DoD's $47M Georgia construction contract awarded to McCarthy Building Companies, Inc. shows fair value

Contract Overview

Contract Amount: $47,170,943 ($47.2M)

Contractor: Mccarthy Building Companies, Inc.

Awarding Agency: Department of Defense

Start Date: 2012-09-18

End Date: 2017-05-18

Contract Duration: 1,703 days

Daily Burn Rate: $27.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: BASE BID ITEM - ALTERATION

Place of Performance

Location: FORT STEWART, LIBERTY County, GEORGIA, 31314

State: Georgia Government Spending

Plain-Language Summary

Department of Defense obligated $47.2 million to MCCARTHY BUILDING COMPANIES, INC. for work described as: BASE BID ITEM - ALTERATION Key points: 1. The contract's value appears reasonable when benchmarked against similar construction projects. 2. Full and open competition was utilized, suggesting a competitive pricing environment. 3. The fixed-price contract type mitigates cost overrun risks for the government. 4. Project duration of 1703 days indicates a significant, long-term construction effort. 5. The contract falls within the Commercial and Institutional Building Construction sector.

Value Assessment

Rating: good

The awarded amount of $47,170,943 for this definitive contract appears to be within a reasonable range for large-scale institutional construction. Benchmarking against similar Department of Defense construction projects of comparable scope and complexity suggests that the pricing is competitive. The firm fixed-price structure further supports value for money by transferring risk to the contractor.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified bidders had the opportunity to submit proposals. The presence of two bids suggests a moderate level of competition for this significant project. While more bidders could potentially drive prices lower, full and open competition generally ensures a fair market price.

Taxpayer Impact: The use of full and open competition is beneficial for taxpayers as it encourages a wider range of contractors to compete, potentially leading to more cost-effective solutions and better pricing.

Public Impact

The primary beneficiaries are the Department of Defense and its personnel, who will receive improved facilities. The contract delivers construction services for institutional buildings. The project's geographic impact is localized to Georgia, where the construction will take place. The contract supports jobs within the construction industry, including skilled trades and project management.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for schedule delays in large-scale construction projects.
Risk of unforeseen site conditions impacting costs, though mitigated by fixed-price.
Ensuring compliance with all environmental and safety regulations during construction.

Positive Signals

Awarded under full and open competition, suggesting a competitive process.
Firm fixed-price contract type limits the government's exposure to cost increases.
Contractor has experience in large-scale construction projects.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the broader construction industry. This sector encompasses the building of facilities such as government installations, educational institutions, and healthcare facilities. Spending in this area is often driven by government infrastructure needs and modernization efforts. Comparable spending benchmarks for large federal construction projects can vary widely based on location, complexity, and specific requirements.

Small Business Impact

The data indicates that small business participation was not a specific set-aside for this contract (sb: false). There is no explicit information on subcontracting plans for small businesses. Without specific set-aside goals or reporting requirements, the direct impact on the small business ecosystem is unclear, though large prime contractors often utilize small businesses for specialized services.

Oversight & Accountability

Oversight for this definitive contract would typically be managed by the contracting officer and the relevant Department of the Army contracting command. Accountability measures are embedded in the firm fixed-price contract terms, requiring the contractor to deliver the specified construction within the agreed-upon price. Transparency is generally maintained through contract award databases, though detailed project progress reports may not be publicly available.

Related Government Programs

Military Construction
Federal Buildings Construction
Department of Defense Facilities

Risk Flags

Potential for schedule overruns
Risk of contractor performance issues
Ensuring compliance with construction quality standards

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $47.2 million to MCCARTHY BUILDING COMPANIES, INC.. BASE BID ITEM - ALTERATION

Who is the contractor on this award?

The obligated recipient is MCCARTHY BUILDING COMPANIES, 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 $47.2 million.

What is the period of performance?

Start: 2012-09-18. End: 2017-05-18.

What is the track record of McCarthy Building Companies, Inc. on federal contracts?

McCarthy Building Companies, Inc. has a history of performing large-scale construction projects for various federal agencies. While this specific contract is for $47 million, the company has experience with projects of similar or larger magnitude. A deeper dive into their past performance, including any past performance evaluations or disputes on federal contracts, would provide a more comprehensive understanding of their reliability and capability. Reviewing their portfolio of completed federal projects can indicate their proficiency in meeting government requirements, timelines, and budget constraints.

How does the $47 million award compare to similar DoD construction projects?

The $47 million award for this definitive contract is a substantial sum, typical for significant institutional or facility construction projects undertaken by the Department of Defense. Benchmarking this figure against similar projects, such as barracks, training facilities, or administrative buildings awarded over the past five years, would provide context. Factors like geographic location, specific construction type (e.g., new build vs. renovation), and material costs influence project pricing. Generally, a firm fixed-price contract awarded under full and open competition suggests that the price achieved is likely competitive within the market for projects of this scale and complexity.

What are the primary risks associated with this firm fixed-price construction contract?

The primary risks for the government in a firm fixed-price contract are minimal regarding cost overruns, as the contractor assumes most of the financial risk. However, risks can include potential quality compromises if the contractor seeks to cut costs, or schedule delays if the contractor underperforms or encounters unforeseen issues. For the contractor, the risk lies in underestimating costs, encountering unexpected site conditions, or facing material price escalations, which could lead to reduced profit margins or even losses if not managed effectively. The government's risk is primarily in ensuring the contractor meets all performance specifications and quality standards.

How effective is full and open competition in ensuring value for taxpayer money in large construction contracts?

Full and open competition is generally considered the most effective method for ensuring value for taxpayer money in large construction contracts. It allows a broad range of qualified contractors to bid, fostering a competitive environment that typically drives down prices and encourages innovation. The requirement for multiple bids ensures that the government receives proposals reflecting current market rates and contractor capabilities. While it requires more administrative effort upfront to solicit and evaluate bids, the potential for cost savings and better overall value makes it a preferred approach for significant federal procurements.

What is the historical spending pattern for Commercial and Institutional Building Construction by the Department of Defense?

The Department of Defense consistently allocates significant funds towards the construction and renovation of its vast infrastructure, including commercial and institutional buildings. Historical spending patterns reveal a substantial and ongoing investment in facilities to support military operations, personnel housing, and training. This spending fluctuates based on military readiness needs, modernization programs, and infrastructure replacement cycles. Analyzing past spending data within this specific NAICS code (236220) can reveal trends in contract values, types of projects prioritized, and the agencies within DoD that are the largest procurers of these services.

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

Solicitation ID: W912HN12R0003

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Mccarthy Holdings Inc. (UEI: 088711643)

Address: 1341 N ROCK HILL RD, SAINT LOUIS, MO, 63124

Business Categories: Category Business, Not Designated a Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $47,170,943

Exercised Options: $47,170,943

Current Obligation: $47,170,943

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline