Navy Exchange Building Construction contract awarded to KBE Building Corp for over $28.5 million

Contract Overview

Contract Amount: $28,536,797 ($28.5M)

Contractor: KBE Building Corp

Awarding Agency: Department of Defense

Start Date: 2012-08-31

End Date: 2014-06-24

Contract Duration: 662 days

Daily Burn Rate: $43.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 7

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: NAVY EXCHANGE BUILDING CONSTRUCTION

Place of Performance

Location: ANNAPOLIS, ANNE ARUNDEL County, MARYLAND, 21402, UNITED STATES OF AMERICA

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $28.5 million to KBE BUILDING CORP for work described as: NAVY EXCHANGE BUILDING CONSTRUCTION Key points: 1. The contract value of over $28.5 million represents a significant investment in defense infrastructure. 2. Competition dynamics for this project involved a full and open approach, suggesting a robust bidding process. 3. The firm-fixed-price contract type indicates that cost risks were largely borne by the contractor. 4. Performance duration of approximately 662 days suggests a substantial construction undertaking. 5. The project falls within the broader commercial and institutional building construction sector. 6. The award was made by the Defense Commissary Agency, highlighting its role in supporting military personnel and families.

Value Assessment

Rating: good

The contract value of $28.5 million for a building construction project of this scale appears reasonable within the defense sector. Benchmarking against similar large-scale construction projects for military exchanges or commissaries would provide a more precise value-for-money assessment. The firm-fixed-price nature of the contract shifts cost overruns to the contractor, which can be advantageous for the government if well-managed.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. With 7 bidders participating, this suggests a healthy level of competition for the project. A higher number of bidders generally leads to more competitive pricing and a wider selection of qualified contractors, potentially resulting in better value for the government.

Taxpayer Impact: The full and open competition with multiple bidders likely resulted in a more competitive price for taxpayers, as contractors vied to win the contract by offering their best terms.

Public Impact

Military personnel and their families stationed in Maryland will benefit from the improved facilities. The project delivered new or renovated building infrastructure, enhancing the services available at the Navy Exchange. The geographic impact is localized to Maryland, where the construction took place. The construction project likely supported local jobs in the construction industry within Maryland.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for construction delays impacting operational readiness.
Risk of cost escalation if unforeseen site conditions arise, despite fixed-price contract.
Ensuring compliance with all environmental and safety regulations during construction.

Positive Signals

Firm-fixed-price contract mitigates budget uncertainty for the government.
Full and open competition suggests a competitive award process.
Award to an established contractor implies a degree of confidence in their capabilities.

Sector Analysis

This contract falls under the Commercial and Institutional Building Construction sector, a significant segment of the broader construction industry. This sector encompasses the building of non-residential structures such as retail spaces, offices, and public facilities. The Department of Defense is a major client within this sector, frequently awarding contracts for the construction and renovation of facilities to support military operations and personnel.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, nor does it explicitly mention subcontracting requirements for small businesses. This suggests that the primary award went to a large business. Further analysis would be needed to determine if KBE Building Corp has a history of subcontracting with small businesses on projects of this magnitude.

Oversight & Accountability

Oversight for this construction contract would typically be managed by the contracting officer and the Defense Contract Management Agency (DCMA). The firm-fixed-price nature of the contract implies that the government's primary oversight focus would be on ensuring the contractor meets the specified construction milestones, quality standards, and delivery timelines, rather than detailed cost monitoring. Transparency is generally maintained through contract award databases and reporting.

Related Government Programs

Military Construction
Defense Facilities Construction
Naval Support Contracts
Commissary and Exchange Construction

Risk Flags

Potential for cost overruns if unforeseen site conditions arise.
Risk of schedule delays impacting operational readiness.
Ensuring quality control throughout the construction process.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.5 million to KBE BUILDING CORP. NAVY EXCHANGE BUILDING CONSTRUCTION

Who is the contractor on this award?

The obligated recipient is KBE BUILDING CORP.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Commissary Agency).

What is the total obligated amount?

The obligated amount is $28.5 million.

What is the period of performance?

Start: 2012-08-31. End: 2014-06-24.

What is the track record of KBE Building Corp with the Department of Defense?

KBE Building Corp has a history of securing contracts with the Department of Defense, as evidenced by this award. To fully assess their track record, a deeper dive into their past performance on similar defense construction projects would be necessary. This would include examining contract completion timeliness, adherence to budget (especially relevant for fixed-price contracts), quality of work, and any past performance issues or disputes. Understanding their experience with large-scale institutional or commercial building projects within the federal sector would provide further context on their capabilities and reliability as a government contractor.

How does the awarded amount compare to similar Navy Exchange construction projects?

The awarded amount of over $28.5 million for the Navy Exchange building construction project provides a significant data point. To benchmark this value effectively, it would be crucial to compare it against other similar construction projects for Navy Exchanges or similar retail/service facilities for military installations. Factors such as project scope (e.g., square footage, new build vs. renovation), location (which influences labor and material costs), and the year of award are critical for a fair comparison. Without specific comparable project data, it's challenging to definitively state if this represents excellent, fair, or questionable value, though the competitive bidding process suggests a reasonable market price was sought.

What are the primary risks associated with this firm-fixed-price construction contract?

While firm-fixed-price contracts are generally favorable to the government by capping costs, risks remain. For KBE Building Corp, the primary risk is absorbing any cost overruns that may occur due to unforeseen site conditions, material price fluctuations, or labor shortages. For the government, the risk lies in ensuring the contractor maintains quality standards and adheres to the schedule, as the contractor may be incentivized to cut corners if facing cost pressures. There's also the risk of contractor default or significant delays, which could impact the intended use of the facility and potentially lead to disputes or contract termination.

How effective is the Defense Commissary Agency in managing large construction projects?

The effectiveness of the Defense Commissary Agency (DeCA) in managing large construction projects like this Navy Exchange building is generally assessed through project outcomes: timely completion, adherence to budget (within the fixed-price framework), and the final quality and functionality of the facility. DeCA's mission is to provide high-quality goods and services to military personnel and their families, and infrastructure projects are key to supporting this. Their success is often reflected in the operational efficiency and customer satisfaction derived from the completed facilities. While this specific contract award doesn't detail DeCA's management performance, their continued role in awarding and overseeing such projects suggests a functional capacity for managing construction procurement.

What are the historical spending patterns for Navy Exchange construction?

Analyzing historical spending patterns for Navy Exchange construction would involve examining the frequency and value of similar contracts awarded over several fiscal years. This would reveal trends in investment in exchange facilities, average project costs, and the typical contracting mechanisms employed (e.g., fixed-price vs. cost-plus, competition levels). Understanding these patterns helps in forecasting future needs, budgeting, and identifying potential shifts in construction strategies or market conditions. For instance, a surge in spending might indicate a modernization initiative, while a decrease could suggest budget constraints or a focus on maintenance over new builds.

What is the typical duration for a commercial building construction project of this scale?

The typical duration for a commercial building construction project of this scale, valued at over $28.5 million, can vary significantly based on complexity, scope, and location. However, a duration of approximately 662 days (roughly 22 months) is within a plausible range for a project of this magnitude. Factors influencing duration include whether it's a new build or renovation, site accessibility, weather conditions, permitting processes, and the availability of labor and materials. Shorter durations might be achieved through modular construction or expedited permitting, while more complex designs or challenging sites could extend the timeline considerably.

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: HDEC0312R0006

Offers Received: 7

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 30 BATTERSON PARK RD, FARMINGTON, CT, 06032

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

Financial Breakdown

Contract Ceiling: $28,536,797

Exercised Options: $28,536,797

Current Obligation: $28,536,797

Contract Characteristics

Cost or Pricing Data: NO

Timeline