DoD awards $19.6M for Ft. Drum MEB buildings, raising questions on value and competition

Contract Overview

Contract Amount: $19,602,997 ($19.6M)

Contractor: Vetco Contracting Services, LLC

Awarding Agency: Department of Defense

Start Date: 2011-08-15

End Date: 2014-07-23

Contract Duration: 1,073 days

Daily Burn Rate: $18.3K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: CONSTRUCTION OF THE MANEUVER ENHANCED BRIGADE (MEB) BRIGADE AND BATTALION HEADQUARTERS BUILDINGS AT FT. DRUM, NY

Place of Performance

Location: FORT DRUM, JEFFERSON County, NEW YORK, 13602

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $19.6 million to VETCO CONTRACTING SERVICES, LLC for work described as: CONSTRUCTION OF THE MANEUVER ENHANCED BRIGADE (MEB) BRIGADE AND BATTALION HEADQUARTERS BUILDINGS AT FT. DRUM, NY Key points: 1. The contract's value appears high relative to the scope of constructing two headquarters buildings. 2. Limited competition may have impacted pricing and overall value for taxpayer dollars. 3. The fixed-price contract type shifts risk to the contractor, but oversight is crucial. 4. Performance duration was extended, potentially impacting cost-effectiveness. 5. This contract falls within the broader industrial building construction sector for the Army. 6. The exclusion of sources in the competition phase warrants further scrutiny.

Value Assessment

Rating: questionable

Benchmarking construction costs for military headquarters buildings is complex due to unique specifications and security requirements. However, the per-square-foot cost for these two buildings, given the total award of approximately $19.6 million, appears to be on the higher end when compared to similar non-military industrial building construction projects. The firm-fixed-price structure is standard, but the extended duration and the nature of the competition raise concerns about whether the government secured the best possible value. Further analysis of the specific building requirements and market rates for similar construction in upstate New York would be needed for a definitive value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating that while a competitive process was intended, certain sources were excluded. This suggests a limited pool of bidders, potentially reducing the competitive pressure on pricing. With only two bidders identified, the level of competition was inherently constrained. This limited competition raises concerns about whether the government received the most favorable pricing and terms achievable in a broader, more open market.

Taxpayer Impact: Limited competition can lead to higher prices for taxpayers as fewer companies vie for the contract, potentially reducing the incentive for aggressive bidding and cost-saving measures.

Public Impact

The primary beneficiaries are the U.S. Army units stationed at Fort Drum, New York, who will gain modern headquarters facilities. The contract delivers essential infrastructure for the Maneuver Enhanced Brigade (MEB) at Fort Drum. The geographic impact is localized to Fort Drum, New York. The contract supports construction jobs in the New York region during its performance period.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may have resulted in suboptimal pricing.
Extended contract duration could indicate unforeseen challenges or scope creep, impacting cost-effectiveness.
The 'exclusion of sources' clause requires detailed understanding to ensure fairness and maximize competition.
Lack of small business set-aside may limit opportunities for smaller firms in this specific contract.

Positive Signals

Firm-fixed-price contract shifts cost overrun risk to the contractor.
Construction of critical infrastructure for military readiness.
Awarded to Vetco Contracting Services, LLC, a specific contractor.

Sector Analysis

This contract falls within the Industrial Building Construction sector, a significant segment of the broader construction industry. The Department of Defense is a major client for construction services, frequently awarding contracts for barracks, training facilities, and administrative buildings. Market size for federal construction is substantial, with annual spending often in the tens of billions. This specific contract for MEB headquarters buildings is a component of the Army's infrastructure modernization efforts, aiming to provide updated facilities for evolving military structures.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of subcontracting requirements specifically targeting small businesses. This means that opportunities for small businesses to participate in this particular contract may have been limited, potentially impacting the broader small business ecosystem involved in federal construction projects. Further investigation into subcontracting plans would be necessary to fully assess the impact.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and project management offices. Accountability measures are inherent in the firm-fixed-price contract type, which obligates the contractor to deliver the specified buildings within the agreed-upon price. Transparency is generally maintained through contract award databases, but detailed project progress and oversight reports may not be publicly accessible. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Military Construction, Army
Facilities and Infrastructure
Department of Defense Construction Contracts
Industrial Building Construction Services

Risk Flags

Limited competition
Extended performance duration
Exclusion of sources in competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.6 million to VETCO CONTRACTING SERVICES, LLC. CONSTRUCTION OF THE MANEUVER ENHANCED BRIGADE (MEB) BRIGADE AND BATTALION HEADQUARTERS BUILDINGS AT FT. DRUM, NY

Who is the contractor on this award?

The obligated recipient is VETCO CONTRACTING SERVICES, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $19.6 million.

What is the period of performance?

Start: 2011-08-15. End: 2014-07-23.

What was the specific rationale for excluding certain sources in the competition phase?

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES.' This designation implies that while the contract was intended to be competed broadly, specific sources were deliberately excluded from the bidding process. The exact reasons for such exclusions are not detailed in the provided data but could stem from various factors, including specific technical requirements, past performance issues with certain contractors, or national security considerations. Understanding the precise criteria for exclusion is crucial for assessing whether the competition was appropriately limited and if it potentially hindered the government's ability to secure the best value. Without this specific rationale, it remains a point of concern regarding the fairness and competitiveness of the procurement.

How does the final award amount compare to the initial estimated cost or baseline budget for these buildings?

The provided data indicates a final award amount of $19,602,996.77. However, there is no information available regarding the initial estimated cost or baseline budget for the construction of the MEB Brigade and Battalion Headquarters buildings at Fort Drum, NY. Without this baseline, it is impossible to determine if the final award represented an increase, decrease, or was in line with initial projections. This comparison is essential for evaluating the contractor's bidding accuracy and the government's initial cost-estimation capabilities. Further analysis would require access to the contract's pre-award estimates and budget documentation.

What factors contributed to the contract's duration of 1073 days (approximately 3 years)?

The contract duration of 1073 days (approximately 3 years) for the construction of two headquarters buildings suggests a significant project scope or potential complexities. Factors contributing to this extended timeline could include the detailed design and engineering requirements, site preparation challenges at Fort Drum, the phased construction approach, or the integration of specialized systems within the buildings. Additionally, unforeseen circumstances such as weather delays, material availability issues, or changes in military operational requirements could have extended the performance period. The firm-fixed-price nature of the contract implies that these duration risks were primarily borne by the contractor, Vetco Contracting Services, LLC, unless specific contract clauses allowed for adjustments.

What is the track record of Vetco Contracting Services, LLC with federal construction contracts, particularly with the Department of Defense?

Vetco Contracting Services, LLC was awarded this $19.6 million contract for constructing MEB headquarters buildings at Fort Drum, NY. To assess their track record, one would need to examine their history of federal contract awards, focusing on projects of similar scale and complexity, particularly those with the Department of Defense and the Army. Key performance indicators to review would include on-time delivery, adherence to budget (especially for fixed-price contracts), quality of work, and any past disputes or contract terminations. A comprehensive review of their contract history in public databases like FPDS or SAM.gov would provide insights into their reliability and expertise in executing large-scale construction projects for the government.

Are there any comparable construction projects at other military installations that could serve as a benchmark for this contract's cost-effectiveness?

Identifying truly comparable construction projects at other military installations is challenging due to variations in building size, specific functional requirements (e.g., security, technology integration), geographic location (affecting labor and material costs), and the specific era of construction. However, general benchmarks for military administrative or headquarters buildings can be established. If similar MEB or equivalent headquarters facilities were constructed at other bases around the same time, comparing their total cost, cost per square foot, and duration could provide valuable insights. Without specific data on such comparable projects, assessing the cost-effectiveness of the $19.6 million award for these two buildings remains difficult, though the initial assessment suggests it may be on the higher side.

What are the potential risks associated with a firm-fixed-price contract for a project of this nature and duration?

While a firm-fixed-price (FFP) contract is designed to provide cost certainty and shift risk to the contractor, significant risks can still emerge, especially for a multi-year construction project. For Vetco Contracting Services, LLC, risks include underestimating material costs or labor shortages, encountering unforeseen site conditions (e.g., environmental issues, subsurface problems), or facing delays due to factors beyond their control (e.g., permitting, weather). If the contractor absorbs these costs, it could impact their financial stability or lead to quality compromises to maintain profitability. Conversely, if the contractor successfully manages these risks, the government benefits from price predictability. However, the initial limited competition and extended duration might suggest that the contractor's bid adequately factored in potential risks, potentially leading to a higher initial price.

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Industrial 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: W912DS09R0012

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 26460 NYS ROUTE 37, WATERTOWN, NY, 13601

Business Categories: Category Business, Corporate Entity Not Tax Exempt, HUBZone Firm, Labor Surplus Area Firm, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $19,602,997

Exercised Options: $19,602,997

Current Obligation: $19,602,997

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W912DS09D0007

IDV Type: IDC

Timeline