DOD awards $14.9M contract for interior renovations, raising questions about competition and value

Contract Overview

Contract Amount: $14,942,776 ($14.9M)

Contractor: Chugach World Services, Inc.

Awarding Agency: Department of Defense

Start Date: 2009-09-27

End Date: 2011-05-20

Contract Duration: 600 days

Daily Burn Rate: $24.9K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: CONSTRUCTION OF ALL INTERIOR RENOVATIONS

Place of Performance

Location: SAN ANTONIO, BEXAR County, TEXAS, 78201

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $14.9 million to CHUGACH WORLD SERVICES, INC. for work described as: CONSTRUCTION OF ALL INTERIOR RENOVATIONS Key points: 1. Contract awarded on a non-competitive basis, limiting price discovery. 2. Duration of 600 days suggests a significant scope of work. 3. Firm Fixed Price contract type shifts risk to the contractor. 4. No indication of small business participation or set-aside. 5. Geographic focus on Texas for construction services. 6. Contractor has a history with the Department of Defense.

Value Assessment

Rating: fair

The contract value of $14.9 million for interior renovations appears substantial, but without competitive bidding, it's difficult to benchmark its value for money. The firm-fixed-price structure is standard for construction, but the lack of competition means taxpayers may not have received the lowest possible price. Further analysis would require comparing this to similar renovation projects of comparable scale and complexity within the Department of Defense or other federal agencies.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not openly competed. This significantly limits the number of potential bidders and the opportunity for market forces to drive down costs. While sole-source awards can be justified under specific circumstances (e.g., unique capabilities, urgent needs), the lack of competition here raises concerns about whether the government obtained the best possible price and value.

Taxpayer Impact: Sole-source awards mean taxpayers may have paid a premium due to the absence of competitive pressure to offer the lowest bid.

Public Impact

The primary beneficiary is the Department of Defense, receiving updated interior facilities. Services delivered include comprehensive interior renovations. The geographic impact is concentrated in Texas, where the work was performed. Workforce implications include employment for construction labor in Texas.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may have led to inflated pricing.
Absence of small business participation could limit opportunities for smaller firms.
The contract's duration and value warrant close monitoring for potential cost overruns or scope creep.

Positive Signals

Firm Fixed Price contract shifts cost risk to the contractor.
Contractor has prior experience with the Department of Defense, suggesting familiarity with requirements.
The contract was awarded to a single entity, potentially streamlining management.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector (NAICS 236220). This sector is a significant part of the broader construction industry, encompassing a wide range of projects from office buildings to educational facilities. Federal spending in construction is substantial, often driven by the need to maintain and upgrade aging infrastructure and facilities across various agencies. Benchmarking this contract's value would involve comparing it to similar renovation projects undertaken by other government entities or large private sector organizations.

Small Business Impact

There is no indication that this contract included a small business set-aside. The award to Chugach World Services, Inc., a large business, suggests that subcontracting opportunities for small businesses may exist, but this is not guaranteed. The absence of a specific set-aside means that the primary contract was not intentionally directed towards the small business sector, potentially limiting their direct participation in this specific award.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. The firm-fixed-price nature of the contract provides some cost control, but the lack of competition necessitates diligent oversight to ensure the contractor meets all performance requirements and adheres to the contract terms. Transparency regarding the justification for the sole-source award and the final project outcomes would be key accountability measures.

Related Government Programs

Department of Defense Facilities Maintenance
Federal Building Renovations
Construction Services Contracts
Army Corps of Engineers Projects

Risk Flags

Sole-source award raises concerns about price competition.
Lack of transparency regarding justification for sole-source award.
Potential for cost overruns given the project's scale and duration.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.9 million to CHUGACH WORLD SERVICES, INC.. CONSTRUCTION OF ALL INTERIOR RENOVATIONS

Who is the contractor on this award?

The obligated recipient is CHUGACH WORLD SERVICES, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $14.9 million.

What is the period of performance?

Start: 2009-09-27. End: 2011-05-20.

What is the track record of Chugach World Services, Inc. with the Department of Defense?

Chugach World Services, Inc. has a history of contracts with the Department of Defense. While specific details of past performance are not provided in this data snippet, their selection for this sole-source contract suggests they have met the agency's requirements in previous engagements. A deeper dive into their contract history, including past performance reviews, any disputes, and the types of services previously rendered, would provide a more comprehensive understanding of their reliability and capability. Federal procurement databases often contain award histories that can be analyzed for patterns of successful contract completion or areas of concern.

How does the $14.9 million value compare to similar renovation contracts?

Benchmarking the $14.9 million value requires comparing it to similar interior renovation projects within the Department of Defense or other federal agencies. Factors such as the scope of work (e.g., square footage renovated, types of upgrades like electrical, plumbing, HVAC), the complexity of the facility, and the prevailing market rates for construction labor and materials in Texas during the contract period (2009-2011) are crucial. Without this comparative data, it is difficult to definitively assess whether the price was competitive or represented good value for money. The sole-source nature of the award further complicates a direct value assessment.

What are the primary risks associated with a sole-source construction contract of this magnitude?

The primary risk associated with a sole-source construction contract of this magnitude is the potential for inflated pricing due to the lack of competitive bidding. Without competing offers, the government may not achieve the most cost-effective solution. Other risks include potential scope creep if the project requirements are not clearly defined upfront, contractor performance issues that could lead to delays or quality problems, and the possibility of the contractor not possessing unique capabilities that would justify the sole-source award. Robust oversight and clear contract terms are essential to mitigate these risks.

What does the contract duration of 600 days imply about the project's scope and complexity?

A contract duration of 600 days (approximately 20 months) for interior renovations suggests a project of significant scope and complexity. This timeframe likely encompasses extensive demolition, rebuilding, and upgrading of interior spaces, potentially involving multiple phases or areas within a facility. Such a duration implies that the project goes beyond simple cosmetic updates and may include substantial structural, mechanical, electrical, or plumbing work. It also indicates a need for careful project management and coordination to ensure timely completion and minimize disruption.

What is the historical spending pattern for interior renovations within the Department of Defense?

Historical spending patterns for interior renovations within the Department of Defense are substantial, reflecting the vast inventory of aging facilities requiring modernization and maintenance. The DoD consistently allocates significant funds towards construction and renovation projects to ensure operational readiness and provide adequate living and working environments for service members and personnel. Analyzing past spending trends, including the average contract values, durations, and the prevalence of competitive versus sole-source awards for similar projects, would provide context for this specific $14.9 million contract and help identify any anomalies or significant shifts in procurement strategies.

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: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W9126G09R0193

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Chugach Alaska Corporation (UEI: 071844021)

Address: 3800 CENTERPOINT DR STE 601, ANCHORAGE, AK, 00

Business Categories: 8(a) Program Participant, Alaskan Native Corporation Owned Firm, Category Business, Corporate Entity Not Tax Exempt, Emerging Small Business, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $15,927,696

Exercised Options: $14,942,776

Current Obligation: $14,942,776

Contract Characteristics

Cost or Pricing Data: NO

Timeline