DoD awards $3.1M contract for Douglas Wells Field well drilling to R-CON CONSTRUCTION INC

Contract Overview

Contract Amount: $3,101,410 ($3.1M)

Contractor: R-Con Construction Inc

Awarding Agency: Department of Defense

Start Date: 2024-08-15

End Date: 2026-05-11

Contract Duration: 634 days

Daily Burn Rate: $4.9K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: THE CONTRACTOR SHALL PROVIDE ALL MATERIALS, EQUIPMENT AND LABOR NECESSARY TO DRILL WELLS AT DOUGLAS WELLS FIELD. ALL WORK SHALL BE PERFORMED IN ACCORDANCE WITH THE STATEMENT OF OBJECTIVES, DATED 7 JUNE 2024.

Place of Performance

Location: ALAMOGORDO, OTERO County, NEW MEXICO, 88310

State: New Mexico Government Spending

Plain-Language Summary

Department of Defense obligated $3.1 million to R-CON CONSTRUCTION INC for work described as: THE CONTRACTOR SHALL PROVIDE ALL MATERIALS, EQUIPMENT AND LABOR NECESSARY TO DRILL WELLS AT DOUGLAS WELLS FIELD. ALL WORK SHALL BE PERFORMED IN ACCORDANCE WITH THE STATEMENT OF OBJECTIVES, DATED 7 JUNE 2024. Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract duration of 634 days indicates a significant, multi-year project. 3. Fixed-price contract type shifts performance risk to the contractor. 4. The contract is for construction services, specifically well drilling. 5. Geographic location is New Mexico, potentially impacting local labor and resources. 6. No small business set-aside was utilized for this award.

Value Assessment

Rating: fair

The contract value of $3.1 million for well drilling over approximately two years appears within a reasonable range for such infrastructure projects. However, without specific details on the number of wells, depth, or complexity, a precise value-for-money assessment is challenging. Benchmarking against similar DoD well-drilling contracts in New Mexico or comparable arid regions would provide a clearer picture of cost-effectiveness. The firm-fixed-price structure aims to control costs, but the ultimate value depends on the contractor's efficiency and the actual scope of work completed.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition after exclusion of sources,' indicating that the solicitation was broadly advertised, and all responsible sources were permitted to submit offers. The presence of 3 bids (no) suggests a moderate level of competition for this specific requirement. While competition existed, the exact number of bidders limits the ability to definitively assess if the pricing achieved reflects the most competitive market rates possible.

Taxpayer Impact: The use of full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down prices and encourage innovation. The fact that three bids were received suggests that the government received multiple proposals, likely leading to a more favorable price than a sole-source award.

Public Impact

The Department of the Air Force benefits from the essential infrastructure development at Douglas Wells Field. Services delivered include the drilling of wells, crucial for water supply or other operational needs. The project's geographic impact is localized to New Mexico. The contract supports the construction sector workforce, potentially creating or sustaining jobs for skilled laborers and tradespeople in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen geological challenges arise during drilling.
Dependence on contractor's specialized equipment and expertise for successful execution.
Risk of schedule delays due to weather or logistical issues in a remote location.

Positive Signals

Firm-fixed-price contract type provides cost certainty for the government.
Full and open competition suggests a structured procurement process.
Award to a single contractor streamlines project management and execution.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, specifically focusing on specialized infrastructure development like well drilling. The market for such services is often regional, driven by local expertise and resource availability. Federal spending in construction, particularly for military installations, is substantial, encompassing a wide range of projects from barracks to specialized facilities. This contract represents a small but critical component of the DoD's broader infrastructure investment strategy, ensuring operational readiness and support at its facilities.

Small Business Impact

This contract was not awarded as a small business set-aside, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. The award went to R-CON CONSTRUCTION INC., and without further information on their size status or subcontracting plans, the direct impact on the small business ecosystem is unclear. However, larger prime contractors often engage small businesses for specialized services, so there may be indirect opportunities.

Oversight & Accountability

Oversight for this contract will likely be managed by the contracting officer and the designated contract administration office within the Department of the Air Force. Performance monitoring will focus on adherence to the Statement of Objectives, quality of work, and timely completion. Transparency is facilitated through contract award databases, though detailed project progress reports are typically internal. Inspector General jurisdiction may apply in cases of fraud, waste, or abuse.

Related Government Programs

Military Construction
Base Operations Support
Water Infrastructure Projects
Federal Construction Contracts

Risk Flags

Potential for cost overruns due to unforeseen geological conditions.
Schedule delays possible due to weather or logistical challenges.
Contractor performance risk under firm-fixed-price structure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $3.1 million to R-CON CONSTRUCTION INC. THE CONTRACTOR SHALL PROVIDE ALL MATERIALS, EQUIPMENT AND LABOR NECESSARY TO DRILL WELLS AT DOUGLAS WELLS FIELD. ALL WORK SHALL BE PERFORMED IN ACCORDANCE WITH THE STATEMENT OF OBJECTIVES, DATED 7 JUNE 2024.

Who is the contractor on this award?

The obligated recipient is R-CON CONSTRUCTION INC.

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 $3.1 million.

What is the period of performance?

Start: 2024-08-15. End: 2026-05-11.

What is the track record of R-CON CONSTRUCTION INC. with the Department of Defense or similar federal agencies?

Information regarding R-CON CONSTRUCTION INC.'s specific track record with the Department of Defense or other federal agencies is not detailed in the provided data. A comprehensive assessment would require reviewing past performance evaluations, contract history, and any reported issues or successes on previous government contracts. Understanding their experience with similar well-drilling projects, project sizes, and geographic locations would be crucial for evaluating their capability and reliability for this specific award. Without this historical data, it's difficult to definitively assess their suitability beyond the competitive bidding outcome.

How does the awarded price of $3.1 million compare to similar well-drilling contracts in New Mexico?

Benchmarking the $3.1 million contract value against similar well-drilling projects in New Mexico is challenging without access to a broader dataset of comparable contracts. Factors such as the number of wells, depth, geological conditions, and specific technical requirements significantly influence pricing. The provided data indicates 3 bids were received, suggesting some level of competition, but it doesn't reveal the range of those bids or how R-CON's price compares to the others. A detailed comparison would necessitate analyzing contracts for similar scope, duration, and location, considering any unique environmental or logistical challenges present in New Mexico.

What are the primary risks associated with this firm-fixed-price contract for well drilling?

The primary risks associated with this firm-fixed-price contract for well drilling primarily lie with the contractor, R-CON CONSTRUCTION INC. If unforeseen geological conditions, such as hard rock formations or groundwater contamination, are encountered, the contractor may incur higher costs than anticipated, potentially impacting their profit margin or leading to claims for equitable adjustments if the contract allows. Additionally, the contractor bears the risk of schedule delays caused by weather, equipment failure, or supply chain disruptions. For the government, the main risk is ensuring the contractor possesses the necessary expertise and resources to successfully complete the project to the required specifications within the agreed-upon price, despite these contractor-borne risks.

What is the expected impact of this contract on the local workforce in New Mexico?

This contract is expected to have a positive impact on the local workforce in New Mexico by creating employment opportunities within the construction sector. R-CON CONSTRUCTION INC. will likely need to hire skilled laborers, equipment operators, geologists, and project managers to execute the well-drilling project. The duration of the contract (634 days) suggests sustained employment for the project team. Furthermore, the project may stimulate indirect employment through local suppliers of materials, equipment rental services, and support businesses in the vicinity of Douglas Wells Field. The extent of this impact will depend on the contractor's hiring practices and reliance on local resources.

How does the competition level (3 bids) influence the price discovery for this contract?

A competition level of three bids suggests a moderate degree of price discovery for this contract. While it indicates that multiple companies were interested and capable of performing the work, it is not as robust as a competition with a larger number of bidders. With three bids, the government likely received a reasonably competitive price, as contractors would be motivated to offer attractive terms to win the award. However, a higher number of bids could potentially have led to even more aggressive pricing and a greater assurance that the government secured the best possible value. The specific pricing strategies of the three competing firms would ultimately determine the effectiveness of the price discovery.

What are the potential long-term implications of this well-drilling project for Douglas Wells Field's operational capabilities?

The long-term implications of this well-drilling project for Douglas Wells Field's operational capabilities are likely significant, assuming the wells are intended to support critical functions such as water supply, environmental remediation, or resource extraction. Successful completion of the wells could enhance the base's self-sufficiency, reduce reliance on external water sources, or provide necessary resources for ongoing operations and future development. The reliability and capacity of the newly drilled wells will directly influence the base's resilience and ability to sustain its mission requirements over time. Proper planning and execution are key to ensuring these wells provide lasting operational benefits.

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Commercial and Institutional Building Construction

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 5195 BATAAN MEMORIAL W, LAS CRUCES, NM, 88012

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Hispanic American Owned Business, Minority Owned Business, Service Disabled Veteran Owned Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $3,101,410

Exercised Options: $3,101,410

Current Obligation: $3,101,410

Actual Outlays: $17,368

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA480119DA009

IDV Type: IDC

Timeline