Krempp Lumber Company awarded $13.5M for industrial building construction, with 11 bids received

Contract Overview

Contract Amount: $13,524,423 ($13.5M)

Contractor: THE Krempp Lumber Company

Awarding Agency: Department of Defense

Start Date: 2008-09-23

End Date: 2010-08-31

Contract Duration: 707 days

Daily Burn Rate: $19.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 11

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: TRI-STATE MACC OPTION YEAR 1

Place of Performance

Location: CRANE, MARTIN County, INDIANA, 47522

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $13.5 million to THE KREMPP LUMBER COMPANY for work described as: TRI-STATE MACC OPTION YEAR 1 Key points: 1. Contract value appears reasonable given the scope of industrial building construction. 2. Strong competition with 11 bidders suggests a healthy market for these services. 3. Fixed-price contract type mitigates cost overrun risks for the government. 4. Contract duration of 707 days indicates a substantial construction project. 5. Geographic focus on Indiana may indicate regional specialization or need. 6. No small business set-aside was applied, potentially limiting smaller firm participation.

Value Assessment

Rating: good

The contract value of $13.5 million for industrial building construction over approximately two years is within a reasonable range for such projects. Benchmarking against similar Department of the Navy construction contracts of comparable size and complexity would provide a more precise value-for-money assessment. The firm fixed-price structure generally leads to better cost control compared to cost-plus contracts, suggesting good value if the scope is met.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with 11 bids received. This high level of competition is a positive indicator, suggesting that the market has sufficient capacity and interest in providing these services. A robust bidding process typically drives prices down and encourages innovation, leading to better outcomes for the government.

Taxpayer Impact: The strong competition ensures that taxpayer dollars are likely being used efficiently, as multiple firms vied to offer the best price and terms for the construction services.

Public Impact

The Department of the Navy is the primary beneficiary, receiving necessary industrial building infrastructure. Services delivered include the construction of industrial facilities, supporting military operations. The geographic impact is concentrated in Indiana, potentially benefiting the local economy through construction jobs. Workforce implications include employment for construction laborers, tradespeople, and project management personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the fixed-price contract does not adequately account for all contingencies.
Risk of delays in construction impacting operational readiness for the Navy.
Dependence on a single contractor for the duration of the project.
Limited visibility into the specific construction methods and materials used without further oversight.

Positive Signals

High competition suggests a robust market and potential for quality service.
Firm fixed-price contract provides cost certainty for the government.
Clear delivery order structure for a defined project scope.
Long contract duration allows for thorough project execution.

Sector Analysis

This contract falls within the Industrial Building Construction sector, a critical component of the broader construction industry. This sector involves the building of facilities used for manufacturing, warehousing, and other industrial processes. Spending in this area is often driven by government infrastructure needs, particularly for defense and logistics. Comparable spending benchmarks would typically be found within government construction spending reports and industry analyses of large-scale building projects.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, and there is no explicit mention of small business subcontracting goals. This suggests that larger firms likely dominated the bidding process. While full and open competition can be efficient, it may limit opportunities for small businesses to participate in significant federal construction projects, potentially impacting the broader small business ecosystem if this is a common practice.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the project management team within the Department of the Navy. Accountability measures are inherent in the firm fixed-price contract, requiring the contractor to deliver the specified construction within the agreed-upon price. Transparency is generally facilitated through contract award databases, though specific project progress and oversight details may not be publicly available.

Related Government Programs

Military Construction
Naval Facilities Engineering Command Contracts
Industrial Facility Development
Department of Defense Construction Projects

Risk Flags

Potential for cost escalation in fixed-price contracts over long durations.
Risk of contractor performance issues impacting project timelines.
Limited visibility into specific construction quality without robust oversight.
Lack of small business participation noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $13.5 million to THE KREMPP LUMBER COMPANY. TRI-STATE MACC OPTION YEAR 1

Who is the contractor on this award?

The obligated recipient is THE KREMPP LUMBER COMPANY.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $13.5 million.

What is the period of performance?

Start: 2008-09-23. End: 2010-08-31.

What is the track record of The Krempp Lumber Company with federal contracts, particularly within the Department of Defense?

A review of The Krempp Lumber Company's federal contract history would be necessary to assess their track record. This would involve examining past performance on similar construction projects, including adherence to schedules, budget, and quality standards. Specifically, looking at their history with the Department of Defense and the Navy would provide relevant context. Data on past contract awards, modifications, and any reported disputes or terminations would help determine their reliability and experience in executing government projects of this scale and nature. Without specific historical data, it's difficult to definitively assess their past performance.

How does the awarded amount of $13.5 million compare to similar industrial building construction contracts awarded by the Department of the Navy?

To benchmark the $13.5 million award, one would compare it to similar industrial building construction contracts awarded by the Department of the Navy over the past few years. Key comparison points would include the square footage of the facility, the complexity of the construction (e.g., specialized equipment installation, environmental controls), the duration of the contract, and the specific location. If similar projects of comparable scope and complexity were awarded for significantly less or more, it would indicate whether this contract represents a particularly good or poor value. The presence of 11 bids suggests competitive pricing, which generally supports the value proposition.

What are the primary risks associated with a firm fixed-price contract for a 707-day construction project?

The primary risk with a firm fixed-price contract for a long-duration project like this 707-day construction is the potential for unforeseen cost increases that are not adequately captured in the initial price. While the government is protected from cost overruns, the contractor bears the risk. This could lead to the contractor cutting corners on materials or labor quality to maintain profitability, or potentially seeking change orders for issues that could have been foreseen. For the government, risks include potential delays if the contractor struggles financially or operationally due to underestimating costs, and the possibility of disputes arising from differing interpretations of the contract scope.

What specific types of industrial buildings are being constructed under this contract, and what is their intended purpose?

The provided data indicates 'Industrial Building Construction' but does not specify the exact type or purpose of the buildings. To understand this, further investigation into the contract details, such as the Statement of Work (SOW) or Performance Work Statement (PWS), would be required. These documents would outline whether the buildings are intended for manufacturing, maintenance, storage, research, or other specific industrial functions critical to the Department of the Navy's operations. Knowing the purpose is crucial for assessing the strategic importance and impact of the construction project.

How has federal spending on industrial building construction by the Department of the Navy trended over the last five years?

Analyzing the trend of federal spending on industrial building construction by the Department of the Navy over the last five years would provide valuable context. This would involve aggregating data on similar contracts awarded during that period. An increasing trend might suggest growing infrastructure needs or modernization efforts, while a decreasing trend could indicate budget constraints or shifting priorities. Understanding this historical spending pattern helps in evaluating whether the current $13.5 million award is consistent with past investment levels or represents a significant deviation.

What is the significance of the contract being awarded in Indiana, and are there other similar contracts in that region?

The significance of the contract being awarded in Indiana relates to its geographic location and potential impact on the local economy and regional defense infrastructure. Indiana has a notable presence of defense manufacturing and logistics facilities, making it a plausible location for such construction. Identifying other similar contracts in the region would help determine if this represents a concentrated investment or a standalone project. It could also indicate the presence of specific regional construction capabilities or needs that the Navy is addressing through this award.

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

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N4008306R4507

Offers Received: 11

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 216 MAIN ST, JASPER, IN, 47546

Business Categories: Category Business, Small Business

Financial Breakdown

Contract Ceiling: $13,524,423

Exercised Options: $13,524,423

Current Obligation: $13,524,423

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N4008306D4018

IDV Type: IDC

Timeline