buildings to specialized facilities like military installations. The Department of Defense is a major client within this sector, frequently awarding large contracts for the construction and renovation of bases and support infrastructure. Spending in this area is often driven by modernization needs, force protection requirements, and strategic basing decisions. Comparable spending benchmarks would typically be found within large-scale government construction programs.

Small Business Impact

This contract was not set aside for small businesses, and there is no explicit indication of subcontracting requirements for small businesses in the provided data. The absence of small business set-aside flags suggests that the primary competition was likely among larger, established construction firms capable of handling projects of this magnitude. This could limit direct opportunities for small businesses to participate as prime contractors on this specific award, though they may be involved as subcontractors if not explicitly mandated.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and engineering divisions, with potential involvement from the Department of Defense's Inspector General for audits and investigations. Accountability measures are embedded in the firm fixed-price contract terms, requiring the contractor to deliver the specified construction within the agreed-upon price. Transparency is generally maintained through contract award databases and reporting requirements, though detailed project-specific oversight information may not be publicly available.

Related Government Programs

Military Construction (MILCON)
Department of Defense Facilities
General Building Construction

Risk Flags

Potential for cost overruns if not managed tightly.
Risk of schedule delays common in large construction.
Ensuring compliance with stringent military construction standards.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $50.6 million to URS GROUP, INC.. P450 GCC MILCON

Who is the contractor on this award?

The obligated recipient is URS GROUP, 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 $50.6 million.

What is the period of performance?

Start: 2018-09-05. End: 2023-06-30.

What is the track record of URS GROUP, INC. with the Department of Defense for similar construction projects?

URS GROUP, INC., now part of AECOM, has a substantial history of working with the Department of Defense on various construction and engineering projects. Their portfolio includes numerous military construction (MILCON) contracts, ranging from barracks and training facilities to infrastructure upgrades. Analyzing their past performance on similar firm-fixed-price contracts, particularly those involving large-scale building construction and adherence to military specifications, would provide insight into their reliability, cost control, and quality of execution. Historical data from contract databases and performance reviews (if available) would be crucial for a comprehensive assessment of their track record.

How does the final award value compare to the initial estimated cost or ceiling for this contract?

The provided data shows a final award amount of $50,579,024.03. Without the initial estimated cost or contract ceiling, a direct comparison is not possible. However, for firm-fixed-price contracts, the award amount represents the agreed-upon total price. If this was a delivery order against a larger indefinite-delivery/indefinite-quantity (IDIQ) contract, the ceiling of the parent contract would be a relevant benchmark. Generally, for large construction projects, the final award value is a key indicator of the negotiated price. Further analysis would require access to the contract's initial solicitation documents or modification history to understand the baseline cost expectations.

What are the primary risks associated with a firm-fixed-price contract for a multi-year construction project?

Firm-fixed-price (FFP) contracts, while offering cost certainty to the government, carry inherent risks, especially for long-duration construction projects like this one. The primary risk for the contractor is underestimating costs, leading to reduced profit margins or even losses if unforeseen issues arise (e.g., material price escalations, labor shortages, unexpected site conditions). For the government, the risk lies in the contractor potentially cutting corners on quality to maintain profitability if cost pressures mount. Effective risk mitigation involves thorough initial cost estimation, robust contract clauses addressing unforeseen conditions, and diligent government oversight to ensure quality standards are met throughout the project lifecycle.

What is the significance of the contract duration (1759 days) in the context of military construction projects?

A duration of 1759 days, approximately 4.8 years, is substantial and typical for large-scale military construction (MILCON) projects. Such durations reflect the complexity of planning, design, environmental reviews, procurement of specialized materials, on-site construction, and final commissioning of military facilities. Factors contributing to this length include adherence to stringent military specifications, potential security requirements, coordination with various stakeholders, and the sheer scale of the undertaking. Shorter durations might be feasible for smaller renovations or simpler structures, but major new construction or significant upgrades often require extended timelines to ensure quality, safety, and compliance.

How does the number of bids (3) influence the perceived value for money in this full and open competition?

Receiving 3 bids in a full and open competition generally suggests a healthy level of market interest and competition. While more bids can sometimes lead to lower prices, three bidders often provide sufficient competitive tension to drive a reasonable price. This number indicates that the opportunity was attractive enough for multiple capable firms to invest in preparing proposals. The government's ability to negotiate effectively with these bidders, coupled with a well-defined scope of work and clear evaluation criteria, would be crucial in ensuring that this level of competition translated into good value for money. A lower number of bids (e.g., one or two) might raise concerns about market limitations or insufficient outreach.

What are the potential implications of this contract being awarded in Texas for local economies and workforce?

An award of this magnitude ($50.6 million) for a construction project in Texas is likely to have a positive impact on the local economy and workforce. It would create numerous jobs for construction workers, engineers, project managers, and support staff. Furthermore, it stimulates demand for local suppliers of materials, equipment, and services, generating a multiplier effect. The presence of a large federal contract can also enhance the reputation of local construction firms, potentially attracting future business. The specific economic benefits would depend on the extent to which local labor and materials are utilized throughout the project's duration.

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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N6247012R5010

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: AECOM

Address: 1600 PERIMETER PARK DR STE 400, MORRISVILLE, NC, 27560

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

Financial Breakdown

Contract Ceiling: $50,579,024

Exercised Options: $50,579,024

Current Obligation: $50,579,024

Subaward Activity

Number of Subawards: 185

Total Subaward Amount: $203,231,570

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N6247013D6022

IDV Type: IDC

Timeline