DoD awards $31.4M design-build contract to RQ Construction, LLC for California facility

Contract Overview

Contract Amount: $31,402,215 ($31.4M)

Contractor: RQ Construction, LLC

Awarding Agency: Department of Defense

Start Date: 2022-06-15

End Date: 2026-01-16

Contract Duration: 1,311 days

Daily Burn Rate: $24.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: X002 Q951 DESIGN-BUILD SOLICITATION AND KT AWARD.

Place of Performance

Location: IMPERIAL BEACH, SAN DIEGO County, CALIFORNIA, 91932

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $31.4 million to RQ CONSTRUCTION, LLC for work described as: X002 Q951 DESIGN-BUILD SOLICITATION AND KT AWARD. Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The firm-fixed-price contract type aims to control costs for the government. 3. The contract duration of 1311 days indicates a significant, long-term project. 4. The award is a delivery order, implying it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract. 5. The project falls under commercial and institutional building construction, a common sector for federal spending. 6. No small business set-aside was indicated, potentially limiting direct opportunities for smaller firms.

Value Assessment

Rating: fair

Benchmarking the value of this specific design-build contract is challenging without more detailed cost breakdowns or comparisons to similar projects in the same geographic region. The firm-fixed-price structure provides cost certainty for the government, but the overall value for money depends on the final quality and adherence to the design specifications. The award amount of $31.4 million for a multi-year construction project needs to be assessed against the scope of work and prevailing market rates for construction services in California.

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 a bid. With 5 bids received, the competition level appears moderate. This suggests that while there was interest from multiple contractors, the number of bidders might not be sufficient to guarantee the most aggressive pricing. The government likely received a range of proposals, but the potential for further price reduction through more intense competition exists.

Taxpayer Impact: Full and open competition generally benefits taxpayers by encouraging multiple contractors to offer their best prices. A moderate number of bidders, like the five in this case, suggests a reasonable effort to achieve competitive pricing, though more bidders could potentially drive costs down further.

Public Impact

The Department of the Navy benefits from the construction of a new facility, enhancing its operational capabilities. The project will deliver a commercial and institutional building, likely supporting military personnel or operations. The geographic impact is concentrated in California, potentially creating local jobs and economic activity. The construction workforce in California will be directly impacted, with opportunities for skilled labor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen construction challenges arise, despite the fixed-price nature.
Dependence on the contractor's ability to meet complex design and build requirements within the specified timeline.
Limited visibility into the specific design elements and their long-term operational efficiency without further details.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Full and open competition suggests a structured procurement process aimed at achieving value.
The project is awarded to a specific contractor, indicating a selection based on qualifications and proposed approach.

Sector Analysis

The construction sector is a significant area of federal spending, encompassing a wide range of projects from infrastructure to facility development. This contract for commercial and institutional building construction, specifically a design-build project, is typical for agencies like the Department of Defense that require specialized facilities. The North American Industry Classification System (NAICS) code 236220, Commercial and Institutional Building Construction, covers general contractors primarily responsible for the construction or alteration of nonresidential buildings. Federal spending in this sector often involves large-scale projects requiring extensive planning, design, and execution.

Small Business Impact

The contract data indicates that this award was not a small business set-aside, nor does it appear to have specific subcontracting goals for small businesses explicitly mentioned in the provided data. This means that while RQ Construction, LLC, as the prime contractor, may choose to subcontract portions of the work to small businesses, there is no mandatory requirement for them to do so. The impact on the small business ecosystem is therefore indirect and dependent on the prime contractor's procurement decisions.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy, with specific contracting officers and project managers responsible for monitoring progress, quality, and adherence to terms. Accountability measures are embedded in the firm-fixed-price contract, which penalizes the contractor for cost overruns. Transparency is generally facilitated through contract award databases, though detailed project-specific oversight activities are typically internal to the agency. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense Construction Projects
Naval Facilities Engineering Command Contracts
Design-Build Solicitations
Commercial Building Construction
Federal Real Property Management

Risk Flags

Potential for cost overruns due to unforeseen site conditions.
Risk of schedule delays impacting operational readiness.
Quality control concerns in design and construction phases.
Contractor performance and financial stability.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $31.4 million to RQ CONSTRUCTION, LLC. X002 Q951 DESIGN-BUILD SOLICITATION AND KT AWARD.

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 $31.4 million.

What is the period of performance?

Start: 2022-06-15. End: 2026-01-16.

What is the track record of RQ Construction, LLC with federal contracts, particularly with the Department of Defense?

RQ Construction, LLC has a history of securing federal contracts, primarily with the Department of Defense and other agencies involved in construction and infrastructure. Their portfolio often includes design-build projects, similar to this award. Analyzing their past performance on similar projects, including adherence to schedules, budget management, and quality of work, would provide a clearer picture of their reliability. Information on past performance, including any disputes or contract terminations, is crucial for assessing their track record. While this specific award is for $31.4 million, their experience with larger or more complex projects would be a key indicator of their capacity and expertise.

How does the awarded amount of $31.4 million compare to similar design-build projects for institutional buildings by the Department of Defense?

Benchmarking the $31.4 million award requires comparing it to similar design-build projects for institutional buildings undertaken by the Department of Defense or other federal agencies in comparable geographic locations and of similar scope. Factors such as square footage, complexity of design, specific functional requirements (e.g., security, specialized equipment), and prevailing construction costs in California would need to be considered. Without access to a detailed cost breakdown or a database of comparable federal construction projects with cost per square foot or per functional unit, a precise value-for-money assessment is difficult. However, the firm-fixed-price nature of the contract suggests the government has negotiated a ceiling price based on the anticipated scope and market conditions.

What are the primary risks associated with this design-build contract for the Department of the Navy?

The primary risks associated with this design-build contract include potential scope creep if the design is not fully defined or if unforeseen site conditions arise during construction, which could lead to change orders and increased costs despite the fixed-price nature. There's also a risk related to the contractor's performance, including potential delays in schedule, quality issues, or contractor default. For design-build, ensuring the design meets all functional and operational requirements of the Navy is critical, and any deficiencies in the design could lead to long-term operational problems or costly modifications. Furthermore, reliance on a single contractor for both design and construction introduces a risk if coordination between these two phases is not managed effectively.

What is the expected effectiveness of the completed facility based on the contract's scope and duration?

The effectiveness of the completed facility will depend on how well the design-build process translates the Department of the Navy's requirements into a functional and efficient building. The contract's duration of 1311 days (approximately 3.5 years) suggests a substantial project, implying it will deliver a significant capability. The firm-fixed-price structure incentivizes the contractor to complete the project efficiently. However, the ultimate effectiveness hinges on the quality of the design, the construction execution, and whether the final facility meets the operational needs for which it was intended. Without specific details on the facility's purpose, assessing its effectiveness is speculative, but the investment of $31.4 million indicates a project of considerable importance.

How has federal spending in commercial and institutional building construction (NAICS 236220) trended in recent years, and how does this contract fit?

Federal spending in the commercial and institutional building construction sector (NAICS 236220) can fluctuate based on infrastructure needs, defense spending priorities, and economic conditions. Agencies like the Department of Defense are consistent contributors to this sector, funding a variety of facilities. This $31.4 million design-build award represents a specific investment within this broader category. Analyzing historical spending data for NAICS 236220, particularly by the Department of the Navy, would reveal trends in contract values, competition levels, and types of projects awarded. This contract fits within the typical pattern of federal agencies procuring construction services for operational facilities, with the design-build approach often chosen for its potential to streamline project delivery and manage risk.

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: N6247319R1237

Offers Received: 5

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: $31,402,215

Exercised Options: $31,402,215

Current Obligation: $31,402,215

Actual Outlays: $5,510,643

Subaward Activity

Number of Subawards: 37

Total Subaward Amount: $12,698,708

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N6247321D1211

IDV Type: IDC

Timeline