Fort Belvoir building renovation awarded to Grunley Construction for over $102.9 million

Contract Overview

Contract Amount: $102,930,486 ($102.9M)

Contractor: Grunley Construction CO., Inc.

Awarding Agency: Department of Defense

Start Date: 2023-09-29

End Date: 2027-04-06

Contract Duration: 1,285 days

Daily Burn Rate: $80.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: RENOVATION OF NOLAN BUILDING PHASE 4 AT FORT BELVOIR, VIRGINIA

Place of Performance

Location: FORT BELVOIR, FAIRFAX County, VIRGINIA, 22060

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $102.9 million to GRUNLEY CONSTRUCTION CO., INC. for work described as: RENOVATION OF NOLAN BUILDING PHASE 4 AT FORT BELVOIR, VIRGINIA Key points: 1. Contract value suggests a significant scope of work for a major renovation project. 2. The firm-fixed-price contract type aims to control costs, but scope creep could still impact final expenditure. 3. The duration of over 3 years indicates a complex, multi-phase project. 4. Competition was full and open, suggesting a potentially competitive bidding process. 5. The project is located in Virginia, a state with substantial federal construction activity. 6. The North American Industry Classification System (NAICS) code 236220 points to commercial and institutional building construction.

Value Assessment

Rating: good

The contract value of over $102.9 million for a multi-year renovation project at Fort Belvoir appears substantial, aligning with the scale of major federal construction endeavors. Benchmarking against similar large-scale building renovations within the Department of Defense or other federal agencies would provide a clearer picture of value for money. The firm-fixed-price structure is a positive indicator for cost control, assuming the scope is well-defined. Without specific cost breakdowns or comparisons to similar projects, a definitive value assessment is challenging, but the scale suggests a significant investment.

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 bids. The presence of two bidders suggests a moderate level of competition for this significant construction project. While two bidders are better than one, a higher number of bids typically leads to more robust price discovery and potentially lower prices for the government. The specific details of the bidding process and the nature of the proposals submitted would further illuminate the effectiveness of the competition.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages multiple firms to bid, driving down prices and increasing the likelihood of selecting the most cost-effective solution.

Public Impact

The primary beneficiaries are the Department of the Army and military personnel stationed at Fort Belvoir, Virginia, who will gain updated and functional facilities. The project will deliver essential renovation services for the Nolan Building, likely improving infrastructure and operational capabilities. The geographic impact is localized to Fort Belvoir, Virginia, a significant military installation. The project will likely create or sustain jobs in the construction sector within the Virginia region, benefiting skilled trades and related support services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the project scope expands beyond initial estimates.
Delays in construction could impact the operational readiness or housing of personnel at Fort Belvoir.
The fixed-price contract, while aiming for cost certainty, may not fully account for unforeseen site conditions or material price volatility over the multi-year duration.

Positive Signals

The firm-fixed-price contract type provides cost certainty for the government.
Awarding to Grunley Construction Co., Inc., a known entity in federal construction, suggests a level of confidence in their capability.
The full and open competition process increases the likelihood of a competitive price and a qualified contractor.

Sector Analysis

This contract falls within the broader construction sector, specifically focusing on commercial and institutional building construction. The federal government is a major client in this sector, awarding numerous contracts for the renovation and construction of military bases, government buildings, and other facilities. The market for federal construction is competitive, with many large and small firms vying for these opportunities. The value of this contract is substantial, placing it among significant federal building projects. Comparable spending benchmarks would involve analyzing other large-scale renovation projects on military installations.

Small Business Impact

The data indicates that small business participation was not a primary focus for this specific contract, as the 'ss' (small business set-aside) and 'sb' (small business) flags are false. Grunley Construction Co., Inc. is likely a large business. There is no explicit information on subcontracting plans for small businesses within this data. The impact on the small business ecosystem would depend on whether Grunley intends to subcontract portions of the work to small businesses, which is not detailed here.

Oversight & Accountability

Oversight for this contract will primarily be managed by the contracting officers and program managers within the Department of the Army at Fort Belvoir. The firm-fixed-price nature of the contract implies a focus on adherence to the defined scope and schedule. Transparency is facilitated by the public nature of federal contract awards. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected during the contract's performance. Regular progress reports and site inspections are standard oversight mechanisms for such projects.

Related Government Programs

Fort Belvoir Base Realignment and Closure (BRAC) Projects
Department of Defense Military Construction Program
Federal Building and Facilities Renovation Contracts
Army Corps of Engineers Construction Contracts

Risk Flags

Potential for cost overruns due to scope creep or unforeseen site conditions.
Risk of construction delays impacting facility availability.
Contractor performance risk on a large, multi-year project.
Material price volatility over the contract duration.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $102.9 million to GRUNLEY CONSTRUCTION CO., INC.. RENOVATION OF NOLAN BUILDING PHASE 4 AT FORT BELVOIR, VIRGINIA

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 $102.9 million.

What is the period of performance?

Start: 2023-09-29. End: 2027-04-06.

What is Grunley Construction Co., Inc.'s track record with the Department of Defense?

Grunley Construction Co., Inc. has a significant history of working with the Department of Defense and other federal agencies. A review of federal procurement data reveals numerous past awards to Grunley for construction and renovation projects, often at military installations. Their experience typically includes a wide range of building types, from administrative facilities to specialized structures. The company's longevity and repeated awards suggest a generally positive track record in terms of performance and compliance with federal contracting requirements. However, a deeper dive into specific past performance reviews, any past disputes, or contract modifications would be necessary for a comprehensive assessment of their suitability for this particular project.

How does the $102.9 million contract value compare to similar large-scale building renovations at federal installations?

The $102.9 million contract value for the renovation of the Nolan Building at Fort Belvoir is substantial and falls within the upper range for major federal building renovation projects. Comparable projects, such as large-scale renovations of barracks, administrative centers, or specialized research facilities on military bases, often range from tens of millions to over a hundred million dollars. For instance, significant upgrades to aging infrastructure at large Army posts or Air Force bases can easily exceed this figure. The specific scope of work, including structural upgrades, MEP (mechanical, electrical, plumbing) systems replacement, and interior modernizations, will dictate the precise cost. Without detailed project specifications, it's difficult to provide an exact benchmark, but the awarded amount is consistent with the scale of significant facility modernization efforts within the Department of Defense.

What are the primary risks associated with a multi-year, firm-fixed-price construction contract of this magnitude?

The primary risks associated with a multi-year, firm-fixed-price construction contract of this magnitude include potential scope creep, unforeseen site conditions, and material price escalation. While the firm-fixed-price structure aims to cap the government's financial exposure, significant changes to the project's scope requested by the government after award can lead to costly change orders. Unforeseen conditions, such as hazardous materials, unexpected structural issues, or subsurface obstructions, can necessitate additional work and time, potentially leading to claims or disputes. Although the contractor assumes the risk of material price increases in a fixed-price contract, the extended duration (over 3 years) increases the likelihood of substantial market fluctuations, which could strain the contractor's ability to complete the work profitably without seeking adjustments or impacting quality.

How effective is full and open competition with only two bidders in ensuring optimal value for taxpayers?

Full and open competition is generally the most effective method for ensuring optimal value for taxpayers because it theoretically allows any responsible source to compete, fostering the widest possible range of proposals and prices. However, when only two bidders submit proposals, the level of competition is reduced compared to scenarios with numerous bidders. While two bidders still provide a competitive dynamic, it may not drive prices down as aggressively as three or more. The effectiveness in this case depends heavily on the nature of the two bids received. If the bids were significantly different in price and technical approach, the government could still select a highly competitive offer. Conversely, if the bids were close or if the market for such specialized large-scale construction is inherently limited, the value achieved might be less than in a more robustly contested bid.

What are the historical spending patterns for building renovations at Fort Belvoir or similar Army installations?

Historical spending patterns for building renovations at Fort Belvoir and similar Army installations typically show a consistent need for infrastructure upgrades and modernization. These patterns are often driven by the lifecycle of facilities, evolving operational requirements, and the need to maintain a modern and safe environment for service members. Spending can fluctuate based on congressional appropriations, military construction priorities, and specific needs identified through facility condition assessments. Large-scale renovations like the Nolan Building project are usually part of multi-year capital investment plans. Analyzing past spending on similar projects at Fort Belvoir or other installations of comparable size and function would reveal average project costs, typical durations, and common types of renovations undertaken, providing context for the current $102.9 million award.

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: TWO STEP

Solicitation ID: W912DR23R0013

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: $103,319,955

Exercised Options: $103,319,955

Current Obligation: $102,930,486

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline