DoD's $23.2M renovation contract for buildings 440 & 442 awarded to Cooperativa Muratori Riuniti

Contract Overview

Contract Amount: $23,199,173 ($23.2M)

Contractor: Cooperativa Muratori Riuniti SOC. Coop. ARL

Awarding Agency: Department of Defense

Start Date: 2008-09-25

End Date: 2013-12-15

Contract Duration: 1,907 days

Daily Burn Rate: $12.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST SHARING

Sector: Construction

Official Description: RENOVATIONS TO BLDGS 440&442

Plain-Language Summary

Department of Defense obligated $23.2 million to COOPERATIVA MURATORI RIUNITI SOC. COOP. ARL for work described as: RENOVATIONS TO BLDGS 440&442 Key points: 1. The contract value represents a significant investment in facility upgrades for the Department of Defense. 2. The award was made under full and open competition, suggesting a competitive bidding process. 3. The duration of the contract (1907 days) indicates a long-term project with potential for scope changes. 4. The contract type is Cost Sharing, which implies shared financial risk and reward between the government and contractor. 5. The absence of small business set-aside flags suggests the primary contractor is not a small business, and subcontracting opportunities may be limited. 6. The contract was awarded as a delivery order, indicating it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract.

Value Assessment

Rating: fair

Benchmarking the value of this specific renovation contract is challenging without more detailed project scope and comparable construction costs in the specific geographic region. The Cost Sharing (PT) contract type introduces complexity in assessing value-for-money, as the final cost is contingent on actual expenses incurred and shared according to the agreement. However, the total award of approximately $23.2 million for renovations to two buildings suggests a substantial project. Further analysis would require detailed breakdowns of the renovation scope and comparison to industry standards for similar building types and construction complexities.

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 presence of two bids (no: 2) suggests a moderate level of competition for this specific delivery order. While competition is generally positive for price discovery, a low number of bidders could indicate market limitations, specialized requirements, or potential barriers to entry for other firms. The government's ability to secure favorable pricing depends on the competitiveness of these two offers.

Taxpayer Impact: Full and open competition is the preferred method for maximizing taxpayer value by encouraging multiple bids and driving down prices. However, with only two bidders, taxpayers may not have benefited from the full potential of a highly competitive market.

Public Impact

The primary beneficiaries are the Department of Defense personnel and operations that will utilize the renovated buildings. The services delivered include comprehensive renovations to Buildings 440 and 442, likely improving functionality, safety, and efficiency. The geographic impact is localized to the specific military installation where Buildings 440 and 442 are located. Workforce implications include employment opportunities for construction workers, project managers, and related trades during the renovation period.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost sharing contracts can lead to cost overruns if not managed meticulously, potentially increasing the final price for the government.
A limited number of bidders (2) may indicate insufficient market research or potential barriers to entry, impacting competitive pricing.
The long contract duration (1907 days) increases the risk of scope creep and potential delays, impacting project timelines and costs.
The specific nature of 'Industrial Building Construction' may require specialized expertise, and the contractor's track record in this niche is crucial.

Positive Signals

Awarding under 'Full and Open Competition' is a positive signal for market engagement and potential for competitive pricing.
The contract is a delivery order, suggesting it is part of a potentially larger, pre-competed IDIQ vehicle, which can streamline procurement.
The Cost Sharing (PT) contract type, while complex, can align contractor incentives with government objectives when structured appropriately.

Sector Analysis

This contract falls within the Industrial Building Construction sector, a segment of the broader construction industry focused on facilities for manufacturing, processing, and industrial operations. The market for such specialized construction services can be influenced by factors like government infrastructure spending, industrial output, and specific technological requirements. Comparable spending benchmarks would typically involve analyzing the cost per square foot or per project for similar industrial facility renovations within the Department of Defense or other federal agencies, adjusted for location and scope.

Small Business Impact

The contract details indicate that small business participation was not a primary focus, as there is no indication of a small business set-aside (ss: false, sb: false). This suggests the contract was awarded based on best value or lowest price technically acceptable to a larger prime contractor. Subcontracting opportunities for small businesses may exist if the prime contractor, Cooperativa Muratori Riuniti, chooses to engage them for specific trades or services. However, without explicit subcontracting plans or set-asides, the direct impact on the small business ecosystem for this specific contract is likely limited.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and project management offices. Given the Cost Sharing (PT) nature, rigorous financial oversight is essential to monitor expenditures and ensure adherence to the cost-sharing agreement. Transparency would be facilitated through contract reporting mechanisms and potentially through the Federal Procurement Data System (FPDS). Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arise during the contract's performance.

Related Government Programs

Department of Defense Facilities Maintenance and Repair
Military Construction Projects
Industrial Facility Upgrades
Federal Building Renovations
Cost-Sharing Contracts

Risk Flags

Potential for cost overruns due to Cost Sharing contract type.
Limited competition may impact price competitiveness.
Long contract duration increases risk of delays and scope creep.
Need for robust oversight of shared costs.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $23.2 million to COOPERATIVA MURATORI RIUNITI SOC. COOP. ARL. RENOVATIONS TO BLDGS 440&442

Who is the contractor on this award?

The obligated recipient is COOPERATIVA MURATORI RIUNITI SOC. COOP. ARL.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $23.2 million.

What is the period of performance?

Start: 2008-09-25. End: 2013-12-15.

What is the specific scope of work for the renovations to Buildings 440 & 442?

The provided data indicates the contract is for 'RENOVATIONS TO BLDGS 440&442' and falls under the 'Industrial Building Construction' (nd) Product Service Code (PSC). However, the specific details of the renovation scope, such as the extent of structural work, system upgrades (HVAC, electrical, plumbing), interior finishing, or specialized industrial equipment installation, are not detailed in the summary data. This level of detail is typically found in the Statement of Work (SOW) or Performance Work Statement (PWS) attached to the contract award. Understanding the precise scope is critical for evaluating the value, risks, and appropriateness of the contract's cost and duration.

How does the $23.2 million cost compare to similar industrial building renovations within the DoD?

Directly comparing the $23.2 million cost without a detailed scope of work and location-specific cost indices is difficult. However, for context, major industrial facility renovations within the DoD can range from several million to tens or even hundreds of millions of dollars, depending on size, complexity, and the nature of the industrial processes housed within. Factors like the age of the buildings, the required upgrades to meet current safety and environmental standards, and the integration of new technologies significantly influence costs. A more precise benchmark would require analyzing cost-per-square-foot data for similar DoD industrial building projects completed around the same time, adjusted for regional construction cost variations and the specific types of renovations undertaken.

What are the key risks associated with a Cost Sharing (PT) contract for construction?

Cost Sharing (PT) contracts carry inherent risks for both the government and the contractor. For the government, the primary risk is that the contractor may have less incentive to control costs compared to a fixed-price contract, potentially leading to higher final expenditures if not managed diligently. There's also a risk of disputes over allowable costs and the allocation of shared expenses. For the contractor, the risk lies in the potential for costs to exceed the government's share, leaving them to absorb a larger portion of the financial burden. Effective oversight, clear definitions of allowable costs, and robust auditing are crucial to mitigate these risks and ensure fair value.

What is the significance of this contract being a Delivery Order (AW)?

The 'DELIVERY ORDER' (aw) designation signifies that this contract is a task order issued under a larger, pre-existing Indefinite-Delivery/Indefinite-Quantity (IDIQ) contract. IDIQ contracts establish terms and conditions for services or supplies over a period, allowing agencies to issue specific orders (delivery or task orders) as needed. This approach can streamline the procurement process for recurring needs and allows for competition among pre-qualified contractors if the IDIQ was competed. The significance here is that the foundational contract vehicle was likely competed previously, and this award represents a specific call against that vehicle for the renovation of Buildings 440 & 442.

What does the limited competition (2 bidders) imply for the government and taxpayers?

Having only two bidders for this contract suggests that the market for this specific type of industrial building renovation, or the requirements of the pre-competed IDIQ vehicle, may be limited. While 'Full and Open Competition' was utilized, the low number of bids could mean that fewer companies were capable, interested, or able to bid. This can potentially reduce the government's leverage in price negotiations and may result in a higher price than if there had been more competition. Taxpayers might be paying a premium due to this limited market response, underscoring the importance of market research prior to establishing IDIQ vehicles and issuing orders.

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Industrial Building Construction

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: COST SHARING (T)

Evaluated Preference: NONE

Contractor Details

Address: VIA MARIA MARGOTTI 14 14/A, ARGENTA

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $23,250,978

Exercised Options: $23,199,173

Current Obligation: $23,199,173

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N3319107D0210

IDV Type: IDC

Timeline