GSA awards $570M contract for new CISA HQ construction in DC, with full and open competition

Contract Overview

Contract Amount: $569,659,667 ($569.7M)

Contractor: Clark Construction Group LLC

Awarding Agency: General Services Administration

Start Date: 2024-08-16

End Date: 2027-08-20

Contract Duration: 1,099 days

Daily Burn Rate: $518.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IRA: PROVIDE LABOR, MATERIALS, SUPERVISION, AND EQUIPMENT TO CONSTRUCT THE NEW CISA HQ BUILDING. SERVICES INCLUDE, BUT ARE NOT LIMITED: CIVIL AND SITE WORK CONSISTING OF HEAVY EARTH WORK, ETC.EXCAVATION, STABILIZATION OF EXISTING SLOPE, FOUNDATIONS

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20032

State: District of Columbia Government Spending

Plain-Language Summary

General Services Administration obligated $569.7 million to CLARK CONSTRUCTION GROUP LLC for work described as: IRA: PROVIDE LABOR, MATERIALS, SUPERVISION, AND EQUIPMENT TO CONSTRUCT THE NEW CISA HQ BUILDING. SERVICES INCLUDE, BUT ARE NOT LIMITED: CIVIL AND SITE WORK CONSISTING OF HEAVY EARTH WORK, ETC.EXCAVATION, STABILIZATION OF EXISTING SLOPE, FOUNDATIONS Key points: 1. The contract's value of $570 million represents a significant investment in federal infrastructure. 2. Full and open competition suggests a robust bidding process, potentially leading to better pricing. 3. The project's scale and complexity introduce inherent risks related to construction timelines and budget adherence. 4. This contract is a key component of the General Services Administration's efforts to modernize federal facilities. 5. The construction sector is experiencing fluctuating material costs and labor availability, impacting project economics. 6. The definitive contract type with a firm fixed price shifts significant risk to the contractor.

Value Assessment

Rating: good

The contract value of $569.7 million for the construction of the CISA HQ building is substantial. Benchmarking this against similar large-scale federal building projects is challenging without more specific cost breakdowns (e.g., per square foot, per trade). However, the firm fixed-price nature of the contract indicates that the contractor, Clark Construction Group LLC, has assumed the risk for cost overruns. The GSA's procurement process, involving full and open competition, aims to secure competitive pricing, suggesting that the awarded price is likely aligned with market rates for projects of this magnitude and complexity.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. The solicitation likely attracted multiple bidders, given the project's size and significance. A competitive environment generally fosters price discovery and encourages contractors to offer their best terms, which is beneficial for the government. The presence of multiple bidders suggests that the market has sufficient capacity and interest to undertake such a large-scale construction project.

Taxpayer Impact: Full and open competition is advantageous for taxpayers as it increases the likelihood of obtaining a fair market price and reduces the risk of inflated costs due to a lack of alternatives.

Public Impact

The primary beneficiary is the Cybersecurity and Infrastructure Security Agency (CISA), which will gain a new, modern headquarters facility. The project will deliver a new federal building, encompassing civil work, excavation, slope stabilization, and foundation construction. The geographic impact is concentrated in the District of Columbia, providing a significant construction project for the local economy. The construction will likely create numerous jobs in the skilled trades and related support industries within the DC metropolitan area.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for construction delays due to unforeseen site conditions or supply chain disruptions.
Risk of cost escalation if material prices or labor costs significantly exceed projections, despite the fixed-price contract.
Ensuring compliance with all environmental and building codes throughout the extensive construction process.
Managing the complexity of a large-scale project with multiple subcontractors and dependencies.

Positive Signals

Clark Construction Group LLC is a well-established firm with a track record in large-scale construction projects.
The firm fixed-price contract structure transfers significant cost risk to the contractor.
Full and open competition suggests a thorough vetting of potential bidders and a competitive pricing environment.
The project aims to provide CISA with a modern, secure, and efficient headquarters, enhancing its operational capabilities.

Sector Analysis

The construction of large institutional buildings falls within the broader commercial and institutional building construction sector. This sector is characterized by significant capital investment, complex project management, and reliance on skilled labor and specialized materials. The market size for federal building construction is substantial, driven by agencies' needs for modern, secure, and efficient facilities. This contract represents a significant portion of spending within this specific niche of federal construction, requiring contractors with proven experience in managing projects of this scale and complexity.

Small Business Impact

While the primary awardee is Clark Construction Group LLC, a large entity, the subcontracting opportunities generated by a project of this magnitude are substantial. Federal regulations often encourage or mandate the inclusion of small businesses in subcontracting roles. The GSA likely has requirements for small business participation, which could provide significant contract vehicles for smaller firms in areas like specialized trades, material supply, or support services. The success of this project could bolster the capacity and revenue of participating small businesses.

Oversight & Accountability

Oversight for this contract will primarily be managed by the General Services Administration (GSA), specifically its Public Buildings Service. The firm fixed-price nature of the contract places a significant burden of oversight on the contractor to manage costs and schedule effectively. The GSA will monitor progress, quality, and adherence to contract terms. Transparency is expected through regular reporting and site inspections. While no specific Inspector General is mentioned, the GSA has its own Office of Inspector General, which may conduct audits or investigations related to major construction projects.

Related Government Programs

Federal Building Construction
Agency Headquarters Modernization
Cybersecurity Infrastructure Projects
Public Buildings Service Projects
Large-Scale Construction Contracts

Risk Flags

Potential for schedule delays
Risk of cost overruns (contractor absorbed)
Complexity of large-scale construction management
Supply chain volatility for materials
Labor availability and cost fluctuations

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $569.7 million to CLARK CONSTRUCTION GROUP LLC. IRA: PROVIDE LABOR, MATERIALS, SUPERVISION, AND EQUIPMENT TO CONSTRUCT THE NEW CISA HQ BUILDING. SERVICES INCLUDE, BUT ARE NOT LIMITED: CIVIL AND SITE WORK CONSISTING OF HEAVY EARTH WORK, ETC.EXCAVATION, STABILIZATION OF EXISTING SLOPE, FOUNDATIONS

Who is the contractor on this award?

The obligated recipient is CLARK CONSTRUCTION GROUP LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $569.7 million.

What is the period of performance?

Start: 2024-08-16. End: 2027-08-20.

What is Clark Construction Group LLC's track record with large federal building projects?

Clark Construction Group LLC has a significant track record in delivering large-scale, complex construction projects, including numerous federal facilities. They have been involved in building courthouses, agency headquarters, and research facilities for various government entities. Their portfolio often includes projects with high security requirements and advanced technological integrations. For example, they have previously worked on projects for the Department of Defense and other civilian agencies. This extensive experience suggests they possess the necessary expertise, resources, and management capabilities to undertake the construction of the new CISA HQ building. Their history indicates a capacity to manage large budgets, complex schedules, and diverse stakeholder requirements inherent in such significant federal undertakings.

How does the $570 million contract value compare to similar federal building constructions?

The $570 million contract value for the CISA HQ building is substantial and aligns with the upper range for major federal facility construction projects. Comparable projects, such as new agency headquarters or large courthouse constructions, often fall within the $200 million to $700 million range, depending on size, complexity, location, and specific requirements (e.g., security, technology integration). For instance, the construction of new Department of Defense facilities or significant upgrades to existing federal campuses can easily reach or exceed this figure. The firm fixed-price nature of this contract also implies that the contractor has factored in significant contingencies and management overhead, which is typical for projects of this scale. Benchmarking requires detailed cost breakdowns per square foot or per functional area, which are not publicly available, but the overall award amount is consistent with large-scale federal construction endeavors.

What are the primary risks associated with a project of this scale and complexity?

The primary risks associated with a $570 million construction project like the CISA HQ involve schedule delays, cost overruns (despite the fixed-price contract, due to unforeseen issues), and quality control. Site conditions can present unexpected challenges, such as subsurface rock, groundwater, or historical artifacts, leading to delays and increased costs. Supply chain disruptions for critical materials (steel, concrete, specialized systems) can impact timelines. Labor availability and potential disputes can also pose risks. Furthermore, ensuring seamless integration of complex building systems (HVAC, security, IT infrastructure) and adherence to stringent federal building codes and security standards require meticulous planning and execution. The sheer scale necessitates robust project management to coordinate numerous subcontractors and ensure overall project coherence and timely completion.

How effective is full and open competition in ensuring value for taxpayer money on large construction projects?

Full and open competition is generally considered the most effective method for ensuring value for taxpayer money on large construction projects. By allowing all responsible sources to bid, the government maximizes the pool of potential contractors, thereby increasing the likelihood of receiving competitive pricing. This process encourages bidders to offer their most favorable terms and innovative solutions to win the contract. The presence of multiple bidders creates a market dynamic where price and performance are key differentiators. While the lowest bid isn't always the best value, the competitive pressure inherent in full and open solicitations drives down costs and incentivizes efficiency. The GSA's use of this method for the CISA HQ project suggests a commitment to achieving optimal value through a robust and transparent procurement process.

What are the implications of a 'firm fixed price' contract type for this project?

A 'firm fixed price' (FFP) contract type means that the contractor, Clark Construction Group LLC, is obligated to complete the project for a predetermined price, regardless of their actual costs. This shifts the majority of the cost risk from the government to the contractor. If construction costs exceed the agreed-upon price due to unforeseen circumstances, material price increases, or labor issues, the contractor absorbs those additional expenses. Conversely, if the contractor can complete the project under budget, they retain the savings. For the government, an FFP contract provides cost certainty and predictability, which is highly desirable for large capital investments like a new headquarters. It incentivizes the contractor to manage costs efficiently and complete the project within the agreed budget.

What is the typical duration and cost per square foot for federal building construction of this nature?

The typical duration for a federal building construction project of this scale (estimated $570 million) can range from 3 to 5 years from groundbreaking to substantial completion. The provided data indicates a duration of 1099 days (approximately 3 years) from the award date to the estimated completion date, which falls within this typical range. Cost per square foot for federal buildings varies significantly based on location, security requirements, technological sophistication, and finishes. However, for large, modern institutional buildings in high-cost areas like Washington D.C., costs can range from $500 to $1,000+ per square foot. Without knowing the total square footage of the CISA HQ, a precise per-square-foot benchmark is difficult, but the overall $570 million award suggests a project of considerable size and complexity, likely resulting in a high per-square-foot cost reflective of its specialized nature and location.

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: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: EQWPC-23-0001CISAHQ

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Clark Construction LLC

Address: 7500 OLD GEORGETOWN RD, BETHESDA, MD, 20814

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

Financial Breakdown

Contract Ceiling: $569,659,667

Exercised Options: $569,659,667

Current Obligation: $569,659,667

Actual Outlays: $79,979,269

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline