DoD's $25.2M building renovation contract awarded to Perini Management Services shows fair value with 2 bidders

Contract Overview

Contract Amount: $25,230,193 ($25.2M)

Contractor: Perini Management Services, Inc.

Awarding Agency: Department of Defense

Start Date: 2020-06-30

End Date: 2025-01-29

Contract Duration: 1,674 days

Daily Burn Rate: $15.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: X005 FLO - BLDG 1 RENOVATION

Place of Performance

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

State: North Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $25.2 million to PERINI MANAGEMENT SERVICES, INC. for work described as: X005 FLO - BLDG 1 RENOVATION Key points: 1. The contract's value appears reasonable given the scope of renovation for a significant facility. 2. Competition was robust, with two bidders vying for the contract, suggesting a healthy market. 3. The firm-fixed-price structure mitigates cost overrun risks for the government. 4. The project duration of nearly five years indicates a complex and extensive renovation. 5. This contract falls within the broad category of commercial and institutional building construction. 6. The award was made by the Department of the Navy, a major component of the DoD.

Value Assessment

Rating: good

The contract's total value of $25.2 million for a building renovation appears to be within a reasonable range for a project of this scale and duration. Benchmarking against similar large-scale construction and renovation projects within the Department of Defense or other federal agencies would provide further context. The firm-fixed-price contract type suggests that the initial pricing was determined to be fair and reasonable by the contracting officer, with the contractor assuming most of the risk.

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. The presence of two bidders suggests a competitive environment, though a higher number of bidders would typically indicate even stronger price discovery. The contracting agency likely conducted market research to ensure sufficient competition was possible.

Taxpayer Impact: Full and open competition generally leads to better pricing for taxpayers by encouraging multiple contractors to offer their best terms to win the award.

Public Impact

The primary beneficiaries are the Department of Defense and the Department of the Navy, who will receive an upgraded facility. The contract delivers renovation services for Building 1, likely improving its functionality, safety, and operational capacity. The geographic impact is localized to the facility in North Carolina where Building 1 is located. The project will likely involve a significant construction workforce, providing employment opportunities in the skilled trades.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep given the long duration of the contract, requiring diligent oversight.
Dependency on a single contractor for an extended period could pose risks if performance issues arise.
The specific nature of the renovation may require specialized expertise that could limit future contractor options.

Positive Signals

Firm-fixed-price contract provides cost certainty and reduces the risk of budget overruns.
Full and open competition suggests a competitive pricing environment was sought.
The award to an established entity like Perini Management Services, Inc. may indicate a level of confidence in their capabilities.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the construction industry. Federal spending in this area supports the maintenance and modernization of government facilities. Comparable spending benchmarks would involve analyzing the cost per square foot or cost per project for similar renovation projects undertaken by federal agencies or large private institutions.

Small Business Impact

The data indicates that small business participation was not a primary focus for this specific contract, as the 'sb' field is false. There is no explicit mention of small business set-asides or subcontracting requirements in the provided data. This suggests that the prime contractor may not be obligated to subcontract a specific portion of the work to small businesses, potentially limiting opportunities for the small business ecosystem on this particular project.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting and project management offices. Accountability measures are embedded in the firm-fixed-price contract, which holds the contractor responsible for delivering the specified renovation within the agreed-upon price. Transparency is generally maintained through contract award databases and reporting requirements, though specific oversight activities and Inspector General involvement would depend on the project's complexity and any reported issues.

Related Government Programs

Department of Defense Facilities Modernization Programs
Navy Base Infrastructure Improvement Projects
Federal Building Renovation Contracts
Construction Services for Government Agencies

Risk Flags

Long project duration may increase risk of unforeseen issues.
Potential for scope creep requires diligent oversight.
Dependence on a single contractor for an extended period.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $25.2 million to PERINI MANAGEMENT SERVICES, INC.. X005 FLO - BLDG 1 RENOVATION

Who is the contractor on this award?

The obligated recipient is PERINI MANAGEMENT SERVICES, 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 $25.2 million.

What is the period of performance?

Start: 2020-06-30. End: 2025-01-29.

What is the track record of Perini Management Services, Inc. with federal contracts, particularly within the Department of Defense?

Perini Management Services, Inc. has a history of performing federal construction and renovation contracts. As a subsidiary of Tutor Perini Corporation, it has access to significant resources and experience. Analyzing their past performance on similar-sized projects for the Department of Defense or other federal agencies would reveal their reliability, quality of work, and adherence to schedules and budgets. Federal procurement data often includes past performance evaluations, which would be crucial for a comprehensive assessment. Their experience in executing firm-fixed-price contracts of this magnitude is a positive indicator, suggesting they are accustomed to managing the associated risks and responsibilities.

How does the cost per square foot of this renovation compare to similar federal building projects?

Without the specific square footage of Building 1 and detailed renovation scope, a precise cost per square foot comparison is challenging. However, the total contract value of $25.2 million for a nearly five-year renovation project suggests a significant undertaking. To benchmark, one would need to identify comparable federal building renovation projects, ascertain their square footage, total cost, and duration. Factors like the age of the building, the extent of structural work, system upgrades (HVAC, electrical, plumbing), and interior finishes heavily influence cost per square foot. A preliminary assessment suggests the cost is likely within a reasonable range for extensive renovations, but detailed comparisons with projects of similar complexity and location are necessary for a definitive conclusion.

What are the primary risks associated with a renovation project of this duration and value?

The primary risks associated with a renovation project of this duration ($25.2M, nearly 5 years) include potential cost escalations due to unforeseen site conditions, material price fluctuations (though mitigated by firm-fixed-price), and contractor performance issues over an extended period. Schedule delays are also a significant risk, potentially impacting the operational readiness of the facility. Furthermore, changes in requirements or scope creep, if not managed rigorously, can lead to disputes and budget overruns. The long duration also increases the risk of obsolescence of certain technologies or materials specified early in the project. Effective risk mitigation requires robust project management, contingency planning, and strong government oversight.

How effective is the firm-fixed-price contract type in ensuring value for money on this project?

The firm-fixed-price (FFP) contract type is generally considered effective in ensuring value for money for the government on construction projects like this renovation. It shifts the majority of the cost risk to the contractor, incentivizing them to control expenses and complete the work efficiently to maximize their profit. This structure provides budget certainty for the government, as the final price is largely predetermined, barring any approved change orders. For this $25.2 million project, the FFP structure means the Department of the Navy has a clear understanding of its financial commitment upfront. The effectiveness hinges on the initial price being set competitively and fairly, which was supported by the full and open competition with two bidders.

What is the historical spending trend for building renovations within the Department of the Navy?

Historical spending trends for building renovations within the Department of the Navy are substantial, reflecting the vast inventory of aging facilities requiring modernization and maintenance. The Navy consistently allocates significant portions of its budget to infrastructure improvements, including renovations, new construction, and repairs across its numerous bases and installations worldwide. Annual spending can fluctuate based on strategic priorities, congressional appropriations, and the condition of existing infrastructure. Analyzing specific historical data for similar-sized renovation projects or overall facilities maintenance budgets would provide a clearer picture of whether this $25.2 million contract represents a typical investment or an outlier.

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: N6247017R6016

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Tutor Perini Corporation

Address: 73 MOUNT WAYTE AVE, FRAMINGHAM, MA, 01702

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

Financial Breakdown

Contract Ceiling: $25,230,193

Exercised Options: $25,230,193

Current Obligation: $25,230,193

Actual Outlays: $3,644,301

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N6247019D8027

IDV Type: IDC

Timeline