DoD's $41M construction contract awarded to Caddell Construction shows fair value, but limited competition raises concerns

Contract Overview

Contract Amount: $40,982,138 ($41.0M)

Contractor: Caddell Construction CO., Inc.

Awarding Agency: Department of Defense

Start Date: 2005-06-24

End Date: 2008-07-13

Contract Duration: 1,115 days

Daily Burn Rate: $36.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Place of Performance

Location: FORT BENNING, CHATTAHOOCHEE County, GEORGIA, 31905

State: Georgia Government Spending

Plain-Language Summary

Department of Defense obligated $41.0 million to CADDELL CONSTRUCTION CO., INC. for work described as: Key points: 1. Contract value appears reasonable given the scope of construction services. 2. The contract was awarded under full and open competition, but only three bids were received. 3. Risk indicators are moderate, with no significant performance issues noted. 4. The contract duration of 1115 days suggests a substantial construction project. 5. This contract falls within the broader Defense sector, specifically for building construction.

Value Assessment

Rating: good

The contract's value of approximately $41 million for commercial and institutional building construction appears to be within a reasonable range for a project of this scale and duration. Benchmarking against similar Department of Defense construction projects of comparable size and complexity would provide a more precise value-for-money assessment. However, the firm fixed-price nature of the contract suggests that the contractor assumed the majority of the cost risk, which can be a positive indicator for the government.

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 offers. However, only three bids were received. This level of competition, while technically open, is on the lower side and may suggest potential barriers to entry for other firms or a limited pool of qualified contractors for this specific type of work. The limited number of bidders could potentially impact price discovery, though the firm fixed-price contract structure helps mitigate this.

Taxpayer Impact: While the competition was open, the low number of bidders means taxpayers may not have benefited from the most aggressive pricing possible. However, the fixed-price nature ensures cost certainty for the government.

Public Impact

The primary beneficiaries are the Department of Defense and its personnel, who will utilize the constructed facilities. The contract delivers essential infrastructure and building construction services for military operations. The geographic impact is localized to the state of Georgia, where the construction took place. The project likely supported a significant number of construction jobs, contributing to the local and regional workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited number of bidders in a full and open competition could indicate market concentration or high barriers to entry.
Contract duration of over three years requires sustained oversight to ensure timely completion and quality control.

Positive Signals

Awarded under firm fixed-price terms, which shifts cost overrun risk to the contractor.
Contractor, Caddell Construction Co., Inc., has a track record with government contracts, suggesting familiarity with requirements.
Project located in Georgia, potentially benefiting local small businesses through subcontracting opportunities (though not explicitly set-aside).

Sector Analysis

The contract falls within the Commercial and Institutional Building Construction sector (NAICS 236220), a significant segment of the broader construction industry. This sector encompasses the building of non-residential structures. Federal spending in this area is crucial for maintaining and expanding government infrastructure, including military bases, administrative buildings, and research facilities. Comparable spending benchmarks would involve analyzing the cost per square foot or per project for similar military construction projects across different regions and agencies.

Small Business Impact

This contract was not specifically set aside for small businesses, and the data indicates no small business participation was mandated. While Caddell Construction Co., Inc. may engage small businesses as subcontractors, the absence of a set-aside or specific subcontracting goals means there is no direct guarantee of small business involvement. This could limit opportunities for smaller firms to participate in larger federal construction projects.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Army contracting office and potentially involve quality assurance representatives on-site during construction. Accountability measures are inherent in the firm fixed-price contract, with penalties or incentives potentially tied to performance and completion. Transparency is generally provided through contract award databases, though detailed project progress reports may not be publicly available.

Related Government Programs

Military Construction
Department of Defense Facilities
General Building Construction
Federal Infrastructure Projects

Risk Flags

Low bidder count in full and open competition
Potential for cost overruns if scope is not well-defined (mitigated by FFP)
Long contract duration requires sustained oversight

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $41.0 million to CADDELL CONSTRUCTION CO., INC.. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is CADDELL CONSTRUCTION CO., 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 $41.0 million.

What is the period of performance?

Start: 2005-06-24. End: 2008-07-13.

What is Caddell Construction Co., Inc.'s overall track record with federal contracts, particularly within the Department of Defense?

Caddell Construction Co., Inc. has a substantial history of securing and performing federal contracts, particularly with the Department of Defense and its various branches, including the Army, Navy, and Air Force. Their portfolio often includes large-scale construction projects, such as barracks, administrative facilities, and specialized military infrastructure. Analysis of past performance indicates a general pattern of successful project completion, though like any large contractor, specific contract histories may contain instances of minor disputes, change orders, or schedule adjustments. Their experience suggests a strong understanding of government contracting regulations and military construction standards.

How does the awarded amount of approximately $41 million compare to similar Department of Defense construction projects awarded in the same period?

Comparing the $41 million award to similar DoD construction projects requires access to a broader dataset of contracts from the same timeframe (2005-2008) and for comparable project types (e.g., institutional buildings, military facilities). However, based on general market knowledge, a $41 million project for commercial and institutional building construction is a significant undertaking. Without specific benchmarks for cost per square foot or per facility type for that era, it's difficult to definitively state if it represents exceptional value. Factors like location, specific requirements (e.g., security, specialized equipment), and prevailing market conditions in Georgia during that period would influence the price. The firm fixed-price nature suggests the government secured a defined cost.

What are the primary risk indicators associated with this contract, considering its duration and the number of bidders?

The primary risk indicators for this contract include the relatively low number of bidders (three) for a full and open competition, which could suggest potential market limitations or a lack of robust competition, possibly leading to less competitive pricing than might be achieved with more bidders. The contract's duration of 1115 days (over three years) also presents risks related to potential cost escalation (though mitigated by fixed-price), schedule delays, unforeseen site conditions, and the need for sustained project management and oversight. While the firm fixed-price contract shifts cost risk to the contractor, performance risks related to quality and timely completion remain.

How effective is the firm fixed-price contract type in ensuring program effectiveness and value for money in large construction projects?

The firm fixed-price (FFP) contract type is generally considered effective for large construction projects when the scope of work is well-defined and risks can be reasonably anticipated. It provides cost certainty for the government, as the contractor is obligated to complete the work for the agreed-upon price, regardless of their actual costs. This incentivizes the contractor to manage costs efficiently and adhere to the schedule. For program effectiveness, FFP can ensure that the project is completed to the specified standards within budget. However, if the scope is poorly defined or unforeseen issues arise, it can lead to change orders or disputes, potentially increasing the overall cost and impacting effectiveness if not managed carefully.

What are the historical spending patterns for commercial and institutional building construction by the Department of Defense?

Historical spending patterns for commercial and institutional building construction by the Department of Defense are substantial and fluctuate based on geopolitical needs, military readiness requirements, and infrastructure modernization initiatives. The DoD consistently allocates significant portions of its budget to facilities construction and maintenance. Spending in this category often increases during periods of military expansion or when upgrading aging infrastructure. Analyzing spending trends over multiple fiscal years would reveal cyclical patterns, major investment periods, and the relative proportion of construction spending within the overall defense budget. This specific contract represents a single data point within that broader spending context.

What are the implications of awarding a $41 million contract with only three bids on taxpayer value?

Awarding a $41 million contract with only three bids, even under full and open competition, can have implications for taxpayer value. While three bidders still represent some level of competition, it is less than ideal compared to a scenario with five or more. This limited competition might mean that the government did not receive the most aggressive pricing possible, as the bidders may have faced less pressure to undercut each other significantly. However, the firm fixed-price nature of the contract provides cost certainty, protecting taxpayers from cost overruns on the contractor's side. The ultimate value to taxpayers depends on the quality of the final product, its longevity, and whether the price paid was indeed fair market value given the competitive landscape.

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: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2700 LAGOON PARK DR, MONTGOMERY, AL, 02

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline