DoD awards $18M contract for laboratory construction, with a significant portion allocated to materials and labor

Contract Overview

Contract Amount: $17,979,678 ($18.0M)

Contractor: G.M. Hill Engineering, Inc.

Awarding Agency: Department of Defense

Start Date: 2023-06-30

End Date: 2026-09-30

Contract Duration: 1,188 days

Daily Burn Rate: $15.1K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: RAPID APPLIED MATERIALS LABORATORY PROJECT

Place of Performance

Location: MILLINGTON, SHELBY County, TENNESSEE, 38054

State: Tennessee Government Spending

Plain-Language Summary

Department of Defense obligated $18.0 million to G.M. HILL ENGINEERING, INC. for work described as: RAPID APPLIED MATERIALS LABORATORY PROJECT Key points: 1. The contract value suggests a substantial investment in specialized construction and materials. 2. The firm fixed-price structure aims to control costs, but potential for change orders exists. 3. Competition was open, which should theoretically drive better pricing, but the final price needs benchmarking. 4. The project duration of nearly four years indicates a complex undertaking. 5. The award to G.M. HILL ENGINEERING, INC. requires scrutiny of their past performance and capacity for this scale of project. 6. The geographic location in Tennessee may influence labor costs and material sourcing.

Value Assessment

Rating: fair

The contract value of $17.98 million for a laboratory project appears within a reasonable range for specialized construction, but without specific details on the scope of work, it's difficult to benchmark precisely. The firm fixed-price contract type suggests an attempt to manage costs upfront. However, the absence of detailed cost breakdowns or comparisons to similar projects makes a definitive value-for-money assessment challenging. Further analysis would require understanding the square footage, specialized equipment included, and prevailing construction costs in the region.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating that while the competition was initially open, certain sources were later excluded. This could imply specific technical requirements or pre-qualification criteria that narrowed the field. The number of bidders is not specified, but the exclusion of sources suggests a potentially less competitive environment than true full and open competition. This could impact price discovery and potentially lead to higher costs for the government.

Taxpayer Impact: The limited competition may mean taxpayers did not benefit from the most aggressive pricing possible, as fewer firms were ultimately considered. This could result in a higher overall expenditure for the project than if a broader range of qualified contractors had been able to bid without exclusion.

Public Impact

The primary beneficiaries are the Department of Defense and its personnel who will utilize the new laboratory facilities. The project will deliver enhanced research and development capabilities for the Army. The geographic impact is concentrated in Tennessee, potentially creating local construction jobs and economic activity. The construction phase will involve a workforce of skilled tradespeople and project managers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions or design changes arise, despite the fixed-price contract.
Risk of schedule delays due to the complexity of laboratory construction and potential supply chain issues for specialized materials.
The 'exclusion of sources' clause warrants investigation to ensure it was justified and did not unduly limit competition.
Ensuring the contractor has adequate experience with similar large-scale, specialized construction projects is crucial.

Positive Signals

The firm fixed-price contract provides a degree of cost certainty for the government.
The project duration is clearly defined, allowing for planning and resource allocation.
The Department of the Army is the awarding agency, suggesting a clear line of command and oversight.
The contract is for a specific, tangible asset (laboratory construction), indicating a defined deliverable.

Sector Analysis

The construction sector, particularly for specialized facilities like laboratories, is a significant part of federal spending. This contract falls within the Commercial and Institutional Building Construction NAICS code. Federal spending in this area often involves complex projects requiring adherence to stringent building codes, safety standards, and specific functional requirements. Comparable spending benchmarks would typically look at cost per square foot for similar government or private sector laboratory constructions, factoring in regional labor and material costs.

Small Business Impact

The data indicates that small business participation was not a primary focus for this specific contract, as the 'small business set-aside' flag is false. There is no explicit mention of subcontracting goals for small businesses. This means the primary contractor, G.M. HILL ENGINEERING, INC., will likely manage the project with its own resources or larger subcontractors, potentially limiting opportunities for small businesses to participate in this significant federal project. Further review of the contract details would be needed to confirm subcontracting plans.

Oversight & Accountability

Oversight for this contract will likely be managed by the contracting officer and project managers within the Department of the Army. Accountability measures are inherent in the firm fixed-price contract, which penalizes the contractor for cost overruns. Transparency could be enhanced by making detailed project milestones and progress reports publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Military Construction
Research and Development Facilities
Department of Defense Facilities Management
Army Corps of Engineers Construction Projects

Risk Flags

Limited competition due to source exclusion.
Potential for cost escalation despite fixed-price contract.
Long project duration increases risk exposure.
Need to verify contractor's experience with specialized facilities.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.0 million to G.M. HILL ENGINEERING, INC.. RAPID APPLIED MATERIALS LABORATORY PROJECT

Who is the contractor on this award?

The obligated recipient is G.M. HILL ENGINEERING, 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 $18.0 million.

What is the period of performance?

Start: 2023-06-30. End: 2026-09-30.

What is the specific purpose and scope of the RAPID APPLIED MATERIALS LABORATORY PROJECT?

The RAPID APPLIED MATERIALS LABORATORY PROJECT, valued at approximately $17.98 million, is being undertaken by the Department of the Army. While the specific details of the laboratory's function are not fully elaborated in the provided data, the name suggests a focus on the research, development, and application of advanced materials. This could encompass areas such as material science, testing, prototyping, and potentially specialized manufacturing processes. The project's scope likely includes the design, construction, and outfitting of a facility equipped for these advanced material-related activities, serving the research and operational needs of the Army.

How does the contract value of $17.98 million compare to similar laboratory construction projects awarded by the federal government?

Benchmarking the $17.98 million contract value requires comparing it to similar federal laboratory construction projects, considering factors like size (square footage), complexity, location, and specific technological requirements. Without these details, a direct comparison is difficult. However, federal laboratory construction projects can range widely, from tens of millions to hundreds of millions of dollars. For a project focused on 'applied materials,' the cost could be influenced by the need for specialized environmental controls, vibration isolation, advanced testing equipment integration, and high-purity systems. A preliminary assessment suggests the value is substantial but potentially reasonable for a specialized facility, pending further comparative data on similar projects.

What are the potential risks associated with a firm fixed-price contract for a complex construction project like this?

While a firm fixed-price (FFP) contract aims to provide cost certainty, it carries inherent risks for complex construction projects. The primary risk is that the contractor may cut corners on quality or safety to maintain profitability if costs escalate unexpectedly due to unforeseen site conditions, material price volatility, or labor shortages. Conversely, if the contractor significantly underestimates costs, they may seek change orders or claim constructive changes to recoup losses, potentially leading to disputes and increased costs for the government. For the government, the risk lies in ensuring the contractor has accurately estimated all potential costs and contingencies. The 'exclusion of sources' aspect also adds a layer of risk, as it might indicate a less competitive bidding environment, potentially leading to a less optimized price.

What does the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' procurement method imply for cost efficiency and taxpayer value?

The procurement method 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' suggests an initial broad competition that was later narrowed down. This implies that while multiple potential bidders may have been considered initially, specific criteria or circumstances led to the exclusion of some. This can be legitimate if based on essential technical qualifications or security requirements. However, if the exclusions were not strictly necessary or well-justified, it could limit the pool of bidders, potentially reducing competitive pressure and leading to a higher contract price than under true full and open competition. Taxpayers may not receive the best possible value if the most competitive offers were inadvertently or deliberately excluded from the final consideration.

What is the track record of G.M. HILL ENGINEERING, INC. in managing large-scale federal construction projects?

Assessing the track record of G.M. HILL ENGINEERING, INC. is crucial for understanding their capability to successfully execute this $17.98 million laboratory project. A review of their past performance on federal contracts, particularly those involving similar scope, complexity, and value, would be necessary. Key indicators include on-time and on-budget delivery, quality of work, safety record, and any history of contract disputes or performance issues. Without access to their specific contract history and performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), it's difficult to definitively assess their suitability. However, the Department of the Army's selection implies they met minimum qualifications.

How does the project duration of 1188 days (approximately 3.25 years) impact the overall cost and risk profile?

A project duration of 1188 days for a laboratory construction project of this magnitude is substantial and carries significant implications for cost and risk. Longer durations increase the exposure to market fluctuations in material prices and labor rates, potentially driving up costs even under a fixed-price contract if not adequately accounted for. It also extends the period during which unforeseen issues, such as design changes, regulatory updates, or environmental factors, can arise and impact the project. Furthermore, extended timelines can affect the availability of specialized labor and equipment. From a risk perspective, a longer duration increases the probability of encountering unexpected challenges, necessitating robust project management, contingency planning, and proactive risk mitigation strategies from the outset.

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 AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 9640 SUNBEAM CENTER DR STE 1, JACKSONVILLE, FL, 32257

Business Categories: 8(a) Program Participant, Category Business, Corporate Entity Not Tax Exempt, DoT Certified Disadvantaged Business Enterprise, Economically Disadvantaged Women Owned Small Business, Minority Owned Business, Other Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Woman Owned Business, Women Owned Small Business

Financial Breakdown

Contract Ceiling: $17,979,678

Exercised Options: $17,979,678

Current Obligation: $17,979,678

Actual Outlays: $538,119

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W912QR20D0024

IDV Type: IDC

Timeline