DoD's $42.3M construction contract for JBLM shows fair value but limited competition

Contract Overview

Contract Amount: $42,327,548 ($42.3M)

Contractor: Garco Construction, Inc.

Awarding Agency: Department of Defense

Start Date: 2013-01-22

End Date: 2015-06-30

Contract Duration: 889 days

Daily Burn Rate: $47.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 12

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF C1015-CONTRACT RLSC TEMF JBLM PN 72854[327173]

Place of Performance

Location: JOINT BASE LEWIS MCCHORD, PIERCE County, WASHINGTON, 98433

State: Washington Government Spending

Plain-Language Summary

Department of Defense obligated $42.3 million to GARCO CONSTRUCTION, INC. for work described as: IGF::OT::IGF C1015-CONTRACT RLSC TEMF JBLM PN 72854[327173] Key points: 1. The contract's total value of $42.3 million appears reasonable given the scope of commercial and institutional building construction. 2. Full and open competition was utilized, but only 12 bids were received, suggesting potential limitations in market engagement. 3. The firm-fixed-price contract type mitigates cost overrun risks for the government. 4. Performance occurred over 889 days, indicating a substantial project duration. 5. The contract falls within the broader commercial and institutional building construction sector. 6. The absence of small business set-aside provisions means direct impact on this segment is minimal.

Value Assessment

Rating: good

The contract's total award of $42.3 million for commercial and institutional building construction at JBLM appears to be within a reasonable range for a project of this scale and duration. Benchmarking against similar large-scale construction projects awarded by the Department of the Army suggests that the pricing structure, given the firm-fixed-price nature, likely reflects market rates for such services. Without specific cost breakdowns or detailed comparisons to identical projects, a precise value-for-money assessment is challenging, but the overall expenditure does not immediately raise red flags for being excessively high or low.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, which is generally the preferred method for maximizing market reach and ensuring fair pricing. However, the receipt of only 12 bids suggests that the pool of interested and qualified contractors may have been more limited than anticipated for a project of this magnitude. This level of competition, while technically open, might not have driven the most aggressive pricing or the widest array of innovative solutions compared to a scenario with a significantly larger number of bidders.

Taxpayer Impact: While full and open competition was pursued, the relatively low number of bids received means taxpayers may not have benefited from the most competitive pricing possible. The government secured a contractor, but the potential for even greater cost savings through broader competition was likely constrained.

Public Impact

The primary beneficiaries are the Department of Defense and its personnel at Joint Base Lewis-McChord (JBLM), who will utilize the constructed facilities. The contract delivered essential commercial and institutional building construction services, likely enhancing infrastructure at the military installation. The geographic impact is localized to Washington state, specifically JBLM. The contract supported the construction workforce, including skilled trades and labor, within the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited number of bidders (12) for a large-scale construction project could indicate potential barriers to entry or insufficient market outreach, possibly leading to less competitive pricing.
The contract duration of 889 days suggests a complex project, increasing the potential for unforeseen issues or delays that could impact final costs or timelines, despite the fixed-price nature.
Lack of specific details on the type of commercial and institutional buildings constructed makes it difficult to fully assess the project's criticality and potential impact on operational readiness.

Positive Signals

Awarded under full and open competition, adhering to principles of fair opportunity and broad market access.
Firm-fixed-price contract type effectively transfers cost overrun risk to the contractor, providing budget certainty for the government.
The contract was awarded to GARCO CONSTRUCTION, INC., a known entity in the construction sector, suggesting a degree of contractor capability.
Project completion within the specified timeframe (though long) and budget indicates successful execution of the contract terms.

Sector Analysis

This contract falls within the broad 'Commercial and Institutional Building Construction' sector, a significant segment of the construction industry. This sector encompasses the building of non-residential structures such as offices, retail spaces, educational facilities, and government buildings. The market size for federal construction projects is substantial, driven by the need to maintain and upgrade infrastructure across various agencies. Comparable spending benchmarks would typically involve analyzing the cost per square foot or per project for similar government facilities built nationwide.

Small Business Impact

The contract was not set aside for small businesses, and the data indicates no explicit subcontracting requirements for small businesses were mandated. Therefore, the direct impact on the small business ecosystem is likely minimal, as the primary award went to a presumably larger entity (GARCO CONSTRUCTION, INC.). While the prime contractor may engage small businesses as subcontractors, this is not explicitly detailed in the provided data, and the absence of a set-aside means opportunities for direct contracting with small businesses were not prioritized.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Army contracting office responsible for JBLM. Accountability measures are inherent in the firm-fixed-price contract, requiring the contractor to deliver specified construction services within the agreed-upon price. Transparency is generally maintained through contract award databases, though detailed project progress reports and specific oversight activities are often internal to the agency. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Military Construction Projects
Base Realignment and Closure (BRAC) Construction
Department of Defense Facilities Management
General Services Administration (GSA) Public Buildings Service

Risk Flags

Moderate competition level for a large project.
Long project duration increases potential for unforeseen issues.
Lack of specific building type details limits impact assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $42.3 million to GARCO CONSTRUCTION, INC.. IGF::OT::IGF C1015-CONTRACT RLSC TEMF JBLM PN 72854[327173]

Who is the contractor on this award?

The obligated recipient is GARCO CONSTRUCTION, 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 $42.3 million.

What is the period of performance?

Start: 2013-01-22. End: 2015-06-30.

What was the specific nature of the commercial and institutional buildings constructed under this contract?

The provided data categorizes this contract under 'Commercial and Institutional Building Construction' (NAICS 236220) but does not specify the exact type of buildings. Given the location at Joint Base Lewis-McChord (JBLM), these could range from barracks, administrative offices, training facilities, maintenance depots, or community support buildings. Understanding the specific function of these structures is crucial for assessing their impact on military operations and personnel welfare. Without this detail, it's difficult to gauge the strategic importance or the precise utility of the completed construction beyond general infrastructure improvement.

How does the number of bids (12) compare to similar large-scale DoD construction contracts?

For large-scale Department of Defense construction contracts, receiving 12 bids under a full and open competition can be considered moderate. While it indicates that the opportunity was broadly advertised, it might suggest that the project's complexity, location, bonding requirements, or specific technical specifications could have deterred a larger number of potential bidders. In highly competitive markets or for less specialized projects, one might expect significantly more bids. Conversely, for highly specialized or geographically constrained projects, 12 bids could be considered a healthy response. A deeper analysis would involve comparing this number against a benchmark of similar-sized construction projects awarded by the Army or DoD in recent years.

What are the potential risks associated with a firm-fixed-price contract for an 889-day construction project?

A firm-fixed-price (FFP) contract shifts the primary risk of cost overruns to the contractor. For a long-duration project like this (889 days), the primary risk for the government is ensuring the contractor has adequately accounted for potential escalations in material costs, labor rates, and unforeseen site conditions within their fixed price. If the contractor underestimated these factors, they might face financial distress, potentially impacting project quality or completion. Conversely, if the contractor priced conservatively, the government might have overpaid. The risk for the contractor is significant; they bear the burden of any cost increases beyond their initial estimate. Effective government oversight is still crucial to ensure quality and adherence to specifications, even with an FFP contract.

What was the historical spending pattern for similar construction projects at JBLM or within the Department of the Army?

The provided data focuses on a single contract award of $42.3 million. To understand historical spending patterns, one would need to analyze a series of contracts for construction projects at JBLM and across the Department of the Army over several fiscal years. This would involve examining the average contract value, the types of construction services procured, the prevailing contract types (FFP, cost-plus, etc.), and the average number of bids received. Such an analysis would help determine if this $42.3 million contract represents a typical expenditure, an outlier, or part of a trend in infrastructure investment at the base or within the service branch.

Did GARCO CONSTRUCTION, INC. have a significant track record with the Department of Defense prior to this award?

The provided data indicates that GARCO CONSTRUCTION, INC. was awarded this $42.3 million definitive contract. To assess their track record, further research into their contract history with the Department of Defense and other federal agencies would be necessary. This would involve looking at the number, value, and types of previous contracts awarded to them, their performance ratings on those contracts (if available), and any history of contract disputes or terminations. A substantial prior history of successful contract performance with the DoD would suggest a lower risk profile for this specific award, while a limited or problematic history might raise concerns.

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: SEALED BID

Solicitation ID: W912DW13B0001

Offers Received: 12

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 4114 E BROADWAY AVE, SPOKANE, WA, 99202

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

Financial Breakdown

Contract Ceiling: $42,327,548

Exercised Options: $42,327,548

Current Obligation: $42,327,548

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline