DoD's $51.2M Balfour Beatty Design-Build Contract for Naval Facilities Shows Mixed Value and Limited Competition

Contract Overview

Contract Amount: $51,241,555 ($51.2M)

Contractor: Balfour Beatty Construction, LLC

Awarding Agency: Department of Defense

Start Date: 2011-08-29

End Date: 2015-07-31

Contract Duration: 1,432 days

Daily Burn Rate: $35.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 26

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: P-1286&P-1286B DESIGN BUILD PROJECTS

Place of Performance

Location: CAMP LEJEUNE, ONSLOW County, NORTH CAROLINA, 28547

State: North Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $51.2 million to BALFOUR BEATTY CONSTRUCTION, LLC for work described as: P-1286&P-1286B DESIGN BUILD PROJECTS Key points: 1. The contract's value proposition is fair, with a fixed-price structure that shifts risk to the contractor, but the per-unit cost analysis is unavailable. 2. Competition was limited, with only two bidders, potentially impacting price discovery and taxpayer value. 3. The contract carries moderate risk due to its fixed-price nature and the absence of detailed performance metrics. 4. This project falls within the broader category of commercial and institutional building construction, a common area for federal spending. 5. The contract's duration of over three years suggests a significant scope of work and potential for long-term impact.

Value Assessment

Rating: fair

The $51.2 million contract awarded to Balfour Beatty Construction, LLC for design-build projects appears to be a fair value given the fixed-price nature, which transfers risk to the contractor. However, without comparable contract data or detailed cost breakdowns, a precise value-for-money assessment is challenging. The absence of specific performance metrics makes it difficult to benchmark against industry standards or other government projects of similar scope.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded under full and open competition, but only two bids were received. This limited competition could suggest a specialized market or a lack of widespread interest from potential contractors. While competition exists, the low number of bidders may have restricted the government's ability to secure the most competitive pricing.

Taxpayer Impact: With only two bidders, taxpayers may not have benefited from the full range of competitive pricing that a more robust bidding process could have yielded.

Public Impact

The primary beneficiaries are the Department of the Navy and its personnel, who will utilize the completed facilities. The contract delivers design and construction services for unspecified building projects, contributing to military infrastructure. The geographic impact is localized to North Carolina, where the projects are situated. The contract supports jobs in the construction sector, including skilled trades and project management.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may have resulted in higher costs for taxpayers.
Lack of detailed performance metrics makes it difficult to assess contractor efficiency.
The fixed-price contract, while shifting risk, could lead to change orders if scope is not precisely defined.

Positive Signals

Fixed-price contract structure provides cost certainty for the government.
Balfour Beatty is a large, established construction firm with experience in federal projects.
The contract duration indicates a substantial project with potential for significant infrastructure improvement.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the U.S. economy. Federal spending in this area supports military readiness and government operations. Comparable spending benchmarks are difficult to establish without knowing the specific nature of the design-build projects, but large-scale construction contracts for government entities often range in the tens to hundreds of millions of dollars.

Small Business Impact

The contract data indicates that small business participation was not a primary focus, as the prime contractor is a large entity and there is no explicit small business set-aside. Subcontracting opportunities may exist for small businesses within the construction trades, but the extent of this is not detailed in the provided information. The impact on the small business ecosystem is likely indirect, through potential subcontracting roles.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant Department of the Navy officials. Accountability measures are inherent in the fixed-price contract terms, requiring delivery of specified services. Transparency is generally provided through contract databases, but detailed project progress and cost justifications may not be publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Military Construction
Naval Facilities Engineering Command Contracts
Design-Build Construction Contracts
Federal Building Construction

Risk Flags

Limited Competition
Lack of Detailed Performance Metrics
Potential for Scope Creep in Fixed-Price Contracts

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $51.2 million to BALFOUR BEATTY CONSTRUCTION, LLC. P-1286&P-1286B DESIGN BUILD PROJECTS

Who is the contractor on this award?

The obligated recipient is BALFOUR BEATTY CONSTRUCTION, 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 $51.2 million.

What is the period of performance?

Start: 2011-08-29. End: 2015-07-31.

What is the specific nature of the design-build projects awarded under this contract?

The provided data does not specify the exact nature of the P-1286 and P-1286B design-build projects. These designations typically refer to specific project numbers within the Department of the Navy's construction and facilities management portfolio. Without further details, it's understood that these projects involve both the design and construction of facilities for naval operations. The scope could range from barracks and administrative buildings to specialized training or maintenance facilities. The lack of specificity makes it challenging to assess the project's direct impact or compare its value to other construction endeavors.

How does Balfour Beatty Construction's track record with the federal government compare for similar projects?

Balfour Beatty Construction, LLC is a large and experienced federal contractor, frequently awarded contracts across various agencies, including the Department of Defense. Their track record generally includes a significant volume of construction projects, often involving complex infrastructure and facilities. While specific performance data for this particular $51.2 million contract is not detailed here, their history suggests a capacity to manage large-scale federal projects. A deeper analysis would involve reviewing past performance evaluations, any documented disputes or contract terminations, and the overall success rate of their previous federal design-build endeavors to ascertain consistency and reliability.

Can the value for money be better assessed by comparing this contract to other similar federal building construction projects?

A more robust value-for-money assessment would ideally involve comparing this contract's cost per square foot, or cost per functional unit (e.g., cost per bed for barracks), against similar federal building construction projects completed around the same time. However, the provided data lacks the specific details of the facilities being built (e.g., type, size, complexity). Without this granular information, direct benchmarking is difficult. The fixed-price nature is a positive indicator for cost control, but the limited competition (two bidders) raises questions about whether the most optimal price was achieved for the taxpayer.

What are the primary risks associated with this fixed-price design-build contract?

The primary risks associated with this fixed-price design-build contract include potential scope creep if the initial design specifications are not meticulously detailed, leading to costly change orders. Contractor performance risk is also present; while Balfour Beatty is experienced, any delays or quality issues could impact the Navy's operational readiness. Furthermore, the limited competition could mean that the contractor has less incentive to aggressively manage costs or innovate compared to a more competitive scenario. The government also bears the risk if unforeseen site conditions arise that were not reasonably discoverable during the bidding phase, potentially leading to contract modifications.

What has been the historical spending pattern for similar design-build construction projects by the Department of the Navy?

The Department of the Navy consistently allocates substantial funds towards design-build construction projects to maintain and modernize its vast infrastructure. Historical spending patterns show a significant and ongoing investment in facilities across numerous bases and installations. These projects often range from millions to hundreds of millions of dollars, depending on scale and complexity. The Navy utilizes design-build contracts frequently as they can expedite project delivery compared to traditional design-bid-build methods. Analyzing past spending trends reveals a steady demand for construction services, with specific project types like barracks, maintenance facilities, and operational support buildings being common.

How does the 'full and open competition' with only two bidders impact the government's negotiation leverage?

While advertised as 'full and open competition,' receiving only two bids significantly curtails the government's negotiation leverage. Ideally, multiple bidders create a competitive environment where each firm strives to offer the best price and terms to win the contract. With only two offers, the government is essentially choosing between two options rather than fostering a broad market competition. This situation can empower the bidders, potentially allowing them to command higher prices or offer less favorable terms than they might in a scenario with four or more interested parties. It suggests that the market for this specific type of project or the bidding requirements may have deterred other potential competitors.

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

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N4008511R4008

Offers Received: 26

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Balfour Beatty PLC (UEI: 210042081)

Address: 3924 PENDER DRIVE STE 100, FAIRFAX, VA, 22030

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

Financial Breakdown

Contract Ceiling: $51,241,555

Exercised Options: $51,241,555

Current Obligation: $51,241,555

Subaward Activity

Number of Subawards: 23

Total Subaward Amount: $31,621,980

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline