DoD's $13.8M construction contract awarded to PROJECTS AND TRADING EST shows long duration and limited competition

Contract Overview

Contract Amount: $13,878,393 ($13.9M)

Contractor: Projects and Trading EST

Awarding Agency: Department of Defense

Start Date: 2002-12-25

End Date: 2009-06-22

Contract Duration: 2,371 days

Daily Burn Rate: $5.9K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Plain-Language Summary

Department of Defense obligated $13.9 million to PROJECTS AND TRADING EST for work described as: Key points: 1. Contract duration of over 6 years suggests a long-term need for construction services. 2. The award to a single entity raises questions about potential cost efficiencies and market responsiveness. 3. Limited competition may indicate specialized requirements or a lack of market availability. 4. The firm-fixed-price structure aims to transfer cost risk to the contractor. 5. Construction sector awards often involve significant capital investment and potential for cost overruns. 6. The contract's value, while substantial, needs to be benchmarked against similar construction projects.

Value Assessment

Rating: fair

The contract value of $13.8 million over nearly 7 years averages to approximately $2 million per year. Without specific details on the scope of work, it's challenging to benchmark against similar contracts. However, the long duration and lack of competition suggest that a thorough cost analysis was crucial at the time of award to ensure fair pricing. The firm-fixed-price nature indicates that the contractor bore the risk of cost overruns, which can sometimes lead to higher initial bids.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not openly competed. This typically occurs when only one responsible source is available or capable of meeting the agency's needs. The lack of multiple bidders limits the government's ability to leverage competitive pressures to drive down prices and explore innovative solutions. The justification for this sole-source award would be critical to understanding why broader competition was not pursued.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers compared to competitively bid contracts, as the government does not benefit from the price discovery mechanisms inherent in a competitive bidding process.

Public Impact

The primary beneficiaries are the Department of Defense and its personnel, who will receive improved or new facilities. The services delivered are commercial and institutional building construction, likely involving new builds, renovations, or repairs. The geographic impact is localized to the area where the construction project is situated, serving military installations. Workforce implications include employment opportunities for construction workers, engineers, and project managers, both directly by the contractor and indirectly through subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may have resulted in a higher price than a fully competed contract.
Long contract duration increases the risk of scope creep or unforeseen cost increases if not managed tightly.
Sole-source awards can set a precedent for future sole-source procurements if not properly justified.
Limited transparency into the sole-source justification process can reduce public trust.
The firm-fixed-price contract might have incentivized the contractor to cut corners on quality if oversight is insufficient.

Positive Signals

The firm-fixed-price contract shifts cost risk to the contractor, potentially protecting the government from budget overruns.
A single, long-term contract can provide stability and predictability for project execution and resource allocation.
The award to a specific entity suggests they possess the necessary expertise and capacity for the required construction.
The contract duration implies a significant and potentially critical need for the construction services.

Sector Analysis

The Commercial and Institutional Building Construction sector is a vital part of the economy, encompassing a wide range of projects from office buildings to specialized facilities. Federal spending in this sector often supports infrastructure development, military readiness, and public services. Benchmarking this $13.8 million contract would involve comparing its cost per square foot, duration, and complexity against similar government or private sector construction projects. The Department of Defense is a significant consumer of construction services, frequently awarding large contracts for base development and modernization.

Small Business Impact

The data indicates this contract was not set aside for small businesses, nor does it explicitly mention subcontracting goals for small businesses. This suggests that the primary awardee, PROJECTS AND TRADING EST, is likely a larger entity. The absence of small business set-aside provisions means that opportunities for small businesses to participate in this specific contract may be limited, unless they are engaged as subcontractors by the prime contractor. Further analysis would be needed to determine if subcontracting plans were in place and if they included provisions for small business participation.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer's representative (COR) within the Department of the Army. Accountability measures would be embedded in the contract's performance clauses, milestones, and payment schedules. Transparency is often limited for sole-source awards, with justifications typically available upon request under specific Freedom of Information Act provisions. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arise during the contract's performance.

Related Government Programs

Military Construction Projects
Base Realignment and Closure (BRAC) Construction
Department of Defense Facilities Modernization
General Services Administration (GSA) Public Buildings Service Construction

Risk Flags

Sole-source award lacks competitive pricing.
Extended contract duration increases risk of cost escalation and scope creep.
Potential for reduced contractor efficiency over a long performance period.
Limited transparency regarding the justification for non-competitive award.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $13.9 million to PROJECTS AND TRADING EST. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is PROJECTS AND TRADING EST.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $13.9 million.

What is the period of performance?

Start: 2002-12-25. End: 2009-06-22.

What was the specific justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was awarded under 'NOT AVAILABLE FOR COMPETITION,' which is synonymous with a sole-source award. The specific justification for this sole-source determination is not detailed in the provided data. Typically, sole-source justifications are required by federal acquisition regulations and must demonstrate that only one responsible source exists that can satisfy the agency's needs. Reasons can include unique capabilities, urgent and compelling needs, or specific follow-on work where only the original contractor can perform. Without the official justification document, it's impossible to ascertain the precise rationale. This lack of transparency is a common concern with sole-source awards, as it limits the public's understanding of why competitive processes were bypassed.

How does the contract's duration of over 6 years compare to typical construction contracts of similar value?

A contract duration of nearly seven years (2371 days) for a $13.8 million construction project is notably long. While construction timelines can vary significantly based on project complexity, scale, and location, many projects of this value are completed within 1-3 years. Extended durations can be justified for large-scale, multi-phase projects, or those involving extensive planning, environmental reviews, or specialized construction techniques. However, such long periods also increase the risk of cost escalation due to inflation, material price fluctuations, and potential changes in project requirements. The firm-fixed-price nature of this contract suggests the contractor assumed the risk for these potential increases over the extended period, which might have been factored into the initial bid price.

What are the potential risks associated with a sole-source construction contract of this magnitude and duration?

The primary risk associated with a sole-source construction contract of this magnitude and duration is the potential for inflated pricing due to the absence of competition. Without competing bids, the government may not achieve the best possible price. Furthermore, a long duration increases the risk of scope creep, where project requirements expand beyond the original agreement, leading to cost overruns if not meticulously managed. There's also a risk of contractor complacency or reduced incentive to innovate or maintain high efficiency over such an extended period. Finally, if the sole-source justification was weak or based on outdated information, it could represent a failure of procurement integrity and potentially lead to suboptimal use of taxpayer funds.

What performance metrics or oversight mechanisms would be expected for a contract of this nature?

For a contract of this nature, robust oversight mechanisms are crucial. Key performance indicators (KPIs) would likely include adherence to project schedules, quality of workmanship, safety compliance, and budget management. The contracting officer's representative (COR) would be responsible for monitoring progress, approving payments based on milestones achieved, and ensuring compliance with contract terms. Regular site inspections, progress reports, and stakeholder meetings would be standard oversight activities. Given the firm-fixed-price structure, the focus would be on ensuring the contractor meets the defined scope and quality standards within the agreed-upon price, while managing any potential changes through a formal change order process.

How does the PSC code '236220' (Commercial and Institutional Building Construction) inform our understanding of this contract?

The Product and Service Code (PSC) '236220' specifically identifies the contract as pertaining to the construction of commercial and institutional buildings. This category encompasses a broad range of structures such as office buildings, retail stores, educational facilities, hospitals, and other non-residential buildings. For this Department of Defense contract, it likely means the construction is related to facilities on a military installation, such as barracks, administrative buildings, training centers, or support facilities. Understanding this PSC code helps contextualize the type of work performed and allows for comparison with other federal contracts within the same construction sub-sector, aiding in benchmarking costs and project complexity.

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: NOT AVAILABLE FOR COMPETITION

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Address: P O BOX 412, JEDDAH

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline