DoD's $14.2M building renovation contract awarded to RQ Construction, LLC, with 4 bids received

Contract Overview

Contract Amount: $14,223,327 ($14.2M)

Contractor: RQ Construction, LLC

Awarding Agency: Department of Defense

Start Date: 2020-08-31

End Date: 2023-04-28

Contract Duration: 970 days

Daily Burn Rate: $14.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: RENOVATION BLDG 201

Place of Performance

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

State: North Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $14.2 million to RQ CONSTRUCTION, LLC for work described as: RENOVATION BLDG 201 Key points: 1. The contract value of $14.2 million for building renovation appears reasonable given the scope and duration. 2. Full and open competition suggests a healthy market for construction services, potentially leading to competitive pricing. 3. The fixed-price contract type mitigates cost overrun risks for the government. 4. Performance duration of 970 days indicates a significant project scale. 5. The contract falls within the broad Commercial and Institutional Building Construction sector. 6. Awarded by the Department of the Navy, this contract supports infrastructure maintenance and upgrades.

Value Assessment

Rating: good

The contract value of approximately $14.2 million for a building renovation project over 970 days is within a typical range for large-scale construction. Benchmarking against similar Department of Defense infrastructure projects of comparable size and complexity would provide a more precise value-for-money assessment. The firm fixed-price structure is advantageous for cost control. The number of bids (4) suggests adequate competition.

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 receipt of four bids suggests a competitive environment for this type of construction service. A higher number of bidders generally correlates with better price discovery and potentially lower prices for the government.

Taxpayer Impact: The full and open competition process is beneficial for taxpayers as it encourages multiple firms to bid, driving down costs and ensuring the government receives competitive pricing for its construction needs.

Public Impact

The primary beneficiaries are the Department of Defense and the Navy, receiving upgraded or renovated building facilities. The services delivered include commercial and institutional building construction, likely involving repairs, upgrades, or new construction elements. The geographic impact is localized to North Carolina, where the renovation took place. The contract supports the construction workforce, including skilled trades and project management personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for schedule delays given the long duration of the project.
Ensuring quality of work meets DoD standards throughout the extensive renovation period.

Positive Signals

Firm fixed-price contract limits cost escalation risks for the government.
Full and open competition likely resulted in a competitive bid.
Awarded to a single contractor, RQ CONSTRUCTION, LLC, simplifying management.
Project duration of 970 days suggests a comprehensive scope of work.

Sector Analysis

This contract falls under the Commercial and Institutional Building Construction sector (NAICS 236220). This sector encompasses establishments primarily engaged in the construction or remodeling of nonresidential buildings. The market for federal construction is substantial, with agencies like the Department of Defense consistently investing in infrastructure maintenance and upgrades. Comparable spending benchmarks would involve analyzing other large-scale renovation or construction contracts awarded by federal agencies for similar facility types.

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 mandated by a set-aside. However, the prime contractor, RQ Construction, LLC, may engage small businesses as subcontractors, which would contribute to the small business ecosystem. Further analysis of subcontracting plans would be needed to assess the full impact.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting and engineering departments. Accountability measures are embedded in the firm fixed-price contract, requiring completion of work to specifications. Transparency is generally maintained through contract award databases. Inspector General jurisdiction would apply if fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Facilities Construction
Navy Infrastructure Modernization
Commercial Building Renovation Contracts
Large-Scale Construction Projects

Risk Flags

Long project duration may increase risk of unforeseen cost impacts or delays.
Contractor's past performance history requires review for potential risks.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.2 million to RQ CONSTRUCTION, LLC. RENOVATION BLDG 201

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 $14.2 million.

What is the period of performance?

Start: 2020-08-31. End: 2023-04-28.

What is the track record of RQ Construction, LLC with federal contracts, particularly for similar renovation projects?

RQ Construction, LLC has a history of federal contracting, primarily with the Department of Defense and Department of the Navy. Analysis of their past performance on similar building renovation projects would be crucial. This includes examining contract values, project durations, any reported performance issues, and timely completion rates. A review of their award history can indicate their experience level and reliability in executing large-scale construction contracts for government entities. Understanding their past performance provides insight into their capacity to deliver on the current contract's requirements and potential risks associated with their execution.

How does the awarded price of $14.2 million compare to similar building renovation contracts awarded by the Navy or other DoD components?

To benchmark the value-for-money, the awarded price of $14.2 million should be compared against similar building renovation contracts. This comparison should consider factors such as project scope (e.g., square footage renovated, type of systems upgraded), geographic location (construction costs vary regionally), contract type (firm fixed-price vs. cost-plus), and the number of bids received. For instance, if similar projects in North Carolina with comparable scopes were awarded for significantly less or more, it would indicate whether this contract represents a good or questionable value. The duration of 970 days also suggests a substantial project, which would naturally command a higher price than shorter-term renovations.

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

While firm fixed-price contracts are generally favorable for the government by capping costs, risks can still arise, especially for long-duration projects like this 970-day renovation. The primary risk is that the contractor may face unforeseen challenges (e.g., material cost increases, labor shortages, discovery of hazardous materials, design changes) that could impact their profitability. If these issues are severe, the contractor might cut corners on quality or attempt to claim constructive changes, leading to disputes. Conversely, the government risks paying a premium if the initial bid was overly conservative due to perceived risks. Effective project management and clear contract specifications are crucial to mitigate these risks.

How effective is the 'full and open competition' strategy in ensuring competitive pricing for large federal construction projects?

Full and open competition is generally considered the most effective strategy for ensuring competitive pricing in federal contracting, including large construction projects. By allowing all responsible sources to submit offers, it maximizes the pool of potential bidders, thereby increasing the likelihood of receiving competitive bids. This process fosters price discovery and encourages contractors to offer their best pricing to win the contract. The receipt of four bids in this case suggests the strategy was successful in attracting multiple interested parties. However, the effectiveness also depends on the complexity of the project and the availability of qualified contractors in the relevant market.

What is the historical spending trend for building renovation contracts by the Department of the Navy in North Carolina?

Analyzing historical spending trends for building renovation contracts by the Department of the Navy in North Carolina would provide valuable context. This involves examining the volume and value of similar contracts awarded over the past several fiscal years. Trends might reveal an increase or decrease in investment in infrastructure, potential shifts in contracting strategies (e.g., more sole-source vs. competitive awards), or changes in average contract values. Understanding these patterns can help assess whether the current $14.2 million contract is an outlier, part of a consistent investment cycle, or indicative of changing market conditions or agency priorities within the region.

Are there any specific performance concerns or positive indicators from previous contracts awarded to RQ Construction, LLC by the Navy?

Assessing previous performance indicators for RQ Construction, LLC is vital for understanding potential risks and strengths. This would involve reviewing past contract performance evaluations (e.g., CPARS reports) for contracts with the Navy or other federal agencies. Positive indicators might include consistent on-time delivery, adherence to budget, high-quality workmanship, and effective communication. Conversely, concerns could arise from documented instances of delays, cost overruns (even in fixed-price contracts if disputes arise), quality issues, or disputes. A thorough review of their performance history provides a data-driven basis for evaluating their capability to successfully execute this current renovation project.

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: 4

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: $14,223,327

Exercised Options: $14,223,327

Current Obligation: $14,223,327

Actual Outlays: $3,927,900

Subaward Activity

Number of Subawards: 27

Total Subaward Amount: $9,172,933

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