DoD's $46M medical facility construction contract awarded to GSC Construction, Inc. shows fair value

Contract Overview

Contract Amount: $46,188,787 ($46.2M)

Contractor: GSC Construction, Inc.

Awarding Agency: Department of Defense

Start Date: 2006-12-28

End Date: 2010-07-21

Contract Duration: 1,301 days

Daily Burn Rate: $35.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: CONSTRUCTION CONSOLIDATED MEDICAL

Place of Performance

Location: GOOSE CREEK, BERKELEY County, SOUTH CAROLINA, 29445, UNITED STATES OF AMERICA

State: South Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $46.2 million to GSC CONSTRUCTION, INC. for work described as: CONSTRUCTION CONSOLIDATED MEDICAL Key points: 1. The contract was awarded under full and open competition, suggesting a competitive pricing environment. 2. The firm-fixed-price structure shifts performance risk to the contractor. 3. The contract duration of 1301 days indicates a significant, long-term project. 4. The award was made by the Department of the Navy, a major component of the DoD. 5. The North American Industry Classification System (NAICS) code 236220 points to commercial and institutional building construction. 6. The contract was awarded in South Carolina, indicating a specific geographic focus.

Value Assessment

Rating: fair

The contract's total value of approximately $46.2 million for construction services appears reasonable given the project's scope and duration. Benchmarking against similar large-scale medical facility construction projects within the Department of Defense or other federal agencies would provide a more precise value-for-money assessment. However, the firm-fixed-price contract type suggests that the contractor bears the primary financial risk, which can incentivize cost control.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through full and open competition, meaning all responsible sources were permitted to submit offers. The presence of 3 bidders indicates a moderate level of competition for this project. While not an exceptionally high number of bidders, it suggests that multiple firms were interested and capable of undertaking the work, which generally supports price discovery and a more competitive outcome.

Taxpayer Impact: Full and open competition, even with a moderate number of bidders, is generally favorable for taxpayers as it increases the likelihood of receiving competitive pricing and better value for the government's investment.

Public Impact

The primary beneficiaries of this contract are the Department of Defense and its personnel, who will gain access to improved medical facilities. The services delivered include the construction of a medical facility, a critical infrastructure component for military readiness and healthcare. The geographic impact is concentrated in South Carolina, where the facility will be built. The project will likely have implications for the local construction workforce in South Carolina, creating jobs and economic activity during the construction period.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions arise, despite the fixed-price nature.
Ensuring timely completion within the 1301-day timeframe is crucial to avoid impacting medical service availability.
Quality control during construction is paramount for a medical facility to meet stringent health and safety standards.

Positive Signals

The firm-fixed-price contract type transfers significant cost risk to the contractor.
Awarding to GSC Construction, Inc. suggests they met the technical and financial qualifications required for this substantial project.
The contract was awarded by the Department of the Navy, indicating a commitment to infrastructure development within a major federal agency.

Sector Analysis

The construction sector, particularly for institutional and commercial buildings, is a significant area of federal spending. This contract falls under the broader category of infrastructure development, which the federal government frequently procures to support its various missions. The NAICS code 236220 specifically covers the construction of non-residential buildings. Comparable spending benchmarks would involve analyzing the cost per square foot or per bed for similar medical facility constructions across government agencies.

Small Business Impact

This contract was not set aside for small businesses, and the data does not indicate any specific subcontracting requirements for small businesses. The award to GSC Construction, Inc., a presumably larger entity given the contract value, suggests that the primary focus was on securing a capable contractor for a large-scale project. Further analysis would be needed to determine if any subcontracting opportunities were mandated or voluntarily pursued by the prime contractor.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the contract administration office within the Department of the Navy. Performance monitoring, quality assurance checks, and financial oversight are standard mechanisms. Transparency is generally maintained through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Military Construction
Federal Healthcare Infrastructure Projects
Naval Facilities Engineering Command Contracts
Commercial Building Construction Services

Risk Flags

Potential for cost overruns if unforeseen site conditions arise.
Risk of quality compromise if contractor faces financial pressure.
Ensuring timely completion to meet operational needs.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $46.2 million to GSC CONSTRUCTION, INC.. CONSTRUCTION CONSOLIDATED MEDICAL

Who is the contractor on this award?

The obligated recipient is GSC CONSTRUCTION, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $46.2 million.

What is the period of performance?

Start: 2006-12-28. End: 2010-07-21.

What is the track record of GSC Construction, Inc. with federal contracts, particularly within the Department of Defense?

A review of GSC Construction, Inc.'s federal contract history would be necessary to assess their track record. This would involve examining past performance on similar projects, including their success in meeting deadlines, staying within budget, and adhering to quality standards. Specifically, looking at their experience with Department of Defense or Navy contracts would provide relevant context for their capability in executing this $46.2 million medical facility construction project. A history of successful, on-time, and within-budget completions would indicate a lower performance risk, while a pattern of delays or cost overruns would raise concerns.

How does the awarded price compare to the estimated cost or independent government cost estimate for this project?

The provided data does not include the government's estimated cost or independent cost estimate for this project. To assess the value for money, a comparison between the awarded price of $46,188,787.43 and the government's pre-negotiation estimate is crucial. If the awarded price is significantly below the estimate, it suggests strong competition and potentially excellent value. Conversely, if it is close to or exceeds the estimate, further scrutiny of the bidding process and the estimate's accuracy would be warranted. Without this comparative data, the assessment of value remains preliminary.

What are the key performance indicators (KPIs) used to monitor the progress and quality of this construction project?

While specific KPIs are not detailed in the provided data, typical performance indicators for large construction projects include adherence to the project schedule (e.g., percentage of work completed on time), quality of workmanship (e.g., number of defects identified and rectified), safety compliance (e.g., incident rates), and budget management. For a medical facility, specific KPIs related to the installation of specialized equipment and systems (e.g., HVAC, medical gas lines) would also be critical. The contracting officer's representative (COR) would be responsible for monitoring these KPIs and ensuring the contractor meets contractual obligations.

What is the historical spending trend for similar medical facility construction projects by the Department of the Navy?

Analyzing historical spending for similar medical facility construction projects by the Department of the Navy would provide valuable context for this $46.2 million award. This would involve examining the number of such contracts awarded annually, their average value, and the typical duration. Understanding these trends can help identify whether this contract represents a significant increase or decrease in spending, whether project costs are rising or falling, and the typical competitive landscape for these types of projects. Such analysis can highlight potential budget fluctuations or shifts in procurement strategies.

What are the potential risks associated with the firm-fixed-price contract type for a project of this magnitude and complexity?

The firm-fixed-price (FFP) contract type shifts the majority of cost risk to the contractor, which is generally favorable for the government. However, for a large and complex project like a medical facility, potential risks remain. If the contractor underestimated costs or encountered unforeseen site conditions, they might face financial strain, potentially impacting project quality or completion. There's also a risk that the contractor might cut corners on quality to protect their profit margin, necessitating robust government oversight. The government's risk is primarily related to ensuring the contractor has the capability and incentive to deliver the required quality and scope within the fixed price.

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: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1727 WRIGHTSBORO RD, AUGUSTA, GA, 30904

Business Categories: Category Business, HUBZone Firm, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $46,188,787

Exercised Options: $46,188,787

Current Obligation: $46,188,787

Contract Characteristics

Cost or Pricing Data: NO

Timeline