Naval Station Norfolk Renovation Project Exceeds Budget by $19.5M, Awarded to DPR Hardin Construction

Contract Overview

Contract Amount: $21,047,298 ($21.0M)

Contractor: DPR Hardin Construction- WGI Joint Venture

Awarding Agency: Department of Defense

Start Date: 2013-09-20

End Date: 2016-08-31

Contract Duration: 1,076 days

Daily Burn Rate: $19.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF DB RM09-2817 RENOVATION OF BQ FOR BLDG KL, KM AND KQ, NAVAL STATION NORFOLK, VIRGINIA

Place of Performance

Location: NORFOLK, NORFOLK CITY County, VIRGINIA, 23511

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $21.0 million to DPR HARDIN CONSTRUCTION- WGI JOINT VENTURE for work described as: IGF::OT::IGF DB RM09-2817 RENOVATION OF BQ FOR BLDG KL, KM AND KQ, NAVAL STATION NORFOLK, VIRGINIA Key points: 1. The project involved renovations to multiple buildings at Naval Station Norfolk. 2. Awarded via full and open competition, indicating a competitive bidding process. 3. The final cost significantly exceeded the initial estimated cost. 4. This project falls within the Commercial and Institutional Building Construction sector.

Value Assessment

Rating: concerning

The final award amount of $21,047,298 was significantly higher than the initial estimate of $1,956,100, representing a substantial cost overrun. This suggests potential issues with initial cost estimation or scope creep during the project.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through full and open competition, which typically promotes competitive pricing. However, the significant cost overrun raises questions about the effectiveness of the price discovery mechanism in this instance.

Taxpayer Impact: Taxpayers bore the brunt of the substantial cost overrun, paying nearly $20 million more than initially estimated for the building renovations.

Public Impact

Military readiness and operational efficiency may be impacted by delays or issues related to building infrastructure. Significant cost overruns on defense projects can divert funds from other critical military needs. Transparency in government contracting is crucial, especially when projects experience such large budget increases.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Significant Cost Overrun
Potential Inaccurate Initial Estimate
Long Project Duration

Positive Signals

Awarded via Full and Open Competition

Sector Analysis

This project falls under Commercial and Institutional Building Construction, a sector that can see significant variation in project costs due to complexity and material fluctuations. Benchmarks for similar renovation projects would be needed for a precise comparison, but a nearly tenfold increase over estimate is unusual.

Small Business Impact

The data does not indicate whether small businesses were involved as subcontractors or prime contractors in this project. Further analysis would be needed to determine the extent of small business participation.

Oversight & Accountability

The significant cost overrun warrants further investigation by oversight bodies to understand the root causes and identify any potential mismanagement or inefficiencies in the contracting and execution process.

Related Government Programs

Commercial and Institutional Building Construction
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Significant Cost Overrun
Potential Inaccurate Initial Estimate
Extended Project Duration
Lack of Small Business Participation Data

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.0 million to DPR HARDIN CONSTRUCTION- WGI JOINT VENTURE. IGF::OT::IGF DB RM09-2817 RENOVATION OF BQ FOR BLDG KL, KM AND KQ, NAVAL STATION NORFOLK, VIRGINIA

Who is the contractor on this award?

The obligated recipient is DPR HARDIN CONSTRUCTION- WGI JOINT VENTURE.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $21.0 million.

What is the period of performance?

Start: 2013-09-20. End: 2016-08-31.

What factors contributed to the nearly tenfold increase in project cost from the initial estimate to the final award?

The substantial cost increase could be attributed to several factors, including inaccurate initial cost estimations, unforeseen site conditions discovered during renovation, significant scope creep requested by the Navy, or substantial increases in material and labor costs over the project's extended duration. A detailed review of project documentation and change orders would be necessary to pinpoint the exact causes.

How did the full and open competition process fail to prevent such a large cost overrun?

Full and open competition primarily ensures a competitive bidding environment to achieve a fair price for the defined scope of work. It does not inherently prevent cost overruns if the initial scope is poorly defined, if unforeseen issues arise, or if the government later approves significant changes. The competition likely secured a price for the initial bid, but subsequent events led to the increased final cost.

What is the long-term impact of such cost overruns on the Department of the Navy's budget and future procurement strategies?

Large cost overruns can strain the Department of the Navy's budget, potentially requiring reallocation of funds from other critical areas or necessitating budget adjustments. This specific instance may prompt a review of procurement processes, particularly for large-scale construction and renovation projects, to improve initial cost estimation accuracy and better manage scope changes to mitigate future overruns.

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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N4008510R5306

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3301 WINDY RIDGE PKWY STE 400, ATLANTA, GA, 30339

Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $21,047,298

Exercised Options: $21,047,298

Current Obligation: $21,047,298

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N4008510D5333

IDV Type: IDC

Timeline