Navy awards $47.5M for construction services, with a 924-day duration, to RAFAEL MORALES SA

Contract Overview

Contract Amount: $25,832,235 ($25.8M)

Contractor: Rafael Morales SA Sociedad Espanola DE Montajes Industriales

Awarding Agency: Department of Defense

Start Date: 2005-09-08

End Date: 2008-03-20

Contract Duration: 924 days

Daily Burn Rate: $28.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 9

Pricing Type: FIXED PRICE

Sector: Construction

Official Description: 200512!601783!1700!N33191!NAVFAC ENGINEERING FIELD ACTIVIT!N3319105C0803 !A!N! !N! ! !20050908!20070717!474825671!474825671!474825671!N!UTE SEMI-RAFAEL MORALES-CONTRE!POL IND PEGUERILLAS, S/N!HUELVA !SP!* !00000! !SP!* !* !SPAIN !+000024883079!N!N!000024883079!C111!ADMINISTRATIVE & SERVICE BUILDINGS !C2 !CONSTRUCTION !000 !* !236220!E! !3! ! ! ! ! !20200930!B! ! !A! !A!U!J!2!009!B! !Z!N!Z!B!SP!N!L!N! ! ! ! ! !A!A!000!A!B!N! ! ! ! !1700!N62863!0001! !

Plain-Language Summary

Department of Defense obligated $25.8 million to RAFAEL MORALES SA SOCIEDAD ESPANOLA DE MONTAJES INDUSTRIALES for work described as: 200512!601783!1700!N33191!NAVFAC ENGINEERING FIELD ACTIVIT!N3319105C0803 !A!N! !N! ! !20050908!20070717!474825671!474825671!474825671!N!UTE SEMI-RAFAEL MORALES-CONTRE!POL IND PEGUERILLAS, S/N!HUELVA !SP!* !00000! !SP!* !* … Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract type is a definitive contract with a fixed price, indicating cost certainty. 3. The project duration of 924 days (approximately 2.5 years) suggests a substantial construction undertaking. 4. The North American Industry Classification System (NAICS) code 236220 points to commercial and institutional building construction. 5. The contract was awarded by the Department of the Navy, a component of the Department of Defense. 6. The contractor, RAFAEL MORALES SA, is a Spanish entity, indicating international procurement.

Value Assessment

Rating: fair

The total award amount of $47,482,567.10 for construction services over 924 days appears to be within a reasonable range for a large-scale project of this nature. However, without specific details on the scope of work, it is difficult to benchmark against similar contracts precisely. The fixed-price nature of the contract provides cost predictability for the government. Further analysis would require comparing the cost per square foot or per unit of construction against industry standards for similar building types and locations.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning that all responsible sources were permitted to submit a bid. The presence of multiple bidders, indicated by the 'no' field showing 9 bids received, suggests a healthy level of competition. This competitive environment is generally expected to drive down prices and encourage innovation from the participating firms.

Taxpayer Impact: For taxpayers, full and open competition typically leads to better value for money as contractors are incentivized to offer competitive pricing to win the contract. It also ensures that the government is not limited to a single provider, potentially avoiding inflated costs.

Public Impact

The primary beneficiaries are the Department of the Navy and its personnel, who will receive the completed construction services. The services delivered involve the construction of administrative and service buildings. The geographic impact is primarily in Spain, as indicated by the contractor's location and the contract details. The contract likely has implications for the local construction workforce in the Huelva region of Spain, providing employment opportunities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the fixed-price contract does not adequately account for unforeseen construction challenges.
Risk associated with the contractor's performance and adherence to project timelines and quality standards.
Geopolitical or economic factors in Spain could impact project execution and costs.
Limited visibility into the specific types of administrative and service buildings being constructed.

Positive Signals

Awarded through full and open competition, indicating a competitive bidding process.
Fixed-price contract type provides cost certainty for the government.
The contractor, RAFAEL MORALES SA, is an established entity, suggesting experience in large projects.
The contract duration allows for a structured and potentially thorough execution of the construction work.

Sector Analysis

The construction sector is a significant part of the global economy, encompassing the building of residential, commercial, and industrial structures. This contract falls under the 'Commercial and Institutional Building Construction' category (NAICS 236220). The global construction market is vast, with government contracts forming a substantial portion. Benchmarking this contract's value would involve comparing its cost per square foot or per functional unit against similar projects in Spain and other European countries, considering the specific building types and materials used.

Small Business Impact

There is no indication from the provided data that this contract included a small business set-aside. The contractor, RAFAEL MORALES SA, appears to be a large Spanish corporation. Therefore, the direct impact on U.S. small businesses is likely minimal, unless RAFAEL MORALES SA engages in subcontracting with U.S. small businesses for specific services or materials, which is not detailed in this data.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. Accountability measures are inherent in the fixed-price definitive contract structure, which obligates the contractor to deliver specified services within a set budget. Transparency is facilitated by the public nature of federal contract awards, allowing for general review. Specific Inspector General jurisdiction would depend on whether the contract involves funds managed by a U.S. IG's office, which is less likely for a contract primarily executed in Spain by a foreign entity.

Related Government Programs

Department of Defense Construction Contracts
Navy Facilities Engineering Command Contracts
International Construction Contracts
Fixed-Price Construction Contracts
Commercial Building Construction

Risk Flags

Long project duration may increase exposure to market fluctuations (materials, labor).
Fixed-price nature could lead to contractor seeking change orders if unforeseen issues arise.
Performance risk associated with a large-scale international construction project.
Potential for currency exchange rate fluctuations if payments are made in different currencies.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $25.8 million to RAFAEL MORALES SA SOCIEDAD ESPANOLA DE MONTAJES INDUSTRIALES. 200512!601783!1700!N33191!NAVFAC ENGINEERING FIELD ACTIVIT!N3319105C0803 !A!N! !N! ! !20050908!20070717!474825671!474825671!474825671!N!UTE SEMI-RAFAEL MORALES-CONTRE!POL IND PEGUERILLAS, S/N!HUELVA !SP!* !00000! !SP!* !* !SPAIN !+000024883079!N!N!000024883079!C111!ADMINISTRATIVE & SERVICE BUILDINGS !C2 !CONSTRUCTION !000 !* !236220!E! !3! ! ! ! ! !202

Who is the contractor on this award?

The obligated recipient is RAFAEL MORALES SA SOCIEDAD ESPANOLA DE MONTAJES INDUSTRIALES.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $25.8 million.

What is the period of performance?

Start: 2005-09-08. End: 2008-03-20.

What is the specific scope of work for the administrative and service buildings being constructed?

The provided data identifies the contract under NAICS code 236220 (Commercial and Institutional Building Construction) and specifies the work as 'ADMINISTRATIVE & SERVICE BUILDINGS'. However, it does not detail the exact nature, size, or purpose of these buildings. This information would typically be found in the contract's statement of work (SOW) or performance work statement (PWS). Without this detail, it is challenging to assess the value proposition or compare it accurately to other construction projects. Further investigation into the contract documents would be necessary to understand the specific deliverables, such as office spaces, support facilities, or other administrative structures.

How does the cost per day of this contract compare to similar construction projects?

The contract has a total award of $47,482,567.10 over 924 days, resulting in an approximate daily cost of $51,400. To benchmark this effectively, we would need to compare it to similar large-scale construction projects, ideally those involving administrative and service buildings, executed in similar geographic and economic conditions (e.g., Spain or Western Europe). Factors such as labor costs, material prices, regulatory environments, and the complexity of the construction significantly influence cost per day. A direct comparison without these contextual details would be speculative. However, for a project of this magnitude and duration, this daily rate suggests a substantial undertaking.

What is the track record of RAFAEL MORALES SA with the Department of Defense or similar government entities?

The provided data indicates that RAFAEL MORALES SA is the contractor for this specific Department of the Navy contract. However, it does not offer a comprehensive history of their past performance with the Department of Defense or other government agencies. To assess their track record, one would need to search federal procurement databases (like SAM.gov or FPDS) for other contracts awarded to RAFAEL MORALES SA, examining their performance ratings, any past disputes, and the types of projects they have completed for the government. Their experience with similar-sized and complex construction projects would be a key indicator of their capability.

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

Fixed-price contracts offer cost certainty to the buyer but can introduce risks for the contractor, especially on long-duration projects like this 924-day contract. Potential risks include unforeseen increases in material costs, labor shortages, unexpected site conditions, or changes in regulatory requirements that could escalate expenses beyond the contractor's initial estimates. If these risks materialize and are not adequately covered by contingency within the fixed price, the contractor may incur losses or seek change orders, potentially leading to disputes. Conversely, if the contractor manages costs effectively and the project scope remains stable, they can achieve higher profit margins. The government's risk is generally lower in terms of cost overrun, but performance risk (quality, schedule) remains.

How does the competition level (9 bidders) influence the final price and value for the government?

Receiving 9 bids for this contract, awarded under full and open competition, suggests a robust competitive environment. A higher number of bidders generally increases the likelihood that the government will receive competitive pricing, as contractors vie for the award. This competition can drive down the overall cost of the contract compared to a sole-source or limited-competition scenario. Furthermore, it allows the government to select the offer that provides the best overall value, considering not just price but also technical approach, past performance, and other evaluation factors outlined in the solicitation. The presence of multiple bidders indicates that the market has sufficient capacity and interest to undertake this project.

What is the significance of the contract being a 'definitive contract'?

A definitive contract is a type of contract that is fully funded and has a defined scope of work, price, and delivery schedule. In this case, it's a fixed-price definitive contract, meaning the total price is set and unlikely to change unless modifications are formally agreed upon. This contrasts with other contract types like indefinite-delivery/indefinite-quantity (IDIQ) contracts, which allow for more flexibility in ordering services over time. For a large construction project like this, a definitive contract provides clear terms and conditions, establishing a firm commitment from both the government and the contractor, thereby reducing ambiguity and facilitating project management.

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Commercial and Institutional Building Construction

Product/Service Code: ARCHITECT/ENGINEER SERVICES › ARCH-ENG SVCS - CONSTRUCTION

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 9

Pricing Type: FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: CARRETERA NACIONAL 431 S/N. KM 86,300. PG PEGUERILLAS, HUELVA

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline