GSA's $40.5M New Custom House Modernization in Denver Faced Limited Competition, Raising Cost Concerns

Contract Overview

Contract Amount: $40,496,684 ($40.5M)

Contractor: Matsuo Engineering Centerre Construction a Joint Venture

Awarding Agency: General Services Administration

Start Date: 2010-03-19

End Date: 2018-04-21

Contract Duration: 2,955 days

Daily Burn Rate: $13.7K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 11

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: ARRA NEW CUSTOM HOUSE MODERNIZATION PROJECT, DENVER CO

Place of Performance

Location: DENVER, DENVER County, COLORADO, 80202

State: Colorado Government Spending

Plain-Language Summary

General Services Administration obligated $40.5 million to MATSUO ENGINEERING CENTERRE CONSTRUCTION A JOINT VENTURE for work described as: ARRA NEW CUSTOM HOUSE MODERNIZATION PROJECT, DENVER CO Key points: 1. The project cost $40.5 million, with a significant portion potentially impacted by limited competition. 2. MATSUO ENGINEERING CENTERRE CONSTRUCTION A JOINT VENTURE was the contractor, but the competition method suggests potential price discovery issues. 3. The 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' method warrants scrutiny for its impact on value for money. 4. The sector is Commercial and Institutional Building Construction, a broad category where benchmarks can vary widely.

Value Assessment

Rating: fair

The final cost of $40.5 million needs comparison against similar GSA modernization projects. The contract type (FIRM FIXED PRICE) suggests cost certainty, but the competition method might have inflated the baseline price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating that not all potential bidders were considered. This limited competition may have reduced price pressure and potentially led to a higher final cost than if full and open competition had been pursued.

Taxpayer Impact: Limited competition can result in taxpayers paying more than necessary for government projects. The lack of broad market engagement may have prevented the government from securing the best possible price.

Public Impact

Modernization of federal buildings impacts public access and the functionality of essential government services. The use of taxpayer funds for construction projects is always under public scrutiny. The long duration (2955 days) suggests potential for cost overruns or scope creep, even with a fixed-price contract.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition
Long project duration
Potential for inflated pricing due to competition method

Positive Signals

Firm Fixed Price contract type
Project completed under GSA oversight

Sector Analysis

This project falls within the Commercial and Institutional Building Construction sector. Spending in this sector can be highly variable based on project scope, location, and specific construction needs. Benchmarking requires detailed comparison with similar federal building modernization efforts.

Small Business Impact

The data indicates the prime contractor was MATSUO ENGINEERING CENTERRE CONSTRUCTION A JOINT VENTURE. There is no specific information provided regarding small business participation in this contract, which is a concern given federal goals for small business utilization.

Oversight & Accountability

The General Services Administration (GSA) is responsible for overseeing federal building projects. The 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' method suggests a specific oversight process was followed, but its effectiveness in ensuring competitive pricing is questionable.

Related Government Programs

Commercial and Institutional Building Construction
General Services Administration Contracting
Public Buildings Service Programs

Risk Flags

Limited competition may have inflated costs.
Long project duration raises questions about efficiency and potential cost impacts.
Lack of transparency regarding small business participation.
The 'exclusion of sources' justification needs thorough review.

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $40.5 million to MATSUO ENGINEERING CENTERRE CONSTRUCTION A JOINT VENTURE. ARRA NEW CUSTOM HOUSE MODERNIZATION PROJECT, DENVER CO

Who is the contractor on this award?

The obligated recipient is MATSUO ENGINEERING CENTERRE CONSTRUCTION A JOINT VENTURE.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $40.5 million.

What is the period of performance?

Start: 2010-03-19. End: 2018-04-21.

What specific criteria led to the exclusion of sources in this 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' award, and how did this impact the final price?

The exclusion of sources typically occurs when specific technical capabilities, past performance, or unique requirements are deemed necessary, limiting the pool of eligible bidders. This reduction in competition can lessen price pressure, potentially leading to a higher contract price than if a broader range of contractors had been allowed to compete. Further investigation into the justification for source exclusion is needed to assess the value achieved.

Given the project's long duration of 2955 days, what were the primary drivers of the extended timeline, and did they contribute to cost increases despite the firm fixed price?

Extended project durations, even under firm fixed-price contracts, can lead to indirect cost increases through factors like extended overhead, potential for scope creep, or unforeseen site conditions. Understanding the specific reasons for the 2955-day timeline is crucial to determine if the contractor incurred additional costs that may have been implicitly passed on or if the initial pricing adequately accounted for such a lengthy period.

How does the final cost of $40.5 million for the New Custom House Modernization compare to industry benchmarks for similar federal building modernization projects of comparable size and complexity?

A direct comparison requires detailed project specifications and market data. However, without specific benchmarks, $40.5 million for a federal building modernization is a substantial investment. The limited competition aspect raises a flag, suggesting the price might be higher than what could have been achieved through broader market engagement. Benchmarking against similar GSA projects would provide a clearer picture of cost-effectiveness.

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: TWO STEP

Solicitation ID: GS-08P-10-JB-C-0007

Offers Received: 11

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 760 DEVINNEY CT, GOLDEN, CO, 80401

Business Categories: Asian Pacific American Owned Business, Category Business, Emerging Small Business, Limited Liability Corporation, Minority Owned Business, SBA Certified 8 a Joint Venture, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $40,496,684

Exercised Options: $40,496,684

Current Obligation: $40,496,684

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline