DoD awards $14M construction contract to W. G. Yates & Sons, highlighting firm fixed-price terms

Contract Overview

Contract Amount: $13,974,563 ($14.0M)

Contractor: W. G. Yates & Sons Construction Company

Awarding Agency: Department of Defense

Start Date: 2004-09-20

End Date: 2006-12-05

Contract Duration: 806 days

Daily Burn Rate: $17.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 7

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Place of Performance

Location: RANDOLPH AFB, BEXAR County, TEXAS, 78150

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $14.0 million to W. G. YATES & SONS CONSTRUCTION COMPANY for work described as: Key points: 1. Contract awarded under full and open competition, suggesting a competitive bidding process. 2. The firm fixed-price contract type shifts cost risk to the contractor. 3. Project duration of 806 days indicates a significant construction undertaking. 4. The contract was awarded by the Department of the Army, a major DoD component. 5. The contractor, W. G. Yates & Sons, has a history of performing federal construction work. 6. The contract value of approximately $14 million falls within a moderate spending range for construction projects.

Value Assessment

Rating: good

The contract value of $13,974,563 for commercial and institutional building construction appears reasonable given the project duration of 806 days. Without specific project scope details or comparable project data, a precise value-for-money assessment is challenging. However, the firm fixed-price nature suggests that the contractor assumed the risk for cost overruns, which can be a positive indicator for the government if the contractor's bid was competitive.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. The presence of 7 bidders suggests a healthy level of competition for this project. A competitive bidding environment generally leads to better price discovery and potentially more favorable pricing for the government.

Taxpayer Impact: The robust competition for this contract is beneficial for taxpayers, as it likely drove down the final price and ensured the government received competitive offers for the construction services.

Public Impact

The primary beneficiaries are the Department of Defense and the Department of the Army, receiving new or improved facilities. The services delivered include commercial and institutional building construction, likely involving the erection or renovation of significant structures. The geographic impact is localized to Texas, where the contractor is based and the project was likely executed. The project would have implications for the construction workforce in the region, providing employment opportunities for skilled laborers and tradespeople.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the firm fixed-price contract did not adequately account for unforeseen site conditions or material price fluctuations.
Dependence on the contractor's ability to manage the project effectively over an 806-day period to ensure timely completion and quality.
Risk associated with the contractor's past performance, although not explicitly detailed here, is always a consideration in large construction projects.

Positive Signals

Awarded under full and open competition, indicating a competitive market for the services.
Firm fixed-price contract shifts cost risk to the contractor, potentially protecting the government from budget overruns.
The contractor, W. G. Yates & Sons, is an established entity in the construction sector, suggesting experience.
The project duration of over two years implies a substantial and well-defined scope of work.

Sector Analysis

The construction sector is a significant part of the federal procurement landscape, encompassing a wide range of building and infrastructure projects. This contract falls under commercial and institutional building construction, a segment that includes offices, barracks, training facilities, and other non-residential structures. Federal spending in this area is often driven by modernization needs, force protection requirements, and infrastructure upgrades. Comparable spending benchmarks would depend heavily on the specific type and scale of the facility being constructed.

Small Business Impact

This contract was awarded under full and open competition and does not indicate any specific small business set-aside provisions. The presence of 7 bidders suggests that larger, established construction firms likely participated. There is no explicit information on subcontracting plans for small businesses within this data, but large federal construction contracts often include subcontracting goals to engage small and disadvantaged businesses.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the contracting officer's representative (COR) within the Department of the Army. The firm fixed-price nature of the contract means oversight would focus on schedule adherence, quality of work, and compliance with contract terms rather than detailed cost monitoring. 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

Military Construction
Building Renovation Contracts
Federal Facilities Management
Department of Defense Construction Projects

Risk Flags

Long project duration may increase risk of cost escalation or schedule delays.
Firm Fixed Price contract places cost risk on contractor, potential for financial strain if estimates are inaccurate.
Dependence on contractor's financial stability and project management capabilities over an extended period.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.0 million to W. G. YATES & SONS CONSTRUCTION COMPANY. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is W. G. YATES & SONS CONSTRUCTION COMPANY.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $14.0 million.

What is the period of performance?

Start: 2004-09-20. End: 2006-12-05.

What is the typical profit margin for firm fixed-price construction contracts of this size awarded by the Department of the Army?

Determining the typical profit margin for firm fixed-price construction contracts is complex, as it's influenced by numerous factors including the contractor's risk assessment, overhead costs, market competition, and the specific nature of the project. For contracts of this approximate value ($14 million) awarded by the Department of the Army, profit margins can range significantly, often falling between 5% and 15% of the total contract value. This range accounts for the contractor's investment, labor, materials, and the inherent risks associated with undertaking a large-scale construction project over an extended period (806 days). The firm fixed-price structure means the contractor must absorb any cost overruns, so a higher perceived risk might necessitate a larger profit margin to compensate. However, intense competition, as indicated by the 7 bidders, can also drive down profit margins as contractors strive to submit the most competitive bids.

How does the number of bidders (7) compare to the average number of bids for similar Department of the Army construction contracts?

The average number of bids for Department of the Army construction contracts can vary widely depending on the project's complexity, location, specialized requirements, and the overall health of the construction market at the time of solicitation. However, receiving 7 bids for a contract valued at approximately $14 million under full and open competition is generally considered a healthy level of competition. Many federal construction solicitations, especially for larger or more specialized projects, might receive fewer bids due to market consolidation or specific technical requirements. Conversely, simpler or more routine projects might attract even more bidders. Therefore, 7 bidders suggests that the market was sufficiently robust and the solicitation was accessible enough to attract a good number of interested and capable firms, which is a positive sign for price discovery and value for the government.

What are the potential risks associated with a firm fixed-price contract for a project spanning over two years?

Firm fixed-price (FFP) contracts, while beneficial for budget certainty, carry inherent risks for the contractor, especially on long-duration projects like this 806-day construction contract. The primary risk is the contractor's inability to accurately forecast all costs over the project's lifespan. Fluctuations in material prices (e.g., steel, concrete, fuel), labor costs, and unforeseen site conditions (e.g., unexpected soil issues, environmental remediation needs) can significantly impact the contractor's profitability. If these costs exceed the initial bid, the contractor must absorb the difference, potentially leading to financial strain or even default. For the government, the risk is less about cost overruns and more about potential impacts on schedule or quality if the contractor struggles financially or cuts corners to maintain profitability. Robust contract administration and clear specifications are crucial to mitigate these risks.

What is the historical spending trend for commercial and institutional building construction by the Department of the Army?

Historical spending trends for commercial and institutional building construction by the Department of the Army are substantial and fluctuate based on military readiness needs, infrastructure modernization initiatives, and global security postures. The Army consistently invests billions annually in construction projects, ranging from barracks and training facilities to administrative buildings and specialized operational structures. Spending in this category is often influenced by multi-year defense budgets and specific congressional appropriations for military construction (MILCON). While this specific $14 million contract represents a single project, it fits within the broader pattern of the Army's ongoing need to maintain, upgrade, and expand its vast real property portfolio across numerous installations worldwide. Analyzing aggregated data over several fiscal years would reveal cyclical patterns and strategic priorities driving this type of procurement.

How does the contractor, W. G. Yates & Sons Construction Company, perform on federal contracts based on past performance data?

W. G. Yates & Sons Construction Company has a history of performing federal contracts, primarily within the construction domain. While specific past performance ratings are often proprietary and not publicly detailed in summary data, their continued ability to win competitive bids from agencies like the Department of the Army suggests a generally satisfactory track record. Federal agencies typically evaluate past performance as a critical factor in source selection. Contractors who consistently deliver quality work on time and within budget are more likely to be successful in future competitions. Without access to detailed performance reviews or CPARS (Contractor Performance Assessment Reporting System) data, it's difficult to provide a definitive assessment, but their presence in the federal contracting space indicates a level of established capability and experience.

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

Offers Received: 7

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Parent Company: THE Yates Companies Inc (UEI: 017041232)

Address: ONE GULLY AVENUE, PHILADELPHIA, MS, 03

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $13,846,190

Exercised Options: $13,846,190

Current Obligation: $13,974,563

Contract Characteristics

Cost or Pricing Data: NO

Timeline