DoD's $2.87M Substation Upgrade Contract Awarded to Westerly HSU JV II, LLC for Naval Base Construction

Contract Overview

Contract Amount: $2,871,405 ($2.9M)

Contractor: Westerly HSU JV II, LLC

Awarding Agency: Department of Defense

Start Date: 2025-04-30

End Date: 2026-10-22

Contract Duration: 540 days

Daily Burn Rate: $5.3K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: UPGRADE SUBSTATION C AND CABLE REPLACEMENT

Place of Performance

Location: QUANTICO, PRINCE WILLIAM County, VIRGINIA, 22134

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $2.9 million to WESTERLY HSU JV II, LLC for work described as: UPGRADE SUBSTATION C AND CABLE REPLACEMENT Key points: 1. The contract focuses on essential infrastructure upgrades, indicating a need for modernization at the naval facility. 2. The fixed-price nature of the contract shifts performance risk to the contractor, potentially leading to cost certainty. 3. The award to a joint venture suggests a capacity to handle complex construction projects. 4. The exclusion of sources in the competition phase warrants further investigation into the rationale and potential impact on pricing. 5. The project duration of 540 days aligns with typical timelines for significant construction and infrastructure work. 6. The contract falls under the Commercial and Institutional Building Construction NAICS code, placing it within a broad sector of the construction industry.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific details on the scope of work for the substation upgrade and cable replacement. However, the award amount of $2.87 million for a project spanning over 1.5 years suggests a moderate investment in facility infrastructure. Comparisons to similar substation upgrade projects at other naval bases would be necessary to determine if this represents a competitive price point. The firm fixed-price contract type implies that the contractor assumes the risk for cost overruns, which can be a positive indicator for the government if the scope is well-defined.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES.' This indicates that while the competition was intended to be broad, specific sources were excluded prior to the final award. The exact number of bidders and the reasons for excluding certain sources are not detailed, making it difficult to fully assess the level of competition. A limited competition, even if initially open, can sometimes result in less aggressive pricing compared to unrestricted full and open competition.

Taxpayer Impact: The exclusion of sources may limit the number of competitive bids received, potentially impacting the final price paid by taxpayers. A more robust competition could have driven down costs further.

Public Impact

Naval personnel and operations at the base will benefit from improved electrical infrastructure reliability. The project will deliver upgraded substation capabilities and replaced electrical cabling, enhancing operational resilience. The geographic impact is localized to the specific naval base where the work is being performed. The contract will likely involve construction labor, potentially creating or sustaining jobs in the local area. The successful completion of this project is crucial for maintaining the operational readiness of the naval facility.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'exclusion of sources' in the competition phase raises questions about the extent of true market competition and potential price impacts.
Lack of detailed scope of work makes it difficult to benchmark the value-for-money proposition effectively.
The specific nature of 'substation upgrade and cable replacement' could involve specialized components or services, potentially limiting the pool of qualified contractors.

Positive Signals

The firm fixed-price contract type provides cost certainty for the government, transferring cost overrun risk to the contractor.
The award to a joint venture (Westerly HSU JV II, LLC) suggests a capable entity with the resources to undertake significant construction projects.
The project addresses critical infrastructure needs, which is essential for maintaining operational capabilities at the naval base.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a broad category encompassing a wide range of building projects. The Department of Defense is a significant investor in construction and infrastructure, with substantial annual spending on facilities maintenance, upgrades, and new builds across its numerous bases and installations. This specific project addresses a critical need for electrical infrastructure modernization, which is a common requirement for aging military facilities. Comparable spending benchmarks would typically involve looking at other large-scale electrical infrastructure projects or substation upgrades at federal facilities, particularly within the Department of Defense.

Small Business Impact

The data indicates that small business participation (ss: false, sb: false) was not a primary set-aside consideration for this particular contract. The award went to Westerly HSU JV II, LLC, which is a joint venture. While joint ventures can sometimes include small businesses, the 'ss' and 'sb' flags suggest this specific award was not structured as a small business set-aside. There is no explicit information on subcontracting plans for small businesses within this award notice, which could be a missed opportunity to engage the small business construction ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and facilities management divisions. The firm fixed-price nature of the contract implies that performance monitoring will be key to ensuring the contractor meets the specified requirements and quality standards. Transparency regarding the 'exclusion of sources' would be beneficial for a complete assessment of accountability. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected during the contract's lifecycle.

Related Government Programs

Naval Base Infrastructure Modernization
Military Construction Projects
Electrical Grid Upgrades
Federal Building Construction Contracts
Department of Defense Facilities Management

Risk Flags

Limited Competition Concerns
Potential for Scope Creep in FFP Contracts
Need for Detailed Performance Oversight

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $2.9 million to WESTERLY HSU JV II, LLC. UPGRADE SUBSTATION C AND CABLE REPLACEMENT

Who is the contractor on this award?

The obligated recipient is WESTERLY HSU JV II, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $2.9 million.

What is the period of performance?

Start: 2025-04-30. End: 2026-10-22.

What specific criteria led to the exclusion of certain sources in the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' process for this contract?

The specific criteria leading to the exclusion of sources are not detailed in the provided data. Typically, such exclusions might be based on factors like a contractor's inability to meet specific technical requirements, past performance issues, security concerns, or if the exclusion was part of a pre-qualification process designed to streamline competition among a vetted group of capable firms. Without further documentation, it's impossible to definitively state the reasons. However, this method of competition, while sometimes necessary for specialized projects, can limit the breadth of market engagement and potentially affect the final price achieved for the government. Understanding the rationale is crucial for assessing whether the exclusion was justified and served the government's best interest in securing a qualified contractor at a fair price.

How does the $2.87 million contract value compare to similar substation upgrade and cable replacement projects at other Department of the Navy facilities?

Directly comparing the $2.87 million contract value to similar projects is challenging without access to a comprehensive database of comparable Department of the Navy (DoN) contracts, including detailed scope of work, location, and specific upgrade requirements. However, for a project spanning approximately 1.5 years (540 days), this amount suggests a significant infrastructure undertaking. Factors influencing cost include the size and capacity of the substation, the complexity of the existing electrical grid, the length and type of cable being replaced, and the specific site conditions at the naval base. Generally, large-scale electrical infrastructure upgrades at federal facilities can range from several hundred thousand to tens of millions of dollars, depending on scale. A detailed benchmark analysis would require identifying contracts with similar NAICS codes (236220), contract types (firm fixed price), and project descriptions within the DoN or other federal agencies.

What are the primary risks associated with the firm fixed-price contract type for this substation upgrade project?

The primary risk associated with a firm fixed-price (FFP) contract for this substation upgrade project lies in the potential for scope creep or unforeseen conditions that are not adequately addressed in the initial contract. While FFP shifts performance and cost overrun risk to the contractor, if the government's requirements are not perfectly defined or if unforeseen site conditions (e.g., hazardous materials, unexpected subsurface obstructions) arise, the contractor may seek change orders. If these change orders are not managed effectively, they can lead to significant cost increases, negating some of the FFP benefits. Additionally, if the initial price was set too low due to aggressive bidding in a limited competition, the contractor might be tempted to cut corners on quality or safety to maintain profitability, necessitating robust government oversight to ensure contract compliance and adherence to standards.

What is the expected impact of this contract on the operational readiness and reliability of the specific naval base?

This contract is expected to significantly enhance the operational readiness and reliability of the specific naval base by modernizing its critical electrical infrastructure. Substation upgrades and cable replacements are fundamental to ensuring a stable and sufficient power supply, which is essential for all base operations, including command and control systems, housing, training facilities, and mission-critical equipment. An aging or unreliable electrical system can lead to power outages, equipment damage, and disruptions to essential services, thereby compromising readiness. By investing in these upgrades, the Department of the Navy aims to mitigate these risks, ensuring that the base can consistently support its assigned missions without interruption due to power failures. This project directly contributes to the long-term resilience and functionality of the installation.

What is the historical spending pattern for substation upgrades and related construction at this specific naval base or within the Department of the Navy?

The provided data does not include historical spending patterns for substation upgrades or related construction at this specific naval base or within the broader Department of the Navy. To assess historical spending, one would need to access contract databases (like FPDS or USASpending) and query for similar projects awarded to the specific base or the Navy over several fiscal years. Analyzing this data would reveal trends in contract values, types of work performed, frequency of upgrades, and the contractors typically involved. Such an analysis could help determine if this $2.87 million award is consistent with past investments, if spending has increased or decreased, and whether there's a pattern of recurring needs for electrical infrastructure modernization across the Navy's portfolio.

Industry Classification

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

Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR NONBUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N4008019R0001

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 507 N FREDERICK AVE, GAITHERSBURG, MD, 20877

Business Categories: Black American Owned Business, Category Business, Limited Liability Corporation, Minority Owned Business, Partnership or Limited Liability Partnership, SBA Certified 8 a Joint Venture, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $2,871,405

Exercised Options: $2,871,405

Current Obligation: $2,871,405

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N4008022D1118

IDV Type: IDC

Timeline