Coast Guard awards $126.6M for Puerto Rico base construction, with AECOM JV as prime

Contract Overview

Contract Amount: $126,584,803 ($126.6M)

Contractor: Rq-Aecom 2 JV

Awarding Agency: Department of Homeland Security

Start Date: 2022-04-01

End Date: 2028-02-26

Contract Duration: 2,157 days

Daily Burn Rate: $58.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: REBUILD BASE DETACHMENT & AIR STATION BORINQUEN, AGUADILLA, PUERTO RICO, PHASE 2

Place of Performance

Location: AGUADILLA, AGUADILLA County, PUERTO RICO, 00603

Plain-Language Summary

Department of Homeland Security obligated $126.6 million to RQ-AECOM 2 JV for work described as: REBUILD BASE DETACHMENT & AIR STATION BORINQUEN, AGUADILLA, PUERTO RICO, PHASE 2 Key points: 1. Contract focuses on critical infrastructure repair and modernization for a key U.S. Coast Guard facility. 2. The project involves significant construction work, indicating a substantial investment in the region's defense and operational capabilities. 3. A firm-fixed-price structure suggests that cost risks are primarily borne by the contractor, providing budget certainty. 4. The project duration spans over five years, implying a phased approach to complex construction and renovation. 5. This award represents a significant portion of the U.S. Coast Guard's capital expenditure in Puerto Rico for facility upgrades.

Value Assessment

Rating: good

The contract value of $126.6 million for base detachment and air station construction appears substantial, reflecting the scope of work. Benchmarking against similar large-scale military or government construction projects in similar geographic regions would be necessary for a precise value-for-money assessment. However, the firm-fixed-price contract type generally indicates a commitment to a defined cost, which can be favorable for the government if managed effectively. The specific details of the work packages and their associated costs would provide further insight into the pricing efficiency.

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 offers. The presence of two bidders (no=2) suggests a moderate level of competition for this significant construction project. While more bidders could potentially drive prices lower, full and open competition is generally the preferred method for ensuring fair pricing and access to a broad range of qualified contractors.

Taxpayer Impact: Full and open competition, even with a limited number of bidders, provides a baseline for fair market pricing and encourages contractors to offer competitive terms to secure the work.

Public Impact

The U.S. Coast Guard will benefit from modernized and resilient facilities at Borinquen Air Station, enhancing operational readiness. The project will deliver essential construction services, including repairs and upgrades to critical base infrastructure. The geographic impact is concentrated in Aguadilla, Puerto Rico, supporting local economic activity through construction jobs. The construction workforce will see implications, with potential job creation and demand for skilled labor in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions arise, despite the fixed-price nature.
Dependency on a single prime contractor (RQ-AECOM 2 JV) for successful project completion.
Risk of schedule delays due to the complexity of phased construction and potential supply chain issues.
Environmental compliance and permitting challenges inherent in large-scale construction projects.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Awarded through full and open competition, suggesting a competitive bidding process.
The contractor, RQ-AECOM 2 JV, likely possesses significant experience in large-scale construction projects.
The project aims to improve critical infrastructure, enhancing long-term operational capabilities for the Coast Guard.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a vital part of the broader construction industry. The market for government construction projects, particularly those involving military and security infrastructure, is substantial and often characterized by stringent requirements and competitive bidding processes. The value of this single award, $126.6 million, is significant and reflects the scale of facility modernization efforts undertaken by agencies like the U.S. Coast Guard. Comparable spending benchmarks would typically involve analyzing other large-scale base construction or renovation projects awarded by federal agencies.

Small Business Impact

This contract was not set aside for small businesses (sb=false) and there is no indication of specific subcontracting requirements for small businesses in the provided data. Therefore, the direct impact on the small business ecosystem through this specific award appears limited. However, the prime contractor may engage small businesses as subcontractors for specialized services or materials, which would indirectly benefit them. Further analysis of the subcontracting plan would be needed to fully assess the impact.

Oversight & Accountability

Oversight for this contract will likely be managed by the U.S. Coast Guard contracting and project management offices. Accountability measures are embedded within the firm-fixed-price contract terms, requiring the contractor to deliver specified work within the agreed budget. Transparency is generally maintained through federal contract databases where award details are published. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract.

Related Government Programs

Military Construction
Federal Building and Facilities
Coast Guard Infrastructure Modernization
Puerto Rico Economic Development Projects
Large-Scale Construction Contracts

Risk Flags

Potential for unforeseen site conditions impacting cost and schedule.
Contract duration exceeds 5 years, increasing exposure to market fluctuations.
Limited competition (2 bidders) may reduce price negotiation leverage.
Dependency on a joint venture structure requires careful management oversight.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $126.6 million to RQ-AECOM 2 JV. REBUILD BASE DETACHMENT & AIR STATION BORINQUEN, AGUADILLA, PUERTO RICO, PHASE 2

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 $126.6 million.

What is the period of performance?

Start: 2022-04-01. End: 2028-02-26.

What is the track record of RQ-AECOM 2 JV on similar federal construction contracts?

RQ-AECOM 2 JV is a joint venture, suggesting a collaboration between established entities to undertake large projects. AECOM, as a major player in engineering and construction, has a extensive history with federal contracts, including significant infrastructure and military base projects. A detailed review of past performance for both AECOM and any other partners in the joint venture on similar firm-fixed-price, large-scale construction contracts would be necessary. This would involve examining past project delivery, adherence to schedule and budget, quality of work, and any past performance issues or disputes. The specific track record of the joint venture itself, if it has operated previously, would also be a key indicator of its capability and reliability for this significant Coast Guard project.

How does the awarded price of $126.6 million compare to similar base construction projects?

Benchmarking the $126.6 million award requires comparing it to similar U.S. Coast Guard or Department of Defense base construction and renovation projects, particularly those in similar geographic regions or with comparable scope (e.g., air station upgrades, detachment rebuilds). Factors such as square footage of facilities renovated/built, complexity of work (e.g., environmental remediation, seismic retrofitting), and prevailing labor and material costs in Puerto Rico versus the continental U.S. are crucial. Without specific comparable project data, it's difficult to definitively state if this represents excellent or fair value. However, the firm-fixed-price nature suggests the government has negotiated a ceiling cost, which is a positive indicator for cost control, assuming the scope is well-defined and competitive.

What are the primary risks associated with this large-scale construction contract?

The primary risks for this $126.6 million construction contract include potential cost overruns due to unforeseen site conditions (e.g., hazardous materials, unexpected structural issues), which can be challenging to manage even with a fixed-price contract if scope changes are required. Schedule delays are another significant risk, stemming from complex phased construction, weather impacts in Puerto Rico, supply chain disruptions for materials, or labor availability issues. Contractor performance risk also exists; while RQ-AECOM 2 JV is likely experienced, ensuring consistent quality and adherence to specifications throughout a multi-year project requires diligent oversight. Finally, environmental compliance and obtaining necessary permits can introduce delays and additional costs if not managed proactively.

How effective is the firm-fixed-price contract type in managing costs for this project?

The firm-fixed-price (FFP) contract type is generally considered effective for managing costs on projects where the scope of work can be clearly defined and risks are well understood, such as base construction. It shifts the primary risk of cost overruns to the contractor, RQ-AECOM 2 JV, providing the U.S. Coast Guard with budget certainty. The government pays a set price for the completed work. However, the effectiveness hinges on the thoroughness of the initial scope definition and specifications. If significant changes or unforeseen conditions necessitate modifications, the contract may require adjustments, potentially leading to increased costs. Diligent government oversight is still crucial to ensure the contractor meets all requirements efficiently and avoids unnecessary change orders.

What is the historical spending trend for facility upgrades at U.S. Coast Guard Air Station Borinquen?

Historical spending data for facility upgrades specifically at U.S. Coast Guard Air Station Borinquen prior to this $126.6 million award would need to be accessed through federal procurement databases (e.g., FPDS, SAM.gov). This contract appears to be a significant investment, potentially indicating a period of substantial modernization or addressing long-standing infrastructure needs. Analyzing previous contracts for repairs, renovations, or new construction at this specific location over the past 5-10 years would reveal spending patterns. A lack of recent large-scale awards might suggest deferred maintenance, making this current contract a catch-up investment. Conversely, consistent smaller awards might indicate ongoing upkeep.

What are the implications of awarding a large contract to a joint venture for this project?

Awarding a large contract like this $126.6 million project to a joint venture (RQ-AECOM 2 JV) can have several implications. It allows for the pooling of resources, expertise, and bonding capacity from multiple firms, which is often necessary for projects of this scale and complexity. This can increase the pool of qualified bidders for large federal contracts. For the government, it can provide access to specialized skills and potentially foster innovation through the combined strengths of the partners. However, it can also introduce complexities in management, communication, and accountability if the joint venture agreement is not robust. Ensuring clear lines of responsibility and performance standards across the JV partners is crucial for successful project execution and oversight.

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: 2

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: $126,584,803

Exercised Options: $126,584,803

Current Obligation: $126,584,803

Subaward Activity

Number of Subawards: 25

Total Subaward Amount: $49,247,308

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