DoD awards $12.8M contract for Georgia construction, raising questions about value and competition

Contract Overview

Contract Amount: $12,842,149 ($12.8M)

Contractor: 4K Global-Acc JV, LLC

Awarding Agency: Department of Defense

Start Date: 2023-10-15

End Date: 2026-01-27

Contract Duration: 835 days

Daily Burn Rate: $15.4K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 10

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: CONSTRUCT BREAKROOM AND ADMIN AREA

Place of Performance

Location: WARNER ROBINS, HOUSTON County, GEORGIA, 31098

State: Georgia Government Spending

Plain-Language Summary

Department of Defense obligated $12.8 million to 4K GLOBAL-ACC JV, LLC for work described as: CONSTRUCT BREAKROOM AND ADMIN AREA Key points: 1. The contract's value appears high relative to the scope of work, suggesting potential overspending. 2. Limited competition dynamics may have inflated the final price. 3. The firm-fixed-price structure offers some cost certainty but doesn't guarantee optimal value. 4. Performance context is minimal, making it difficult to assess the contractor's track record. 5. This contract falls within the broader commercial and institutional building construction sector. 6. The 'after exclusion of sources' clause warrants scrutiny regarding the initial competition.

Value Assessment

Rating: questionable

The $12.8 million award for constructing a breakroom and admin area seems disproportionately high for the described scope. Benchmarking against similar construction projects of this size and complexity is difficult without more detailed specifications, but the cost per square foot or per functional area appears elevated. The firm-fixed-price contract type provides cost certainty for the government, but the initial pricing assessment needs further investigation to ensure it represents fair market value.

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 an initial broad solicitation may have occurred, specific sources were later excluded. This process limits the pool of potential bidders, potentially reducing competitive pressure and leading to higher prices. With only 10 bids received, the level of competition might not be sufficient to drive the most cost-effective outcome for the government.

Taxpayer Impact: The limited competition suggests that taxpayers may not have received the most competitive pricing available, as fewer qualified contractors were considered in the final award decision.

Public Impact

The primary beneficiaries are the Department of Defense personnel who will utilize the new breakroom and administrative facilities. The contract delivers construction services for essential facility upgrades. The geographic impact is localized to the specific military installation in Georgia where the construction will take place. The contract will likely involve local construction labor and potentially impact small businesses through subcontracting opportunities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'after exclusion of sources' clause raises concerns about the fairness and breadth of the initial competition.
The high contract value for the described scope suggests potential for cost overruns or inefficient resource allocation.
Lack of detailed performance metrics makes it challenging to evaluate the contractor's effectiveness and value delivery.
The limited number of bids received could indicate barriers to entry for other qualified contractors or a lack of robust market outreach.

Positive Signals

The firm-fixed-price contract type offers cost certainty for the government, mitigating the risk of cost overruns.
The contract is awarded to a joint venture, potentially leveraging specialized expertise.
The project is located in Georgia, potentially benefiting the local economy through job creation and material sourcing.

Sector Analysis

This contract falls under the Commercial and Institutional Building Construction sector (NAICS 236220). This sector encompasses a wide range of construction projects for non-residential buildings. The market is typically characterized by a mix of large general contractors and smaller specialized firms. Federal construction spending in this sector is substantial, driven by the need for infrastructure maintenance, upgrades, and new facilities across various government agencies. Benchmarking this specific award requires comparison with similar-sized institutional construction projects, considering factors like location, complexity, and specific requirements.

Small Business Impact

The contract data indicates that small business participation (ss: false, sb: false) was not a primary set-aside criterion for this award. While the prime contractor is a joint venture, it's unclear if this structure inherently includes small business components or if subcontracting opportunities will be directed towards small businesses. Further analysis would be needed to determine if subcontracting plans were mandated and how effectively they will be implemented to benefit the small business ecosystem.

Oversight & Accountability

Oversight for this contract will primarily reside with the Department of the Army, a component of the Department of Defense. Accountability measures will be enforced through contract clauses, performance monitoring, and payment schedules. Transparency is facilitated by the public availability of contract award data. The Inspector General for the Department of Defense may have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Department of Defense Construction Projects
Federal Building and Infrastructure Contracts
General Services Administration (GSA) Construction Contracts
Military Base Facility Upgrades

Risk Flags

Limited competition due to source exclusion
Potentially high cost relative to scope
Uncertain contractor performance history
Lack of detailed project specifications for benchmarking

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.8 million to 4K GLOBAL-ACC JV, LLC. CONSTRUCT BREAKROOM AND ADMIN AREA

Who is the contractor on this award?

The obligated recipient is 4K GLOBAL-ACC JV, LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $12.8 million.

What is the period of performance?

Start: 2023-10-15. End: 2026-01-27.

What is the typical cost range for constructing breakroom and administrative areas of this size and scope within the Department of Defense?

Determining a precise typical cost range for constructing breakroom and administrative areas of this size and scope within the Department of Defense is challenging without more specific project details, such as square footage, material quality, specific amenities, and the complexity of the administrative functions supported. However, general construction cost data for commercial and institutional buildings can provide a benchmark. For instance, depending on the region and finishes, costs can range from $200 to $500 per square foot or more. Given the $12.8 million award, if this project involves a substantial footprint or high-end finishes, it might fall within a reasonable range. However, if the scope is more modest, the cost per square foot could be significantly higher than typical market rates, indicating potential overpricing or scope creep not evident in the basic award data.

How did the 'exclusion of sources' clause impact the competitive landscape for this contract?

The 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' clause indicates that while the contract was initially intended for full and open competition, certain potential bidders were subsequently excluded from consideration. The reasons for exclusion are not provided in the basic data but could stem from specific technical requirements, past performance issues, or other pre-qualification criteria. This exclusion inherently limits the number of bidders who can submit proposals, thereby reducing the overall competitive pressure. A smaller pool of bidders may lead to less aggressive pricing and potentially higher contract values than if all qualified sources had been allowed to compete. Understanding the rationale behind the exclusion is crucial to assessing whether it was justified and did not unduly restrict competition.

What is the track record of 4K GLOBAL-ACC JV, LLC in executing similar federal construction contracts?

Information regarding the specific track record of '4K GLOBAL-ACC JV, LLC' in executing similar federal construction contracts is not detailed in the provided data. As a joint venture, its performance history might be a composite of its member companies or specific to projects undertaken under the JV's banner. To assess their reliability and past performance, a review of their contract history with federal agencies, including project types, values, completion timeliness, and any documented performance issues or successes, would be necessary. This would involve searching federal procurement databases and performance rating systems (like the Contractor Performance Assessment Reporting System - CPARS) to gauge their experience and capability in delivering projects of comparable scale and complexity.

Are there any specific risk indicators associated with this contract award or the contractor?

Several potential risk indicators are present. Firstly, the 'exclusion of sources' clause, as mentioned, can signal a reduced competitive environment, potentially leading to higher costs and less innovation. Secondly, the contract value of $12.8 million for what is described as a 'breakroom and admin area' construction might be disproportionately high, suggesting potential risks related to cost overruns, scope creep, or inefficient project management if not carefully monitored. Thirdly, without detailed performance history for the joint venture '4K GLOBAL-ACC JV, LLC,' there's an inherent risk associated with the contractor's capacity and past performance in delivering similar projects successfully. Finally, the firm-fixed-price contract type, while offering cost certainty, can sometimes incentivize contractors to cut corners on quality if not adequately overseen, posing a risk to the final deliverable's integrity.

How does this contract compare to other federal spending on commercial and institutional building construction?

Comparing this $12.8 million contract to the broader federal spending on commercial and institutional building construction requires context regarding the specific nature of the project (e.g., size, complexity, location, specific requirements) and the overall market conditions. Federal spending in this sector is substantial, encompassing a wide array of projects from small renovations to large-scale facility constructions across numerous agencies. While $12.8 million is a significant sum for a single project, it may represent a moderate investment within the vast landscape of federal construction outlays. To provide a meaningful comparison, one would need to analyze the contract's cost per square foot against industry benchmarks and aggregate data on similar DoD construction awards to determine if it aligns with typical spending patterns or stands out as an outlier.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SEALED BID

Solicitation ID: W912HN23B3000

Offers Received: 10

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 635 NW FRONTAGE RD, AUGUSTA, GA, 30907

Business Categories: Category Business, Joint Venture Women Owned Small Business, Limited Liability Corporation, Partnership or Limited Liability Partnership, Small Business, Special Designations, U.S.-Owned Business, Woman Owned Business

Financial Breakdown

Contract Ceiling: $12,842,149

Exercised Options: $12,842,149

Current Obligation: $12,842,149

Actual Outlays: $1,791,458

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline