DoD's $122.4M Norfolk Naval Shipyard Repair Contract Awarded to RQ Construction, LLC

Contract Overview

Contract Amount: $122,430,246 ($122.4M)

Contractor: RQ Construction, LLC

Awarding Agency: Department of Defense

Start Date: 2025-05-09

End Date: 2028-05-08

Contract Duration: 1,095 days

Daily Burn Rate: $111.8K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: NORFOLK NAVAL SHIPYARD TRIPLEX AND BUILDING 163 REPAIRS

Place of Performance

Location: PORTSMOUTH, PORTSMOUTH CITY County, VIRGINIA, 23709

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $122.4 million to RQ CONSTRUCTION, LLC for work described as: NORFOLK NAVAL SHIPYARD TRIPLEX AND BUILDING 163 REPAIRS Key points: 1. Contract focuses on critical infrastructure repairs at a major naval facility. 2. Awarded under full and open competition, suggesting a competitive bidding process. 3. Firm-fixed-price contract type aims to control costs for the government. 4. Long duration of 1095 days indicates a substantial scope of work. 5. Project is located in Virginia, a key state for naval operations. 6. No small business set-aside was utilized for this significant contract.

Value Assessment

Rating: good

The contract value of $122.4 million for building repairs at a naval shipyard appears to be within a reasonable range for large-scale construction projects of this nature. Benchmarking against similar large-scale institutional building construction contracts would provide a more precise value-for-money assessment. The firm-fixed-price structure is generally favorable for the government in managing cost certainty for defined scopes of work. However, without detailed cost breakdowns or comparisons to industry standards for similar repair work, a definitive assessment of exceptional value is difficult.

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 specific number of bidders is not provided, but this method generally fosters a competitive environment, which is expected to lead to more favorable pricing and better value for the government. The open competition suggests that the agency sought the best possible offer from a wide range of qualified contractors.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it maximizes the potential for cost savings through a robust bidding process, ensuring that the government receives competitive pricing for its investments.

Public Impact

Naval operations at Norfolk Naval Shipyard will benefit from improved infrastructure. Services delivered include repairs to triplex systems and Building 163. Geographic impact is concentrated in Norfolk, Virginia. Potential workforce implications for construction labor in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen issues arise during extensive repairs.
Contract duration is long, increasing exposure to market fluctuations in material costs.
Dependence on a single contractor for critical infrastructure repairs.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Awarded through full and open competition, likely resulting in competitive pricing.
Focus on essential repairs to maintain operational readiness of a key naval facility.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the broader construction industry. The Department of Defense is a major client for construction services, particularly for maintaining and upgrading its extensive network of facilities. Spending in this sector is influenced by infrastructure needs, modernization efforts, and national security priorities. Comparable spending benchmarks would involve analyzing other large-scale federal construction and repair contracts for institutional or industrial facilities.

Small Business Impact

The contract was not awarded as a small business set-aside, nor is there an indication of specific subcontracting goals for small businesses in the provided data. This suggests that the primary award went to a large business or a business that did not meet the criteria for a set-aside. The impact on the small business ecosystem would depend on whether the prime contractor engages small businesses as subcontractors, which is not specified here.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy's contracting and engineering departments. Accountability measures are inherent in the firm-fixed-price contract type, which obligates the contractor to complete the work within the agreed-upon price. Transparency is facilitated by the public nature of federal contract awards, though detailed project oversight and inspection reports may not be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Naval Facilities Engineering Command (NAVFAC) Contracts
Department of Defense Military Construction
Shipyard Infrastructure Modernization Program
Federal Building and Repair Contracts

Risk Flags

Long contract duration increases exposure to market volatility.
Potential for unforeseen conditions in aging infrastructure.
Scope definition clarity is critical for FFP contract success.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $122.4 million to RQ CONSTRUCTION, LLC. NORFOLK NAVAL SHIPYARD TRIPLEX AND BUILDING 163 REPAIRS

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 $122.4 million.

What is the period of performance?

Start: 2025-05-09. End: 2028-05-08.

What is the track record of RQ CONSTRUCTION, LLC in performing similar large-scale government construction projects, particularly for the Department of Defense?

RQ CONSTRUCTION, LLC has a history of performing government contracts, including significant projects for the Department of Defense and other federal agencies. Their portfolio often includes construction, renovation, and repair work on military installations and federal buildings. To assess their suitability for this specific contract, a detailed review of their past performance on projects of comparable size, complexity, and type (e.g., shipyard facilities, large institutional buildings) would be necessary. This would involve examining past performance evaluations, any documented issues or disputes, and their ability to meet schedule and budget requirements on previous similar endeavors. Their experience with firm-fixed-price contracts and adherence to safety and quality standards on prior DoD projects are key indicators.

How does the awarded price of $122.4 million compare to industry benchmarks for similar building repair projects of this scale?

Benchmarking the $122.4 million award against industry standards requires detailed cost data and scope comparison. For large-scale institutional and commercial building repairs, costs can vary significantly based on location, specific repair needs (e.g., structural, MEP, hazardous materials abatement), and prevailing labor and material rates. A preliminary assessment suggests this value is substantial, consistent with major infrastructure projects. However, a precise comparison would necessitate analyzing cost-per-square-foot metrics from similar completed projects, factoring in the unique requirements of a naval shipyard environment. Without access to detailed cost breakdowns or a comprehensive database of comparable projects, it's challenging to definitively state if this represents excellent or merely fair value. The firm-fixed-price nature, however, aims to cap the government's financial exposure.

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

The primary risk with a firm-fixed-price (FFP) contract, especially one spanning 1095 days (3 years) and involving extensive repairs, is the potential for the contractor to encounter unforeseen conditions or scope creep that significantly increase their costs beyond what was anticipated. While FFP is generally advantageous for the government by providing cost certainty, it places the risk of cost overruns on the contractor. If the contractor underestimated the complexity, encountered unexpected structural issues, or faced substantial increases in material and labor costs over the contract's life, they might seek change orders or face financial distress. Conversely, the government risks paying a premium if the contractor's initial bid was excessively high to cover potential risks. Robust contract administration, clear scope definition, and diligent oversight are crucial to mitigate these risks.

What is the expected impact of these repairs on the operational effectiveness and capacity of the Norfolk Naval Shipyard?

The repairs to the triplex systems and Building 163 are expected to significantly enhance the operational effectiveness and capacity of the Norfolk Naval Shipyard. Triplex systems are often critical for power distribution, water, or other essential utilities within a facility, and their repair or upgrade can improve reliability, efficiency, and safety. Building 163 likely houses essential functions, workshops, or administrative spaces; its renovation or repair would ensure these areas are functional, modern, and capable of supporting the shipyard's demanding mission. Improved infrastructure directly supports the shipyard's ability to maintain, repair, and modernize naval vessels, thereby bolstering fleet readiness and the overall capacity of the Navy's maintenance infrastructure.

How does this contract align with the Department of the Navy's broader infrastructure modernization and maintenance strategies?

This contract aligns with the Department of the Navy's ongoing efforts to modernize and maintain its critical infrastructure, particularly at strategic locations like the Norfolk Naval Shipyard. Naval facilities worldwide require continuous investment to ensure they can support the fleet's operational requirements, including the maintenance of aging vessels and the integration of new technologies. Projects focused on essential systems (like triplex) and key buildings are fundamental to maintaining the shipyard's capability and efficiency. Such investments are crucial for ensuring the long-term viability and readiness of naval installations, reflecting a strategic commitment to infrastructure resilience and modernization in the face of evolving defense needs.

What are the potential implications for local employment and the regional construction market in Virginia due to this contract?

A contract of this magnitude, valued at over $122 million and spanning three years, is likely to have a positive impact on local employment and the regional construction market in Virginia. The project will necessitate a significant workforce, including skilled tradespeople (electricians, plumbers, carpenters, etc.), project managers, engineers, and support staff. RQ CONSTRUCTION, LLC, as the prime contractor, may hire directly or rely on local subcontractors, thereby stimulating job creation and demand for construction services in the Norfolk area and surrounding regions. This influx of work can benefit local suppliers of materials and equipment, contributing to the overall economic activity within the regional construction sector.

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: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N4008521R2507

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, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $122,441,054

Exercised Options: $122,430,246

Current Obligation: $122,430,246

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N4008521D0081

IDV Type: IDC

Timeline