DoD's $11.2M contract to PARAGON PROFESSIONAL SERVICES LLC for construction services raises value and competition concerns

Contract Overview

Contract Amount: $11,190,408 ($11.2M)

Contractor: Paragon Professional Services LLC

Awarding Agency: Department of Defense

Start Date: 2025-09-30

End Date: 2027-11-15

Contract Duration: 776 days

Daily Burn Rate: $14.4K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: W81W3G52656864

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20515

State: District of Columbia Government Spending

Plain-Language Summary

Department of Defense obligated $11.2 million to PARAGON PROFESSIONAL SERVICES LLC for work described as: W81W3G52656864 Key points: 1. The contract's value appears high relative to its duration and scope, warranting further scrutiny. 2. Limited competition for this contract may have led to suboptimal pricing for taxpayers. 3. The absence of a clear per-unit cost benchmark makes assessing value for money challenging. 4. The contract's fixed-price nature offers some cost certainty but doesn't guarantee optimal pricing. 5. The contractor's track record and past performance on similar projects are critical for assessing risk. 6. The geographic location in Washington D.C. might influence labor costs and material availability.

Value Assessment

Rating: questionable

The total contract value of $11.2 million over approximately 26 months (776 days) suggests a daily burn rate of roughly $14,421. Without specific deliverables or a breakdown of services, it is difficult to benchmark this against similar construction contracts. The fixed-price nature provides some cost control, but the lack of competitive bidding raises questions about whether the government secured the best possible price. Further analysis of the scope of work and comparable market rates for construction services in the Washington D.C. area is needed to definitively assess value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as 'NOT AVAILABLE FOR COMPETITION,' indicating a sole-source or limited competition procurement. The specific justification for this limited competition is not provided in the data. Typically, sole-source awards occur when only one responsible source can satisfy agency requirements. The lack of a competitive process means that multiple bidders did not have the opportunity to offer their services, potentially limiting price discovery and innovation.

Taxpayer Impact: When contracts are not competed, taxpayers may not benefit from the cost savings and efficiencies that typically arise from a competitive bidding environment. This can lead to higher overall spending for government projects.

Public Impact

The primary beneficiaries are the Department of the Army, which will receive construction services. The contract will likely support infrastructure development or maintenance within the Department of Defense. The geographic impact is concentrated in Washington D.C., where the services will be performed. The contract may create or sustain jobs in the construction sector within the Washington D.C. metropolitan area.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in higher costs for taxpayers.
Absence of detailed performance metrics makes it difficult to assess project success.
The contract duration is substantial, requiring ongoing oversight to ensure timely completion and quality.
Potential for cost overruns if the scope of work is not clearly defined and managed.
Reliance on a single contractor for critical construction services could pose a risk if performance issues arise.

Positive Signals

The firm-fixed-price contract type provides cost certainty for the government.
The contract is awarded to PARAGON PROFESSIONAL SERVICES LLC, suggesting they have met initial vetting requirements.
The contract has a defined end date, providing a clear timeline for project completion.
The contract is managed by the Department of the Army, a major component of the DoD with established procurement processes.

Sector Analysis

The construction sector is a significant area of federal spending, encompassing a wide range of projects from building maintenance to large-scale infrastructure development. Federal contracts in this sector often involve complex logistics, material sourcing, and labor management. Benchmarking this contract's value requires comparison against similar commercial and institutional building construction projects, considering factors like project complexity, location-specific labor rates, and material costs. The Department of Defense is a major consumer of construction services, with annual spending in the billions across various agencies.

Small Business Impact

The data indicates that small business participation (ss: false, sb: false) was not a primary consideration or set-aside for this contract. This suggests that the procurement was not specifically targeted towards small businesses, and there is no explicit information about subcontracting opportunities for small businesses. Consequently, the direct impact on the small business ecosystem for this particular award appears minimal, though the prime contractor may engage small businesses as subcontractors if their own capabilities do not cover all aspects of the project.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. Accountability measures are typically embedded in the contract terms, including performance standards, delivery schedules, and payment milestones. Transparency is often facilitated through contract award databases and reporting requirements. While specific Inspector General (IG) jurisdiction is not detailed here, the DoD IG generally oversees contracts to prevent fraud, waste, and abuse, and could investigate this contract if concerns arise.

Related Government Programs

Department of Defense Construction Contracts
General Services Administration (GSA) Public Buildings Service
Army Corps of Engineers Construction Projects
Federal Buildings Fund
Military Construction Program

Risk Flags

Limited Competition
Lack of Transparency in Justification
Potential for Overpricing
Uncertainty of Contractor Performance

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.2 million to PARAGON PROFESSIONAL SERVICES LLC. W81W3G52656864

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 $11.2 million.

What is the period of performance?

Start: 2025-09-30. End: 2027-11-15.

What is the specific scope of work for this $11.2 million construction contract awarded to PARAGON PROFESSIONAL SERVICES LLC?

The provided data indicates the contract is for 'Commercial and Institutional Building Construction' (NAICS 236220) and was awarded by the Department of the Army. However, the specific scope of work, such as whether it involves new construction, renovation, repair, or maintenance of specific facilities, is not detailed. Understanding the precise deliverables, project specifications, and required materials is crucial for a comprehensive assessment of the contract's value and performance. Without this information, it's challenging to determine if the $11.2 million is commensurate with the services rendered or to compare it effectively with other construction projects.

What is the justification for awarding this contract on a 'NOT AVAILABLE FOR COMPETITION' basis?

The data explicitly states the contract was awarded under 'NOT AVAILABLE FOR COMPETITION' (CT: NOT AVAILABLE FOR COMPETITION), which typically signifies a sole-source procurement. The specific justification for this sole-source award is not provided. Common reasons for sole-source contracts include the unique capability of a single contractor, urgent and compelling needs where competition is impractical, or when only one source is capable of meeting the requirement. Without the official justification document, it is impossible to verify the necessity of bypassing a competitive bidding process. This lack of competition raises concerns about potential overpricing and reduced value for taxpayer funds.

How does the per-day cost of this contract compare to industry benchmarks for similar construction projects in Washington D.C.?

The contract has a total value of $11,204,084.30 and a duration of 776 days, resulting in an approximate daily cost of $14,421. However, without a detailed breakdown of the services included (e.g., labor hours, material costs, specific construction activities), it is not possible to establish a meaningful per-unit cost or benchmark it against industry standards. Construction costs are highly variable, depending on project complexity, size, materials, and labor rates specific to the location. A direct comparison would require detailed project specifications and access to comparable market data for commercial and institutional building construction in the Washington D.C. area.

What is PARAGON PROFESSIONAL SERVICES LLC's track record with federal construction contracts, particularly with the Department of Defense?

The provided data identifies PARAGON PROFESSIONAL SERVICES LLC as the contractor but does not include details about their past performance, track record, or experience with federal construction projects. A thorough assessment of this contract would necessitate reviewing the company's history, including previous contract awards, performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), and any history of disputes or contract terminations. Understanding their past performance is critical for evaluating the risk associated with this current award and for determining if they have a demonstrated ability to successfully execute contracts of this magnitude and complexity.

What are the potential risks associated with a sole-source construction contract of this value and duration?

Sole-source contracts, especially for significant value and duration like this $11.2 million, carry inherent risks. The primary risk is the lack of competitive pressure, which can lead to inflated pricing and reduced incentive for the contractor to optimize costs or innovate. There's also a risk related to contractor performance; without the vetting process of competition, there's a possibility the selected contractor may not be the most qualified or capable, potentially leading to delays, quality issues, or cost overruns. Furthermore, reliance on a single source can create vulnerabilities if the contractor faces financial difficulties, legal challenges, or fails to meet contractual obligations, potentially disrupting critical government operations.

How does this contract fit into the broader landscape of federal spending on construction services, and are there comparable spending benchmarks?

Federal spending on construction services is substantial, supporting a wide array of projects across numerous agencies. This $11.2 million contract for commercial and institutional building construction falls within a common category of federal procurement. Comparable spending benchmarks are difficult to establish without specific details on the project's scope (e.g., square footage, type of construction, specific systems involved). However, the Department of Defense, as a whole, awards billions of dollars annually in construction contracts. This specific award represents a moderate-sized project within the DoD's overall construction portfolio. Benchmarking would ideally involve comparing it to similar projects managed by the Army Corps of Engineers or other federal entities undertaking comparable building projects in similar geographic regions.

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

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: $11,190,408

Exercised Options: $11,190,408

Current Obligation: $11,190,408

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline