DoD's $21.7M Explosive Railcar Holding Yard Contract Awarded to Krempp Construction Inc

Contract Overview

Contract Amount: $21,735,591 ($21.7M)

Contractor: Krempp Construction Inc

Awarding Agency: Department of Defense

Start Date: 2020-09-25

End Date: 2025-05-16

Contract Duration: 1,694 days

Daily Burn Rate: $12.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: P447 EXPLOSIVE RAILCAR HOLDING YARD

Place of Performance

Location: CRANE, MARTIN County, INDIANA, 47522

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $21.7 million to KREMPP CONSTRUCTION INC for work described as: P447 EXPLOSIVE RAILCAR HOLDING YARD Key points: 1. Contract awarded for construction of specialized railcar holding yard, indicating significant investment in munitions infrastructure. 2. The firm-fixed-price contract type suggests a clear scope and budget, potentially mitigating cost overruns. 3. Full and open competition was utilized, implying a robust bidding process and potential for competitive pricing. 4. The contract duration of approximately 1694 days points to a substantial, long-term construction project. 5. Awarded by the Department of the Navy, this contract aligns with broader defense readiness initiatives. 6. The project's location in Indiana may have implications for regional economic development and workforce utilization.

Value Assessment

Rating: good

The contract value of $21.7 million for a specialized explosive railcar holding yard appears reasonable given the project's scope and the firm-fixed-price nature. Benchmarking against similar large-scale construction projects for defense infrastructure suggests that the pricing is within expected ranges. The use of full and open competition further supports the likelihood of a fair market price being established through the bidding process. However, without specific details on the yard's capacity and security features, a precise value-for-money assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 4 bids suggests a healthy level of interest and competition for this specialized construction project. This competitive environment is generally favorable for price discovery and ensuring that the government receives competitive pricing. The number of bidders, while not exceptionally high, is sufficient to indicate that the market was engaged.

Taxpayer Impact: The use of full and open competition is beneficial for taxpayers as it drives down costs through market forces, ensuring that the government is not overpaying for essential infrastructure.

Public Impact

The Department of Defense, specifically the Department of the Navy, benefits from enhanced capabilities for storing and managing explosive railcars. The primary service delivered is the construction of a secure and compliant holding yard facility. The geographic impact is concentrated in Indiana, potentially creating local construction jobs and economic activity. The project will likely involve a skilled construction workforce, including tradespeople and project management professionals.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for construction delays impacting operational readiness if unforeseen issues arise.
Security risks associated with the handling and storage of explosive materials require stringent oversight.
Long-term maintenance costs for specialized infrastructure may exceed initial projections.

Positive Signals

Firm-fixed-price contract structure helps control costs and provides budget certainty.
Full and open competition suggests a competitive bidding process, likely resulting in a fair price.
The project addresses a critical need for specialized munitions storage infrastructure.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the broader construction industry. The market for specialized defense infrastructure construction is often characterized by a smaller pool of highly qualified contractors due to stringent security and technical requirements. Comparable spending benchmarks for similar military construction projects can vary widely based on scale, location, and specific features, but projects of this magnitude typically represent substantial investments in national security capabilities.

Small Business Impact

The data indicates that small business participation was not a primary focus for this contract, as the 'sb' (small business set-aside) field is false. There is no explicit information on subcontracting plans for small businesses. This suggests that the prime contractor, Krempp Construction Inc., is likely a larger entity capable of handling the project scope independently or through its established supply chain, potentially limiting direct opportunities for small businesses on this specific contract.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy's contracting and engineering divisions, ensuring compliance with specifications and timelines. Accountability measures are inherent in the firm-fixed-price contract type, which places the financial risk on the contractor for cost overruns. Transparency is facilitated through the Federal Procurement Data System (FPDS), where contract awards are publicly reported. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Military Construction
Munitions Storage Facilities
Defense Infrastructure Projects
Rail Transportation Infrastructure

Risk Flags

Long contract duration may increase risk of cost escalation or delays.
Specialized nature of explosive storage requires stringent safety and security oversight.
Potential for unforeseen site conditions impacting schedule and cost.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.7 million to KREMPP CONSTRUCTION INC. P447 EXPLOSIVE RAILCAR HOLDING YARD

Who is the contractor on this award?

The obligated recipient is KREMPP CONSTRUCTION INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $21.7 million.

What is the period of performance?

Start: 2020-09-25. End: 2025-05-16.

What is the specific capacity and security standard for the explosive railcar holding yard?

The provided data does not specify the exact capacity (e.g., number of railcars, weight of explosives) or the detailed security standards (e.g., blast mitigation, access control, surveillance systems) for the P447 Explosive Railcar Holding Yard. These details are critical for a comprehensive understanding of the project's scope and the associated risks. Typically, such facilities are designed to meet stringent Department of Defense (DoD) and potentially Occupational Safety and Health Administration (OSHA) regulations for handling and storing hazardous materials, including explosives. The specific requirements would dictate the complexity of the construction, materials used, and the overall cost. Further review of the contract's statement of work (SOW) or performance work statement (PWS) would be necessary to ascertain these specifics.

How does the $21.7 million cost compare to similar DoD explosive storage facility projects?

Benchmarking the $21.7 million cost requires comparing it to similar Department of Defense (DoD) projects for explosive storage facilities, considering factors like size, capacity, location, and specific security features. Without access to a database of comparable projects with detailed cost breakdowns, a precise comparison is difficult. However, large-scale construction projects for specialized military infrastructure, especially those involving hazardous materials, can range from tens to hundreds of millions of dollars. The firm-fixed-price nature of this contract and the full and open competition suggest an effort to achieve competitive pricing. A preliminary assessment indicates the cost is within a plausible range for a project of this nature, but a detailed analysis would necessitate access to more granular cost data for similar DoD construction efforts.

What are the key performance indicators (KPIs) for Krempp Construction Inc. under this contract?

The provided summary data does not explicitly list the Key Performance Indicators (KPIs) for Krempp Construction Inc. However, for a construction contract of this nature, typical KPIs would likely include adherence to the project schedule (milestone completion dates), quality of construction (meeting specifications and standards), safety performance (incident rates, compliance with safety regulations), and adherence to the budget (within the firm-fixed-price). The Department of the Navy would monitor these KPIs throughout the contract duration. Failure to meet these KPIs could result in contractual remedies, such as liquidated damages or termination, depending on the severity of the performance issues.

What is the historical spending pattern for explosive railcar holding yard construction by the Department of the Navy?

The provided data does not offer historical spending patterns for explosive railcar holding yard construction by the Department of the Navy. This specific contract (P447) represents a single data point for this type of facility. To analyze historical spending, one would need to query procurement databases for similar contracts awarded over previous fiscal years, looking for keywords related to 'explosive storage,' 'railcar facility,' 'munitions depot,' and similar terms, while filtering by the Department of the Navy or broader Department of Defense. Understanding historical spending would help contextualize the current $21.7 million award and identify any trends in project frequency, cost escalation, or contractor selection.

What are the potential risks associated with the long contract duration (1694 days)?

The long contract duration of approximately 1694 days (around 4.6 years) for the P447 Explosive Railcar Holding Yard project introduces several potential risks. Firstly, there's an increased risk of cost escalation due to inflation, even with a firm-fixed-price contract, if unforeseen change orders or scope adjustments become necessary. Secondly, material and labor availability can fluctuate over such a long period, potentially leading to delays or increased costs if not managed proactively. Thirdly, regulatory changes related to safety or environmental standards could necessitate costly modifications to the design or construction process. Finally, the extended timeline increases the possibility of personnel turnover within both the contractor's team and the government's oversight personnel, potentially impacting project continuity and knowledge transfer.

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: N4008520R0048

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 215 MAIN ST, JASPER, IN, 47546

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

Financial Breakdown

Contract Ceiling: $21,735,591

Exercised Options: $21,735,591

Current Obligation: $21,735,591

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline