DoD's $133.8M NPS facility modernization contract awarded to RQ Construction, LLC

Contract Overview

Contract Amount: $133,791,924 ($133.8M)

Contractor: RQ Construction, LLC

Awarding Agency: Department of Defense

Start Date: 2025-04-04

End Date: 2027-07-23

Contract Duration: 840 days

Daily Burn Rate: $159.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: MODERNIZE NPS ACADEMIC/RESEARCH FACILITY HALLIGAN HALL B-234, MONTEREY, CALIFORNIA

Place of Performance

Location: MONTEREY, MONTEREY County, CALIFORNIA, 93943

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $133.8 million to RQ CONSTRUCTION, LLC for work described as: MODERNIZE NPS ACADEMIC/RESEARCH FACILITY HALLIGAN HALL B-234, MONTEREY, CALIFORNIA Key points: 1. Contract value represents a significant investment in naval education infrastructure. 2. Competition dynamics suggest a potentially competitive bidding process for this project. 3. Project duration of 840 days indicates a substantial construction timeline. 4. Fixed-price contract type aims to control costs for the government. 5. Geographic focus on California may have implications for local construction markets. 6. The award to RQ Construction, LLC warrants a review of their past performance in similar projects.

Value Assessment

Rating: fair

The contract value of $133.8 million for a facility modernization project appears substantial. Benchmarking against similar large-scale academic or research facility construction projects would be necessary to definitively assess value for money. The firm-fixed-price structure suggests an attempt to cap government liability, but the final cost will depend on the contractor's efficiency and any potential change orders. Without specific cost breakdowns or comparisons to similar projects, a precise value assessment 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 all responsible sources were permitted to submit bids. With 6 bidders participating, this suggests a reasonably competitive environment. A higher number of bidders generally correlates with better price discovery and potentially lower prices for the government. The presence of multiple bidders implies that the market has sufficient capacity and interest for this type of project.

Taxpayer Impact: Full and open competition with multiple bidders is beneficial for taxpayers as it increases the likelihood of receiving competitive pricing and encourages contractors to offer their best value proposals.

Public Impact

Naval Postgraduate School (NPS) students and faculty will benefit from modernized academic and research facilities. The project will deliver upgrades to Halligan Hall (B-234), enhancing the learning and research environment. The geographic impact is concentrated in Monterey, California, potentially stimulating the local economy through construction jobs and related services. The construction activities will likely involve a significant workforce, including skilled trades and project management personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if project scope expands beyond initial estimates.
Risk of construction delays impacting the academic calendar at NPS.
Ensuring compliance with environmental and safety regulations during construction.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Full and open competition suggests a competitive bidding process leading to potentially favorable pricing.
Award to an established contractor (RQ Construction, LLC) may indicate a level of confidence in their capabilities.

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, with substantial annual spending on facilities maintenance, upgrades, and new builds. Benchmarking this contract's value against other large-scale educational or research facility projects, both within the government and private sector, would provide further context on its scale and potential cost-effectiveness.

Small Business Impact

The contract details indicate that small business participation was not a primary set-aside criterion (ss: false, sb: false). While this specific award may not directly benefit small businesses through a set-aside, the prime contractor, RQ Construction, LLC, may engage small businesses as subcontractors. An analysis of the subcontracting plan, if applicable, would reveal the extent of small business involvement and its potential impact on the small business ecosystem in the region.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy, with potential involvement from the Naval Postgraduate School's facilities management and contracting offices. Accountability measures are inherent in the firm-fixed-price contract type, which holds the contractor responsible for delivering the project within the agreed-upon price. Transparency can be assessed through contract award notices and any publicly available project progress reports. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Naval Postgraduate School Campus Development
Department of Defense Facilities Modernization
Military Education Infrastructure Projects
Federal Construction Contracts
Academic Building Construction

Risk Flags

Potential for cost overruns
Risk of schedule delays
Contractor performance history
Adequacy of competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $133.8 million to RQ CONSTRUCTION, LLC. MODERNIZE NPS ACADEMIC/RESEARCH FACILITY HALLIGAN HALL B-234, MONTEREY, CALIFORNIA

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 $133.8 million.

What is the period of performance?

Start: 2025-04-04. End: 2027-07-23.

What is RQ Construction, LLC's track record with similar Department of Defense or academic facility construction projects?

A review of RQ Construction, LLC's past performance is crucial for assessing their suitability for this project. Information regarding their experience with large-scale institutional buildings, particularly those with academic or research functions, would be beneficial. Examining their history with Department of Defense contracts, including any awards, past performance evaluations, and any instances of contract disputes or terminations, can provide insights into their reliability and capability. Understanding their success in delivering projects on time and within budget for similar clients will help gauge the risk associated with this award.

How does the awarded price compare to similar academic or research facility construction projects in California or nationally?

To benchmark the value for money, the awarded price of $133.8 million needs to be compared against similar projects. This involves identifying comparable projects in terms of size (square footage), scope of work (renovation vs. new build, specific facility types like labs or lecture halls), and geographic location. Data from construction industry cost databases, public contract award databases, or reports from construction cost estimating firms can provide benchmarks. Factors such as prevailing wage rates, material costs, and local market conditions in Monterey, California, should be considered when making comparisons to ensure relevance and accuracy in assessing whether the price is competitive.

What are the primary risks associated with the construction of Halligan Hall B-234, and how are they being mitigated?

Key risks for this project likely include unforeseen site conditions (e.g., hazardous materials, structural issues), potential for scope creep leading to cost increases, construction delays due to weather or supply chain disruptions, and contractor performance issues. Mitigation strategies typically involve thorough site investigations prior to award, a well-defined scope of work with a robust change order process, contingency planning for schedule and budget, and strong contract administration and oversight by the government. The firm-fixed-price contract structure itself is a risk mitigation tool, placing the onus on the contractor to manage costs.

What is the expected impact of these facility upgrades on the educational and research capabilities of the Naval Postgraduate School?

The modernization of Halligan Hall is expected to significantly enhance the educational and research capabilities of the Naval Postgraduate School. Upgraded facilities can lead to improved learning environments, better equipped laboratories, and more collaborative spaces, which are essential for cutting-edge research and effective teaching. This can attract top-tier faculty and students, foster innovation, and ensure that NPS remains at the forefront of naval science and technology. The specific impact will depend on the nature of the upgrades, such as the incorporation of new technologies or specialized research equipment.

How has federal spending on construction and facility modernization for educational institutions evolved over the past five years?

Federal spending on construction and facility modernization for educational institutions, particularly those affiliated with military branches like NPS, has generally been a consistent area of investment. While specific figures fluctuate annually based on budget appropriations and identified needs, there's a continuous requirement to maintain and upgrade aging infrastructure and adapt facilities to evolving technological and pedagogical demands. Trends may show increased focus on sustainability, energy efficiency, and technology integration in new construction and renovation projects. Analyzing historical spending patterns for the Department of Defense and specific service academies can reveal trends in prioritization and funding levels.

What are the potential long-term cost savings or operational efficiencies anticipated from this modernization project?

Long-term cost savings and operational efficiencies are often a key objective of facility modernization projects. This can be achieved through the implementation of energy-efficient systems (e.g., HVAC, lighting), which reduce utility costs. Modernized infrastructure may also require less frequent maintenance and repair, lowering long-term operational expenses. Furthermore, improved facility layouts and technology integration can enhance productivity and streamline research processes, indirectly contributing to cost-effectiveness. Quantifying these benefits typically requires a life-cycle cost analysis conducted during the project planning phase.

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: N6247323R1012

Offers Received: 6

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: $133,791,924

Exercised Options: $133,791,924

Current Obligation: $133,791,924

Subaward Activity

Number of Subawards: 34

Total Subaward Amount: $72,372,127

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N6247324D5234

IDV Type: IDC

Timeline