DoD's $32.8M Naval Shipyard Clinic Replacement Contract Awarded to KBE Building Corp

Contract Overview

Contract Amount: $32,775,923 ($32.8M)

Contractor: KBE Building Corp

Awarding Agency: Department of Defense

Start Date: 2018-12-26

End Date: 2021-07-14

Contract Duration: 931 days

Daily Burn Rate: $35.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: P-1509, MEDICAL/DENTAL CLINIC REPLACEMENT, PORTSMOUTH NAVAL SHIPYARD, KITTERY, MAINE

Place of Performance

Location: PORTSMOUTH, ROCKINGHAM County, NEW HAMPSHIRE, 03801

State: New Hampshire Government Spending

Plain-Language Summary

Department of Defense obligated $32.8 million to KBE BUILDING CORP for work described as: P-1509, MEDICAL/DENTAL CLINIC REPLACEMENT, PORTSMOUTH NAVAL SHIPYARD, KITTERY, MAINE Key points: 1. Contract value appears reasonable for a large-scale construction project of this nature. 2. Full and open competition suggests a robust bidding process. 3. Project duration of 931 days indicates a significant undertaking. 4. Fixed-price contract type shifts risk to the contractor. 5. Geographic location in Kittery, Maine, serves a specific naval base. 6. No small business set-aside was utilized for this contract.

Value Assessment

Rating: good

The contract value of $32.8 million for a medical/dental clinic replacement at a naval shipyard is within a typical range for such specialized construction projects. Benchmarking against similar federal construction contracts for healthcare facilities of comparable size and complexity would provide a more precise value-for-money assessment. The firm fixed-price structure suggests that the initial pricing was deemed acceptable, with the contractor bearing cost overruns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of two bidders suggests a moderate level of competition for this specialized construction project. While two bidders are better than one, a higher number of bids could potentially lead to more aggressive pricing and a stronger demonstration of market competitiveness.

Taxpayer Impact: The full and open competition process is generally favorable for taxpayers as it aims to secure the best value through market forces. A competitive bidding environment helps prevent inflated prices and encourages efficiency from the contractors.

Public Impact

Personnel at Portsmouth Naval Shipyard will benefit from updated medical and dental facilities. The project delivers essential healthcare infrastructure for military readiness. The geographic impact is concentrated in Kittery, Maine, serving the naval base and surrounding community. Construction activities will likely involve local and regional labor, providing employment opportunities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for construction delays impacting clinic operational readiness.
Risk of cost overruns if unforeseen site conditions arise, despite fixed-price contract.
Ensuring compliance with stringent military construction standards and healthcare facility regulations.

Positive Signals

Firm fixed-price contract mitigates budget uncertainty for the government.
Full and open competition suggests a thorough vetting of potential contractors.
Project addresses a critical need for modernized healthcare facilities at a key naval installation.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, specifically for specialized healthcare facilities. The federal government is a significant consumer of construction services, with spending often concentrated on infrastructure, defense installations, and healthcare facilities. The market for such projects is competitive, involving general contractors with experience in large-scale, complex builds, often requiring adherence to specific government standards and security protocols.

Small Business Impact

The contract was not set aside for small businesses, and there is no explicit mention of subcontracting requirements for small businesses in the provided data. This suggests that the primary contractor, KBE Building Corp., will manage the project, and opportunities for small businesses would likely be through direct subcontracting by KBE, rather than a mandated set-aside. The absence of a set-aside may limit direct opportunities for small businesses to compete for the prime contract.

Oversight & Accountability

Oversight for this definitive contract would typically be managed by the contracting officer and the project's technical representatives within the Department of the Navy. The firm fixed-price nature of the contract implies that the government's primary oversight will focus on ensuring the contractor meets the specified scope, quality, and schedule requirements. Transparency is generally maintained through contract award databases and reporting, though detailed day-to-day oversight specifics are not publicly available.

Related Government Programs

Naval Facilities Engineering Command (NAVFAC) Construction Projects
Department of Defense Healthcare Infrastructure Modernization
Military Medical Treatment Facility Construction
General Services Administration (GSA) Public Buildings Service Construction

Risk Flags

Potential for schedule slippage impacting operational readiness.
Risk of unforeseen site conditions impacting cost and schedule.
Ensuring compliance with specialized healthcare construction codes and military standards.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $32.8 million to KBE BUILDING CORP. P-1509, MEDICAL/DENTAL CLINIC REPLACEMENT, PORTSMOUTH NAVAL SHIPYARD, KITTERY, MAINE

Who is the contractor on this award?

The obligated recipient is KBE BUILDING CORP.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $32.8 million.

What is the period of performance?

Start: 2018-12-26. End: 2021-07-14.

What is the track record of KBE Building Corp. in completing similar federal construction projects, particularly healthcare facilities?

KBE Building Corp. has a history of undertaking various construction projects, including commercial, institutional, and government facilities. While specific details on their past performance on federal healthcare facility construction are not provided in this data snippet, their selection under full and open competition suggests they met the qualifications outlined in the solicitation. A deeper dive into their contract history, past performance reviews (e.g., CPARS), and experience with similar project scopes would be necessary for a comprehensive assessment of their track record. Their ability to successfully manage the complexities of a naval shipyard environment and adhere to stringent military construction standards would be key indicators.

How does the awarded price of $32.8 million compare to the estimated cost or budget for this clinic replacement project?

The provided data indicates the awarded contract value is $32,775,923. Without access to the government's initial cost estimates, independent government cost estimates (IGCE), or the bids submitted by other potential contractors, it is difficult to definitively assess if this award represents optimal value. The fact that it was awarded under full and open competition with two bidders suggests the price was deemed acceptable by the contracting officer, likely falling within or close to the government's estimate. However, a comparison to industry benchmarks for similar square footage, complexity, and location would provide further context on the pricing's reasonableness.

What are the primary risks associated with the construction of a medical/dental clinic at a naval shipyard, and how are they mitigated?

Key risks include potential delays due to the operational tempo of the naval shipyard, unforeseen site conditions (e.g., environmental, structural), and ensuring compliance with stringent military construction standards and healthcare facility regulations. Mitigation strategies often involve detailed site investigations prior to award, robust project management plans, contingency planning within the schedule and budget (though limited by fixed-price), and close collaboration between the contractor, the contracting officer's representative (COR), and relevant shipyard authorities. The firm fixed-price contract shifts much of the cost overrun risk to the contractor, incentivizing them to manage these risks effectively.

How effective is the firm fixed-price contract type in ensuring project success and value for this type of construction?

The firm fixed-price (FFP) contract type is generally considered effective for construction projects where the scope of work is well-defined and risks can be reasonably anticipated. For this clinic replacement, FFP shifts the primary responsibility for cost control and managing unforeseen issues to KBE Building Corp. This incentivizes the contractor to perform efficiently and complete the project within budget. However, it also means the government has less flexibility to make scope changes without potentially incurring significant cost adjustments. The success hinges on the thoroughness of the initial scope definition and the contractor's ability to manage risks.

What is the historical spending pattern for similar medical/dental facility construction by the Department of the Navy or Department of Defense?

Historical spending on medical and dental facilities by the Department of the Navy and the broader Department of Defense is substantial, driven by the need to maintain modern healthcare infrastructure for service members and their families. Spending patterns vary based on modernization needs, new base construction, and upgrades to existing facilities. Contracts for such facilities often range from millions to tens of millions of dollars, depending on size, complexity, and location. Analyzing past awards for similar-sized clinics or hospitals at other naval installations or DoD facilities would provide a benchmark for this $32.8 million contract, indicating whether it aligns with typical investment levels for such critical 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: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N4008517R5034

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 30 BATTERSON PARK RD, FARMINGTON, CT, 06032

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $32,797,095

Exercised Options: $32,775,923

Current Obligation: $32,775,923

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline