Potawatomi Defense Operations LLC Awarded $34.7M for Dorm Construction, Raising Questions on Competition and Value

Contract Overview

Contract Amount: $34,709,007 ($34.7M)

Contractor: Potawatomi Defense Operations LLC

Awarding Agency: Department of Defense

Start Date: 2024-01-02

End Date: 2026-03-31

Contract Duration: 819 days

Daily Burn Rate: $42.4K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: THIS PROJECT IS A BID BUILD (BB) PROJECT. BID BUILD CONTRACTOR SHALL PROVIDE ALL PLANT, LABOR AND MATERIAL, AS WELL AS CONSTRUCTING, INSTALLING, AND PERFORMING IAW THE ATTACHED SUMMARY OF WORK DATED 13 SEP 2023 FOR DORM 10652 AND DORM 10804

Place of Performance

Location: JBSA LACKLAND, BEXAR County, TEXAS, 78236

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $34.7 million to POTAWATOMI DEFENSE OPERATIONS LLC for work described as: THIS PROJECT IS A BID BUILD (BB) PROJECT. BID BUILD CONTRACTOR SHALL PROVIDE ALL PLANT, LABOR AND MATERIAL, AS WELL AS CONSTRUCTING, INSTALLING, AND PERFORMING IAW THE ATTACHED SUMMARY OF WORK DATED 13 SEP 2023 FOR DORM 10652 AND DORM 10804 Key points: 1. The contract is a firm-fixed-price definitive contract, indicating a clear scope and cost structure. 2. The project involves constructing and installing facilities for two dormitories, suggesting a significant infrastructure investment. 3. The award to Potawatomi Defense Operations LLC was not available for competition, warranting scrutiny of the procurement process. 4. The contract duration of 819 days points to a substantial, multi-year construction effort. 5. The project is categorized under 'Other Heavy and Civil Engineering Construction,' a broad sector with varying cost benchmarks. 6. The absence of small business set-aside flags suggests potential missed opportunities for smaller contractors. 7. The contract's value of $34.7 million places it as a significant award within its construction sub-sector.

Value Assessment

Rating: questionable

Benchmarking the value of this $34.7 million contract is challenging without specific details on the scope of work for Dorms 10652 and 10804. The firm-fixed-price nature provides cost certainty, but the lack of competitive bidding makes it difficult to assess if the price reflects fair market value. Comparing this to similar dormitory construction projects for the Department of Defense, especially those procured competitively, would be necessary to determine if the pricing is advantageous for the government. The provided data does not offer enough detail to definitively assess value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under a 'not available for competition' procurement, indicating that a sole-source or limited competition process was likely employed. The specific justification for this limited competition is not provided in the data. A lack of open competition means that potential cost savings and innovative solutions that might arise from a broader bidder pool were not explored. This approach can sometimes be justified for specialized needs or urgent requirements, but it typically leads to higher prices and reduced transparency.

Taxpayer Impact: The absence of a competitive bidding process means taxpayers may not be receiving the best possible price for this construction project. Without multiple bids, there is less pressure on the contractor to offer competitive rates, potentially leading to overspending.

Public Impact

Military personnel stationed at the facility will benefit from improved dormitory accommodations. The construction services will be delivered at a Department of the Air Force installation. The project's geographic impact is concentrated in Texas, where the contract is being performed. The construction activities will likely create temporary employment opportunities for skilled trades and laborers in the local Texas area. The successful completion of the dormitories will support the operational readiness and quality of life for Air Force personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competitive bidding raises concerns about potential overpayment and reduced value for taxpayer funds.
The sole-source nature of the award limits transparency and the opportunity to explore alternative, potentially more cost-effective solutions.
Without a clear benchmark from competitive bids, assessing the reasonableness of the $34.7 million price is difficult.
The broad 'Other Heavy and Civil Engineering Construction' category makes it hard to pinpoint specific cost efficiencies or risks without more detailed project specifications.

Positive Signals

The firm-fixed-price contract type provides cost certainty for the government, mitigating the risk of cost overruns.
The contract is for essential infrastructure (dormitories), directly supporting military personnel and their living conditions.
The project has a defined start and end date, indicating a structured approach to project management and completion.
The award is to a specific entity, Potawatomi Defense Operations LLC, suggesting a known contractor is undertaking the work.

Sector Analysis

The 'Other Heavy and Civil Engineering Construction' sector encompasses a wide range of infrastructure projects, from roads and bridges to specialized facilities. Within this sector, large-scale construction projects like dormitory building for military installations can vary significantly in cost based on location, complexity, and specific requirements. Comparable spending benchmarks for similar military housing projects would typically be derived from competitively bid contracts to ensure fair pricing. The $34.7 million award suggests a substantial project, likely involving significant labor, materials, and project management overhead.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This means that the procurement was not specifically targeted to encourage participation from small businesses. Consequently, there is no direct analysis of subcontracting opportunities for small businesses within this award. The lack of a small business set-aside may mean that larger firms were the primary focus or sole bidders, potentially limiting the broader impact on the small business construction ecosystem for this specific contract.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and project management offices. As a definitive contract, it is subject to standard federal procurement regulations and oversight. The firm-fixed-price nature simplifies some aspects of financial oversight compared to cost-reimbursement contracts. Transparency regarding the justification for the sole-source award and the project's progress would be key areas for oversight. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Military Housing Construction
Department of Defense Infrastructure Projects
Federal Civil Engineering Contracts
Air Force Base Development

Risk Flags

Sole-source award lacks competitive justification.
Potential for non-competitive pricing.
Limited transparency in procurement process.
Insufficient data to benchmark value for money.
No small business participation noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $34.7 million to POTAWATOMI DEFENSE OPERATIONS LLC. THIS PROJECT IS A BID BUILD (BB) PROJECT. BID BUILD CONTRACTOR SHALL PROVIDE ALL PLANT, LABOR AND MATERIAL, AS WELL AS CONSTRUCTING, INSTALLING, AND PERFORMING IAW THE ATTACHED SUMMARY OF WORK DATED 13 SEP 2023 FOR DORM 10652 AND DORM 10804

Who is the contractor on this award?

The obligated recipient is POTAWATOMI DEFENSE OPERATIONS LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $34.7 million.

What is the period of performance?

Start: 2024-01-02. End: 2026-03-31.

What is the specific justification for awarding this $34.7 million construction contract on a sole-source basis to Potawatomi Defense Operations LLC?

The provided data states the contract was 'NOT AVAILABLE FOR COMPETITION,' which is synonymous with a sole-source or limited competition award. However, the specific justification for this procurement approach is not detailed. Typically, sole-source awards require a formal justification and approval (J&A) process, outlining why full and open competition is not feasible or not in the government's best interest. Reasons can include unique capabilities of a single contractor, urgent and compelling needs, or specific national security requirements. Without access to the J&A document for this contract, it is impossible to ascertain the precise rationale behind bypassing competitive bidding, which is a critical piece of information for evaluating the procurement's integrity and potential value.

How does the $34.7 million contract value compare to similar dormitory construction projects awarded by the Department of Defense or Air Force?

Directly comparing the $34.7 million contract value for Dorms 10652 and 10804 to similar projects is challenging without more specific project details and a competitive benchmark. The 'Other Heavy and Civil Engineering Construction' category is broad. However, large-scale military dormitory construction projects can range widely in cost depending on factors like size, amenities, location, and specific structural requirements. A $34.7 million project for two dormitories suggests a significant undertaking. To assess value, one would need to compare the cost per square foot or cost per bed against recently awarded, competitively bid dormitory projects at comparable military installations. The lack of competition for this award makes a direct value-for-money comparison more difficult, as there isn't a clear market-driven price point established.

What are the key performance indicators (KPIs) and oversight mechanisms in place to ensure the successful and timely completion of this construction project?

The provided data indicates a firm-fixed-price contract with a defined start date (January 2, 2024) and end date (March 31, 2026), spanning 819 days. While these define the project's timeline, specific Key Performance Indicators (KPIs) for quality, safety, and adherence to the Summary of Work (dated September 13, 2023) are not detailed. Oversight would typically involve the Air Force's contracting officer's representative (COR) and project managers responsible for monitoring progress, ensuring compliance with specifications, and managing any change orders. Regular site inspections, progress reports, and milestone reviews are standard oversight mechanisms for such construction contracts. The effectiveness of these mechanisms would depend on the diligence of the government oversight team and the contractor's adherence to contractual obligations.

What is the track record of Potawatomi Defense Operations LLC in performing similar large-scale civil engineering and construction contracts for the federal government?

Information regarding the specific track record of Potawatomi Defense Operations LLC in performing similar large-scale civil engineering and construction contracts for the federal government is not provided in the data snippet. To assess their capability and past performance, one would typically need to consult federal procurement databases (like SAM.gov or FPDS) for their contract history, including past performance evaluations. Understanding their experience with projects of similar size, complexity, and type (e.g., dormitory construction, military facilities) is crucial for evaluating the risk associated with this award. Without this historical performance data, it's difficult to gauge their reliability and expertise in executing this $34.7 million project effectively.

Given the sole-source nature, what are the potential risks to the government regarding cost control and contractor performance?

The primary risk associated with a sole-source award like this is the potential for inflated costs due to the lack of competitive pressure. Without multiple bids, Potawatomi Defense Operations LLC may not have been incentivized to offer the most competitive pricing. Another risk relates to contractor performance; while the government relies on the contractor's stated capabilities, the absence of a competitive process means less opportunity to evaluate a range of potential performers. This could increase the risk of delays, quality issues, or cost overruns if the selected contractor underperforms. Robust government oversight and clear contractual terms are essential to mitigate these risks, but the inherent lack of competition remains a significant concern for ensuring optimal value and performance.

Industry Classification

NAICS: Construction › Other Heavy and Civil Engineering Construction › Other Heavy and Civil Engineering Construction

Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR NONBUILDINGS

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3215 W STATE ST, MILWAUKEE, WI, 53208

Business Categories: 8(a) Program Participant, Category Business, Corporate Entity Tax Exempt, Limited Liability Corporation, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Tribally Owned Firm, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $34,709,007

Exercised Options: $34,709,007

Current Obligation: $34,709,007

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline