Coast Guard awards $86M construction contract for Sector Key West, Florida

Contract Overview

Contract Amount: $86,335,156 ($86.3M)

Contractor: Rq-Aecom 2 JV

Awarding Agency: Department of Homeland Security

Start Date: 2021-07-06

End Date: 2027-09-30

Contract Duration: 2,277 days

Daily Burn Rate: $37.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: REBUILD SECTOR/STATION KEY WEST

Place of Performance

Location: KEY WEST, MONROE County, FLORIDA, 33040

State: Florida Government Spending

Plain-Language Summary

Department of Homeland Security obligated $86.3 million to RQ-AECOM 2 JV for work described as: REBUILD SECTOR/STATION KEY WEST Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract duration of 2277 days (over 6 years) indicates a long-term commitment to the project. 3. The firm-fixed-price contract type shifts cost risk to the contractor. 4. The project is located in Florida, potentially impacting local construction workforce and businesses. 5. The contract falls under the Commercial and Institutional Building Construction NAICS code. 6. The award amount of over $86 million represents a significant investment in infrastructure.

Value Assessment

Rating: good

The contract's value of $86.3 million for a multi-year construction project appears reasonable given the scope. Benchmarking against similar large-scale federal construction projects would provide a more precise value-for-money assessment. The firm-fixed-price structure is generally favorable for the government in managing cost certainty. However, without specific details on the scope of work and comparable project costs, a definitive assessment of pricing efficiency is challenging.

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 presence of 3 bidders suggests a moderate level of competition for this significant construction project. A higher number of bidders typically leads to more competitive pricing and a wider range of innovative solutions. The fact that it was competed openly is a positive sign for price discovery.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down costs and improve the quality of services or goods received.

Public Impact

The U.S. Coast Guard will benefit from improved infrastructure at Sector Key West. The project will deliver essential construction and renovation services. The geographic impact is concentrated in Florida, specifically Key West. The construction activities will likely create temporary jobs for the local workforce. The improved facilities will support the Coast Guard's operational readiness and mission effectiveness.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen issues arise during the extended construction period.
Risk of schedule delays impacting Coast Guard operational readiness.
Dependency on the contractor's ability to manage complex construction logistics in a potentially sensitive environment.

Positive Signals

Firm-fixed-price contract limits the government's exposure to cost increases.
Awarded through full and open competition, suggesting a competitive pricing environment.
Long-term duration allows for phased construction and potential integration of new technologies.
The project addresses critical infrastructure needs for the Coast Guard.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the broader construction industry. Federal spending in this area often supports critical infrastructure for government agencies. The market for large-scale federal construction is competitive, with many firms capable of undertaking such projects. Benchmarks for similar projects would typically consider factors like square footage, complexity, and location.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). While this means small businesses were not the primary target, there may be opportunities for them to participate as subcontractors to the prime contractor, RQ-AECOM 2 JV. The extent of small business subcontracting will depend on the prime contractor's strategy and any specific requirements outlined in the contract.

Oversight & Accountability

Oversight for this contract will likely be managed by the U.S. Coast Guard contracting office and project managers. Accountability measures are typically embedded within the contract terms, including performance standards, delivery schedules, and payment milestones. Transparency is facilitated through contract award databases and public reporting. Inspector General jurisdiction may apply if significant issues or allegations of fraud arise.

Related Government Programs

Coast Guard Infrastructure Modernization Programs
Federal Building and Facility Construction
Homeland Security Infrastructure Projects
Military Construction Projects

Risk Flags

Long project duration may increase risk of cost escalation or schedule delays.
Firm-fixed-price contracts can be susceptible to change orders if scope is not precisely defined.
Potential for unforeseen site conditions impacting budget and timeline.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $86.3 million to RQ-AECOM 2 JV. REBUILD SECTOR/STATION KEY WEST

Who is the contractor on this award?

The obligated recipient is RQ-AECOM 2 JV.

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (U.S. Coast Guard).

What is the total obligated amount?

The obligated amount is $86.3 million.

What is the period of performance?

Start: 2021-07-06. End: 2027-09-30.

What is the track record of RQ-AECOM 2 JV in performing similar large-scale federal construction contracts?

RQ-AECOM 2 JV is a joint venture, suggesting a collaboration between two or more entities to leverage combined expertise and resources. To assess their track record, one would need to examine the past performance of the individual companies comprising the joint venture, as well as any previous projects undertaken by the JV itself. Key areas to investigate include their history with firm-fixed-price contracts, experience with projects of similar magnitude and complexity, adherence to schedules and budgets, and overall client satisfaction ratings from previous federal contracts. Information on past performance can often be found in federal procurement databases and through agency performance evaluations.

How does the awarded amount of $86.3 million compare to similar Coast Guard or DHS construction projects?

Comparing the $86.3 million award to similar projects requires access to a database of comparable federal construction contracts, ideally within the Department of Homeland Security (DHS) or specifically the U.S. Coast Guard. Factors such as project scope (e.g., new construction vs. renovation), facility type, size (square footage), complexity, and geographic location significantly influence costs. Without specific data on comparable projects, it's difficult to definitively state whether this award represents a high, low, or average cost. However, the duration of over six years suggests a substantial and complex undertaking, which would naturally command a higher price point than shorter-term projects.

What are the primary risks associated with a construction project of this duration and value?

Construction projects spanning over six years and valued at $86.3 million carry several inherent risks. These include potential cost escalation due to inflation or unforeseen site conditions, which, despite the firm-fixed-price contract, could lead to change orders if not meticulously managed during the initial bidding phase. Schedule delays are another significant risk, potentially stemming from weather, labor shortages, material availability, or permitting issues, which could impact the Coast Guard's operational capabilities. Furthermore, the long duration increases the risk of technological obsolescence or changes in regulatory requirements that might necessitate design modifications. The contractor's financial stability and management capacity over such an extended period are also critical risk factors.

What is the expected impact of this contract on the operational effectiveness of Sector Key West?

This contract is expected to significantly enhance the operational effectiveness of Sector Key West by providing modernized and potentially expanded facilities. Improved infrastructure can lead to better working conditions, enhanced security, more efficient logistics, and increased capacity for housing personnel and equipment. For a Coast Guard sector, this translates to a greater ability to conduct maritime law enforcement, search and rescue operations, port security, and other critical missions. The project aims to ensure that the physical assets supporting the sector's operations are up-to-date and capable of meeting current and future demands, thereby bolstering overall readiness and mission accomplishment.

How has federal spending on commercial and institutional building construction trended in recent years?

Federal spending on commercial and institutional building construction has generally seen fluctuations influenced by economic conditions, infrastructure priorities, and national security needs. In recent years, there has been a notable emphasis on modernizing aging federal facilities, investing in resilient infrastructure, and supporting critical agency missions. Spending in this category can be substantial, particularly during periods of increased government investment in public works and defense installations. Analyzing historical spending data from sources like the Federal Procurement Data System (FPDS) would reveal specific trends, including the average contract values, the number of awards, and the distribution of spending across different agencies and construction types.

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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3194 LIONSHEAD AVE, CARLSBAD, CA, 92010

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

Financial Breakdown

Contract Ceiling: $86,335,156

Exercised Options: $86,335,156

Current Obligation: $86,335,156

Subaward Activity

Number of Subawards: 22

Total Subaward Amount: $101,800,791

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 70Z04718DRQAECM00

IDV Type: IDC

Timeline