Department of the Navy awards $62M design-build contract for NAS New Orleans infrastructure upgrades

Contract Overview

Contract Amount: $62,050,641 ($62.1M)

Contractor: Broadmoor LLC

Awarding Agency: Department of Defense

Start Date: 2007-07-03

End Date: 2010-09-10

Contract Duration: 1,165 days

Daily Burn Rate: $53.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: FIRM FIXED PRICE FOR ALL WORK ASSOCIATED WITH TWO PHASE DESIGN-BUILD CONTRACT PKG 3A, P305K COMMAND AND CONTROL HARDENING; P002K CRASH/FIRE/RESCUE/P519V YOUTH CENTER; P252K PUBLIC WORKS COMPLEX; P263K HANGAR 263; P206K COMPREHENSIVE UTILITIES, NAS NEW ORLEANS, LA.

Place of Performance

Location: METAIRIE, JEFFERSON County, LOUISIANA, 70001

State: Louisiana Government Spending

Plain-Language Summary

Department of Defense obligated $62.1 million to BROADMOOR LLC for work described as: FIRM FIXED PRICE FOR ALL WORK ASSOCIATED WITH TWO PHASE DESIGN-BUILD CONTRACT PKG 3A, P305K COMMAND AND CONTROL HARDENING; P002K CRASH/FIRE/RESCUE/P519V YOUTH CENTER; P252K PUBLIC WORKS COMPLEX; P263K HANGAR 263; P206K COMPREHENSIVE UTILITIES, NAS NEW ORLEANS, LA. Key points: 1. Contract awarded via full and open competition, indicating a broad market solicitation. 2. The contract covers multiple construction projects including command and control hardening, crash/fire/rescue facilities, and a youth center. 3. The firm-fixed-price structure shifts cost risk to the contractor. 4. The contract duration of 1165 days suggests a significant scope of work. 5. The award was made by the Department of the Navy, a major defense spender. 6. The project is located in Louisiana, impacting the regional construction sector.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific cost breakdowns for each sub-project. The total award of $62 million for five distinct construction packages (command and control hardening, crash/fire/rescue, youth center, hangar, and utilities) over a three-year period suggests a substantial investment in infrastructure. However, without comparable project costs for similar hardening and facility upgrades at other naval installations, a precise value-for-money assessment is difficult. The firm-fixed-price nature of the contract implies that the contractor is responsible for managing costs to meet the agreed-upon price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit bids. With five bids received, the competition level appears moderate. A higher number of bidders typically suggests greater price discovery and potentially more competitive pricing for the government. The fact that five firms submitted proposals indicates sufficient interest from the market for this type of construction work.

Taxpayer Impact: The full and open competition process is generally favorable for taxpayers as it encourages multiple contractors to offer their best pricing, potentially leading to cost savings compared to less competitive procurement methods.

Public Impact

Naval Air Station New Orleans personnel and operations benefit from improved and hardened facilities. The construction work directly supports the readiness and operational capabilities of the Navy. The project provides significant economic stimulus to the Louisiana construction industry and its workforce. Upgraded utilities and facilities enhance the overall infrastructure and safety of the base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions or scope creep occurs, despite the fixed-price nature.
Contractor performance risk associated with managing multiple complex construction packages simultaneously.
Dependency on the contractor for timely completion, which could impact base operations if delayed.

Positive Signals

Firm-fixed-price contract shifts cost risk to the contractor.
Full and open competition suggests a competitive bidding environment.
Award to a single contractor for multiple packages may offer efficiencies in project management and coordination.

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 infrastructure development and maintenance at military installations worldwide. The market for large-scale federal construction projects is competitive, often involving large prime contractors who may utilize numerous subcontractors. This specific award contributes to the overall spending within the defense construction sub-sector.

Small Business Impact

The data indicates that this contract was not specifically set aside for small businesses, and the prime contractor, Broadmoor LLC, is likely a large business. There is no explicit information regarding subcontracting plans for small businesses within the provided data. The impact on the small business ecosystem would depend on whether Broadmoor LLC actively seeks to subcontract portions of this work to small businesses, which is a common practice in large federal construction projects.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting and engineering departments. Accountability measures are inherent in the firm-fixed-price contract, requiring the contractor to deliver the specified work within the agreed budget. Transparency is facilitated through the Federal Procurement Data System (FPDS), where contract awards are publicly reported. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Naval Facilities Engineering Command (NAVFAC) construction projects
Military construction (MILCON) programs
Base Realignment and Closure (BRAC) related infrastructure projects
Department of Defense infrastructure modernization initiatives

Risk Flags

Potential for cost overruns if scope is not clearly defined.
Risk of delays impacting operational readiness.
Contractor performance risk on multiple concurrent packages.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $62.1 million to BROADMOOR LLC. FIRM FIXED PRICE FOR ALL WORK ASSOCIATED WITH TWO PHASE DESIGN-BUILD CONTRACT PKG 3A, P305K COMMAND AND CONTROL HARDENING; P002K CRASH/FIRE/RESCUE/P519V YOUTH CENTER; P252K PUBLIC WORKS COMPLEX; P263K HANGAR 263; P206K COMPREHENSIVE UTILITIES, NAS NEW ORLEANS, LA.

Who is the contractor on this award?

The obligated recipient is BROADMOOR 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 $62.1 million.

What is the period of performance?

Start: 2007-07-03. End: 2010-09-10.

What is the historical spending pattern for Broadmoor LLC with the Department of the Navy?

Analyzing Broadmoor LLC's historical contract awards with the Department of the Navy requires access to comprehensive federal procurement databases. Typically, a firm's track record with an agency can be assessed by examining the number, value, and types of contracts previously awarded. A history of successful performance on similar projects, particularly those involving design-build and infrastructure upgrades at military installations, would indicate a lower performance risk. Conversely, a pattern of contract disputes, delays, or cost overruns could raise concerns. Without specific historical data for Broadmoor LLC and the Navy, it's difficult to provide a definitive assessment of their past relationship and performance.

How does the $62 million award compare to similar infrastructure upgrade contracts at other naval installations?

Comparing this $62 million award to similar contracts requires identifying comparable projects at other Naval installations in terms of scope, complexity, and timeframe. Infrastructure upgrades can vary widely; for instance, hardening command and control facilities might have different cost drivers than utility system replacements or new construction like a youth center. A direct comparison would ideally look at contracts for similar combinations of facilities, awarded around the same period, and under similar procurement methods (e.g., design-build, firm-fixed-price). Without access to a database of comparable projects with detailed cost breakdowns, it is challenging to definitively benchmark this contract's value. However, $62 million for multiple significant construction packages over three years suggests a substantial but potentially reasonable investment for a large naval installation.

What are the primary risk indicators associated with this firm-fixed-price design-build contract?

The primary risk indicators for this firm-fixed-price design-build contract include potential for contractor underestimation of costs, leading to quality compromises or requests for change orders to maintain profitability. Design-build inherently carries coordination risk between design and construction phases, which can be exacerbated when multiple distinct packages are bundled. The firm-fixed-price nature shifts cost risk to the contractor, but significant unforeseen site conditions or scope creep (if not managed tightly through contract modifications) could still lead to disputes or contractor financial distress. Furthermore, the duration of 1165 days for multiple projects increases the risk of market fluctuations in material costs and labor availability impacting the contractor's ability to maintain the fixed price.

How effective is the firm-fixed-price contract type in ensuring program effectiveness for construction projects?

The firm-fixed-price (FFP) contract type is generally considered effective for construction projects where the scope of work is well-defined and risks can be reasonably anticipated. Its primary advantage is providing cost certainty for the government, as the contractor assumes most of the cost risk. This can incentivize efficiency and careful planning by the contractor. For program effectiveness, FFP can be beneficial if it leads to timely completion within budget, thereby ensuring the intended facilities are delivered as planned. However, if the scope is not perfectly defined upfront, FFP can sometimes lead to contractors cutting corners on quality or resisting necessary changes to protect their profit margin, potentially impacting the long-term effectiveness or functionality of the delivered assets. In design-build scenarios, clear performance specifications are crucial for FFP effectiveness.

What is the historical spending by the Department of the Navy on construction at NAS New Orleans?

Determining the historical spending by the Department of the Navy specifically on construction at NAS New Orleans prior to this $62 million award would require a detailed analysis of past federal procurement data for that installation. Naval installations often undergo periodic upgrades, repairs, and new construction to maintain operational readiness and modernize facilities. Spending patterns can fluctuate based on military needs, budget allocations, and specific infrastructure initiatives like base hardening or modernization programs. Without access to historical contract databases filtered by installation and agency, it is not possible to quantify past construction expenditures at NAS New Orleans. This $62 million award represents a significant single investment in the base's infrastructure.

What is the typical number of bids received for similar large-scale federal construction contracts?

The typical number of bids received for large-scale federal construction contracts, especially those procured under full and open competition, can vary significantly. Factors influencing bid volume include the project's complexity, geographic location, market conditions, and the perceived profitability or risk. For major projects valued in the tens of millions of dollars, receiving between 3 to 7 bids is often considered a healthy level of competition. Receiving only 5 bids, as in this case, suggests a reasonably competitive market but perhaps not an overwhelming number of interested parties, which could be due to specialized requirements or the current workload of potential bidders. A very low number of bids (1-2) might indicate issues with the solicitation or market limitations.

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: N6945007R0062

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: BOH Bros. Construction CO., L.L.C. (UEI: 006947386)

Address: 2740 N ARNOULT RD, METAIRIE, LA, 01

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $67,525,340

Exercised Options: $62,050,641

Current Obligation: $62,050,641

Contract Characteristics

Cost or Pricing Data: NO

Timeline