State Department awarded $182.6M construction contract to Caddell Construction, a firm-fixed-price definitive contract

Contract Overview

Contract Amount: $182,598,153 ($182.6M)

Contractor: Caddell Construction CO. (DE), LLC

Awarding Agency: Department of State

Start Date: 2013-08-28

End Date: 2020-05-31

Contract Duration: 2,468 days

Daily Burn Rate: $74.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF

Place of Performance

Location: MONTGOMERY, MONTGOMERY County, ALABAMA, 36109

State: Alabama Government Spending

Plain-Language Summary

Department of State obligated $182.6 million to CADDELL CONSTRUCTION CO. (DE), LLC for work described as: IGF::OT::IGF Key points: 1. Contract value represents a significant investment in infrastructure. 2. The award was made under full and open competition, suggesting a competitive bidding process. 3. The contract duration of 2468 days indicates a long-term project with substantial scope. 4. The firm-fixed-price structure shifts cost risk to the contractor. 5. Geographic location in Alabama may indicate a specific regional development project. 6. The absence of small business set-asides warrants further investigation into subcontracting opportunities.

Value Assessment

Rating: fair

The contract value of $182.6 million is substantial for a construction project. Benchmarking this against similar large-scale government construction projects would be necessary for a precise value-for-money assessment. The firm-fixed-price nature of the contract implies that the contractor bears the risk of cost overruns, which can be a positive indicator for the government if managed effectively. However, without detailed cost breakdowns or comparisons to industry standards for similar scope and complexity, it is difficult to definitively assess if the price represents excellent value.

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 3 bidders, the competition level appears moderate. A higher number of bidders typically leads to more competitive pricing and better price discovery for the government. The fact that Caddell Construction was selected suggests they offered the most advantageous proposal based on the evaluation criteria, which could include price, technical approach, and past performance.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down prices through market forces. A moderate number of bidders suggests that while competition existed, there may be room for improvement in attracting a wider pool of qualified contractors to ensure the most cost-effective outcome.

Public Impact

The primary beneficiaries are likely the Department of State and its personnel who will utilize the constructed facilities. The contract delivers commercial and institutional building construction services. The geographic impact is concentrated in Alabama, where the construction will take place. The project will likely create numerous jobs in the construction sector within Alabama, including skilled trades and support staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of explicit small business subcontracting goals could limit opportunities for smaller firms.
The long contract duration might lead to potential scope creep or changes if not managed tightly.
Dependence on a single large contractor for a significant project duration carries inherent performance risks.

Positive Signals

Firm-fixed-price contract shifts cost risk to the contractor.
Full and open competition suggests a robust bidding process.
The contractor, Caddell Construction, has a track record in large-scale projects.
The project is located in Alabama, potentially boosting the local economy.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the broader construction industry. This sector encompasses the building of non-residential structures such as government facilities, offices, and public institutions. The market size for government construction is substantial, driven by the need for infrastructure upgrades and new facilities. This specific contract, valued at over $182 million, represents a large-scale project within this sector, likely for a critical government function.

Small Business Impact

The data indicates that this contract was not specifically set aside for small businesses (ss: false, sb: false). This means that large businesses were eligible to compete and potentially win the award. While this allows for broader competition, it also raises questions about subcontracting opportunities for small businesses. The government often encourages or mandates subcontracting plans for large prime contractors to ensure small businesses participate in contract performance. Further analysis would be needed to determine if a subcontracting plan was required and how effectively it is being implemented.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of State's contracting and program management offices. Given the significant value and duration, regular progress reviews, site inspections, and financial audits are expected. The contract type (firm-fixed-price) necessitates close monitoring of performance against milestones and quality standards. While no specific Inspector General jurisdiction is mentioned, the Department of State's Office of Inspector General would likely have oversight authority for fraud, waste, and abuse.

Related Government Programs

Department of State Facilities Management
Federal Building Construction Projects
Large-Scale Government Infrastructure Contracts
Firm-Fixed-Price Construction Awards

Risk Flags

Potential for cost overruns despite FFP due to unforeseen conditions or scope changes.
Risk of contractor performance issues over the long contract duration.
Limited visibility into small business subcontracting opportunities.
Moderate competition level may not guarantee the absolute best price.
Dependence on a single contractor for a critical long-term project.

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $182.6 million to CADDELL CONSTRUCTION CO. (DE), LLC. IGF::OT::IGF

Who is the contractor on this award?

The obligated recipient is CADDELL CONSTRUCTION CO. (DE), LLC.

Which agency awarded this contract?

Awarding agency: Department of State (Department of State).

What is the total obligated amount?

The obligated amount is $182.6 million.

What is the period of performance?

Start: 2013-08-28. End: 2020-05-31.

What is Caddell Construction's track record with large federal construction contracts, particularly with the Department of State?

Caddell Construction Co. (DE), LLC has a history of performing large-scale construction projects for various federal agencies, including significant work with the Department of Defense and other entities requiring complex infrastructure. Their experience often includes projects with high security requirements and demanding timelines. While specific details on their past performance with the Department of State for projects of this exact magnitude would require deeper database analysis, their general profile suggests they are a capable contractor for substantial federal building endeavors. Reviewing past performance evaluations and any contract disputes or awards would provide a more granular understanding of their reliability and quality of work in similar federal contexts.

How does the $182.6 million contract value compare to similar Department of State construction projects?

The $182.6 million award is a substantial sum, placing it among the larger construction contracts undertaken by the Department of State. To benchmark its value effectively, comparisons should be made with other projects of similar scope, complexity, and geographic location. For instance, the construction of embassies, consulates, or major office complexes by the State Department would serve as relevant comparators. Without access to a detailed breakdown of the project's scope (e.g., square footage, specific facilities, security features), a precise comparison is challenging. However, the value suggests a significant undertaking, potentially a new major facility or a comprehensive renovation of an existing critical infrastructure.

What are the primary risks associated with a firm-fixed-price contract of this magnitude and duration?

The primary risks with a firm-fixed-price (FFP) contract of this magnitude ($182.6M) and duration (2468 days) revolve around potential contractor underestimation of costs, unforeseen site conditions, and scope creep. While FFP shifts cost overrun risk to the contractor, a poorly estimated bid could lead to contractor financial distress, impacting project completion. Unforeseen geological issues, hazardous materials, or complex utility interferences discovered during construction can lead to costly change orders, even under FFP. Furthermore, the long duration increases the likelihood of design changes or evolving operational requirements, which, if not managed through a rigorous change control process, can significantly inflate the contract price beyond the initial fixed amount. Contractor performance and quality control are also critical risks that must be actively managed.

How effective is 'full and open competition' in ensuring optimal price discovery for large construction contracts?

Full and open competition is generally considered the most effective method for ensuring optimal price discovery in large government construction contracts. By allowing all responsible sources to compete, it maximizes the potential for multiple bids, thereby fostering a competitive environment. This competition incentivizes bidders to offer their most aggressive pricing and best value proposals to win the contract. The presence of 3 bidders in this case, while indicating some level of competition, might suggest that the market for this specific type of project or location could potentially support more participants. A higher number of bidders typically leads to more robust price discovery and a greater likelihood of the government securing the most cost-effective solution.

What are the potential workforce implications of a $182.6M construction project in Alabama?

A construction project of this magnitude ($182.6 million) in Alabama would have significant positive workforce implications for the region. It would create a substantial number of direct jobs for skilled tradespeople, including electricians, plumbers, masons, carpenters, and heavy equipment operators. Additionally, indirect employment would be generated in supporting industries such as material supply, logistics, engineering, architecture, and project management. The long duration of the contract (2468 days) suggests sustained employment opportunities over several years. This influx of work could also lead to increased demand for training programs and apprenticeships to meet the need for skilled labor, potentially boosting the long-term capacity of the local construction workforce.

What are the historical spending patterns for commercial and institutional building construction by the Department of State?

Historical spending patterns for commercial and institutional building construction by the Department of State reveal a consistent need for facility maintenance, upgrades, and new construction, particularly for overseas diplomatic missions and domestic support facilities. Annual spending in this category can fluctuate significantly based on major capital projects, security upgrades, and geopolitical requirements. While specific annual figures require detailed historical data analysis, the Department of State consistently allocates substantial funds towards its real property portfolio. This $182.6 million contract aligns with the department's ongoing investment in its infrastructure, reflecting a commitment to maintaining and modernizing its operational capabilities and presence globally and domestically.

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

Parent Company: Caddell Construction CO., Inc. (UEI: 102087285)

Address: 2700 LAGOON PARK DR, MONTGOMERY, AL, 36109

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $348,587,198

Exercised Options: $348,587,198

Current Obligation: $182,598,153

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline