DoD awards $21.8M for Sterling, VA waterline extension to Paragon Professional Services

Contract Overview

Contract Amount: $21,808,778 ($21.8M)

Contractor: Paragon Professional Services LLC

Awarding Agency: Department of Defense

Start Date: 2025-01-02

End Date: 2027-04-20

Contract Duration: 838 days

Daily Burn Rate: $26.0K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: CONSTRUCTION SERVICES FOR HIDDEN LANE WATERLINE EXTENSION, STERLING, VIRGINIA

Place of Performance

Location: STERLING, LOUDOUN County, VIRGINIA, 20164

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $21.8 million to PARAGON PROFESSIONAL SERVICES LLC for work described as: CONSTRUCTION SERVICES FOR HIDDEN LANE WATERLINE EXTENSION, STERLING, VIRGINIA Key points: 1. Contract value appears reasonable given the scope of a major infrastructure project. 2. Limited competition raises concerns about potential overpayment and reduced value for taxpayers. 3. Project duration of nearly three years suggests a complex and significant undertaking. 4. Fixed-price contract type shifts risk to the contractor, potentially impacting final cost. 5. This contract falls within the broad construction services sector, specifically water infrastructure. 6. The award to a single entity warrants scrutiny regarding the procurement process.

Value Assessment

Rating: fair

Benchmarking this contract's value is challenging without detailed cost breakdowns or comparable projects. However, the $21.8 million price tag for a waterline extension project of this scale and duration (nearly three years) suggests a substantial investment. The firm fixed-price nature indicates that the contractor bears the risk of cost overruns, which can sometimes lead to higher initial bids to compensate for that risk. Without more granular data on labor, materials, and overhead, a definitive value-for-money assessment is difficult, but the price seems within a plausible range for large-scale civil engineering work.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor possesses the unique capabilities or qualifications required for the project, or in specific emergency situations. The lack of competition means that the government did not benefit from the price discovery and innovation that typically arises from a competitive bidding process. This raises questions about whether the selected contractor offered the best possible price and terms.

Taxpayer Impact: Sole-source awards limit the government's ability to secure the most competitive pricing. Taxpayers may have paid a premium due to the absence of competing bids, as the contractor did not face pressure to lower their offer to win the contract.

Public Impact

The primary beneficiaries are residents and businesses in Sterling, Virginia, who will gain access to improved water infrastructure. The project will deliver essential services by constructing and extending water and sewer lines. The geographic impact is localized to Sterling, Virginia, and surrounding areas served by the new waterline. The construction will likely create temporary jobs for skilled laborers, engineers, and project managers in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases cost to taxpayers.
Lack of transparency in the procurement process due to limited competition.
Firm fixed-price contract could lead to higher initial bids to cover contractor risk.

Positive Signals

Firm fixed-price contract shifts cost overrun risk to the contractor.
Project addresses critical infrastructure needs, ensuring service delivery.
Long-term contract duration allows for sustained project execution and potential workforce stability.

Sector Analysis

This contract falls within the Construction Services sector, specifically focusing on heavy civil construction related to water and sewer infrastructure. The North American Industry Classification System (NAICS) code 237110, 'Water and Sewer Line and Related Structures Construction,' confirms this specialization. The market for such projects is often characterized by a mix of large, established engineering firms and smaller, specialized contractors. Government contracts for infrastructure are a significant portion of this market, driven by the need to maintain and expand public utilities.

Small Business Impact

The data indicates that this contract was not awarded as a small business set-aside, nor does it appear to have specific subcontracting requirements for small businesses mentioned. This suggests that the primary contractor, Paragon Professional Services LLC, is likely a larger entity. The absence of explicit small business provisions means that opportunities for small businesses to participate in this project, either as prime contractors or subcontractors, may be limited unless proactively sought by the prime contractor.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Army's contracting and project management offices. As a definitive contract, it implies a structured process with defined milestones and deliverables. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected during the contract's performance or execution.

Related Government Programs

Army Corps of Engineers Civil Works Projects
EPA Water Infrastructure Grants
State and Local Water System Modernization Programs
Public Utility Construction Contracts

Risk Flags

Sole-source award raises concerns about competition and potential cost overruns.
Lack of detailed cost breakdown hinders value-for-money assessment.
Contractor's specific experience with similar large-scale infrastructure projects needs verification.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.8 million to PARAGON PROFESSIONAL SERVICES LLC. CONSTRUCTION SERVICES FOR HIDDEN LANE WATERLINE EXTENSION, STERLING, VIRGINIA

Who is the contractor on this award?

The obligated recipient is PARAGON PROFESSIONAL SERVICES LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $21.8 million.

What is the period of performance?

Start: 2025-01-02. End: 2027-04-20.

What is the track record of Paragon Professional Services LLC with the Department of Defense and similar infrastructure projects?

Information regarding Paragon Professional Services LLC's specific track record with the Department of Defense or on similar large-scale waterline extension projects is not detailed in the provided data. A comprehensive assessment would require reviewing past performance evaluations, contract history, and project portfolios. Understanding their experience with firm fixed-price contracts, sole-source procurements, and projects of comparable size and complexity in Virginia would be crucial for evaluating their capability and reliability in executing this contract successfully. Further research into their past performance metrics and client satisfaction would provide a clearer picture of their suitability.

How does the $21.8 million cost compare to similar waterline extension projects in Virginia or the Mid-Atlantic region?

Direct comparison of the $21.8 million cost to similar waterline extension projects is difficult without specific project details such as length of pipe, diameter, depth, soil conditions, and specific materials used. However, large-scale municipal or federal infrastructure projects of this nature can range from tens to hundreds of millions of dollars. The cost per linear foot or per connection is a common metric for comparison. Given the duration of nearly three years, this project likely involves significant complexity, potentially including difficult terrain, extensive land acquisition, or advanced engineering solutions, which would justify a higher overall cost. A detailed cost-benefit analysis and benchmarking against projects with similar scope and complexity would be necessary for a precise comparison.

What are the specific risks associated with a sole-source award for a construction project of this magnitude?

The primary risk of a sole-source award for a construction project of this magnitude is the potential for inflated pricing due to the lack of competitive pressure. Without competing bids, the government may not achieve the best possible value. Other risks include a reduced incentive for the contractor to innovate or optimize costs, as they are not vying against other firms. There's also a potential risk if the selected contractor lacks the necessary expertise or resources, as there was no vetting process involving multiple bidders to identify the most capable firm. This can lead to delays, cost overruns (despite the fixed-price nature, change orders can occur), or subpar quality if not managed rigorously.

What are the potential implications of the firm fixed-price contract type on project delivery and cost?

A firm fixed-price (FFP) contract shifts the majority of the cost risk from the government to the contractor. This means the contractor is obligated to complete the work for the agreed-upon price, regardless of their actual costs. This contract type provides cost certainty for the government and incentivizes the contractor to manage their costs efficiently and complete the project on time. However, contractors often build contingency into their FFP bids to account for unforeseen risks, which can result in a higher initial price compared to cost-reimbursement contracts. For the government, the main implication is predictability of the final cost, but it requires careful scope definition to avoid costly change orders.

How does the geographic location (Sterling, Virginia) influence the cost and complexity of this waterline extension project?

Sterling, Virginia, is located in a developed suburban area within Northern Virginia, which is known for its high cost of living and labor. This can directly translate to higher costs for materials, equipment, and skilled labor compared to less developed regions. Additionally, construction in established suburban areas often involves navigating existing infrastructure, utility lines, traffic management, and potentially complex permitting processes with local authorities. The proximity to Washington D.C. may also mean stricter environmental regulations or community engagement requirements. These factors can increase the overall complexity and cost of the project.

What is the significance of the contract duration (838 days) in assessing the project's scope and potential challenges?

A contract duration of 838 days, approximately 2.3 years, indicates a project of considerable scale and complexity. Short-term projects are typically less intricate. This extended timeline suggests that the waterline extension likely involves significant linear footage, potentially challenging terrain (e.g., rocky soil, wetlands, crossing existing infrastructure), extensive planning and design phases, or phased construction to minimize disruption. It also implies a substantial workforce requirement over an extended period. Such durations necessitate robust project management, scheduling, and risk mitigation strategies from both the contractor and the overseeing agency to ensure timely and successful completion.

Industry Classification

NAICS: Construction › Utility System Construction › Water and Sewer Line and Related Structures 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: W912DR24R0Z87

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3301 C ST, ANCHORAGE, AK, 99503

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

Financial Breakdown

Contract Ceiling: $21,808,778

Exercised Options: $21,808,778

Current Obligation: $21,808,778

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline