GSA Awards $92.5M Design-Build Contract for Dunseith ND LPOE to McGough Construction

Contract Overview

Contract Amount: $92,523,323 ($92.5M)

Contractor: Mcgough Construction CO., LLC

Awarding Agency: General Services Administration

Start Date: 2024-06-28

End Date: 2027-09-01

Contract Duration: 1,160 days

Daily Burn Rate: $79.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Construction

Official Description: DESIGN-BUILD SERVICES FOR THE NEW CONSTRUCTION OF THE DUNSEITH ND LPOE, 10098 US-281, DUNSEITH, ND 58329

Place of Performance

Location: DUNSEITH, ROLETTE County, NORTH DAKOTA, 58329

State: North Dakota Government Spending

Plain-Language Summary

General Services Administration obligated $92.5 million to MCGOUGH CONSTRUCTION CO., LLC for work described as: DESIGN-BUILD SERVICES FOR THE NEW CONSTRUCTION OF THE DUNSEITH ND LPOE, 10098 US-281, DUNSEITH, ND 58329 Key points: 1. Significant investment in border infrastructure with a substantial fixed-price contract. 2. Full and open competition suggests a potentially competitive bidding process. 3. Risk of economic price adjustments could impact final cost. 4. Construction sector spending benchmarked against similar large-scale public building projects.

Value Assessment

Rating: good

The contract value of $92.5M for a large-scale construction project appears reasonable given the scope. Benchmarking against similar GSA design-build projects for ports of entry would provide a more precise assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating multiple bidders likely participated. This method generally promotes price discovery and competitive pricing.

Taxpayer Impact: Taxpayer funds are being utilized for a critical infrastructure project, with competition aiming to secure the best value.

Public Impact

Enhances border security and facilitates trade at the Dunseith, ND port of entry. Creates construction jobs and stimulates economic activity in North Dakota. Modernizes federal facilities, improving operational efficiency for border personnel.

Waste & Efficiency Indicators

Waste Risk Score: 79 / 10

Warning Flags

Potential cost overruns due to economic price adjustments.
Construction delays impacting operational readiness.
Scope creep leading to increased costs.

Positive Signals

Awarded through full and open competition.
Clear project scope and defined completion date.
Experienced contractor with a history of large projects.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector. Large federal construction projects like this often represent significant portions of annual spending in this category, with costs influenced by material prices, labor rates, and project complexity.

Small Business Impact

The contract was awarded to McGough Construction Co., LLC, a large business. There is no explicit indication of small business subcontracting participation in the provided data, which warrants further investigation.

Oversight & Accountability

The General Services Administration (GSA) is responsible for overseeing this project. Robust oversight will be crucial to manage the fixed-price with economic price adjustment terms and ensure timely completion.

Related Government Programs

Commercial and Institutional Building Construction
General Services Administration Contracting
Public Buildings Service Programs

Risk Flags

Economic Price Adjustment Clause
Long Project Duration (1160 days)
Potential for Construction Delays
Lack of Small Business Subcontracting Data

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $92.5 million to MCGOUGH CONSTRUCTION CO., LLC. DESIGN-BUILD SERVICES FOR THE NEW CONSTRUCTION OF THE DUNSEITH ND LPOE, 10098 US-281, DUNSEITH, ND 58329

Who is the contractor on this award?

The obligated recipient is MCGOUGH CONSTRUCTION CO., LLC.

Which agency awarded this contract?

Awarding agency: General Services Administration (Public Buildings Service).

What is the total obligated amount?

The obligated amount is $92.5 million.

What is the period of performance?

Start: 2024-06-28. End: 2027-09-01.

What is the projected impact of economic price adjustments on the final contract cost?

The contract includes economic price adjustments, which means the final cost could increase based on fluctuations in material and labor costs. The specific indices and caps for these adjustments are critical to assess the potential financial risk. Without detailed terms, it's difficult to quantify the exact taxpayer impact, but it introduces a layer of uncertainty beyond the initial fixed price.

What are the specific risks associated with the 1160-day duration and the fixed-price with economic price adjustment structure?

A long duration like 1160 days increases the likelihood of significant economic shifts impacting material and labor costs, potentially leading to substantial price adjustments. The fixed-price nature aims to cap profit but the adjustment clause can inflate the base cost. Risks include contractor claims for unforeseen conditions or delays, and potential disputes over the application of economic price adjustments, impacting budget certainty.

How effectively does the 'full and open competition' mitigate cost overruns for this large-scale construction project?

Full and open competition is designed to foster a competitive bidding environment, theoretically driving down initial bid prices. However, for long-term construction projects with economic price adjustments, the initial low bid may not reflect the final cost. While competition helps establish a baseline, the effectiveness in mitigating overall cost overruns depends heavily on the contract's specific clauses regarding price adjustments and change orders.

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: TWO STEP

Solicitation ID: 47PJ0023R0041

Offers Received: 3

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

Evaluated Preference: NONE

Contractor Details

Address: 2737 FAIRVIEW AVE N, SAINT PAUL, MN, 55113

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

Financial Breakdown

Contract Ceiling: $92,523,323

Exercised Options: $92,523,323

Current Obligation: $92,523,323

Actual Outlays: $7,349,281

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline