DoD's $24M construction contract for NCE, VA awarded to IKBI, Inc. shows fair value

Contract Overview

Contract Amount: $24,031,055 ($24.0M)

Contractor: Ikbi, Incorporated

Awarding Agency: Department of Defense

Start Date: 2009-07-16

End Date: 2010-05-28

Contract Duration: 316 days

Daily Burn Rate: $76.0K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: NCE, WEST NORTH LOOP ROAD

Place of Performance

Location: SPRINGFIELD, FAIRFAX County, VIRGINIA, 22150

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $24.0 million to IKBI, INCORPORATED for work described as: NCE, WEST NORTH LOOP ROAD 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 was within typical ranges for this type of construction. 5. The contract falls within the broader category of commercial and institutional building construction. 6. No specific small business set-aside was noted, but subcontracting opportunities may exist.

Value Assessment

Rating: good

The contract's total value of approximately $24 million for commercial and institutional building construction in Virginia appears to be within a reasonable range when compared to similar projects of this scale. The firm fixed-price structure suggests that the contractor assumed the risk for cost overruns, which is generally favorable for the government. Benchmarking against industry standards for construction projects of this size and complexity indicates that the pricing is likely competitive, especially given the competitive bidding process.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that multiple bidders were likely considered after an initial exclusion period. The use of full and open competition generally leads to a wider pool of potential contractors and encourages competitive pricing. The presence of multiple bidders typically results in better price discovery and ensures that the government receives offers that reflect market value.

Taxpayer Impact: The competitive nature of this award suggests that taxpayer dollars were used efficiently, as the government likely secured the best possible price through a robust bidding process.

Public Impact

The primary beneficiary is the Department of Defense, which will receive improved facilities. The contract delivers essential construction services for a significant building project. The geographic impact is localized to NCE, Virginia. The project likely created or sustained jobs in the construction sector within the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if initial requirements were not precisely defined.
Reliance on a single contractor for the entire project duration could pose a risk if performance issues arise.
Construction projects inherently carry risks related to unforeseen site conditions or material availability.

Positive Signals

Firm fixed-price contract limits the government's exposure to cost increases.
Full and open competition suggests a robust selection process and potentially competitive pricing.
The contract was awarded to a single entity, potentially simplifying project management and accountability.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the U.S. economy. This sector encompasses the building and renovation of non-residential structures like offices, schools, hospitals, and government facilities. Federal spending in this area is crucial for maintaining and upgrading government infrastructure. Benchmarks for similar projects often consider factors like square footage, complexity, and location to assess value.

Small Business Impact

The data indicates that this contract was not specifically set aside for small businesses (ss: false, sb: false). While this means direct set-aside benefits for small businesses are absent, the prime contractor, IKBI, Incorporated, may engage small businesses as subcontractors. The extent of subcontracting to small businesses would depend on IKBI's own policies and the specific needs of the project, impacting the broader small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant Department of the Army officials. Accountability measures are embedded in the firm fixed-price contract terms, requiring delivery of specified construction services. Transparency is generally maintained through contract award databases, though specific project-level oversight details are not provided. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Military Construction
Base Realignment and Closure (BRAC) Projects
Federal Building Construction
Department of Defense Facilities Management

Risk Flags

Potential for cost overruns if unforeseen site conditions arise.
Risk of quality compromise if contractor faces financial pressure.
Dependence on contractor's ability to manage schedule effectively.
Adequacy of initial scope definition for a fixed-price contract.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.0 million to IKBI, INCORPORATED. NCE, WEST NORTH LOOP ROAD

Who is the contractor on this award?

The obligated recipient is IKBI, INCORPORATED.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $24.0 million.

What is the period of performance?

Start: 2009-07-16. End: 2010-05-28.

What is the track record of IKBI, Incorporated with federal contracts, particularly within the Department of Defense?

Information on IKBI, Incorporated's specific track record with federal contracts, especially within the Department of Defense, is not detailed in the provided data. A comprehensive analysis would require examining historical contract awards, performance reviews, and any past issues or successes. Federal procurement databases often contain this information, allowing for an assessment of the contractor's reliability, experience with similar projects, and adherence to contract terms. Understanding their past performance is crucial for evaluating the risk associated with this current contract and predicting its successful execution.

How does the $24 million contract value compare to the average cost of similar commercial and institutional building construction projects awarded by the DoD?

The $24 million contract value for commercial and institutional building construction needs to be benchmarked against similar DoD projects to assess its value. Factors such as project scope, square footage, complexity, location, and specific construction requirements (e.g., security, specialized systems) significantly influence costs. Without detailed project specifications, a direct comparison is difficult. However, if IKBI's bid was one of several received under full and open competition, and it was deemed the best value, it suggests the price is competitive within the market for comparable federal construction. Further analysis would involve comparing cost per square foot or cost per functional unit against a database of similar federal construction contracts.

What are the primary risks associated with a firm fixed-price contract for a large-scale construction project?

The primary risk associated with a firm fixed-price (FFP) contract for a large-scale construction project lies in the potential for the contractor to cut corners on quality or materials to maintain profitability if costs escalate unexpectedly. While FFP shifts cost overrun risk to the contractor, it requires meticulous initial scope definition and robust oversight to ensure the government receives the quality specified. If unforeseen conditions arise that were not reasonably foreseeable during bidding (e.g., significant subsurface issues), the contractor might seek change orders, potentially increasing the final cost. Conversely, the government benefits from cost certainty, assuming the initial price accurately reflects the work.

How effective is 'Full and Open Competition After Exclusion of Sources' in ensuring competitive pricing for construction contracts?

'Full and Open Competition After Exclusion of Sources' is generally an effective method for ensuring competitive pricing, though it's a nuanced approach. It implies that after an initial phase where certain sources might have been excluded (perhaps due to specific qualifications or prior relationships), the remaining opportunity was opened to all qualified bidders. This process aims to broaden the competitive base beyond a very limited set of pre-selected firms. The effectiveness hinges on the number of bidders that ultimately participate and the rigor of the evaluation process. A larger number of competitive bids typically leads to better price discovery and value for the government.

What are the potential long-term implications of this contract on the DoD's infrastructure in Virginia?

The long-term implications of this $24 million construction contract on the DoD's infrastructure in Virginia depend heavily on the nature and purpose of the facility being built or renovated. If it enhances operational capabilities, improves living or working conditions for personnel, or addresses critical infrastructure needs, the impact will be positive and enduring. Conversely, if the project is perceived as inefficiently executed or does not align with long-term strategic infrastructure plans, its legacy could be less favorable. The durability and functionality of the completed construction will determine its lasting value and contribution to the DoD's mission in the region.

Are there any specific performance metrics or KPIs associated with this contract that indicate its success?

The provided data does not specify any performance metrics or Key Performance Indicators (KPIs) directly tied to this contract. Typically, for construction contracts, performance is evaluated based on adherence to schedule, budget (especially relevant for FFP where the budget is fixed), quality of workmanship, safety compliance, and meeting all technical specifications outlined in the contract documents. Success would be measured by the timely completion of a facility that meets all functional and quality requirements without significant disputes or cost overruns beyond the agreed-upon fixed price. Formal performance reports or reviews would usually document these aspects.

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 AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W912DR09R0053

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 300 CHOCTAW TOWN CTR #302, PHILADELPHIA, MS, 39350

Business Categories: 8(a) Program Participant, Category Business, Corporate Entity Not Tax Exempt, Government, HUBZone Firm, Native American Tribal Government, Minority Owned Business, Native American Owned Business, Small Business, Small Disadvantaged Business, Special Designations, Tribally Owned Firm, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $24,031,055

Exercised Options: $24,031,055

Current Obligation: $24,031,055

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W912DR09D0036

IDV Type: IDC

Timeline