DoD's $16.3M Slate Replacement Contract Awarded to HSU Development, Inc. for Washington Headquarters Services

Contract Overview

Contract Amount: $16,307,420 ($16.3M)

Contractor: HSU Development, Inc.

Awarding Agency: Department of Defense

Start Date: 2010-09-28

End Date: 2013-03-08

Contract Duration: 892 days

Daily Burn Rate: $18.3K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: PENTAGON WEDGES 3-5 SLATE REPLACEMENT

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22202

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $16.3 million to HSU DEVELOPMENT, INC. for work described as: PENTAGON WEDGES 3-5 SLATE REPLACEMENT Key points: 1. Contract value of $16.3 million for slate replacement services. 2. Awarded to HSU Development, Inc. under a firm-fixed-price contract. 3. Procurement method was full and open competition after exclusion of sources. 4. Contract duration was 892 days, spanning from September 2010 to March 2013. 5. The contract falls under the Commercial and Institutional Building Construction NAICS code. 6. Geographic location of service was Virginia. 7. No small business set-aside was utilized for this contract.

Value Assessment

Rating: fair

The contract value of $16.3 million for slate replacement is difficult to benchmark without specific details on the scope of work and the size of the facility. However, given the duration of nearly three years, the annual spending averaged approximately $5.6 million. This figure needs to be compared against similar large-scale building maintenance and repair contracts within the federal government to assess value for money. The firm-fixed-price structure suggests that the contractor assumed the risk for cost overruns, which can be a positive indicator if the price was competitive.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded using 'full and open competition after exclusion of sources.' This procurement method implies that while the competition was intended to be open, certain sources were excluded for specific reasons, potentially related to technical capabilities or past performance. The number of bidders is not explicitly stated, but the method suggests a limited pool of qualified contractors were considered. This could impact price discovery compared to a truly unrestricted full and open competition.

Taxpayer Impact: The exclusion of certain sources may have limited the competitive pressure, potentially leading to a higher price for taxpayers than if all capable vendors had been allowed to bid.

Public Impact

The primary beneficiaries of this contract are the facilities management teams at the Washington Headquarters Services, ensuring the structural integrity and maintenance of federal buildings. The services delivered include the replacement of slate roofing, a critical component for building protection against the elements. The geographic impact is localized to federal facilities in Virginia, supporting the operational continuity of the Department of Defense. The contract likely supported a workforce involved in construction, roofing, and project management, contributing to employment in the construction sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'exclusion of sources' in the competition method raises questions about the breadth of competition and potential impact on pricing.
Lack of detailed scope of work makes it challenging to assess the true value for money and compare per-unit costs.
The contract duration of nearly three years for a specific repair task might warrant scrutiny regarding project phasing and potential for extended service needs.

Positive Signals

The use of a firm-fixed-price contract shifts cost risk to the contractor, which can be beneficial for the government.
The contract was awarded under a competitive process, indicating an effort to secure services through a structured procurement.
The services provided are essential for maintaining critical federal infrastructure, ensuring operational readiness.

Sector Analysis

The Commercial and Institutional Building Construction sector encompasses a wide range of activities related to the erection, renovation, and repair of non-residential buildings. Federal spending in this sector is substantial, covering everything from office buildings to specialized facilities. This contract for slate replacement fits within the broader category of building maintenance and repair, a consistent area of federal expenditure. Comparable spending benchmarks would typically involve analyzing the cost per square foot for roofing projects or the total value of similar large-scale repair contracts awarded by agencies like the General Services Administration or the Department of Defense.

Small Business Impact

This contract was not set aside for small businesses, as indicated by 'sb: false'. The award to HSU Development, Inc. does not appear to have direct subcontracting implications for small businesses based on the provided data. The absence of a small business set-aside suggests that the procurement was either not targeted towards small businesses or that larger firms were deemed more capable or competitive for this specific project. This means the direct economic impact on the small business ecosystem for this particular contract is likely minimal.

Oversight & Accountability

Oversight for this contract would have been managed by the Washington Headquarters Services, likely through contracting officers and project managers. Accountability measures would be embedded in the firm-fixed-price contract terms, requiring HSU Development, Inc. to complete the work to specified standards. Transparency is generally facilitated through federal contract databases like FPDS, where basic award information is publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected during the contract's lifecycle.

Related Government Programs

Department of Defense Facilities Maintenance
Federal Building Renovation and Repair
Commercial Roofing Contracts
Washington Headquarters Services Contracts
Construction Services for Government Buildings

Risk Flags

Limited competition due to source exclusion
Potential for cost overruns if scope was not well-defined
Contractor performance risk over a long duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $16.3 million to HSU DEVELOPMENT, INC.. PENTAGON WEDGES 3-5 SLATE REPLACEMENT

Who is the contractor on this award?

The obligated recipient is HSU DEVELOPMENT, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Washington Headquarters Services).

What is the total obligated amount?

The obligated amount is $16.3 million.

What is the period of performance?

Start: 2010-09-28. End: 2013-03-08.

What was the specific scope of work for the slate replacement, and how did it justify the $16.3 million cost over nearly three years?

The provided data does not detail the specific scope of work for the slate replacement project. To justify the $16.3 million cost over 892 days (approximately 2.4 years), a comprehensive analysis would require information on the total square footage of roofing replaced, the complexity of the structures involved, the specific types of slate used, and any associated structural repairs or upgrades. Without these details, it's challenging to ascertain if the cost was commensurate with the work performed. A typical approach to assess value would involve comparing the cost per square foot against industry averages for similar high-quality roofing projects on large institutional buildings. The firm-fixed-price nature suggests the contractor bore the risk of cost escalation, but the initial pricing would still need to reflect a reasonable estimate of the required labor, materials, and overhead for the defined scope.

How did HSU Development, Inc. perform on this contract, and what is their general track record with the federal government?

The provided data does not include performance ratings or specific details on HSU Development, Inc.'s performance for this particular contract. To assess their track record, one would need to consult performance evaluation reports (e.g., Contractor Performance Assessment Reporting System - CPARS) if available for this award. General track records can be inferred from the number and types of federal contracts awarded to the company, their past performance on similar projects, and any history of disputes or contract terminations. A review of FPDS or SAM.gov would reveal other contracts awarded to HSU Development, Inc., allowing for an analysis of their experience in the federal contracting space, particularly within the construction and building maintenance sectors.

Can the $16.3 million expenditure be considered a good value compared to similar federal slate replacement projects?

Assessing the value for money of this $16.3 million contract is difficult without detailed comparative data. To determine if it represents good value, it would need to be benchmarked against similar slate replacement projects undertaken by federal agencies. Key comparison points would include the cost per square foot, the complexity of the work, the age and condition of the buildings, and the specific type and quality of slate specified. If comparable projects of similar scale and complexity were completed at a significantly lower cost per square foot, then this contract might be considered less favorable in terms of value. Conversely, if the project involved unique challenges, specialized materials, or extensive structural work, the higher cost could be justified. The firm-fixed-price nature is a positive aspect, but it doesn't inherently guarantee value without a competitive and well-defined scope.

What are the potential risks associated with a contract of this size and duration for building construction services?

Contracts of this size ($16.3 million) and duration (892 days) for building construction services carry several potential risks. One primary risk is scope creep, where the project's requirements expand beyond the original agreement, potentially leading to cost overruns if not managed properly (though less likely with firm-fixed-price). Another risk involves contractor performance; delays, quality issues, or financial instability of the contractor could impact project completion and the functionality of the facility. Material price fluctuations, especially for specialized items like slate, can pose a risk if not adequately accounted for in the fixed price. Furthermore, unforeseen site conditions or structural issues discovered during the work could necessitate contract modifications or lead to disputes. Finally, the long duration increases the exposure to changes in federal regulations or agency needs.

How does this contract fit into the broader historical spending patterns for building maintenance and repair within the Department of Defense?

This $16.3 million contract for slate replacement represents a specific expenditure within the Department of Defense's (DoD) broader budget for facilities maintenance and repair. The DoD manages a vast portfolio of real property, requiring continuous investment in upkeep, renovation, and modernization. Spending on building maintenance and repair is a recurring necessity, often fluctuating based on the age of infrastructure, deferred maintenance backlogs, and specific modernization initiatives. To understand how this contract fits, one would need to analyze historical DoD spending trends for similar construction and repair services, looking at the average annual expenditure, the types of projects prioritized, and the distribution of funds across different service categories. This single contract, while substantial, is likely one of many contributing to the overall facilities management budget.

What does the 'full and open competition after exclusion of sources' procurement method imply about the market for slate replacement services?

The 'full and open competition after exclusion of sources' method suggests that the government initially intended to solicit bids from all responsible sources but subsequently excluded certain ones based on specific criteria. This could be due to requirements for specialized expertise, unique certifications, or past performance on similar complex projects that only a limited number of contractors possess. It implies that the market for highly specialized slate replacement services, particularly for large federal facilities, might be concentrated among a smaller group of qualified firms. While it aims for broad competition within that qualified group, the exclusion of other potential bidders could limit the overall competitive pressure and potentially affect the final price compared to a truly unrestricted open competition where all interested parties could participate.

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Commercial and Institutional Building Construction

Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCT OF RESTORATION ACTIVITIES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: HQ003408R0001

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1335 RCKVLLE PIKE STE 255, ROCKVILLE, MD, 08

Business Categories: Asian Pacific American Owned Business, Category Business, Corporate Entity Not Tax Exempt, HUBZone Firm, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Subchapter S Corporation

Financial Breakdown

Contract Ceiling: $16,307,420

Exercised Options: $16,307,420

Current Obligation: $16,307,420

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HQ003408D0004

IDV Type: IDC

Timeline