DoD's $26.4M communication facility construction contract awarded to CH2M HILL CONSTRUCTORS, INC

Contract Overview

Contract Amount: $26,393,963 ($26.4M)

Contractor: CH2M Hill Constructors, Inc.

Awarding Agency: Department of Defense

Start Date: 2009-09-23

End Date: 2011-11-30

Contract Duration: 798 days

Daily Burn Rate: $33.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 15

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: CONSTRUCTION OF COMMUNICATION FACILITY

Plain-Language Summary

Department of Defense obligated $26.4 million to CH2M HILL CONSTRUCTORS, INC. for work described as: CONSTRUCTION OF COMMUNICATION FACILITY Key points: 1. The contract value of $26.4 million for industrial building construction appears substantial, warranting a review of its efficiency. 2. Full and open competition was utilized, suggesting a potentially competitive pricing environment. 3. The contract duration of 798 days indicates a significant project timeline. 4. The award was made by the Department of the Army, a major component of the Department of Defense. 5. The North American Industry Classification System (NAICS) code 236210 points to industrial building construction. 6. The contract type is Firm Fixed Price, which shifts cost risk to the contractor.

Value Assessment

Rating: fair

Benchmarking the value of this $26.4 million construction contract against similar industrial building projects is challenging without more specific project details and scope. However, the firm fixed-price nature of the contract suggests that the government has a defined cost ceiling. The number of bids received (15) indicates a degree of market interest, but the ultimate value for money depends on the quality of construction and adherence to schedule and budget, which are not detailed here. Further analysis would require comparing the final cost to the initial bid and to the cost of comparable facilities.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with 15 bids received. This indicates a robust bidding process where multiple contractors had the opportunity to compete. A higher number of bidders generally suggests a more competitive market, which can lead to better pricing and innovation for the government. The selection of a contractor from this pool implies that the chosen firm offered the best value proposition based on the evaluation criteria.

Taxpayer Impact: The use of full and open competition is generally favorable for taxpayers as it maximizes the potential for cost savings through competitive bidding, ensuring that the government is not overpaying for services.

Public Impact

The primary beneficiaries are the Department of Defense and the Department of the Army, who will receive a new communication facility. The services delivered include the construction of an industrial building, likely to house critical communication infrastructure. The geographic impact is localized to the site of the construction, which is not specified in the provided data. Workforce implications include employment opportunities for construction workers and related trades during the project's duration.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific details on project scope and potential overruns.
Firm Fixed Price contracts can sometimes lead to change orders if the scope is not perfectly defined upfront.
The long duration (798 days) increases the risk of unforeseen economic or material cost fluctuations.

Positive Signals

Full and open competition with 15 bids suggests a healthy market and potential for competitive pricing.
Firm Fixed Price contract type provides cost certainty for the government.
Award to a single contractor (CH2M HILL CONSTRUCTORS, INC.) implies a thorough selection process.

Sector Analysis

The construction of communication facilities falls under the broader industrial building construction sector. This sector is characterized by large-scale projects requiring specialized engineering, project management, and skilled labor. The market size for such government contracts can be substantial, driven by defense, infrastructure, and technological development needs. This specific contract represents a significant investment within this niche, contributing to the overall spending in the construction services industry.

Small Business Impact

The provided data indicates that small business participation was not a specific set-aside (ss: false, sb: false). Therefore, the direct impact on small businesses through set-asides is likely minimal for this prime contract. However, the prime contractor, CH2M HILL CONSTRUCTORS, INC., may engage small businesses as subcontractors for specialized services or materials, contributing indirectly to the small business ecosystem. Further investigation into subcontracting plans would be needed for a complete assessment.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant project management office within the Department of the Army. Accountability measures are inherent in the firm fixed-price contract type, which penalizes the contractor for cost overruns. Transparency is generally facilitated through contract award databases, though detailed project progress and spending reports may not always be publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Military Construction
Defense Infrastructure Projects
Communication Network Upgrades
Industrial Facility Development

Risk Flags

Potential for scope creep given the long duration.
Reliance on fixed-price contract may not account for unforeseen material cost increases.
Lack of specific performance metrics makes post-award evaluation difficult.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.4 million to CH2M HILL CONSTRUCTORS, INC.. CONSTRUCTION OF COMMUNICATION FACILITY

Who is the contractor on this award?

The obligated recipient is CH2M HILL CONSTRUCTORS, 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 $26.4 million.

What is the period of performance?

Start: 2009-09-23. End: 2011-11-30.

What is the track record of CH2M HILL CONSTRUCTORS, INC. with similar Department of Defense construction contracts?

CH2M HILL CONSTRUCTORS, INC. has a history of performing large-scale engineering and construction projects, including those for government and defense clients. Analyzing their past performance on similar Department of Defense contracts would involve reviewing contract histories for on-time delivery, budget adherence, and quality of work. Specific data on their past performance, including any awards or penalties, would provide a clearer picture of their reliability and capability for this communication facility project. Without access to detailed performance metrics for their prior DoD work, it's difficult to definitively assess their track record beyond their general industry reputation.

How does the awarded price of $26.4 million compare to the estimated cost or market rates for similar communication facility constructions?

Directly comparing the $26.4 million award price to market rates for similar communication facilities is challenging without detailed specifications of the facility's size, complexity, and technological requirements. However, the fact that 15 bids were received under full and open competition suggests that the market found the opportunity attractive, potentially indicating a competitive pricing environment. To assess value for money, one would ideally compare this contract's cost per square foot or cost per unit of capacity against benchmarks for comparable government or private sector projects. The firm fixed-price nature provides a ceiling, but the actual value depends on the final delivered product relative to this cost.

What are the key performance indicators (KPIs) used to measure the success of this construction contract?

Key performance indicators for a construction contract like this typically include adherence to the project schedule (original completion date of November 30, 2011, within a 798-day duration), meeting quality standards and specifications outlined in the contract, and staying within the firm fixed price of $26.4 million. Other potential KPIs could involve safety record during construction, successful integration of communication systems, and final acceptance by the Department of the Army. The absence of specific performance metrics in the provided data means these are inferred based on standard construction contract management practices.

What is the historical spending pattern for communication facility construction by the Department of the Army?

Historical spending patterns for communication facility construction by the Department of the Army would reveal trends in contract awards, average contract values, and the frequency of such procurements. Analyzing past data could indicate whether this $26.4 million contract is within the typical range for similar projects or represents an outlier. It could also highlight preferred contracting methods or dominant contractors in this space. Without access to historical spending databases or reports specific to the Army's communication infrastructure investments, a detailed analysis of these patterns is not possible from the given information.

Are there any identified risks associated with the contractor or the project scope that could impact cost or schedule?

Potential risks associated with this contract include those inherent in any large-scale construction project, such as unforeseen site conditions, material price volatility, labor availability issues, and potential design changes or scope creep, especially given the 798-day duration. For the contractor, CH2M HILL CONSTRUCTORS, INC., risks could relate to their specific experience with the type of communication technology to be housed or their capacity to manage a project of this magnitude. The firm fixed-price contract shifts cost overrun risk to the contractor, but significant delays or disputes could still impact the government. The provided data does not detail specific identified risks beyond these general categories.

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Industrial Building Construction

Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCTION OF BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W912ER09R0019

Offers Received: 15

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: CH2M Hill Companies, Ltd. (UEI: 027620574)

Address: 15010 CONFERENCE CENTER DR STE 200, CHANTILLY, VA, 90

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

Financial Breakdown

Contract Ceiling: $26,393,963

Exercised Options: $26,393,963

Current Obligation: $26,393,963

Contract Characteristics

Consolidated Contract: Yes

Cost or Pricing Data: NO

Timeline