Department of Defense awards $18.3M contract for construction services, highlighting significant investment in infrastructure

Contract Overview

Contract Amount: $18,272,869 ($18.3M)

Contractor: SAN Juan Construction, Inc.

Awarding Agency: Department of Defense

Start Date: 2011-06-03

End Date: 2015-02-16

Contract Duration: 1,354 days

Daily Burn Rate: $13.5K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: LARGE MACC

Place of Performance

Location: SILVERDALE, KITSAP County, WASHINGTON, 98315

State: Washington Government Spending

Plain-Language Summary

Department of Defense obligated $18.3 million to SAN JUAN CONSTRUCTION, INC. for work described as: LARGE MACC Key points: 1. The contract value represents a substantial commitment to infrastructure development within the Department of Defense. 2. Competition dynamics suggest a robust market for commercial and institutional building construction services. 3. The duration of the contract indicates a long-term need for these services. 4. Fixed-price contract type aims to control costs and provide budget certainty. 5. The award was made under full and open competition, signaling a broad search for qualified contractors.

Value Assessment

Rating: good

The contract value of $18.3 million for construction services appears reasonable given the scope and duration. Benchmarking against similar large-scale construction projects within the Department of Defense would provide further context. The firm fixed-price structure suggests an effort to manage cost overruns, which is a positive indicator for value.

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. The presence of six bidders suggests a healthy level of competition for this type of service. This broad competition is generally expected to drive more competitive pricing and ensure the government receives the best value.

Taxpayer Impact: The extensive competition for this contract is beneficial for taxpayers as it likely resulted in a more favorable price than a sole-source or limited competition award.

Public Impact

The primary beneficiaries are the Department of Defense and its personnel, who will receive improved facilities. Services delivered include commercial and institutional building construction, essential for operational readiness and support. The geographic impact is likely concentrated in the region where the construction takes place, potentially boosting local economies. Workforce implications include job creation for construction workers, engineers, and project managers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if initial estimates were inaccurate, despite fixed-price structure.
Delays in construction timelines could impact operational readiness.
Quality control issues could arise in large-scale construction projects.

Positive Signals

Firm fixed-price contract provides cost certainty.
Full and open competition suggests a thorough vetting of potential contractors.
Award to an established contractor with experience in construction.

Sector Analysis

The commercial and institutional building construction sector is a significant part of the broader construction industry. This contract falls within a segment that supports government infrastructure needs. Comparable spending benchmarks for similar MACC (Multi-Agency Contract) or large construction projects within federal agencies can range from millions to billions of dollars, depending on the scale and complexity.

Small Business Impact

The contract details indicate that small business participation was not a primary set-aside criterion for this specific award (ss: false, sb: false). However, the prime contractor, San Juan Construction, Inc., may engage small businesses as subcontractors to fulfill portions of the work, contributing to the small business ecosystem. Further analysis of subcontracting plans would be needed to fully assess the impact.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant Department of the Navy program office. Accountability measures are embedded in the firm fixed-price contract terms and performance requirements. Transparency is facilitated through contract award databases, though detailed project-specific oversight reports may not always be publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Department of Defense Construction Contracts
General Services Administration (GSA) Schedules for Construction
Military Construction Projects
Federal Buildings Fund

Risk Flags

Long contract duration increases risk of unforeseen cost impacts.
Potential for quality control issues in large-scale construction.
Contractor financial risk under firm fixed-price terms.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.3 million to SAN JUAN CONSTRUCTION, INC.. LARGE MACC

Who is the contractor on this award?

The obligated recipient is SAN JUAN CONSTRUCTION, 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 $18.3 million.

What is the period of performance?

Start: 2011-06-03. End: 2015-02-16.

What is the track record of San Juan Construction, Inc. with federal contracts, particularly within the Department of Defense?

San Juan Construction, Inc. has a history of federal contract awards, primarily with the Department of Defense. Analysis of their past performance indicates experience in various construction projects, including infrastructure and facility development. While specific details on past performance metrics like on-time delivery or budget adherence for all contracts are not fully detailed here, the award of this significant $18.3 million contract suggests a satisfactory performance history and capability to handle large-scale projects. Further investigation into their contract close-out data and any past performance reviews would provide a more comprehensive understanding of their reliability and quality of work.

How does the awarded amount of $18.3 million compare to similar construction contracts awarded by the Department of the Navy in the past five years?

The $18.3 million award is a substantial sum, placing it in the mid-to-large range for individual construction contracts within the Department of the Navy. Similar projects, such as barracks construction, facility upgrades, or specialized infrastructure development, have seen awards ranging from $5 million to over $50 million. The specific nature of 'Commercial and Institutional Building Construction' suggests a broad category, and without more granular detail on the project's scope (e.g., square footage, specific building types, complexity of systems), a precise comparison is challenging. However, the value is consistent with significant infrastructure investments required to maintain and modernize naval facilities.

What are the primary risk indicators associated with a firm fixed-price contract of this magnitude and duration?

The primary risk indicator for a firm fixed-price contract of this magnitude ($18.3 million) and duration (1354 days) is the potential for the contractor to face financial strain if unforeseen issues lead to significantly higher costs than anticipated. While the fixed price protects the government from cost increases, it places the risk on the contractor. This could incentivize cost-cutting measures that might compromise quality or lead to disputes if the contractor believes the scope has expanded beyond the original agreement. Additionally, the long duration increases the risk of material price fluctuations or labor availability issues impacting the contractor's profitability and potentially leading to delays or performance issues.

How effective is 'full and open competition after exclusion of sources' in ensuring competitive pricing for construction services?

Awarding contracts under 'full and open competition after exclusion of sources' is generally an effective method for ensuring competitive pricing, especially for complex services like construction. This approach allows the government to solicit proposals from all responsible sources but may exclude specific sources based on defined criteria (e.g., past performance, technical capabilities). The fact that six bidders participated in this instance suggests that the exclusion criteria did not unduly limit competition. A higher number of bidders typically leads to more competitive proposals and better price discovery. However, the effectiveness also depends on the clarity of the solicitation requirements and the evaluation criteria used to select the winning bid.

What are the historical spending patterns for commercial and institutional building construction within the Department of the Navy?

Historical spending patterns for commercial and institutional building construction within the Department of the Navy are substantial, reflecting the ongoing need to maintain, upgrade, and expand its vast network of facilities. Annual spending in this category can fluctuate based on military readiness requirements, infrastructure modernization initiatives, and budget allocations. Over the past decade, the Navy has consistently awarded billions of dollars in construction contracts annually, covering a wide range of projects from barracks and training facilities to administrative buildings and specialized operational structures. This $18.3 million award represents a typical investment within this broader spending trend.

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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N4425509R4013

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 301 N CASCADE AVE, MONTROSE, CO, 81401

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

Financial Breakdown

Contract Ceiling: $18,272,869

Exercised Options: $18,272,869

Current Obligation: $18,272,869

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N4425510D5006

IDV Type: IDC

Timeline