Smithsonian Institution awards $12.3M contract for museum building construction, highlighting significant investment in cultural infrastructure

Contract Overview

Contract Amount: $12,298,331 ($12.3M)

Contractor: Raad Construction Group LLC

Awarding Agency: Smithsonian Institution

Start Date: 2021-09-22

End Date: 2026-07-31

Contract Duration: 1,773 days

Daily Burn Rate: $6.9K/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: NMAI -NY REPLACE AHUS 1 THROUGH 4.

Place of Performance

Location: NEW YORK, NEW YORK County, NEW YORK, 10004

State: New York Government Spending

Plain-Language Summary

Smithsonian Institution obligated $12.3 million to RAAD CONSTRUCTION GROUP LLC for work described as: NMAI -NY REPLACE AHUS 1 THROUGH 4. Key points: 1. Contract value represents a substantial investment in maintaining and upgrading national museum facilities. 2. The project involves critical infrastructure replacement, suggesting a focus on long-term asset preservation. 3. Competition dynamics indicate a market capable of supporting specialized construction services for institutional clients. 4. The fixed-price contract structure aims to control costs and provide budget certainty for the Smithsonian. 5. Project duration suggests a complex scope of work requiring phased execution and careful management. 6. Geographic focus on New York points to specific needs within the Smithsonian's national portfolio.

Value Assessment

Rating: good

The contract value of approximately $12.3 million for replacing museum building components appears reasonable given the scope of commercial and institutional building construction. Benchmarking against similar projects for cultural institutions would provide a more precise value-for-money assessment. However, the fixed-price nature of the award suggests an effort to establish clear cost expectations upfront. The duration of the contract (over 4 years) also implies a significant undertaking, justifying the awarded amount.

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, indicating that multiple qualified contractors were solicited and considered. The presence of three bidders suggests a healthy level of competition for this type of specialized construction work. This competitive environment is generally favorable for price discovery and ensuring the government receives competitive proposals.

Taxpayer Impact: The robust competition for this contract is beneficial for taxpayers as it likely drove down costs and ensured the Smithsonian secured a qualified contractor at a fair market price.

Public Impact

The National Museum of the American Indian benefits from essential infrastructure upgrades, ensuring its long-term operational integrity. Services delivered include the replacement of critical building components (AHUs 1-4), enhancing facility performance and safety. The geographic impact is concentrated in New York, addressing specific needs at a key Smithsonian institution. The project supports the construction industry workforce in the New York region through direct employment and related economic activity.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen construction challenges arise, despite the fixed-price structure.
Delays in project completion could impact museum operations and visitor experience.
Ensuring the quality of work meets the specific requirements for historical and cultural preservation.

Positive Signals

Awarded through full and open competition, indicating a competitive bidding process.
Fixed-price contract type helps to mitigate financial risk for the government.
Contractor has a track record in commercial and institutional building construction.
Project addresses critical infrastructure needs, ensuring long-term facility viability.

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 and renovation of non-residential structures, including museums, government facilities, and educational institutions. Spending in this area is often driven by the need to maintain, upgrade, or expand public and private infrastructure. Comparable spending benchmarks would typically involve analyzing other large-scale renovation or construction projects for federal agencies or major cultural organizations.

Small Business Impact

The contract data indicates that small business participation was not a primary set-aside objective for this specific award, as the prime contractor is RAAD CONSTRUCTION GROUP LLC. Further analysis would be needed to determine if subcontracting opportunities were made available to small businesses. The impact on the small business ecosystem would depend on the extent to which RAAD CONSTRUCTION GROUP LLC engages small businesses as subcontractors for specialized services or materials.

Oversight & Accountability

Oversight for this contract is managed by the Smithsonian Institution, which is responsible for ensuring compliance with contract terms, quality standards, and timely delivery. Accountability measures are embedded within the fixed-price contract structure, which incentivizes the contractor to complete the work within the agreed budget. Transparency is facilitated through federal contract databases where such awards are reported. The Smithsonian may also utilize internal quality assurance personnel or engage third-party inspectors to monitor progress and adherence to specifications.

Related Government Programs

Smithsonian Institution Capital Improvements
Federal Building and Facilities Construction
Museum and Cultural Institution Infrastructure Projects
National Museum of the American Indian Operations

Risk Flags

Potential for construction delays
Risk of cost overruns
Quality control during installation
Dependence on contractor's specialized expertise

Frequently Asked Questions

What is this federal contract paying for?

Smithsonian Institution awarded $12.3 million to RAAD CONSTRUCTION GROUP LLC. NMAI -NY REPLACE AHUS 1 THROUGH 4.

Who is the contractor on this award?

The obligated recipient is RAAD CONSTRUCTION GROUP LLC.

Which agency awarded this contract?

Awarding agency: Smithsonian Institution (Smithsonian Institution).

What is the total obligated amount?

The obligated amount is $12.3 million.

What is the period of performance?

Start: 2021-09-22. End: 2026-07-31.

What is the track record of RAAD CONSTRUCTION GROUP LLC in completing similar large-scale institutional building projects?

RAAD CONSTRUCTION GROUP LLC is identified under the North American Industry Classification System (NAICS) code 236220 for Commercial and Institutional Building Construction. While the provided data confirms their role as the prime contractor for this Smithsonian project, a comprehensive assessment of their track record would require examining their past performance on similar contracts. This includes evaluating project completion history, adherence to schedules and budgets, quality of work, and client satisfaction on previous institutional or government projects. Further research into federal contract databases and past performance reviews would be necessary to fully understand their capabilities and reliability for complex projects like the NMAI AHU replacement.

How does the awarded amount of $12.3 million compare to the estimated cost or market rates for similar HVAC system replacements in large cultural institutions?

The awarded amount of $12.3 million for replacing Air Handling Units (AHUs) 1 through 4 at the National Museum of the American Indian is a significant figure. To benchmark its value, one would need to compare it against the estimated costs or actual contract values of similar HVAC replacement projects in comparable cultural institutions (e.g., other Smithsonian museums, national archives, major art museums) of similar size and complexity. Factors such as the age and condition of the existing systems, the specific technical requirements for the new units, and the labor and material costs in the New York region would influence these comparisons. Without access to detailed project scopes and market data for comparable projects, it is difficult to definitively state if this represents excellent, good, or fair value, though the full and open competition suggests a competitive pricing environment.

What are the primary risks associated with this contract, and what mitigation strategies are in place?

The primary risks associated with this contract include potential construction delays due to unforeseen site conditions or supply chain disruptions, cost overruns if the fixed-price contract does not adequately account for all contingencies, and quality control issues during the installation of critical HVAC components. Mitigation strategies likely involve robust project management by the Smithsonian Institution, detailed inspection protocols, adherence to the fixed-price contract terms which place cost risk on the contractor, and potentially performance bonds. The contractor's experience in commercial and institutional building construction (NAICS 236220) and the competitive bidding process also serve as indicators of their ability to manage these risks.

How effective is the 'full and open competition after exclusion of sources' method in ensuring competitive pricing for specialized construction services?

The 'full and open competition after exclusion of sources' method is designed to maximize competition while allowing for specific exclusions if justified. In this case, it suggests that while the competition was broad, certain sources might have been excluded based on specific criteria (e.g., security, past performance, specialized capabilities). The fact that three bids were received indicates a reasonable level of competition. This method can be effective in ensuring competitive pricing by attracting multiple qualified bidders, but its effectiveness is contingent on the clarity of the solicitation requirements and the fairness of the exclusion criteria. If the exclusions were narrowly defined, it could limit competition and potentially lead to higher prices than true full and open competition.

What is the historical spending pattern of the Smithsonian Institution on building maintenance and upgrades, and how does this contract fit within that pattern?

The Smithsonian Institution, as a major national cultural institution, consistently requires significant investment in maintaining and upgrading its vast array of facilities. Historical spending patterns would likely show recurring allocations for capital improvements, repairs, and system modernizations across its various museums and research centers. This $12.3 million contract for critical HVAC replacement at the National Museum of the American Indian fits within this pattern as a necessary expenditure for preserving the operational integrity and environmental controls essential for artifact preservation and visitor comfort. Analyzing past Smithsonian capital budgets and specific project awards would reveal the scale and frequency of such investments.

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 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: 26 BROAD ST 2ND FLOOR, RED BANK, NJ, 07701

Business Categories: 8(a) Program Participant, Category Business, Hispanic American Owned Business, Limited Liability Corporation, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $12,298,331

Exercised Options: $12,298,331

Current Obligation: $12,298,331

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: F15CC10446

IDV Type: IDC

Timeline