DoD's $16.8M Guam fuel pipeline contract awarded to Cape-Burns & McDonnell JV shows strong competition

Contract Overview

Contract Amount: $16,803,069 ($16.8M)

Contractor: Cape-Burns & Mcdonnell JV

Awarding Agency: Department of Defense

Start Date: 2017-06-30

End Date: 2024-06-05

Contract Duration: 2,532 days

Daily Burn Rate: $6.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF CIR/INSP TANKS AT DSFP GUAM

Place of Performance

Location: SANTA RITA, GUAM County, GUAM, 96915

Plain-Language Summary

Department of Defense obligated $16.8 million to CAPE-BURNS & MCDONNELL JV for work described as: IGF::OT::IGF CIR/INSP TANKS AT DSFP GUAM Key points: 1. Contract awarded through full and open competition, indicating a robust bidding process. 2. The firm-fixed-price structure shifts risk to the contractor, potentially stabilizing costs. 3. A long performance period (2532 days) suggests a complex or extended project. 4. The contract is for construction of oil and gas pipeline and related structures. 5. Awarded by the Department of the Navy, supporting critical infrastructure in Guam. 6. The contractor, Cape-Burns & McDonnell JV, has experience in this domain.

Value Assessment

Rating: good

The contract's firm-fixed-price nature is generally favorable for cost control. Benchmarking against similar pipeline construction projects in remote or overseas locations would provide a clearer picture of value. Given the specialized nature and location, the price appears reasonable, though direct comparisons are challenging without more specific project scope details. The duration of the contract also suggests a significant undertaking, which can influence overall cost-effectiveness.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple qualified bidders had the opportunity to submit proposals. The presence of four bidders (no=4) indicates a healthy level of competition for this specialized construction project. This competitive environment is expected to drive more favorable pricing and ensure the government receives the best value proposition.

Taxpayer Impact: Taxpayers benefit from a competitive bidding process that typically leads to lower prices and higher quality services compared to sole-source or limited competition awards.

Public Impact

The primary beneficiaries are the Department of Defense and its operations in Guam, ensuring reliable fuel infrastructure. Services delivered include the construction of essential oil and gas pipelines and related structures. The geographic impact is concentrated in Guam, supporting U.S. military readiness in the Indo-Pacific region. The project likely involves a skilled construction workforce, potentially creating employment opportunities in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions arise in Guam's environment.
Long contract duration increases exposure to market fluctuations in material and labor costs.
Dependence on a joint venture for critical infrastructure could pose risks if internal dynamics falter.

Positive Signals

Firm-fixed-price contract mitigates cost escalation risk for the government.
Award to a joint venture suggests combined expertise and capacity for complex projects.
Full and open competition indicates a thorough vetting of potential contractors.

Sector Analysis

This contract falls within the Construction sector, specifically related to heavy civil infrastructure for energy transport. The market for specialized pipeline construction, particularly in strategic locations like Guam, is often dominated by a few experienced firms capable of handling large-scale, complex projects. Benchmarking against similar Department of Defense infrastructure projects in overseas territories would be relevant for assessing cost and performance.

Small Business Impact

The data indicates this contract was not set aside for small businesses (sb=false) and there is no explicit mention of subcontracting goals for small businesses. This suggests the primary award went to a large joint venture, and opportunities for small businesses would likely be through direct subcontracting by Cape-Burns & McDonnell JV, if they choose to engage them.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Given the nature of construction and infrastructure projects, the Inspector General's office for the Department of Defense may also conduct audits or investigations to ensure compliance and prevent fraud. Transparency is generally maintained through contract award databases and reporting requirements.

Related Government Programs

Department of Defense Infrastructure Projects
Fueling Infrastructure Construction
Guam Military Construction Projects
Oil and Gas Pipeline Construction Contracts

Risk Flags

Long contract duration may increase exposure to cost fluctuations.
Remote location presents logistical and supply chain challenges.
Reliance on a joint venture could introduce coordination risks.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $16.8 million to CAPE-BURNS & MCDONNELL JV. IGF::OT::IGF CIR/INSP TANKS AT DSFP GUAM

Who is the contractor on this award?

The obligated recipient is CAPE-BURNS & MCDONNELL JV.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $16.8 million.

What is the period of performance?

Start: 2017-06-30. End: 2024-06-05.

What is the track record of Cape-Burns & McDonnell JV in executing similar large-scale pipeline construction projects, especially in overseas or remote locations?

Assessing the track record of Cape-Burns & McDonnell JV is crucial for understanding their capability to deliver on this significant contract. While the award itself suggests they met the qualifications, a deeper dive into their past performance on similar projects—specifically those involving fuel pipelines, extensive construction, and challenging geographic locations like Guam—would provide greater confidence. Information on project completion times, adherence to budget, safety records, and client satisfaction from previous large-scale infrastructure projects would be valuable. Without specific project history readily available in this data, further research into their portfolio and client reviews would be necessary to fully evaluate their experience and reliability for this specific Department of Defense contract.

How does the awarded price of $16.8 million compare to similar fuel pipeline construction projects undertaken by the government in comparable geographic regions?

The $16.8 million contract value for the Guam fuel pipeline construction needs to be benchmarked against similar projects to assess value for money. Factors such as the length and diameter of the pipeline, the complexity of the terrain, environmental considerations specific to Guam, and the inclusion of related structures (like pumping stations or storage facilities) significantly influence cost. Comparing this award to other DoD or federal contracts for pipeline construction in island territories or areas with similar logistical challenges would provide a relevant context. If comparable projects are scarce, analysis of the cost per linear foot or per unit of capacity, adjusted for regional economic factors, could offer insights into whether the price is competitive and reflects efficient resource utilization by the contractor.

What are the primary risk indicators associated with this contract, considering its long duration and the remote location of Guam?

Several risk indicators are associated with this contract. The long performance period (2532 days, approximately 7 years) increases the risk of cost escalation due to inflation, material price volatility, and potential changes in labor costs over time, despite the firm-fixed-price structure. The remote location of Guam presents logistical challenges for material delivery, workforce mobilization, and potential supply chain disruptions, which can lead to delays and increased indirect costs. Furthermore, unforeseen geological or environmental conditions specific to Guam could impact construction timelines and budgets. The reliance on a joint venture also introduces potential risks related to internal coordination, financial stability, or differing strategic priorities between the partners. Effective risk mitigation strategies by the contractor and robust oversight by the Navy are essential.

How effective is the firm-fixed-price contract type in ensuring cost control for a project of this scale and duration?

The firm-fixed-price (FFP) contract type is generally considered effective for cost control when the scope of work is well-defined and risks can be reasonably anticipated. For this $16.8 million fuel pipeline construction project in Guam, FFP shifts the primary cost risk to the contractor, Cape-Burns & McDonnell JV. This incentivizes the contractor to manage their costs efficiently and complete the project within the agreed-upon price. However, the long duration (2532 days) introduces inherent uncertainties. While FFP aims to cap the government's liability, significant unforeseen issues (e.g., major design changes required by the government, or exceptionally severe and unanticipatable site conditions) could still lead to claims or contract modifications, potentially increasing the final cost. The effectiveness hinges on the initial accuracy of the cost estimates and the contractor's ability to manage risks throughout the project lifecycle.

What are the historical spending patterns for fuel infrastructure construction within the Department of the Navy, and how does this contract fit within that trend?

Analyzing historical spending patterns for fuel infrastructure construction within the Department of the Navy (DoN) is key to contextualizing this $16.8 million award. The DoN, operating globally, requires extensive and robust fuel supply chains, including pipelines, storage facilities, and hydrant systems, particularly at its numerous bases. Spending in this category can fluctuate based on modernization needs, aging infrastructure replacement, and strategic geopolitical requirements, such as enhancing capabilities in the Indo-Pacific region where Guam is strategically vital. This contract appears to align with ongoing efforts to maintain and upgrade critical infrastructure supporting naval operations. Understanding the average cost per mile of pipeline constructed, the typical contract durations, and the frequency of such awards by the DoN would help determine if this specific contract represents a typical investment or an outlier in terms of scope, cost, or urgency.

Industry Classification

NAICS: Construction › Utility System Construction › Oil and Gas Pipeline and Related Structures Construction

Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCTION OF BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N3943014R1405

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 9400 WARD PKWY, KANSAS CITY, MO, 64114

Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $16,803,069

Exercised Options: $16,803,069

Current Obligation: $16,803,069

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N3943015D1631

IDV Type: IDC

Timeline