DoD's $30.3M contract for building construction in Texas awarded to RKJ Construction Inc

Contract Overview

Contract Amount: $30,348,337 ($30.3M)

Contractor: RKJ Construction Inc

Awarding Agency: Department of Defense

Start Date: 2007-09-30

End Date: 2010-09-03

Contract Duration: 1,069 days

Daily Burn Rate: $28.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: BLDG 2265 & BLDG 615 FSH

Place of Performance

Location: SAN ANTONIO, BEXAR County, TEXAS, 78234

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $30.3 million to RKJ CONSTRUCTION INC for work described as: BLDG 2265 & BLDG 615 FSH Key points: 1. The contract value of $30.3 million represents a significant investment in facility maintenance and upgrades. 2. RKJ Construction Inc. secured this contract through full and open competition, suggesting a competitive bidding process. 3. The contract duration of 1069 days indicates a substantial project timeline, requiring sustained performance. 4. Awarded as a Firm Fixed Price contract, the financial risk is largely borne by the contractor. 5. The North American Industry Classification System (NAICS) code 236220 points to commercial and institutional building construction. 6. The contract was awarded by the Department of the Army, a major component of the Department of Defense.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific details on the scope of work for Buildings 2265 and 615 at Fort Sam Houston. However, a $30.3 million contract for construction over approximately three years suggests a moderate to large-scale project. The firm fixed-price nature implies that the contractor assumed the risk for cost overruns, which can sometimes lead to higher initial bids to compensate for that risk. Without comparable project data or detailed cost breakdowns, a precise value-for-money assessment is difficult, but the price appears within a plausible range for significant construction.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a 'full and open competition' procurement method. This indicates that all responsible sources were permitted to submit a bid, and the solicitation was widely advertised. The presence of multiple bidders, though not specified in the provided data, is generally expected under this method. A competitive process like this typically leads to better price discovery and potentially more favorable terms for the government compared to sole-source or limited competition awards.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a market where contractors must offer competitive pricing to win contracts, potentially leading to cost savings for government projects.

Public Impact

Military personnel and civilian staff at Fort Sam Houston will benefit from improved or maintained facilities. The contract delivers construction services essential for the upkeep and functionality of critical base infrastructure. The geographic impact is localized to Fort Sam Houston, Texas, a significant military installation. The contract supports the construction workforce, including skilled trades and labor, within the Texas region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the fixed-price contract did not adequately account for unforeseen construction challenges.
Dependence on a single contractor (RKJ Construction Inc.) for the duration of the project could limit flexibility.
The specific scope of work for 'BLDG 2265 & BLDG 615' is not detailed, making it hard to assess if it fully meets evolving needs.

Positive Signals

Firm fixed-price contract structure shifts cost risk to the contractor, potentially protecting the government from budget overruns.
Full and open competition suggests a robust bidding process, likely resulting in a competitive price.
The contract duration of over 1000 days allows for thorough project execution and quality assurance.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a vital part of the broader construction industry. This sector encompasses the building of non-residential structures such as government facilities, educational institutions, and commercial properties. The Department of Defense is a significant client for construction services, with substantial annual spending on maintaining and upgrading its vast real estate portfolio across numerous installations. Benchmarks for similar DoD construction projects would typically consider factors like square footage, complexity, location, and specific building systems.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). As a result, small businesses would likely not have been the primary recipients of this prime contract. However, RKJ Construction Inc., as the prime contractor, may have subcontracting opportunities available for small businesses, depending on their subcontracting plan and the nature of the construction work required. The absence of a small business set-aside means the competition was open to all eligible firms, regardless of size.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the contracting officer's representative (COR) within the Department of the Army. Performance monitoring, quality control, and adherence to contract terms would be key aspects of oversight. Transparency is generally facilitated through contract award databases like FPDS. Inspector General (IG) jurisdiction might be invoked if allegations of fraud, waste, or abuse arise during the contract's performance or closeout.

Related Government Programs

Department of Defense Facilities Maintenance
Military Construction Projects
General Building Construction Services
Fort Sam Houston Infrastructure Projects

Risk Flags

Potential for scope creep if not managed tightly.
Contractor performance risk over a long duration.
Adequacy of initial bid pricing for unforeseen conditions.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $30.3 million to RKJ CONSTRUCTION INC. BLDG 2265 & BLDG 615 FSH

Who is the contractor on this award?

The obligated recipient is RKJ CONSTRUCTION INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $30.3 million.

What is the period of performance?

Start: 2007-09-30. End: 2010-09-03.

What is the track record of RKJ CONSTRUCTION INC. with federal contracts, particularly with the Department of Defense?

Analyzing the track record of RKJ CONSTRUCTION INC. requires accessing historical contract data. While the provided snippet shows one significant award from the Department of the Army, a comprehensive assessment would involve reviewing all their federal awards, including contract values, agencies served, performance history (if available), and any past performance issues or disputes. Understanding their experience with similar construction projects, contract types (like firm fixed-price), and project durations would provide insight into their capability and reliability. Without access to a broader contract history, it's difficult to definitively assess their overall federal performance beyond this single data point.

How does the $30.3 million contract value compare to similar building construction projects at military installations?

Comparing the $30.3 million value requires context regarding the scope and scale of 'BLDG 2265 & BLDG 615'. If these are large, complex structures requiring extensive renovations or new construction, the price might be reasonable. However, without details on square footage, specific systems (HVAC, electrical, structural), or the extent of work (renovation vs. new build), a direct comparison is difficult. Generally, large-scale construction projects at major military installations can range from tens to hundreds of millions of dollars. The firm fixed-price nature also suggests the contractor absorbed significant risk, which can influence pricing. Benchmarking against similar projects at other Army bases or DoD facilities would be necessary for a more precise assessment.

What are the primary risks associated with this firm fixed-price construction contract for the government?

The primary risk for the government with a firm fixed-price (FFP) contract is that the contractor may have inflated their bid to account for potential risks and uncertainties in the project scope or execution. While FFP protects the government from cost overruns, it doesn't guarantee the lowest possible price if the initial competition or scope definition was suboptimal. Another risk is contractor performance; if RKJ Construction Inc. underperforms or faces significant delays, the project timeline and potentially the quality could be impacted, even within the fixed price. Ensuring robust oversight and clear performance metrics are crucial to mitigate these risks.

What does the 'FULL AND OPEN COMPETITION' designation imply about the potential for cost savings for taxpayers?

The 'FULL AND OPEN COMPETITION' designation is generally positive for taxpayers. It signifies that the government actively sought bids from all responsible sources, maximizing the pool of potential offerors. This increased competition typically drives down prices as contractors vie for the award. It also suggests that the government likely received a range of proposals, allowing for selection based on best value, which often includes price. Therefore, this procurement method increases the likelihood that the $30.3 million awarded represents a competitive market price for the construction services rendered.

How does the contract duration of 1069 days (approx. 3 years) impact project management and potential cost fluctuations?

A contract duration of 1069 days, approximately three years, is substantial for a construction project. This extended timeline allows for detailed planning, execution, and quality assurance. For the government, it means sustained oversight is required over a long period. Potential cost fluctuations are largely mitigated by the firm fixed-price nature; the contractor is responsible for managing costs within the agreed-upon price. However, a longer duration can increase the risk of material price escalation or labor market changes impacting the contractor's profitability, which they would have ideally factored into their initial bid. It also means the facilities in question will be impacted by the construction for an extended period.

What is the significance of the NAICS code 236220 (Commercial and Institutional Building Construction) in understanding this contract's scope?

The NAICS code 236220 specifically identifies the industry sector as 'Commercial and Institutional Building Construction.' This code helps categorize the type of work performed, distinguishing it from heavy civil construction (like roads or bridges) or residential building. For this contract, it means the project likely involves the construction or major renovation of non-residential buildings, such as administrative facilities, barracks, training centers, or other support structures common on military bases like Fort Sam Houston. Understanding this code is crucial for comparing this contract to others within the same industry and assessing the contractor's specialization.

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: W9126G04R0013

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 604 W AVE C, LAMPASAS, TX, 11

Business Categories: Category Business, Small Business

Financial Breakdown

Contract Ceiling: $31,614,156

Exercised Options: $30,348,337

Current Obligation: $30,348,337

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W9126G04D0026

IDV Type: IDC

Timeline