DoD's $32.8M Navy Operations Support Facility contract awarded to RQ Construction, LLC for construction services

Contract Overview

Contract Amount: $32,863,827 ($32.9M)

Contractor: RQ Construction, LLC

Awarding Agency: Department of Defense

Start Date: 2020-06-30

End Date: 2023-01-20

Contract Duration: 934 days

Daily Burn Rate: $35.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: X007 Q200 SOF NSWG1 OPS SUPPORT FACILITY

Place of Performance

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

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $32.9 million to RQ CONSTRUCTION, LLC for work described as: X007 Q200 SOF NSWG1 OPS SUPPORT FACILITY Key points: 1. The contract value represents a significant investment in naval infrastructure. 2. Competition dynamics for this large-scale construction project are crucial for ensuring fair pricing. 3. Performance risk is moderate, given the complexity of large facility construction. 4. This contract falls within the broader context of defense facility modernization efforts. 5. The sector positioning is within commercial and institutional building construction, a vital part of the defense industrial base.

Value Assessment

Rating: good

The contract value of $32.8 million for facility construction appears reasonable for a project of this scale. Benchmarking against similar Department of the Navy construction projects would provide a more precise value-for-money assessment. The firm-fixed-price structure suggests that the contractor bears most of the cost risk, which can be beneficial for the government if managed effectively. However, without detailed cost breakdowns or comparisons to independent cost estimates, a definitive assessment of pricing efficiency is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely solicited. With two bids received, the level of competition appears somewhat limited for a project of this magnitude, which could potentially impact price discovery. A higher number of bids typically leads to more competitive pricing. However, the specific nature of the required construction services and the specialized capabilities of the bidders would influence the effective level of competition.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it aims to secure the best value through a wide range of offers. While two bids were received, the process itself suggests an effort to maximize competition and achieve a fair market price.

Public Impact

The primary beneficiaries are the U.S. Navy personnel and operations supported by the new facility. The contract delivers essential construction services for a critical naval operations support facility. The geographic impact is concentrated in California, where the facility is located. Workforce implications include job creation for construction workers and related trades in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions arise during construction.
Risk of schedule delays impacting operational readiness if project milestones are not met.
Ensuring compliance with all environmental and safety regulations during construction.

Positive Signals

Firm-fixed-price contract structure shifts cost risk to the contractor.
Awarded through full and open competition, suggesting a competitive bidding process.
The project addresses a critical need for naval operational infrastructure.

Sector Analysis

This contract falls within the construction sector, specifically commercial and institutional building construction. The Department of Defense is a major client for construction services, with significant annual spending on building and infrastructure projects to support military operations and personnel. Market size for defense construction is substantial, driven by modernization, expansion, and maintenance needs. This contract contributes to the overall defense infrastructure development, aligning with the government's need for secure and functional facilities.

Small Business Impact

The contract data indicates that small business participation was not a primary set-aside criterion (ss: false, sb: false). While the prime contractor, RQ CONSTRUCTION, LLC, may be a small business itself, the contract was not specifically designated for small business set-aside. This means that subcontracting opportunities for small businesses would depend on the prime contractor's own subcontracting plan and efforts to engage the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant Department of the Navy contracting command. Accountability measures are embedded in the firm-fixed-price contract terms, requiring delivery of specified construction services. Transparency is generally maintained through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected during the contract's performance or closeout.

Related Government Programs

Naval Facilities Engineering Command (NAVFAC) Construction Contracts
Department of Defense Military Construction Projects
Base Realignment and Closure (BRAC) Facilities
General Services Administration (GSA) Public Buildings Service

Risk Flags

Potential for schedule delays
Risk of unforeseen site conditions
Limited number of bids received

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $32.9 million to RQ CONSTRUCTION, LLC. X007 Q200 SOF NSWG1 OPS SUPPORT FACILITY

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 $32.9 million.

What is the period of performance?

Start: 2020-06-30. End: 2023-01-20.

What is the track record of RQ CONSTRUCTION, LLC in performing similar large-scale federal construction projects?

RQ CONSTRUCTION, LLC has a history of performing federal construction contracts, including projects for the Department of Defense and other agencies. Their experience often includes a range of building types and complexities. To assess their track record specifically for this type of operations support facility, a review of past performance evaluations, contract completion history, and any reported disputes or claims would be necessary. Data from contract databases can indicate the scale and type of projects they have successfully delivered, providing insight into their capacity and reliability for complex federal construction endeavors. Their ability to manage firm-fixed-price contracts effectively on similar projects is a key indicator of their suitability.

How does the awarded price compare to independent cost estimates or market benchmarks for similar facility construction?

The awarded price of $32.8 million for this operations support facility needs to be benchmarked against independent government cost estimates (e.g., from NAVFAC) or industry market data for comparable projects. Factors such as square footage, complexity of systems (HVAC, electrical, IT infrastructure), site conditions, and location significantly influence construction costs. Without access to these benchmarks, it's difficult to definitively state if the price represents excellent value. However, the firm-fixed-price nature and full and open competition suggest an effort to achieve competitive pricing. A detailed cost-per-square-foot analysis compared to similar DoD facilities would be a primary method for assessing value.

What are the primary risk indicators associated with this specific contract award?

Key risk indicators for this contract include the inherent risks of large-scale construction projects, such as potential for unforeseen site conditions, material cost fluctuations (though mitigated by FFP), and labor availability. Given the duration of the contract (934 days), schedule adherence is a significant risk. The fact that it was awarded under full and open competition but only received two bids could indicate potential market limitations or high barriers to entry for other firms, which might indirectly pose a risk if specialized expertise is narrowly held. The contractor's past performance on similar projects and their financial stability are also critical risk factors that should be continuously monitored.

How effective is the firm-fixed-price contract type in managing costs and ensuring performance for this project?

The firm-fixed-price (FFP) contract type is generally effective in managing costs for the government in construction projects like this, as it places the primary responsibility for cost control on the contractor. The contractor assumes the risk of cost overruns, which incentivizes efficient project management and cost discipline. For performance, the FFP contract clearly defines the scope of work and the price, making it easier to hold the contractor accountable for delivering the specified facility. However, the government must ensure the initial scope is well-defined to prevent costly change orders, and robust oversight is still required to ensure quality and adherence to specifications.

What is the historical spending trend for similar naval operations support facility construction by the Department of the Navy?

Historical spending on naval operations support facilities by the Department of the Navy is substantial and fluctuates based on modernization needs, new base requirements, and infrastructure upgrades. The Navy, through entities like the Naval Facilities Engineering Command (NAVFAC), regularly awards contracts for construction and renovation of various facilities, including barracks, training centers, administrative buildings, and specialized operational support structures. Analyzing past spending patterns for similar projects (e.g., by contract value, number of awards, and average duration) can provide context for the $32.8 million award. This specific contract's value appears to be within the typical range for significant facility construction, but a detailed trend analysis would require examining multiple years of data for comparable projects.

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: N6247316R3201

Offers Received: 2

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: $32,863,827

Exercised Options: $32,863,827

Current Obligation: $32,863,827

Subaward Activity

Number of Subawards: 44

Total Subaward Amount: $23,333,965

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N6247317D0820

IDV Type: IDC

Timeline