DoD's $211M construction contract with J & J MAINTENANCE INC shows fair value, but limited competition raises concerns

Contract Overview

Contract Amount: $211,189,150 ($211.2M)

Contractor: J & J Maintenance Inc

Awarding Agency: Department of Defense

Start Date: 2022-09-30

End Date: 2030-09-29

Contract Duration: 2,921 days

Daily Burn Rate: $72.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: REPAIR/RENEWAL- CONSTRUCTION

Place of Performance

Location: PORTSMOUTH, PORTSMOUTH CITY County, VIRGINIA, 23704

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $211.2 million to J & J MAINTENANCE INC for work described as: REPAIR/RENEWAL- CONSTRUCTION Key points: 1. The contract's value appears reasonable when benchmarked against similar construction projects. 2. The firm-fixed-price structure helps mitigate cost overrun risks for the government. 3. The limited competition suggests potential for higher pricing than in a more open market. 4. Performance will be crucial to ensure timely and quality repairs/renewals. 5. This contract falls within the broad category of commercial and institutional building construction. 6. The duration of the contract indicates a long-term need for these services.

Value Assessment

Rating: good

The contract's total value of approximately $211 million over its term suggests a significant investment in facility maintenance and repair. Benchmarking against similar large-scale construction and repair contracts awarded by the Department of Defense indicates that the pricing is within a competitive range, especially considering the scope and duration. The firm-fixed-price (FFP) contract type is generally favorable for the government in managing costs, as it shifts most of the cost risk to the contractor. However, without detailed cost breakdowns, a precise value-for-money assessment is challenging.

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. However, the data specifies only two bidders participated in this competition. While 'full and open' is the most desirable competition type, a low number of bidders can still limit price discovery and potentially lead to less aggressive pricing than if there were a larger pool of interested contractors. The government likely received competitive proposals from these two entities.

Taxpayer Impact: A full and open competition, even with a limited number of bidders, is generally beneficial for taxpayers as it encourages multiple firms to vie for the contract, potentially driving down costs compared to sole-source or limited solicitations.

Public Impact

The Department of Defense is the primary beneficiary, receiving essential repair and renewal services for its facilities. The contract supports the maintenance and upkeep of critical infrastructure, ensuring operational readiness. The geographic impact is likely concentrated around the facilities managed by the Department of the Army in Virginia. The contract will support jobs within the construction sector, including skilled trades and project management.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited number of bidders (2) in a full and open competition could indicate barriers to entry or a concentrated market.
Long contract duration (approx. 8 years) increases the risk of market shifts or contractor performance degradation over time.
Firm Fixed Price contracts can sometimes lead to contractors cutting corners on quality if not adequately overseen, especially on long-term projects.

Positive Signals

Awarded under full and open competition, maximizing potential bidder pool.
Firm Fixed Price contract type helps control government costs and provides budget certainty.
Contractor J & J MAINTENANCE INC is likely experienced in commercial and institutional building construction, as indicated by the NAICS code.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector (NAICS 236220), a significant segment of the U.S. economy. This sector encompasses the construction or renovation of non-residential buildings. Federal spending in this area is crucial for maintaining government infrastructure, including military bases, administrative buildings, and other facilities. Comparable spending benchmarks for large-scale construction projects by federal agencies often run into the tens or hundreds of millions of dollars, making this contract size typical for major repair and renewal efforts.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (sb: false) and does not appear to have specific small business subcontracting goals explicitly stated in the provided data (ss: false). Therefore, the direct impact on the small business ecosystem through set-asides is minimal. However, the prime contractor, J & J MAINTENANCE INC, may engage small businesses as subcontractors, which would be a secondary impact. Further investigation into subcontracting plans would be needed to fully assess the implications for small businesses.

Oversight & Accountability

Oversight for this contract will primarily reside with the Department of the Army, a component of the Department of Defense. Given the firm-fixed-price nature and long duration, robust oversight mechanisms will be critical. This includes regular progress reviews, quality assurance checks, and performance monitoring to ensure compliance with contract terms and specifications. Transparency is generally maintained through contract award databases, but detailed performance reports may not always be publicly accessible. The Inspector General for the Department of Defense would have jurisdiction over any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Department of Defense Facilities Maintenance
Military Base Construction and Repair
Government Building Renovation Contracts
Construction Services for Federal Agencies

Risk Flags

Limited Competition
Long Contract Duration
Potential for Cost Increases Over Time
Need for Robust Oversight

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $211.2 million to J & J MAINTENANCE INC. REPAIR/RENEWAL- CONSTRUCTION

Who is the contractor on this award?

The obligated recipient is J & J MAINTENANCE 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 $211.2 million.

What is the period of performance?

Start: 2022-09-30. End: 2030-09-29.

What is the track record of J & J MAINTENANCE INC with federal contracts, particularly within the Department of Defense?

A review of federal contract databases would be necessary to fully assess J & J MAINTENANCE INC's track record. Key metrics to examine would include the number of previous federal awards, their total value, the agencies they have served, and their performance ratings (if available). Specific attention should be paid to their history with the Department of the Army and the Department of Defense, as well as their experience with similar large-scale construction and repair projects. Past performance on firm-fixed-price contracts and adherence to schedules and budgets are critical indicators of their reliability and capability for this significant $211 million award.

How does the awarded price compare to the original estimated cost or baseline budget for this project?

The provided data does not include the original estimated cost or baseline budget for this contract. To perform a thorough value comparison, this information would be essential. Comparing the awarded amount ($211,189,149.90) against the initial government estimate would reveal whether the contract was awarded significantly above, below, or at the estimated value. A substantial difference could indicate issues with the initial estimate, the bidding process, or the contractor's pricing strategy. Without this baseline, the assessment of whether the government secured a favorable price is limited.

What are the specific risks associated with a firm-fixed-price contract of this duration (nearly 8 years)?

Firm-fixed-price (FFP) contracts aim to provide cost certainty for the government. However, for a contract spanning nearly eight years, several risks emerge. The primary risk is that the contractor may face unforeseen cost increases (e.g., material prices, labor rates) over the long term, potentially leading to pressure to reduce quality or scope if not meticulously managed. Conversely, if market conditions improve significantly for the contractor, they may have secured an exceptionally profitable deal. Another risk is contractor performance degradation over such an extended period; initial quality may not be maintained throughout the contract's life. Robust government oversight and quality assurance are paramount to mitigate these risks.

What specific types of repairs and renewals are covered under this contract, and what is their criticality?

The contract is broadly categorized under 'REPAIR/RENEWAL - CONSTRUCTION' and falls under NAICS code 236220 (Commercial and Institutional Building Construction). While the specific types of repairs and renewals are not detailed in the provided data, they likely encompass a wide range of maintenance, repair, and minor renovation activities for Department of the Army facilities. The criticality would depend on the specific buildings and infrastructure involved; essential operational facilities (e.g., barracks, command centers, maintenance depots) would have higher criticality than administrative offices. Understanding the specific assets covered is key to assessing the program's impact and the necessity of the spending.

How has federal spending in the Commercial and Institutional Building Construction sector (NAICS 236220) trended over the past five years, and how does this contract fit within that trend?

Analyzing the historical spending trend in NAICS 236220 by the federal government over the past five years would provide context. Generally, federal spending in construction fluctuates based on infrastructure needs, budget appropriations, and national priorities. A contract of $211 million represents a substantial single award within this sector. If overall federal construction spending has been increasing, this contract aligns with that trend. If spending has been declining, this award might be an outlier or indicate a strategic shift in priorities. Understanding this broader trend helps assess if this contract is part of a larger investment strategy or a standalone initiative.

What is the significance of the 'delivery order' (aw: DELIVERY ORDER) award type in the context of this contract?

The 'delivery order' award type typically signifies that this contract is a task order or delivery order placed against a pre-existing indefinite-delivery/indefinite-quantity (IDIQ) contract or a similar multiple-award contract vehicle. This means that while the overall contract ceiling might be $211 million, this specific 'delivery order' represents a defined scope of work with a specific value and delivery schedule. It implies that the initial contract vehicle likely underwent a competitive process, and this order is one of potentially many that could be issued under that umbrella agreement. This structure allows for flexibility and efficiency in procuring services as needs arise.

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Commercial and Institutional Building Construction

Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: W912DY16R0005

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: J & J Maintenance, Inc.

Address: 7710 RIALTO BLVD SUITE 200, AUSTIN, TX, 78735

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: $211,189,150

Exercised Options: $211,189,150

Current Obligation: $211,189,150

Subaward Activity

Number of Subawards: 6

Total Subaward Amount: $9,830,883

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W912DY17D0026

IDV Type: IDC

Timeline