DoD awards $33M for building renovation at Fort Myer, with a 2-bidder competition

Contract Overview

Contract Amount: $32,984,439 ($33.0M)

Contractor: Grunley Construction CO., Inc.

Awarding Agency: Department of Defense

Start Date: 2021-09-15

End Date: 2024-10-30

Contract Duration: 1,141 days

Daily Burn Rate: $28.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: RENOVATION OF BLDG 248, FT. MYER - JBMHH

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20850

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $33.0 million to GRUNLEY CONSTRUCTION CO., INC. for work described as: RENOVATION OF BLDG 248, FT. MYER - JBMHH Key points: 1. The contract value of $32.98 million for building renovation appears to be within a reasonable range for large-scale construction projects of this nature. 2. Competition was limited to two bidders, suggesting potential for less aggressive pricing than a broader competition. 3. The fixed-price contract type shifts risk to the contractor, which can be beneficial for the government if managed effectively. 4. The project duration of 1141 days indicates a significant undertaking requiring substantial contractor resources and oversight. 5. The contract is for commercial and institutional building construction, a sector with established market rates and practices. 6. The award was a delivery order, implying it was part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract or a similar framework.

Value Assessment

Rating: good

Benchmarking the exact value requires detailed project specifications and local construction cost indices. However, for a substantial renovation of a government building, $33 million is not an outlier. The firm-fixed-price structure suggests the government has a clear understanding of the scope, and the contractor bears the risk of cost overruns. Without specific comparable projects, a precise value-for-money assessment is difficult, but the limited competition warrants scrutiny of the final price.

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 offers. However, only two bids were received. This limited number of bidders could suggest market concentration, high barriers to entry for this type of project, or perhaps a lack of aggressive marketing by the procuring agency to attract more competition. While competition was technically open, the low number of actual bids may have constrained price discovery.

Taxpayer Impact: A limited number of bidders, even under full and open competition, can sometimes lead to higher prices for taxpayers compared to scenarios with multiple competitive bids. However, the fixed-price nature of the contract helps to cap the government's financial exposure.

Public Impact

Military personnel and their families at Fort Myer will benefit from improved facilities. The renovation will enhance the functionality and safety of Building 248. The project is geographically located in Maryland, supporting the local construction economy. The construction activities will likely involve a significant number of skilled tradespeople and laborers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition (2 bidders) may have resulted in a higher price than if more firms had bid.
The long project duration (1141 days) increases the risk of unforeseen issues and potential cost escalations, despite the fixed-price nature.

Positive Signals

Firm-fixed-price contract type transfers cost overrun risk to the contractor.
Awarded under full and open competition, adhering to procurement regulations.
The contractor, GRUNLEY CONSTRUCTION CO., INC., is likely experienced in government construction projects.

Sector Analysis

The contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the broader construction industry. This sector involves the building, alteration, or repair of non-residential structures. Spending in this area is influenced by government infrastructure needs, economic conditions, and specific agency requirements. Benchmarking against similar large-scale government building renovations would provide further context on the value received.

Small Business Impact

The data indicates that small business participation was not a specific set-aside for this contract (ss: false, sb: false). While the prime contractor is GRUNLEY CONSTRUCTION CO., INC., there is no explicit information on subcontracting goals for small businesses. The impact on the small business ecosystem would depend on whether the prime contractor actively seeks small business subcontractors for specialized work or materials.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Army contracting officer and potentially contracting officer's representatives (CORs) responsible for monitoring performance and ensuring compliance with contract terms. 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 Base Construction
Federal Building Renovations
Department of Defense Facilities Management
Construction Services Contracts

Risk Flags

Limited competition (2 bidders) may indicate potential for higher pricing.
Long project duration increases inherent risks of cost and schedule overruns.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $33.0 million to GRUNLEY CONSTRUCTION CO., INC.. RENOVATION OF BLDG 248, FT. MYER - JBMHH

Who is the contractor on this award?

The obligated recipient is GRUNLEY CONSTRUCTION CO., 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 $33.0 million.

What is the period of performance?

Start: 2021-09-15. End: 2024-10-30.

What is the track record of GRUNLEY CONSTRUCTION CO., INC. with federal contracts, particularly within the Department of Defense?

GRUNLEY CONSTRUCTION CO., INC. has a history of performing federal contracts, including significant work for the Department of Defense and other agencies. Their portfolio often includes complex renovation and construction projects on military installations and government facilities. Analyzing their past performance on similar-sized projects, their on-time and on-budget delivery rates, and any past performance issues or disputes would provide a clearer picture of their reliability and capability for this specific renovation. Accessing detailed contract histories and performance evaluations would be necessary for a comprehensive assessment.

How does the awarded price of $32.98 million compare to similar building renovation projects undertaken by the Department of Defense or other federal agencies?

A precise comparison requires detailed project specifications (e.g., square footage, scope of work, materials, historical significance) and location-specific cost data. However, for a major renovation of a government building, $33 million is within the expected range for large-scale projects. Factors like the age and condition of Building 248, the complexity of the required upgrades (e.g., HVAC, electrical, structural), and prevailing market rates in the Maryland region would influence the final cost. Without access to detailed cost breakdowns or a database of highly comparable projects, it's challenging to definitively state if this represents exceptional value, but it does not appear to be an immediate outlier.

What are the primary risks associated with a 1141-day (approximately 3-year) construction project of this magnitude, and how are they mitigated?

The primary risks for a long-duration project like this include potential cost escalation (even with fixed-price contracts, unforeseen conditions can arise), material price volatility, labor availability issues, and schedule delays due to weather, site conditions, or design changes. Mitigation strategies typically involve robust contract clauses addressing unforeseen conditions, contingency planning, proactive material procurement, strong project management by the contractor, and diligent oversight by the government's COR. The firm-fixed-price nature shifts significant cost risk to the contractor, but schedule delays can still impact operational readiness and potentially lead to claims.

Given the 'full and open competition' with only two bidders, what does this imply about the market for this type of construction service in the region?

The fact that only two bids were received under 'full and open competition' suggests several possibilities regarding the market for this specific type of construction service in the Maryland region. It could indicate a highly consolidated market with few firms possessing the necessary qualifications, bonding capacity, and experience for projects of this scale. Alternatively, it might reflect high barriers to entry, such as stringent pre-qualification requirements or the specialized nature of the renovation. It could also mean that the project was not widely advertised or that potential bidders perceived risks or complexities that deterred broader participation. This limited competition warrants careful review of the pricing to ensure it reflects fair market value.

What is the significance of the 'Delivery Order' award type in the context of this contract?

A 'Delivery Order' award typically signifies that this contract is a task order issued under a pre-existing indefinite-delivery/indefinite-quantity (IDIQ) contract, a basic ordering agreement (BOA), or a similar contract vehicle. This means that the overarching contract terms, conditions, and potentially pricing structures were established previously, often through a competitive process. The delivery order then specifies the exact goods or services to be provided, the quantity, and the delivery schedule for this particular requirement. This approach allows agencies to procure services more efficiently over time without conducting a full, separate competition for each individual task.

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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: W912DR16R0001

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 15020 SHADY GROVE RD STE 500, ROCKVILLE, MD, 20850

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $33,212,439

Exercised Options: $32,984,439

Current Obligation: $32,984,439

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W912DR17D0002

IDV Type: IDC

Timeline