Navy awards $61.9M for operating room renovations, a sole-source contract for construction services

Contract Overview

Contract Amount: $61,901,150 ($61.9M)

Contractor: Clark/Balfour Beatty, a Joint Venture

Awarding Agency: Department of Defense

Start Date: 2010-05-06

End Date: 2012-08-16

Contract Duration: 833 days

Daily Burn Rate: $74.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: RENOVATION MAIN OPERATING ROOMS IN B9

Place of Performance

Location: BETHESDA, MONTGOMERY County, MARYLAND, 20889

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $61.9 million to CLARK/BALFOUR BEATTY, A JOINT VENTURE for work described as: RENOVATION MAIN OPERATING ROOMS IN B9 Key points: 1. Contract awarded on a firm-fixed-price basis, indicating defined cost expectations. 2. The contract duration of 833 days suggests a significant scope of work. 3. Awarded to a joint venture, potentially indicating specialized capabilities required. 4. Construction services are essential for maintaining and upgrading critical medical facilities. 5. The lack of competition raises questions about potential cost efficiencies. 6. Geographic location in Maryland may point to specific base or facility needs.

Value Assessment

Rating: fair

Benchmarking the value of this specific renovation contract is challenging without comparable sole-source projects. The firm-fixed-price structure provides cost certainty, but the absence of competition limits the ability to assess if the price reflects optimal market value. Further analysis would require comparing the per-square-foot cost or cost per functional unit against similar, competitively bid renovation projects in the healthcare construction sector.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one contractor was solicited. The specific justification for this approach is not detailed here, but it typically arises when unique capabilities, urgent needs, or proprietary technologies are involved. The lack of multiple bidders means there was no direct price competition to drive down costs or encourage innovative solutions from a wider pool of contractors.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as the government does not benefit from the competitive pressure that usually optimizes pricing. This necessitates robust internal cost analysis and negotiation to ensure fair value.

Public Impact

Benefits military personnel and staff by providing updated and functional operating rooms. Ensures the continued delivery of essential medical services at the specified Navy facility. Impacts the local construction workforce through employment opportunities during the renovation period. Enhances the overall healthcare infrastructure supporting the Department of the Navy.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing, potentially increasing costs for taxpayers.
Lack of transparency in the justification for sole-source procurement.
Long contract duration could introduce risks related to cost overruns or schedule delays if not managed effectively.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Award to a joint venture may indicate specialized expertise for complex renovations.
Renovation of critical medical facilities is essential for operational readiness.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a vital part of the broader construction industry. Federal spending in this area supports the maintenance and modernization of government facilities, including critical infrastructure like healthcare centers. Benchmarking this specific renovation against broader construction spending requires looking at similar medical facility upgrades or large-scale institutional building projects, considering factors like square footage, complexity, and location.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses in the provided data. This suggests that the primary contractor, a joint venture, was selected based on its capabilities for this specific project, rather than a focus on small business participation. The impact on the small business ecosystem is likely minimal unless the joint venture partners themselves engage small businesses for specialized support.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and facilities management divisions. Accountability measures are inherent in the firm-fixed-price contract type, which obligates the contractor to complete the work within the agreed-upon price. Transparency is limited by the sole-source nature of the award; however, contract award details are usually publicly accessible through federal procurement databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Military Construction
Healthcare Facility Modernization
Department of Defense Facilities Maintenance
Naval Medical Command Projects

Risk Flags

Sole-source award
Lack of competition
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $61.9 million to CLARK/BALFOUR BEATTY, A JOINT VENTURE. RENOVATION MAIN OPERATING ROOMS IN B9

Who is the contractor on this award?

The obligated recipient is CLARK/BALFOUR BEATTY, A JOINT VENTURE.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $61.9 million.

What is the period of performance?

Start: 2010-05-06. End: 2012-08-16.

What was the specific justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was 'NOT COMPETED,' signifying a sole-source award. Specific justifications for sole-source procurements typically include reasons such as urgent and compelling needs, the availability of only one responsible source, or the requirement for unique capabilities or proprietary technology. Without further documentation from the awarding agency (Department of the Navy), the precise rationale remains undisclosed in this dataset. Such justifications are crucial for ensuring fair and efficient use of taxpayer funds, as competitive bidding is generally preferred to ensure optimal pricing and innovation.

How does the $61.9 million cost compare to similar operating room renovation projects?

Direct comparison of the $61.9 million cost for operating room renovations is difficult without more specific project details and comparable data. Factors influencing cost include the size of the operating rooms, the extent of technological integration (e.g., advanced imaging, robotics), the complexity of structural modifications, and the specific location's labor and material costs. Generally, major medical facility renovations are substantial investments. To assess value, one would ideally compare the cost per square foot or cost per operating room against similar, competitively bid projects undertaken by other military branches or federal healthcare facilities, adjusted for regional economic differences and project scope.

What are the potential risks associated with a sole-source contract of this magnitude and duration?

Sole-source contracts, especially for large projects like this $61.9 million renovation lasting 833 days, carry inherent risks. The primary risk is the potential for inflated pricing due to the lack of competitive pressure, which could lead to reduced value for taxpayer money. Another risk is contractor performance; without the ongoing threat of losing future business to competitors, the incentive for optimal performance might be diminished, although contract terms and oversight can mitigate this. Schedule delays and cost overruns are also risks, particularly on complex, long-duration projects, and the sole-source nature means the government has fewer options if issues arise mid-project.

What is the track record of CLARK/BALFOUR BEATTY, A JOINT VENTURE, on similar federal contracts?

Information regarding the specific track record of the joint venture 'CLARK/BALFOUR BEATTY, A JOINT VENTURE' on similar federal contracts is not detailed in the provided data snippet. A comprehensive assessment would require examining their past performance history, including project types, contract values, on-time and on-budget completion rates, and any past performance evaluations or disputes. Both Clark and Balfour Beatty are established construction firms, and their joint venture likely leverages their combined experience. However, the performance of this specific JV entity on federal projects, particularly large-scale medical facility renovations, would need to be independently verified through federal procurement databases and performance records.

How does the firm-fixed-price (FFP) contract type influence cost control and risk allocation?

A Firm-Fixed-Price (FFP) contract type, as used here, is generally favored by the government for its cost control and risk allocation benefits. Under an FFP contract, the contractor agrees to a set price for the defined scope of work, regardless of the actual costs incurred. This shifts the primary cost risk to the contractor. For the government, this provides budget certainty, as the final price is known upfront, barring any contract modifications. The contractor is incentivized to manage costs efficiently to maximize profit. However, if the scope of work significantly changes or unforeseen issues arise that are not covered by contract clauses, the government may need to issue modifications, potentially increasing the total cost.

What is the significance of the contract being awarded by the Department of the Navy for construction services?

The awarding agency, the Department of the Navy, signifies that these operating room renovations are intended to support naval medical facilities. This implies a focus on meeting the specific healthcare needs of military personnel, their families, and potentially other authorized users. Construction services for medical facilities are highly specialized, requiring adherence to stringent building codes, infection control standards, and the integration of complex medical equipment. The Navy's involvement suggests these renovations are critical for maintaining the health readiness and operational capabilities of naval forces and their support infrastructure.

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: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N4008010R4405

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Clark Enterprises, Inc. (UEI: 064862345)

Address: 7500 OLD GEORGETOWN RD, BETHESDA, MD, 20814

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

Financial Breakdown

Contract Ceiling: $61,901,150

Exercised Options: $61,901,150

Current Obligation: $61,901,150

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline