DoD's $70.8M SEAL Team Facilities Contract with RQ Construction Faces Scrutiny Over Value and Competition

Contract Overview

Contract Amount: $70,817,894 ($70.8M)

Contractor: RQ Construction, LLC

Awarding Agency: Department of Defense

Start Date: 2017-09-28

End Date: 2020-08-31

Contract Duration: 1,068 days

Daily Burn Rate: $66.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 10

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF Q889 AND Q890 SOF SEAL TEAM OPERATIONS FACILITIES FOR SEAL TEAMS 5&7 AT NSW CC, CORONADO, CA

Place of Performance

Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92135

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $70.8 million to RQ CONSTRUCTION, LLC for work described as: IGF::OT::IGF Q889 AND Q890 SOF SEAL TEAM OPERATIONS FACILITIES FOR SEAL TEAMS 5&7 AT NSW CC, CORONADO, CA Key points: 1. The contract awarded to RQ Construction, LLC for SEAL Team facilities at NSW CC, Coronado, CA, totals $70.8 million. 2. Awarded under full and open competition, the contract's pricing and value require further examination given the significant expenditure. 3. The project falls under Commercial and Institutional Building Construction, a sector with established benchmarks for cost efficiency. 4. Potential risks include cost overruns and schedule delays common in large-scale construction projects, impacting taxpayer investment.

Value Assessment

Rating: questionable

The contract's total value of $70.8 million for specialized facilities warrants a detailed cost-benefit analysis. Benchmarking against similar government construction projects of comparable scope and complexity is crucial to assess if the price reflects fair market value and efficient use of funds.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through full and open competition, suggesting a broad solicitation process. However, the effectiveness of this competition in driving competitive pricing for this specific project needs to be evaluated, especially considering the final award amount.

Taxpayer Impact: The substantial $70.8 million expenditure directly impacts taxpayers. Ensuring this investment yields optimal value and meets the intended operational needs of SEAL Teams is paramount for responsible fiscal management.

Public Impact

Taxpayer funds are allocated for critical infrastructure supporting elite military units. The project's success is vital for the operational readiness and effectiveness of SEAL Teams 5 & 7. Transparency in the contract's execution and final cost is essential for public trust. Potential for job creation within the construction sector in California.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

High contract value requires rigorous oversight.
Potential for scope creep or change orders.
Construction project risks (delays, cost overruns).

Positive Signals

Awarded through full and open competition.
Supports critical national defense capabilities.
Clear end date for project completion.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector. Spending benchmarks in this area often focus on cost per square foot, project management efficiency, and adherence to timelines. Large-scale military construction projects can sometimes exceed typical commercial benchmarks due to specialized requirements and security protocols.

Small Business Impact

While the prime contractor is RQ CONSTRUCTION, LLC, the contract details do not specify subcontracting goals or participation by small businesses. Further investigation is needed to determine the extent of small business involvement in this significant project.

Oversight & Accountability

Oversight will be critical throughout the project lifecycle, from initial construction phases to final delivery. The Department of the Navy and potentially the DoD Inspector General should monitor progress, expenditures, and adherence to contract terms to ensure accountability and prevent waste.

Related Government Programs

Commercial and Institutional Building Construction
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

High contract value.
Potential for cost overruns.
Complexity of specialized facility requirements.
Need for detailed cost-benefit analysis.
Ensuring long-term operational effectiveness.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $70.8 million to RQ CONSTRUCTION, LLC. IGF::OT::IGF Q889 AND Q890 SOF SEAL TEAM OPERATIONS FACILITIES FOR SEAL TEAMS 5&7 AT NSW CC, CORONADO, CA

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 $70.8 million.

What is the period of performance?

Start: 2017-09-28. End: 2020-08-31.

What specific factors contributed to the $70.8 million cost, and how does this compare to similar specialized military facility constructions?

The final cost is influenced by factors such as specialized security requirements, advanced technological integration, unique operational needs of SEAL Teams, and prevailing market rates for materials and labor in Coronado, California. A detailed cost breakdown and comparison with similar projects, accounting for these specific demands, are necessary to ascertain if the $70.8 million represents a justifiable expenditure.

Were there any challenges during the full and open competition that might have limited true price discovery or led to a higher-than-expected award?

While awarded under full and open competition, potential challenges could include a limited number of qualified bidders capable of meeting the stringent requirements, unforeseen complexities in the solicitation documents, or market conditions at the time of bidding. These factors might have influenced the number of bids received or the pricing strategies of the bidders, potentially impacting the final award amount.

How will the effectiveness of these new facilities be measured to ensure they meet the operational needs of SEAL Teams 5 & 7?

Effectiveness will be measured through post-occupancy evaluations, user feedback from SEAL Team personnel, and assessment of the facilities' ability to support training, operational readiness, and mission requirements. Key performance indicators could include reduced downtime for training, improved logistical support, and enhanced security, all contributing to the overall operational effectiveness of the units housed within.

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: N6247316R3214

Offers Received: 10

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3194 LIONSHEAD AVE, CARLSBAD, CA, 92010

Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $70,817,894

Exercised Options: $70,817,894

Current Obligation: $70,817,894

Subaward Activity

Number of Subawards: 82

Total Subaward Amount: $74,557,342

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline