USDA awards $120M design-build contract for South Building modernization to Grunley Construction

Contract Overview

Contract Amount: $119,536,274 ($119.5M)

Contractor: Grunley Construction CO., Inc.

Awarding Agency: Department of Agriculture

Start Date: 2022-09-30

End Date: 2026-04-30

Contract Duration: 1,308 days

Daily Burn Rate: $91.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: USDA SOUTH BUILDING WINGS 7 DESIGN-BUILD MODERNIZATION

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20250

State: District of Columbia Government Spending

Plain-Language Summary

Department of Agriculture obligated $119.5 million to GRUNLEY CONSTRUCTION CO., INC. for work described as: USDA SOUTH BUILDING WINGS 7 DESIGN-BUILD MODERNIZATION Key points: 1. The contract value represents a significant investment in federal building infrastructure. 2. The project's scope includes modernization of building wings, indicating a focus on improving federal workspace efficiency and sustainability. 3. The use of a design-build approach suggests an emphasis on streamlined project delivery and integrated accountability. 4. The contract duration of over three years points to a complex and extensive renovation project. 5. The firm-fixed-price contract type aims to provide cost certainty for the government. 6. The project is located in the District of Columbia, impacting federal facilities in the capital.

Value Assessment

Rating: good

The contract value of $119.5 million for a design-build modernization of federal building wings appears reasonable given the scope. Benchmarking against similar large-scale federal construction projects, particularly those involving design-build delivery for institutional buildings, would provide a more precise value-for-money assessment. The firm-fixed-price structure helps mitigate cost overrun risks for the government, suggesting a well-defined project scope and pricing strategy.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. This competitive process is expected to foster price discovery and encourage contractors to offer their best value. The number of bidders is not specified, but the full and open nature suggests a robust competition.

Taxpayer Impact: A full and open competition generally benefits taxpayers by driving down prices through market forces and ensuring the government receives competitive bids, leading to better value for public funds.

Public Impact

Federal employees working within the USDA South Building will benefit from modernized facilities, potentially improving working conditions and productivity. The project will deliver updated infrastructure and modern workspaces for a key federal agency. The geographic impact is concentrated in the District of Columbia, affecting federal government operations in the capital. The construction and modernization activities will likely create jobs in the construction sector within the Washington D.C. metropolitan area.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep in large-scale modernization projects, even with fixed-price contracts.
Ensuring timely completion within the allocated budget and schedule is crucial for project success.
Coordination between design and construction phases in a design-build contract requires diligent oversight.

Positive Signals

The firm-fixed-price contract type provides cost certainty and incentivizes the contractor to manage costs effectively.
Full and open competition suggests a strong market response and potential for competitive pricing.
The design-build approach can lead to efficiencies and faster project delivery compared to traditional design-bid-build methods.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the broader construction industry. Federal building modernization projects are crucial for maintaining and upgrading government infrastructure. Spending in this sector is often influenced by infrastructure investment priorities, agency modernization needs, and economic conditions. Comparable spending benchmarks would involve analyzing other large federal building renovation or construction contracts awarded by agencies like GSA or other cabinet-level departments.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Therefore, the primary contractor, Grunley Construction Co., Inc., is likely a large business. There is no explicit information on subcontracting plans for small businesses within this data, which would typically be detailed in the contract itself. The absence of a small business set-aside means that opportunities for small businesses would primarily arise through subcontracting opportunities offered by the prime contractor.

Oversight & Accountability

Oversight for this contract will likely be managed by the USDA's Office of the Chief Financial Officer and relevant contracting officers. The firm-fixed-price nature of the contract provides a degree of accountability for the contractor to deliver within the agreed-upon cost. Transparency will depend on the agency's public reporting practices regarding contract performance and any Inspector General reviews that may occur.

Related Government Programs

USDA Facilities Modernization Programs
Federal Building Construction and Renovation
Design-Build Contracts
Capital Infrastructure Investment

Risk Flags

Potential for unforeseen conditions in existing building infrastructure.
Risk of schedule delays impacting agency operations.
Contractor performance and quality control.
Management of scope changes.

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $119.5 million to GRUNLEY CONSTRUCTION CO., INC.. USDA SOUTH BUILDING WINGS 7 DESIGN-BUILD MODERNIZATION

Who is the contractor on this award?

The obligated recipient is GRUNLEY CONSTRUCTION CO., INC..

Which agency awarded this contract?

Awarding agency: Department of Agriculture (Office of the Chief Financial Officer).

What is the total obligated amount?

The obligated amount is $119.5 million.

What is the period of performance?

Start: 2022-09-30. End: 2026-04-30.

What is Grunley Construction Co., Inc.'s track record with large federal design-build projects?

Grunley Construction Co., Inc. has a substantial track record in the Washington D.C. metropolitan area, including numerous large-scale federal projects. Their portfolio often features complex renovations, new construction, and design-build initiatives for government agencies such as the Department of Defense, General Services Administration (GSA), and various intelligence community clients. Analyzing their past performance on similar projects, including any history of cost overruns, schedule delays, or successful project completions, would provide critical context for assessing their capability to execute the USDA South Building modernization effectively. Their experience with secure facilities and occupied building renovations is particularly relevant.

How does the $119.5 million contract value compare to similar federal building modernization projects?

The $119.5 million contract value for the USDA South Building modernization is substantial and falls within the range of significant federal infrastructure projects. To benchmark its value, one would compare it to other large-scale design-build or renovation contracts for institutional or commercial buildings awarded by agencies like GSA, Department of Defense, or other cabinet-level departments. Factors such as building size (square footage), complexity of renovations (e.g., MEP systems, structural upgrades, historical preservation), and geographic location (which influences labor and material costs) are critical for a fair comparison. Without specific details on the scope per square foot or the exact nature of the modernization, a precise comparison is difficult, but the amount suggests a comprehensive overhaul.

What are the primary risks associated with this design-build modernization contract?

Key risks for this design-build modernization contract include potential scope creep, where unforeseen conditions or evolving requirements necessitate changes that could impact cost and schedule, despite the firm-fixed-price structure. Coordination challenges between the design and construction phases, while mitigated by the design-build approach, still require diligent management. Schedule delays due to site conditions, material availability, or labor shortages are also inherent risks in large construction projects. Furthermore, ensuring the security and operational continuity of the USDA South Building during extensive renovation work presents logistical and safety challenges. The contractor's ability to effectively manage these risks will be crucial for successful project delivery.

How effective is the design-build delivery method for federal building modernization projects like this one?

The design-build delivery method is often considered effective for federal building modernization projects because it consolidates design and construction under a single contract. This single point of responsibility can streamline communication, reduce potential conflicts between designers and builders, and accelerate the project schedule. For modernization efforts, where existing conditions may be complex and require adaptive solutions, the integrated approach allows for quicker problem-solving. However, the success heavily relies on the contractor's expertise in both design and construction, and the government's ability to clearly define performance requirements upfront. Effective government oversight is still critical to ensure the design meets functional needs and the construction adheres to quality standards.

What are historical spending patterns for USDA building maintenance and modernization?

Historical spending patterns for USDA building maintenance and modernization would reveal the agency's consistent investment in its physical infrastructure. Analyzing past budgets and contract awards for similar projects would indicate whether this $119.5 million contract represents a typical investment, an increase, or a decrease in modernization efforts. Trends might show a cyclical need for upgrades, a response to aging facilities, or a strategic push towards energy efficiency and sustainability. Understanding these patterns helps contextualize the current investment and assess its alignment with long-term facility management strategies. Data on prior modernization projects, their costs, and outcomes would be essential for this analysis.

What is the significance of the firm-fixed-price contract type for this project?

The firm-fixed-price (FFP) contract type is significant because it places the primary risk of cost overruns on the contractor, Grunley Construction Co., Inc. This structure incentivizes the contractor to manage project costs efficiently and accurately estimate all expenses related to design and construction. For the USDA, an FFP contract offers the highest degree of cost certainty, making budgeting more predictable. While it requires a well-defined scope of work at the outset to minimize disputes, it is generally preferred for projects where the requirements are well understood and the risk of unforeseen conditions can be reasonably assessed and managed by the contractor.

Industry Classification

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

Product/Service Code: ARCHITECT/ENGINEER SERVICES › ARCH-ENG SVCS - CONSTRUCTION

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 12314421R0006

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 15020 SHADY GROVE RD STE 500, ROCKVILLE, MD, 20850

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $119,536,274

Exercised Options: $119,536,274

Current Obligation: $119,536,274

Actual Outlays: $116,308,311

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline