State Department awards $416K for Nassau perimeter wall construction, emphasizing full and open competition

Contract Overview

Contract Amount: $4,164,115 ($4.2M)

Contractor: HSU Development, Inc.

Awarding Agency: Department of State

Start Date: 2024-08-22

End Date: 2026-01-13

Contract Duration: 509 days

Daily Burn Rate: $8.2K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: TO FUND THE AWARD OF FULL DESIGN AND CONSTRUCTION SERVICES FOR THE NASSAU CMR CSU PERIMETER WALL PROJECT.

Plain-Language Summary

Department of State obligated $4.2 million to HSU DEVELOPMENT, INC. for work described as: TO FUND THE AWARD OF FULL DESIGN AND CONSTRUCTION SERVICES FOR THE NASSAU CMR CSU PERIMETER WALL PROJECT. Key points: 1. The contract focuses on design and construction services, indicating a need for specialized building expertise. 2. A firm-fixed-price contract type suggests that cost risks are largely borne by the contractor. 3. The award was made under full and open competition after exclusion of sources, implying a robust bidding process. 4. The project duration of approximately 1.5 years aligns with typical construction timelines for moderate-sized infrastructure. 5. The relatively small award value may indicate a specific, localized need rather than a large-scale infrastructure initiative.

Value Assessment

Rating: good

The award of $416,411 for the Nassau CMR CSU Perimeter Wall Project appears reasonable given the scope of design and construction services. Benchmarking against similar government construction contracts for perimeter security and minor infrastructure projects suggests that this price falls within expected ranges. The firm-fixed-price structure further supports value by transferring cost overrun risks to the contractor, HSU Development, Inc. Without specific details on the wall's length, height, and materials, a precise per-unit cost comparison is difficult, but the overall value seems aligned with market expectations for specialized construction services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'full and open competition after exclusion of sources,' which is a less common but still competitive procurement method. It suggests that while the intent was broad competition, specific circumstances may have led to excluding certain potential bidders, possibly due to specialized requirements or prior engagement. With 3 bids received, the competition level indicates that multiple firms were interested and capable of performing the work, which generally supports price discovery and a more competitive outcome for the government.

Taxpayer Impact: The use of full and open competition, even with exclusions, aims to ensure the government receives the best value by considering a wide range of qualified contractors, thereby driving down prices through market forces.

Public Impact

The primary beneficiaries are the Department of State and its personnel, who will gain enhanced security through the new perimeter wall. The project delivers essential design and construction services for critical infrastructure at a specific location. The geographic impact is localized to the Nassau area where the perimeter wall will be constructed. The contract supports the construction workforce, potentially creating jobs for skilled tradespeople involved in the project.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if initial design requirements are not clearly defined, leading to cost increases.
Ensuring timely completion within the 509-day duration is crucial to avoid security gaps or operational disruptions.
Quality control of construction materials and workmanship needs rigorous oversight to ensure long-term durability.

Positive Signals

Firm-fixed-price contract mitigates budget uncertainty for the government.
Award to HSU Development, Inc. suggests a contractor with relevant experience in construction projects.
The competitive bidding process likely resulted in a fair market price for the services.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a broad category encompassing the erection of non-residential structures. The market for such services is typically robust, with numerous firms capable of undertaking design and construction projects. Government spending in this sector often focuses on infrastructure upgrades, facility maintenance, and security enhancements. Comparable spending benchmarks would involve analyzing other perimeter security projects or specialized construction awards by federal agencies, which often range from tens of thousands to millions of dollars depending on scale and complexity.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses in the provided data. This suggests that the primary award went to a larger entity or that the specific nature of the project did not lend itself to small business participation. Further analysis would be needed to determine if any subcontracting opportunities were available or utilized by the prime contractor.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of State's contracting officers and project managers. Accountability measures are embedded in the firm-fixed-price contract, requiring the contractor to deliver specified services within the agreed-upon budget and timeline. Transparency is facilitated through federal contract databases where award details are published. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arise during the contract's performance.

Related Government Programs

Department of State Facilities Management
Department of State Security Infrastructure
Federal Perimeter Security Projects
Government Building Construction Contracts

Risk Flags

Potential for cost overruns if unforeseen site conditions arise, despite firm-fixed-price.
Risk of quality compromise if contractor faces profitability pressures.
Dependency on contractor's specialized expertise and timely delivery.
Need for robust government oversight to ensure compliance and quality.

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $4.2 million to HSU DEVELOPMENT, INC.. TO FUND THE AWARD OF FULL DESIGN AND CONSTRUCTION SERVICES FOR THE NASSAU CMR CSU PERIMETER WALL PROJECT.

Who is the contractor on this award?

The obligated recipient is HSU DEVELOPMENT, INC..

Which agency awarded this contract?

Awarding agency: Department of State (Department of State).

What is the total obligated amount?

The obligated amount is $4.2 million.

What is the period of performance?

Start: 2024-08-22. End: 2026-01-13.

What is the specific nature and scope of the 'Nassau CMR CSU Perimeter Wall Project' and what are the key design and construction requirements?

The 'Nassau CMR CSU Perimeter Wall Project' involves the full design and construction of a perimeter wall. 'CMR' likely stands for Construction Management and 'CSU' could refer to a specific unit or function within the Department of State that requires this security enhancement. Key requirements would typically include detailed architectural and engineering designs, site preparation, foundation work, wall construction using specified materials (e.g., concrete, reinforced steel), potential integration of security features (e.g., sensors, lighting, access control points), and final landscaping or site restoration. The exact scope, including the wall's length, height, security specifications, and any associated structures or utilities, would be detailed in the contract's Statement of Work (SOW).

How does the $416,411 award amount compare to similar perimeter wall construction projects undertaken by the Department of State or other federal agencies?

The $416,411 award for this perimeter wall project appears to be on the lower end for significant federal construction projects, suggesting a relatively modest scope or scale. For instance, larger federal perimeter security projects, especially those involving advanced technology integration or extensive land areas, can easily run into millions of dollars. Smaller projects, such as reinforcing existing barriers, constructing short boundary walls, or implementing basic security fencing, might fall within this price range. A direct comparison would require analyzing contracts with similar geographic locations, security requirements, and construction materials. However, for a project described as 'full design and construction,' this value suggests a focused, perhaps localized, security enhancement rather than a large-scale infrastructure overhaul.

What specific factors might have led to the 'exclusion of sources' in this 'full and open competition' scenario?

The 'exclusion of sources' within a 'full and open competition' framework typically arises when specific, justifiable criteria limit the pool of eligible bidders, even while aiming for broad competition. This could include requirements for highly specialized technical expertise, unique security clearances, specific past performance on similar sensitive projects, or the need to leverage existing infrastructure or systems that only certain contractors can interface with. It's also possible that a pre-qualification process (e.g., through a Request for Information or Sources Sought notice) identified a limited number of capable firms, and only those meeting stringent criteria were invited to bid. The Department of State, dealing with sensitive facilities, might have specific security or operational requirements that naturally narrow the field of qualified contractors.

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

While firm-fixed-price (FFP) contracts are generally favored for transferring cost risk to the contractor, they carry specific risks for both parties. For the government, the primary risk is that the contractor may cut corners on quality or materials to maintain profitability if unforeseen issues arise, potentially leading to a less durable or effective final product. Conversely, if the contractor underestimated costs or encountered significant unforeseen site conditions, they might face financial losses, potentially leading to disputes, delays, or even contractor default. For this project, risks could include unexpected subsurface conditions, material price fluctuations not adequately accounted for, or design ambiguities that lead to change orders, although FFP aims to minimize these.

How does the contractor, HSU Development, Inc., perform on other federal contracts, and does this project align with their typical work?

Information on HSU Development, Inc.'s past performance is crucial for assessing the risk associated with this award. A review of federal contract databases (like SAM.gov or FPDS) would reveal their contract history, including agencies served, contract types, award values, and performance ratings, if available. If HSU Development, Inc. has a strong track record in commercial and institutional building construction, particularly for government clients and security-related projects, this award would be seen as low-risk. Conversely, a history of disputes, poor performance ratings, or work outside their core competencies might raise concerns. Without specific data on HSU Development, Inc., it's assumed the Department of State conducted due diligence to ensure their capability for this project.

What is the historical spending pattern for perimeter security and construction at this specific Nassau location or similar Department of State facilities?

Analyzing historical spending patterns for perimeter security and construction at this specific Nassau location or comparable Department of State facilities would provide valuable context. If previous projects at this site have been frequent and costly, it might indicate ongoing security challenges or a history of upgrades. Conversely, if this is a new investment, it suggests a recent shift in security priorities or the establishment of new operational needs. Comparing this $416K award to past expenditures can reveal whether this project represents a significant increase or decrease in spending, and whether it aligns with a consistent strategy for facility security and maintenance across the agency's portfolio.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 507 N FREDERICK AVE, GAITHERSBURG, MD, 20877

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

Financial Breakdown

Contract Ceiling: $4,164,115

Exercised Options: $4,164,115

Current Obligation: $4,164,115

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: 19AQMM22D0052

IDV Type: IDC

Timeline