HHS awarded $16.6M for building renovation, with 6 bidders competing for the firm-fixed-price contract

Contract Overview

Contract Amount: $16,632,043 ($16.6M)

Contractor: United States Surety CO.

Awarding Agency: Department of Health and Human Services

Start Date: 2010-09-02

End Date: 2015-02-12

Contract Duration: 1,624 days

Daily Burn Rate: $10.2K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: ARRA::YES::ARRA TAS::75 0839::TAS RECOVERY ACT CONSTRUCTIONS SERVICES TO RENOVATE BUILDING 3

Place of Performance

Location: BETHESDA, MONTGOMERY County, MARYLAND, 20892

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $16.6 million to UNITED STATES SURETY CO. for work described as: ARRA::YES::ARRA TAS::75 0839::TAS RECOVERY ACT CONSTRUCTIONS SERVICES TO RENOVATE BUILDING 3 Key points: 1. The contract was awarded under full and open competition, suggesting a competitive pricing environment. 2. The duration of the contract (over 4 years) indicates a significant, long-term renovation project. 3. The firm-fixed-price structure shifts cost risk to the contractor, potentially stabilizing project expenses. 4. The project falls under commercial and institutional building construction, a broad but essential sector. 5. The award to United States Surety Co. represents a specific investment in infrastructure maintenance. 6. The contract's value is moderate within the context of large federal construction projects.

Value Assessment

Rating: good

The contract value of $16.6 million for building renovation appears reasonable given the project's scope and duration. Benchmarking against similar large-scale institutional building renovations by federal agencies would provide a more precise value-for-money assessment. The firm-fixed-price nature of the award suggests that the contractor is responsible for cost overruns, which is a positive indicator for the government.

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 a robust bidding process where multiple qualified vendors were invited to submit proposals. With six bidders, the competition level was healthy, likely driving competitive pricing and ensuring the government received a fair market offer. This level of competition generally leads to better value for taxpayer dollars.

Taxpayer Impact: The strong competition for this contract suggests that taxpayers benefited from a price that was likely driven down by multiple offers, rather than being set by a single provider.

Public Impact

The primary beneficiaries are the National Institutes of Health (NIH) and its staff, who will utilize the renovated Building 3. The services delivered include the renovation of a specific institutional building, improving its functionality and safety. The geographic impact is localized to the NIH campus in Maryland. The project likely involved a construction workforce, contributing to employment in the skilled trades sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep in long-term construction projects if not managed tightly.
Reliance on a single contractor for an extended period could pose risks if performance issues arise.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Full and open competition indicates a competitive award process.
The contract is for essential infrastructure maintenance and improvement.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, which encompasses a wide range of projects for government, commercial, and non-profit entities. Federal spending in this sector is substantial, covering everything from office buildings to research facilities. The $16.6 million award is a moderate-sized project within this broad category, reflecting the government's ongoing need to maintain and upgrade its physical infrastructure.

Small Business Impact

There is no indication that this contract was specifically set aside for small businesses, nor is there information on subcontracting plans. Given the contract's value and nature, it is likely that larger construction firms were the primary participants. Further analysis would be needed to determine if small businesses were involved as subcontractors.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program officials within the National Institutes of Health. The firm-fixed-price nature of the contract implies that the contractor bears the primary responsibility for cost control. Transparency is generally maintained through contract award databases, though specific project oversight details are not provided.

Related Government Programs

Federal Building and Facilities Construction
NIH Capital Investments
Health and Human Services Infrastructure Projects

Risk Flags

Long contract duration increases potential for unforeseen issues.
Firm-fixed-price requires diligent government oversight to ensure quality.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $16.6 million to UNITED STATES SURETY CO.. ARRA::YES::ARRA TAS::75 0839::TAS RECOVERY ACT CONSTRUCTIONS SERVICES TO RENOVATE BUILDING 3

Who is the contractor on this award?

The obligated recipient is UNITED STATES SURETY CO..

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (National Institutes of Health).

What is the total obligated amount?

The obligated amount is $16.6 million.

What is the period of performance?

Start: 2010-09-02. End: 2015-02-12.

What was the specific scope of work for the renovation of Building 3?

The provided data indicates the contract was for 'RECOVERY ACT CONSTRUCTIONS SERVICES TO RENOVATE BUILDING 3.' While the specific details of the renovation are not itemized in the summary data, such projects typically involve structural repairs, system upgrades (e.g., HVAC, electrical, plumbing), interior modifications to improve space utilization or meet modern standards, and potentially aesthetic enhancements. Given the ARRA designation, the renovation likely aimed to improve energy efficiency or modernize facilities to stimulate economic activity. A detailed review of the contract's Statement of Work (SOW) would be necessary to ascertain the precise scope.

How does the $16.6 million cost compare to similar federal building renovation projects?

Benchmarking the $16.6 million cost requires comparing it to similar federal building renovation projects in terms of size, complexity, location, and scope of work. Projects of this magnitude are common within agencies like HHS for upgrading research facilities or administrative buildings. Without specific details on the square footage renovated, the extent of system upgrades, or the specific type of facility (e.g., laboratory vs. office), a precise comparison is difficult. However, for a multi-year renovation of a significant building, this value appears within a plausible range for federal construction contracts awarded under competitive conditions.

What are the potential risks associated with a firm-fixed-price contract for a long-duration renovation?

While firm-fixed-price (FFP) contracts are generally favored for cost control, they carry specific risks, especially for long-duration projects like this 1624-day contract. The primary risk for the government is that the contractor may cut corners on quality or materials to maintain profitability if unforeseen issues arise or costs escalate beyond their initial estimates. Conversely, the contractor bears the risk of cost overruns. Effective government oversight is crucial to ensure the contractor adheres to the SOW and quality standards throughout the project lifecycle, mitigating risks associated with potential performance degradation or disputes over change orders.

What was the role of the Recovery Act in this contract award?

The data explicitly states 'ARRA::YES' and 'TAS RECOVERY ACT CONSTRUCTIONS SERVICES.' This indicates that the funding for this contract originated from the American Recovery and Reinvestment Act of 2009 (ARRA). ARRA was enacted to stimulate the economy during the 2008 recession, with a significant portion allocated to infrastructure projects, including federal building renovations. Contracts awarded under ARRA often had specific goals related to job creation and economic stimulus, in addition to their primary purpose. This renovation likely aimed to improve federal facilities while contributing to economic recovery efforts.

What is the significance of the contract type 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES'?

This contract type signifies a competitive procurement process that aimed to maximize participation while adhering to specific regulatory requirements. 'Full and open competition' means that all responsible sources were permitted to submit a bid. The phrase 'after exclusion of sources' suggests that certain potential sources may have been excluded based on pre-defined criteria (e.g., specific qualifications, past performance issues, or statutory limitations), but the remaining pool of bidders was still broad and competitive. This approach balances the desire for broad competition with the need to ensure only qualified and appropriate vendors participate, ultimately aiming for the best value for the government.

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 AFTER EXCLUSION OF SOURCES

Solicitation Procedures: ALTERNATIVE SOURCES

Solicitation ID: NIHOF2010210

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: HCC Insurance Holdings, Inc. (UEI: 781120100)

Address: 20 W AYLESBURY RD, LUTHERVILLE TIMONIUM, MD, 21093

Business Categories: 8(a) Program Participant, Black American Owned Business, Category Business, Emerging Small Business, Minority Owned Business, Small Business, Small Disadvantaged Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $16,632,043

Exercised Options: $16,632,043

Current Obligation: $16,632,043

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Timeline