DoD's $37.4M Letterkenny Joint Missile Maintenance Facility contract awarded to Grunley Construction, highlighting construction sector spending

Contract Overview

Contract Amount: $37,411,147 ($37.4M)

Contractor: Grunley Construction CO., Inc.

Awarding Agency: Department of Defense

Start Date: 2024-09-17

End Date: 2027-04-06

Contract Duration: 931 days

Daily Burn Rate: $40.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: LETTERKENNY MUNITIONS CENTER (LEMC) JOINT MISSILE MAINTENANCE FACILITY (JMMF) LOCATED AT LETTERKENNY ARMY DEPOT (LEAD), PENNSYLVANIA.

Place of Performance

Location: CHAMBERSBURG, FRANKLIN County, PENNSYLVANIA, 17201

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $37.4 million to GRUNLEY CONSTRUCTION CO., INC. for work described as: LETTERKENNY MUNITIONS CENTER (LEMC) JOINT MISSILE MAINTENANCE FACILITY (JMMF) LOCATED AT LETTERKENNY ARMY DEPOT (LEAD), PENNSYLVANIA. Key points: 1. Contract value of $37.4 million for a significant construction project. 2. Full and open competition suggests a robust bidding process. 3. Firm Fixed Price contract type aims to control costs. 4. Project duration of 931 days indicates a long-term commitment. 5. Located at Letterkenny Army Depot, supporting critical defense infrastructure. 6. Construction services are essential for maintaining missile systems.

Value Assessment

Rating: good

The contract value of $37.4 million for the Joint Missile Maintenance Facility appears reasonable for a project of this scale and complexity, involving specialized construction for defense purposes. Benchmarking against similar large-scale institutional building construction projects within the Department of Defense or other federal agencies would provide a more precise value-for-money assessment. The firm fixed-price structure is a positive indicator for cost control, shifting risk to the contractor.

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 four bidders participating, the competition level appears healthy, suggesting that the government received a range of proposals and pricing. This level of competition is generally expected to drive competitive pricing and ensure that the selected contractor offers good value.

Taxpayer Impact: Full and open competition benefits taxpayers by fostering a competitive environment that typically leads to more favorable pricing and a wider selection of qualified contractors, ultimately maximizing the value of federal investment.

Public Impact

The primary beneficiaries are the Department of the Army and the defense industrial base, ensuring readiness of missile systems. The project will deliver a new, specialized facility for missile maintenance and support operations. The geographic impact is concentrated at the Letterkenny Army Depot in Pennsylvania. The contract will likely create or sustain jobs in the construction sector, including skilled trades and project management.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions arise during construction.
Delays in project completion could impact operational readiness of missile systems.
Ensuring compliance with stringent military construction standards requires diligent oversight.

Positive Signals

Firm Fixed Price contract mitigates cost escalation risk for the government.
Full and open competition suggests a competitive bid process leading to potentially better pricing.
The contractor, Grunley Construction Co., Inc., likely has experience with similar large-scale projects.
The project's location within an established Army Depot suggests existing infrastructure support.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the broader construction industry. Federal spending in this area supports critical infrastructure for various government functions, including defense. The market for large-scale military construction is often characterized by specialized requirements and stringent compliance, with major construction firms competing for these high-value projects. Comparable spending benchmarks would involve analyzing other large military facility construction contracts awarded by the Department of Defense.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Grunley Construction Co., Inc. is likely a large business. There is no explicit information on subcontracting plans for small businesses within this data, which is a common requirement for large federal construction contracts. The impact on the small business ecosystem will depend on whether the prime contractor actively seeks to engage small businesses for subcontracting opportunities.

Oversight & Accountability

Oversight for this contract will primarily be managed by the Department of the Army, likely through contracting officers and project managers at the Letterkenny Army Depot. Accountability measures are embedded in the firm fixed-price contract terms, requiring delivery of specified facilities within budget. Transparency is generally maintained through contract award databases and public reporting, though specific project progress details may be less accessible. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Military Construction Projects
Defense Infrastructure
Army Logistics Facilities
Missile System Maintenance
Federal Building Construction

Risk Flags

Potential for schedule delays
Unforeseen site conditions
Contractor performance risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $37.4 million to GRUNLEY CONSTRUCTION CO., INC.. LETTERKENNY MUNITIONS CENTER (LEMC) JOINT MISSILE MAINTENANCE FACILITY (JMMF) LOCATED AT LETTERKENNY ARMY DEPOT (LEAD), PENNSYLVANIA.

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 $37.4 million.

What is the period of performance?

Start: 2024-09-17. End: 2027-04-06.

What is Grunley Construction Co., Inc.'s track record with large federal construction projects, particularly for the Department of Defense?

Grunley Construction Co., Inc. has a significant history of performing large-scale construction projects, including numerous contracts with federal agencies. While specific details for this contract are limited, their portfolio often includes complex projects such as educational facilities, healthcare centers, and government buildings. Their experience with the Department of Defense would likely encompass projects requiring adherence to strict security protocols, specialized building requirements, and rigorous quality control standards. A review of their past performance on similar-sized military construction contracts would be necessary to fully assess their suitability and past success rates in delivering projects on time and within budget for defense clients.

How does the $37.4 million contract value compare to similar missile maintenance facility constructions?

Benchmarking the $37.4 million contract value requires comparing it to similar projects in terms of size, complexity, and specific requirements for missile maintenance facilities. Projects involving specialized environmental controls, secure storage, advanced assembly lines, or testing capabilities can significantly influence costs. Without access to a database of comparable missile maintenance facility constructions, a precise comparison is difficult. However, for a facility of substantial size and specialized function within a military depot, this value appears within a plausible range for large-scale institutional construction. Factors like geographic location, labor costs, and material prices also play a role in determining the overall cost.

What are the primary risks associated with this firm fixed-price construction contract?

The primary risks associated with this firm fixed-price (FFP) contract, while generally favorable for cost control, revolve around potential scope creep and unforeseen conditions. If the project scope expands beyond the initial contract requirements, change orders could increase the total cost, although the FFP structure aims to limit this. Unforeseen site conditions (e.g., subsurface issues, hazardous materials) could also necessitate costly remediation and potentially lead to delays and claims, even under an FFP contract. Contractor performance risk is also present; if Grunley Construction encounters significant management or execution issues, project delays and quality compromises could occur. The government's risk is primarily in ensuring the contractor's ability to deliver the specified quality and functionality within the fixed price.

How effective is full and open competition in ensuring value for money for large military construction projects?

Full and open competition is generally considered a highly effective mechanism for ensuring value for money in large military construction projects. By allowing all responsible sources to bid, it maximizes the pool of potential contractors, thereby increasing the likelihood of receiving competitive pricing and innovative solutions. The presence of multiple bidders, such as the four noted in this contract, intensifies this competition, pushing contractors to offer their best terms. This process helps prevent price gouging and ensures that the government selects a contractor based on a balance of price, technical capability, and past performance. While effective, the government must still diligently evaluate proposals to ensure the lowest price doesn't compromise essential quality or long-term durability.

What are the historical spending patterns for similar construction projects at Letterkenny Army Depot?

Analyzing historical spending patterns for similar construction projects at Letterkenny Army Depot (LEAD) would provide valuable context for the $37.4 million award. This would involve examining past contracts for facility construction, upgrades, or maintenance at LEAD, noting their values, durations, and the types of construction involved. Understanding the average cost per square foot for similar facilities, the typical number of bidders, and the range of contract types used previously could reveal trends. For instance, if past projects of similar scope have consistently cost more or less, or if they have experienced significant cost overruns, it would inform the assessment of the current contract's value. Without specific historical data for LEAD, it's challenging to establish precise spending patterns.

What are the implications of a 931-day project duration for defense readiness and budget planning?

A project duration of 931 days (approximately 2.5 years) for the Joint Missile Maintenance Facility has significant implications for defense readiness and budget planning. From a readiness perspective, the extended timeline means that the full operational benefits of the new facility will not be realized for an extended period. This could necessitate continued reliance on existing, potentially less efficient or capable, maintenance infrastructure. For budget planning, a multi-year project requires consistent allocation of funds across fiscal years. Delays or cost increases during this long period can strain future budgets and require reprogramming of funds. Effective project management and realistic scheduling are crucial to mitigate risks associated with such long-duration construction efforts.

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

Solicitation ID: W912DR24R0013

Offers Received: 4

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: $37,665,587

Exercised Options: $37,665,587

Current Obligation: $37,411,147

Actual Outlays: $-3,574,556

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline