DOD awards $59M construction contract for Kentucky elementary school, Messer Construction selected

Contract Overview

Contract Amount: $62,420,486 ($62.4M)

Contractor: Messer Construction CO

Awarding Agency: Department of Defense

Start Date: 2021-08-12

End Date: 2026-01-22

Contract Duration: 1,624 days

Daily Burn Rate: $38.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: AWARD OF THE BASE PLUS ALL OPTIONS FOR THE CONSTRUCTION OF VAN VOORHIS ELEMENTARY SCHOOL - $58,989,000.00.

Place of Performance

Location: FORT KNOX, MEADE County, KENTUCKY, 40121

State: Kentucky Government Spending

Plain-Language Summary

Department of Defense obligated $62.4 million to MESSER CONSTRUCTION CO for work described as: AWARD OF THE BASE PLUS ALL OPTIONS FOR THE CONSTRUCTION OF VAN VOORHIS ELEMENTARY SCHOOL - $58,989,000.00. Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract is a firm-fixed-price type, which shifts cost risk to the contractor. 3. The project duration spans over 4 years, indicating a significant construction undertaking. 4. The award value is substantial, reflecting the scale and complexity of building a school. 5. The Department of the Army is the contracting agency, part of the broader DOD. 6. The North American Industry Classification System (NAICS) code 236220 points to commercial and institutional building construction.

Value Assessment

Rating: fair

The total award value of $58,989,000.00 for the construction of Van Voorhis Elementary School appears to be within a reasonable range for a project of this magnitude. Benchmarking against similar large-scale educational facility construction projects, especially those undertaken by the Department of Defense, would be necessary for a definitive value-for-money assessment. The firm-fixed-price contract structure implies that the contractor bears the primary responsibility for cost overruns, which can be a positive indicator for the government if the initial pricing is competitive.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. The data shows 6 bids were received, suggesting a healthy level of competition for this project. A higher number of bidders generally leads to more competitive pricing and a greater likelihood of selecting the best value proposal for the government.

Taxpayer Impact: The full and open competition process is beneficial for taxpayers as it fosters a competitive environment that should drive down costs and ensure the government receives fair market value for the construction services.

Public Impact

The primary beneficiaries are military families and children in Kentucky who will gain a new educational facility. The contract will deliver the construction of a new elementary school, providing essential infrastructure for education. The geographic impact is localized to Kentucky, specifically the area served by the school. The project will likely create numerous jobs in the construction sector, benefiting the local workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if initial bids did not fully account for all project complexities.
Delays in construction could impact the school's opening date and disrupt educational services.
Quality control during construction needs to be rigorously monitored to ensure long-term durability.

Positive Signals

Firm-fixed-price contract shifts cost risk to the contractor.
Full and open competition suggests a competitive bidding process leading to potentially better pricing.
The contractor, Messer Construction Co., has a track record in large-scale construction projects.

Sector Analysis

The construction sector is a significant part of the economy, encompassing a wide range of projects from residential to large-scale institutional and commercial buildings. The Department of Defense is a major client for construction services, often undertaking projects to support military bases and personnel worldwide. This contract falls under commercial and institutional building construction, a segment that includes schools, hospitals, and government facilities. Comparable spending benchmarks for similar-sized school construction projects, particularly those managed by federal agencies, would provide further context on the value of this award.

Small Business Impact

The contract was awarded under full and open competition and the data indicates that small business set-aside was not utilized (ss: false, sb: false). This means that large businesses were eligible to bid and potentially win the contract. While there is no explicit small business set-aside, the prime contractor, Messer Construction Co., may engage small businesses as subcontractors to fulfill portions of the work. The extent of small business subcontracting will be a key factor in assessing the impact on the small business ecosystem for this project.

Oversight & Accountability

Oversight for this Department of the Army contract would typically involve contract officers, contracting specialists, and potentially quality assurance representatives from the agency. The firm-fixed-price nature of the contract places a significant portion of the accountability for cost control on the contractor. Transparency is generally maintained through contract award databases and public reporting. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected during the performance of the contract.

Related Government Programs

Department of Defense Construction Projects
Military Family Housing Construction
Educational Facility Construction
Federal Building and Infrastructure Projects

Risk Flags

Potential for cost overruns due to unforeseen site conditions or material price fluctuations.
Risk of construction delays impacting the school's operational timeline.
Ensuring consistent quality of construction materials and workmanship throughout the project.
Adequate oversight to prevent potential contractor shortcuts on a firm-fixed-price contract.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $62.4 million to MESSER CONSTRUCTION CO. AWARD OF THE BASE PLUS ALL OPTIONS FOR THE CONSTRUCTION OF VAN VOORHIS ELEMENTARY SCHOOL - $58,989,000.00.

Who is the contractor on this award?

The obligated recipient is MESSER CONSTRUCTION CO.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $62.4 million.

What is the period of performance?

Start: 2021-08-12. End: 2026-01-22.

What is Messer Construction Co.'s track record with large federal construction projects, particularly schools?

Messer Construction Co. has a significant history of undertaking large-scale construction projects, including educational facilities and government buildings. While specific details on their past performance on federal elementary school construction projects are not provided in this data snippet, their involvement in a nearly $59 million Department of Defense contract suggests a demonstrated capability to manage complex projects of substantial value. A deeper dive into their contract history with federal agencies, including past performance reviews and any reported issues on similar projects, would offer a more comprehensive understanding of their reliability and expertise in this domain. Their experience likely includes navigating federal procurement regulations, managing diverse subcontractors, and adhering to stringent quality and safety standards.

How does the $58,989,000 award value compare to similar Department of Defense school construction projects?

The award value of $58,989,000.00 for the Van Voorhis Elementary School construction is substantial and aligns with the typical scale of major institutional building projects undertaken by the Department of Defense. To provide a precise comparison, one would need to analyze data from similar projects, considering factors such as square footage, specific facility requirements (e.g., specialized labs, athletic facilities), geographic location (which impacts labor and material costs), and the year of award. Projects of this nature often range from tens to hundreds of millions of dollars. The firm-fixed-price nature of this contract suggests that the initial bid was deemed competitive by the Army, but a detailed cost breakdown and comparison with industry benchmarks for educational construction would be necessary for a definitive value-for-money assessment.

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

The primary risk associated with a firm-fixed-price (FFP) contract of this magnitude ($58,989,000.00) is the potential for the contractor, Messer Construction Co., to incur losses if their cost estimates are inaccurate or if unforeseen issues arise during construction that significantly increase expenses. While the FFP structure shifts cost overrun risk to the contractor, it can also incentivize them to cut corners on quality or materials to protect their profit margin if they face unexpected cost increases. For the government, the risk lies in ensuring the initial pricing was competitive and that robust oversight mechanisms are in place to monitor quality and adherence to specifications. Delays, material shortages, or labor disputes are other potential risks that could impact project completion and functionality.

What is the expected impact of this contract on the local Kentucky economy and workforce?

This $58.9 million construction contract is expected to have a positive impact on the local Kentucky economy and workforce. The construction of a new elementary school will necessitate the hiring of a significant number of skilled and unskilled laborers, tradespeople (electricians, plumbers, carpenters, etc.), project managers, and support staff. This influx of jobs will boost local employment rates and increase household incomes. Furthermore, the demand for construction materials, equipment, and related services will likely benefit local suppliers and businesses, creating a ripple effect throughout the regional economy. The completion of the school will also provide a modern educational facility, potentially enhancing the quality of life for military families stationed in the area.

How does the NAICS code 236220 (Commercial and Institutional Building Construction) inform our understanding of this contract?

The North American Industry Classification System (NAICS) code 236220, 'Commercial and Institutional Building Construction,' precisely categorizes the nature of the work being performed under this contract. This code signifies that the project involves the construction of buildings intended for commercial purposes or public institutional use, such as schools, hospitals, government offices, and retail spaces. For this specific contract, it confirms the project is the construction of Van Voorhis Elementary School. Understanding this NAICS code is crucial for benchmarking purposes, allowing comparison with other federal or private sector projects within the same industry classification to assess pricing, project scope, and typical timelines. It also helps identify the relevant industry standards and regulatory frameworks applicable to the contractor.

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: W912QR21R0040

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 643 W COURT ST, CINCINNATI, OH, 45203

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

Financial Breakdown

Contract Ceiling: $62,420,486

Exercised Options: $62,420,486

Current Obligation: $62,420,486

Actual Outlays: $2,443,946

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline