GSA awards $34.1M construction management contract to Kraus-Anderson for pre-construction services in Minnesota

Contract Overview

Contract Amount: $34,100,825 ($34.1M)

Contractor: Kraus-Anderson Construction CO

Awarding Agency: General Services Administration

Start Date: 2007-10-04

End Date: 2011-01-04

Contract Duration: 1,188 days

Daily Burn Rate: $28.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: CONSTRUCTION MANAGER AS CONSTRUCTOR SERVICES - BASE AWARD IS FOR PRE-CONSTRUCTION PHASE SERVICES

Place of Performance

Location: WARROAD, ROSEAU County, MINNESOTA, 56763

State: Minnesota Government Spending

Plain-Language Summary

General Services Administration obligated $34.1 million to KRAUS-ANDERSON CONSTRUCTION CO for work described as: CONSTRUCTION MANAGER AS CONSTRUCTOR SERVICES - BASE AWARD IS FOR PRE-CONSTRUCTION PHASE SERVICES Key points: 1. Contract awarded for pre-construction phase services, indicating a focus on planning and design before full construction. 2. The contract value of $34.1 million suggests a significant project requiring extensive management. 3. Firm Fixed Price contract type implies cost certainty for the government, shifting risk to the contractor. 4. The contract duration of 1188 days (approximately 3.25 years) points to a long-term engagement. 5. Awarded by the General Services Administration (GSA), a key agency for federal building management. 6. The North American Industry Classification System (NAICS) code 236220 identifies the sector as Commercial and Institutional Building Construction.

Value Assessment

Rating: fair

The base award of $34.1 million for pre-construction services is a substantial amount, but without comparable project data or detailed cost breakdowns, a precise value-for-money assessment is difficult. The firm fixed-price nature provides some cost control. Benchmarking against similar large-scale public building construction management contracts would be necessary for a more definitive evaluation of pricing and value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting a broad solicitation process. The data indicates two bids were received. While this indicates competition, the low number of bidders could suggest a specialized market or limited outreach, potentially impacting price discovery.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it aims to solicit the best possible pricing through a wide range of potential offerors.

Public Impact

Federal agencies requiring new or renovated commercial and institutional buildings will benefit from these pre-construction services. The services delivered will focus on planning, design coordination, and cost estimation to ensure project readiness. The geographic impact is centered in Minnesota, as indicated by the state code 'MN'. The contract supports the construction industry workforce through the engagement of a construction management firm.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition with only two bids received could indicate potential for higher costs than a more robust bidding environment.
The substantial award amount necessitates close monitoring to ensure adherence to budget and scope.
The long contract duration requires sustained oversight to manage performance and potential scope creep.

Positive Signals

Awarded through full and open competition, maximizing the pool of potential contractors.
Firm Fixed Price contract type offers cost predictability for the government.
The contract is for pre-construction services, which can lead to better project planning and cost control.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the construction industry. The General Services Administration (GSA) is a major player in federal construction, managing a vast portfolio of government buildings. Comparable spending benchmarks would involve analyzing other large-scale construction management contracts managed by GSA or similar federal agencies for projects of similar scope and complexity.

Small Business Impact

The data indicates that small business participation was not a specific set-aside (ss: false, sb: false). Therefore, the primary impact on small businesses would be through potential subcontracting opportunities offered by Kraus-Anderson. The extent of these opportunities would depend on the firm's subcontracting plan and the specific needs of the pre-construction services.

Oversight & Accountability

Oversight for this contract would primarily fall under the General Services Administration (GSA), specifically its Public Buildings Service. Accountability measures are inherent in the firm fixed-price contract type, which holds the contractor responsible for costs exceeding the agreed-upon price. Transparency would be facilitated through contract award data and potentially through GSA's reporting mechanisms. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Federal Building Construction
Public Works Projects
Government Facility Management
Construction Management Services

Risk Flags

Limited number of bidders
Potential for cost overruns if scope is not well-defined
Need for robust government oversight throughout the contract duration

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $34.1 million to KRAUS-ANDERSON CONSTRUCTION CO. CONSTRUCTION MANAGER AS CONSTRUCTOR SERVICES - BASE AWARD IS FOR PRE-CONSTRUCTION PHASE SERVICES

Who is the contractor on this award?

The obligated recipient is KRAUS-ANDERSON CONSTRUCTION CO.

Which agency awarded this contract?

Awarding agency: General Services Administration (Public Buildings Service).

What is the total obligated amount?

The obligated amount is $34.1 million.

What is the period of performance?

Start: 2007-10-04. End: 2011-01-04.

What is the track record of Kraus-Anderson Construction Co. with federal contracts, particularly with the GSA?

Kraus-Anderson Construction Co. has a history of working with the federal government, including contracts with the General Services Administration (GSA). While this specific award is for pre-construction services, their broader experience likely encompasses various phases of construction projects. Analyzing their past performance on similar federal contracts, including on-time delivery, budget adherence, and quality of work, would provide further insight into their capabilities and reliability. Federal procurement databases and past performance reviews can offer more detailed information on their track record.

How does the $34.1 million base award compare to similar pre-construction service contracts managed by the GSA?

The $34.1 million base award for pre-construction services is a significant figure, suggesting a large-scale or complex project. To benchmark this value, one would need to compare it against other GSA contracts for similar services on projects of comparable size, scope, and location. Factors such as the type of facility being planned (e.g., courthouse, office building, laboratory), the complexity of the design, and the duration of the pre-construction phase are crucial for a meaningful comparison. Without access to a database of comparable GSA pre-construction contracts, it's challenging to definitively state whether this award represents excellent, fair, or questionable value.

What are the primary risks associated with a firm fixed-price contract for pre-construction services?

While a firm fixed-price (FFP) contract offers cost certainty for the government, risks can still exist. For pre-construction services, potential risks include the contractor underestimating the complexity of the planning phase, leading to cost overruns that they must absorb. Conversely, if the scope is not clearly defined, the contractor might deliver minimal services to maximize profit. Another risk is that the contractor may be less inclined to collaborate openly on value engineering or cost-saving measures if it directly impacts their fixed profit margin. The government's risk lies in ensuring the contract adequately defines the scope and performance standards to prevent subpar service delivery.

What is the expected effectiveness of this contract in ensuring successful project delivery?

The effectiveness of this contract hinges on the quality of the pre-construction services provided by Kraus-Anderson. Effective pre-construction planning, including accurate cost estimating, constructability reviews, and detailed scheduling, is crucial for the overall success of a construction project. By engaging a qualified firm like Kraus-Anderson through a competitive process, the GSA aims to lay a solid foundation for the subsequent construction phases. The firm fixed-price nature incentivizes the contractor to manage these early stages efficiently. However, ongoing government oversight and collaboration will be essential to ensure the planned outcomes translate into a successful final project.

How has GSA spending on construction management services evolved over the past five years?

Analyzing GSA's spending on construction management services over the past five years would require access to historical federal procurement data. Generally, federal spending on construction and related services can fluctuate based on infrastructure needs, economic conditions, and administration priorities. GSA, as a major manager of federal real estate, would likely show consistent, albeit variable, spending in this category. Trends might include shifts towards more sustainable building practices, increased use of advanced project management technologies, or a focus on modernizing existing federal facilities. A detailed analysis would involve examining contract award databases for trends in award values, contract types, and the number of awarded contracts within this service category.

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: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: GS-05P-07-GC-C-0007

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Kraus Anderson Inc (UEI: 006962104)

Address: 523 SOUTH 8TH ST, MINNEAPOLIS, MN, 90

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

Financial Breakdown

Contract Ceiling: $34,100,825

Exercised Options: $34,100,825

Current Obligation: $34,100,825

Contract Characteristics

Cost or Pricing Data: NO

Timeline