GSA's $79.4M Design-Build CUP2 Expansion Contract Awarded to Balfour Beatty Construction

Contract Overview

Contract Amount: $79,385,175 ($79.4M)

Contractor: Balfour Beatty Construction, LLC

Awarding Agency: General Services Administration

Start Date: 2016-12-06

End Date: 2020-06-30

Contract Duration: 1,302 days

Daily Burn Rate: $61.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF DESIGN-BUILD OF CENTRAL UTILITY PLANT EXPANSION (CUP2), ST ELIZABETHS WEST CAMPUS, SE, WASH., DC

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20032

State: District of Columbia Government Spending

Plain-Language Summary

General Services Administration obligated $79.4 million to BALFOUR BEATTY CONSTRUCTION, LLC for work described as: IGF::OT::IGF DESIGN-BUILD OF CENTRAL UTILITY PLANT EXPANSION (CUP2), ST ELIZABETHS WEST CAMPUS, SE, WASH., DC Key points: 1. Contract value represents a significant investment in campus infrastructure. 2. The project was awarded under full and open competition, suggesting a robust bidding process. 3. Fixed-price contract type aims to control costs, but requires careful scope management. 4. Project duration of 1302 days indicates a complex, long-term undertaking. 5. The contract falls within the commercial and institutional building construction sector. 6. Geographic focus on Washington D.C. highlights regional development investment.

Value Assessment

Rating: fair

The contract value of $79.4 million for a utility plant expansion appears substantial. Benchmarking against similar large-scale construction projects is necessary to fully assess value for money. The firm fixed-price nature suggests an attempt to cap costs, but the final cost-effectiveness will depend on the scope of work and any change orders. Without detailed cost breakdowns or comparisons to similar projects, a definitive value assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through full and open competition, indicating that multiple bidders were likely considered. This competitive process is generally expected to yield a fair market price and encourage efficiency from the winning contractor. The presence of four bids suggests a reasonable level of interest in the project, though the exact number of bidders does not always correlate directly with the competitiveness of the pricing.

Taxpayer Impact: A competitive bidding process for this contract is beneficial for taxpayers as it likely drove down the price compared to a sole-source award. It ensures that public funds are used efficiently by selecting the most cost-effective and capable bidder.

Public Impact

The primary beneficiaries are likely the occupants and users of the St. Elizabeths West Campus, who will benefit from improved and expanded utility services. The project delivers essential infrastructure upgrades, ensuring reliable power, heating, and cooling for the campus. The geographic impact is concentrated in Washington D.C., supporting local infrastructure development. The construction activities will likely create jobs for skilled trades and construction workers in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the fixed-price scope is not meticulously managed.
Delays in construction could impact the operational readiness of the campus.
Ensuring the long-term reliability and maintenance costs of the expanded utility plant.

Positive Signals

Awarded through full and open competition, suggesting a competitive pricing environment.
Firm fixed-price contract type provides cost certainty for the government.
Project addresses critical infrastructure needs for a significant government campus.

Sector Analysis

This contract falls within the construction sector, specifically commercial and institutional building construction. The market for large-scale utility plant expansions is specialized, often involving significant engineering and project management expertise. Comparable spending benchmarks would typically be found in large public works projects or major campus development initiatives, where costs are driven by scale, complexity, and regulatory requirements.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, small businesses are unlikely to be direct prime contractors. However, Balfour Beatty Construction, as a large prime contractor, may engage small businesses as subcontractors, contributing to the small business ecosystem indirectly. The extent of small business subcontracting would need further investigation.

Oversight & Accountability

Oversight for this contract would typically be managed by the General Services Administration's Public Buildings Service. Mechanisms likely include contract performance monitoring, site inspections, and review of progress reports. Accountability is enforced through the firm fixed-price contract terms, with potential penalties for delays or non-performance. Transparency is generally maintained through contract award databases and public reporting, though detailed project financials may be internal.

Related Government Programs

Federal Building Construction
Public Infrastructure Projects
Government Campus Development
Utility Infrastructure Modernization

Risk Flags

Potential for scope creep in design-build projects.
Risk of unforeseen site conditions impacting schedule and cost.
Reliance on contractor's expertise for design and construction quality.
Long project duration increases exposure to market fluctuations.

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $79.4 million to BALFOUR BEATTY CONSTRUCTION, LLC. IGF::OT::IGF DESIGN-BUILD OF CENTRAL UTILITY PLANT EXPANSION (CUP2), ST ELIZABETHS WEST CAMPUS, SE, WASH., DC

Who is the contractor on this award?

The obligated recipient is BALFOUR BEATTY CONSTRUCTION, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $79.4 million.

What is the period of performance?

Start: 2016-12-06. End: 2020-06-30.

What is the track record of Balfour Beatty Construction on similar large-scale federal projects?

Balfour Beatty Construction is a major player in the construction industry with a significant portfolio of federal projects. Their experience often includes large-scale infrastructure, design-build, and complex facility construction. To assess their track record specifically for this type of utility plant expansion, a review of past performance on similar projects, including any history of cost overruns, schedule delays, or quality issues, would be beneficial. Examining past federal contract awards and performance evaluations would provide a clearer picture of their reliability and expertise in delivering projects of comparable scope and complexity.

How does the awarded price compare to industry benchmarks for similar utility plant expansions?

Benchmarking the $79.4 million award against industry standards for utility plant expansions requires detailed cost data and project scope comparisons. Factors such as square footage, capacity (e.g., megawatts, tons of cooling), specific technologies employed, and geographic location significantly influence costs. Without access to detailed cost breakdowns from the bid or comparable project data from sources like RSMeans or industry cost indices, a precise comparison is difficult. However, the scale of the project suggests it is a substantial investment, and GSA likely conducted its own internal cost estimates and reviews during the procurement process to ensure reasonableness.

What are the primary risks associated with a firm fixed-price design-build contract of this magnitude?

The primary risks in a firm fixed-price design-build contract of this magnitude ($79.4M) revolve around scope definition and management. For the government, the risk is that the contractor may cut corners on quality or scope to maintain profitability if unforeseen issues arise during design or construction, or if initial estimates were too low. For the contractor, the risk is absorbing cost overruns if design complexities, unforeseen site conditions, or material price escalations exceed the fixed price. Effective risk mitigation relies on a clearly defined scope of work, robust change order management processes, and diligent government oversight throughout the project lifecycle.

What is the expected impact of this expansion on the operational efficiency and capacity of the St. Elizabeths West Campus?

The expansion of the Central Utility Plant (CUP2) is intended to significantly enhance the operational efficiency and capacity of the St. Elizabeths West Campus. This typically involves upgrading or increasing the generation of essential utilities such as electricity, heating, and cooling. The improved capacity ensures that the campus can support current and future operational demands, potentially reducing the risk of service disruptions and improving energy efficiency. Enhanced reliability and capacity are critical for the functioning of any large campus, particularly one housing significant government operations.

How has federal spending on similar infrastructure projects in Washington D.C. trended over the past five years?

Federal spending on infrastructure projects in Washington D.C. has generally been substantial, driven by the need to maintain and modernize federal facilities and support the capital's infrastructure. Over the past five years, there has been a continued emphasis on upgrading aging federal buildings, enhancing energy efficiency, and ensuring the resilience of critical infrastructure. Projects like the CUP2 expansion align with this trend. Specific data on trends would require analysis of federal procurement databases, looking at contract awards for construction, renovation, and utility systems within the D.C. metropolitan area across various agencies.

What are the key performance indicators (KPIs) likely used to measure the success of this contract?

Key performance indicators for this contract would likely focus on schedule adherence, cost control within the fixed-price budget, quality of construction meeting specified standards, and successful commissioning of the expanded utility plant. Safety performance on site, adherence to environmental regulations, and the contractor's responsiveness to government oversight would also be critical. Ultimately, the success will be measured by the plant's ability to reliably and efficiently provide the required utilities to the St. Elizabeths West Campus post-completion, meeting all contractual performance specifications.

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-11-P-16-MM-C-7001

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 11325 RANDOM HILLS RD STE 500, FAIRFAX, VA, 22030

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $79,385,175

Exercised Options: $79,385,175

Current Obligation: $79,385,175

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline