Naval Foundry Repair Contract Awarded for Over $55 Million to CH2M HILL CONSTRUCTORS, INC

Contract Overview

Contract Amount: $55,682,077 ($55.7M)

Contractor: CH2M Hill Constructors, Inc.

Awarding Agency: Department of Defense

Start Date: 2017-04-12

End Date: 2020-03-31

Contract Duration: 1,084 days

Daily Burn Rate: $51.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF GCC-MAC NAVAL FOUNDRY REPAIR

Place of Performance

Location: PHILADELPHIA, PHILADELPHIA County, PENNSYLVANIA, 19112

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $55.7 million to CH2M HILL CONSTRUCTORS, INC. for work described as: IGF::OT::IGF GCC-MAC NAVAL FOUNDRY REPAIR Key points: 1. The contract value of over $55 million represents a significant investment in naval infrastructure. 2. CH2M HILL CONSTRUCTORS, INC. secured this contract through full and open competition, suggesting a competitive bidding process. 3. The firm fixed-price contract type indicates that the contractor bears the primary risk for cost overruns. 4. The contract duration of 1084 days (approximately 3 years) suggests a substantial scope of work. 5. The contract was awarded in April 2017 and completed in March 2020, providing a historical performance context. 6. The Public Sector (PA) designation may indicate specific regulatory or reporting requirements. 7. The contract falls under the Commercial and Institutional Building Construction (236220) industry, highlighting its focus on construction services.

Value Assessment

Rating: fair

Benchmarking the value of this specific contract is challenging without detailed cost breakdowns or comparable project data. However, a contract of this magnitude for foundry repair suggests a significant investment. The firm fixed-price nature shifts cost risk to the contractor, which can be a positive indicator of value if the contractor manages costs effectively. Further analysis would require comparing the final cost against the initial bid and the scope of work completed.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through full and open competition, meaning all responsible sources were permitted to submit bids. The fact that it was competed openly suggests that the Department of the Navy sought the best possible pricing and technical solutions available in the market. The presence of two bids (no: 2) indicates some level of competition, though a higher number of bidders would typically lead to more robust price discovery and potentially lower costs for the government.

Taxpayer Impact: Full and open competition is generally beneficial for taxpayers as it encourages a wider range of contractors to bid, potentially driving down prices through market forces. While two bidders is a moderate level of competition, it still provides a basis for comparison and negotiation.

Public Impact

The primary beneficiaries of this contract are the Department of the Navy and its operational readiness, ensuring critical foundry facilities are maintained. The services delivered include construction and repair work essential for the functionality of naval foundries. The geographic impact is concentrated in Pennsylvania (SN: PENNSYLVANIA), where the foundry is located. The contract likely supported a workforce involved in construction, engineering, and skilled trades within the Pennsylvania region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition with only two bidders could potentially lead to higher prices than if more firms had participated.
The firm fixed-price contract, while shifting risk, could also incentivize the contractor to cut corners on quality if not adequately overseen.
The specific nature of 'foundry repair' might involve specialized knowledge and materials, potentially limiting the pool of qualified bidders.
The duration of the contract (over 1000 days) requires sustained oversight to ensure performance remains on track and within scope.

Positive Signals

Awarded through full and open competition, indicating an effort to maximize market participation.
Firm fixed-price contract type aligns incentives for cost control with the contractor.
The contract was successfully completed within its defined period, suggesting effective project management.
The contractor, CH2M HILL CONSTRUCTORS, INC., has a track record in large-scale construction projects, implying relevant experience.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, specifically related to industrial facilities. The construction and repair of specialized facilities like naval foundries are critical for national defense infrastructure. Spending in this sector can fluctuate based on government modernization efforts, infrastructure needs, and defense budgets. Comparable benchmarks would involve analyzing other large-scale industrial construction or repair contracts awarded by federal agencies.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses arising from a specific set-aside. However, the prime contractor, CH2M HILL CONSTRUCTORS, INC., may engage small businesses as subcontractors for specialized services or materials, contributing to the broader small business ecosystem. The absence of a set-aside suggests the scope or nature of the work was deemed more suitable for larger, potentially non-small business, contractors.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and their representatives within the Department of the Navy. Accountability measures are inherent in the firm fixed-price contract, where the contractor is responsible for delivering the specified work within the agreed price. Transparency is facilitated by the public nature of contract awards, though detailed performance metrics and cost breakdowns may not always be publicly available. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Naval Facilities Engineering Command (NAVFAC) Contracts
Department of Defense Construction Contracts
Industrial Facility Maintenance and Repair
Defense Infrastructure Projects
Public Works Contracts

Risk Flags

Limited Competition
Potential for Cost Overruns (mitigated by FFP)
Specialized Service Requirement

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $55.7 million to CH2M HILL CONSTRUCTORS, INC.. IGF::OT::IGF GCC-MAC NAVAL FOUNDRY REPAIR

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 Navy).

What is the total obligated amount?

The obligated amount is $55.7 million.

What is the period of performance?

Start: 2017-04-12. End: 2020-03-31.

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

CH2M HILL CONSTRUCTORS, INC. has a history of performing significant contracts with the Department of Defense and other federal agencies, often in large-scale engineering, construction, and environmental services. Their portfolio includes infrastructure development, facility maintenance, and program management for various military branches. This specific contract for naval foundry repair aligns with their capabilities in industrial construction. A deeper dive into their past performance ratings, any past performance issues, and the types of projects they have successfully completed for the DoD would provide further context on their reliability and expertise in handling complex defense-related construction.

How does the $55.6 million award compare to similar naval foundry repair contracts?

Direct comparison of this $55.6 million award to similar naval foundry repair contracts is difficult without access to a comprehensive database of specialized industrial repair projects. Foundry repair is a niche service, and the scale can vary significantly based on the size and complexity of the facility. However, for major industrial facility construction or repair projects within the Department of Defense, a contract in the tens of millions of dollars is substantial, indicating a significant scope of work. To benchmark effectively, one would need to identify contracts with similar PSS codes (Product and Service Codes) or NAICS codes (North American Industry Classification System) related to heavy industrial construction and repair, and then adjust for inflation and project complexity.

What were the primary risks associated with this contract, and how were they managed?

Key risks for this contract likely included potential cost overruns (mitigated by the firm fixed-price structure, shifting risk to the contractor), schedule delays due to unforeseen site conditions or material availability, and ensuring the specialized nature of foundry repair was met with adequate expertise. The firm fixed-price contract inherently manages cost risk for the government. Schedule risks would be managed through diligent project management, clear milestones, and contingency planning by the contractor. Ensuring technical expertise would be addressed during the source selection process, evaluating the bidders' technical proposals and past performance on similar projects. The government's role would involve robust oversight to monitor progress and address any emerging issues promptly.

How effective was the competition for this contract in achieving value for taxpayers?

The contract was awarded under full and open competition, which is a positive indicator for taxpayer value as it theoretically maximizes the pool of potential bidders and encourages competitive pricing. However, with only two bids received, the level of competition was moderate. While this is better than a sole-source award, a higher number of bidders often leads to more aggressive pricing and a clearer demonstration of market value. The effectiveness in achieving taxpayer value would ultimately depend on whether the winning bid was competitive relative to the market and the scope of work performed. Without knowing the government's independent cost estimate or the details of the losing bid, a definitive assessment of optimal value is challenging.

What is the historical spending pattern for naval foundry repair contracts?

Analyzing historical spending patterns for naval foundry repair requires access to detailed contract databases and filtering by specific service categories (e.g., PSS codes related to foundry maintenance and repair) and agencies (Department of the Navy). Generally, spending on such specialized infrastructure maintenance can be cyclical, influenced by the age of facilities, modernization programs, and overall defense budget allocations. Significant investments are often made during periods of fleet expansion or when aging infrastructure requires substantial upgrades. Without specific historical data for this contract category, it's difficult to establish a precise pattern, but it's reasonable to assume that such critical repairs represent a consistent, albeit potentially variable, component of the Navy's facilities maintenance budget.

What are the implications of the 'PA' (Public Sector) designation on this contract?

The 'PA' designation, often indicating 'Public Sector' or a specific type of government entity, typically signifies that the contract is subject to particular federal acquisition regulations and oversight mechanisms. For this contract, it likely means it falls under standard federal procurement rules, requiring adherence to competitive bidding processes, reporting requirements, and potentially specific labor standards or environmental regulations applicable to public sector projects. It reinforces that this is a government-funded contract managed through official channels, ensuring a degree of transparency and accountability inherent in public spending.

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

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N6247012R5010

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Jacobs Engineering Group Inc (UEI: 074103508)

Address: 9189 S JAMAICA ST, ENGLEWOOD, CO, 80112

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

Financial Breakdown

Contract Ceiling: $55,682,077

Exercised Options: $55,682,077

Current Obligation: $55,682,077

Subaward Activity

Number of Subawards: 98

Total Subaward Amount: $40,248,314

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N6247013D6019

IDV Type: IDC

Timeline