DoD's $23.9M Test Cell Renovation Contract Awarded to North State Mechanical Inc

Contract Overview

Contract Amount: $23,906,282 ($23.9M)

Contractor: North State Mechanical Inc

Awarding Agency: Department of Defense

Start Date: 2021-09-23

End Date: 2024-09-23

Contract Duration: 1,096 days

Daily Burn Rate: $21.8K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: X013 FRCE - RENOVATE TEST CELL 1 FOR T-408

Place of Performance

Location: CHERRY POINT, CRAVEN County, NORTH CAROLINA, 28533

State: North Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $23.9 million to NORTH STATE MECHANICAL INC for work described as: X013 FRCE - RENOVATE TEST CELL 1 FOR T-408 Key points: 1. Contract value of $23.9 million for a multi-year renovation project. 2. Awarded to North State Mechanical Inc. under a full and open competition. 3. Project duration spans 1096 days, indicating a significant scope of work. 4. The contract is firm-fixed-price, shifting cost risk to the contractor. 5. Located in North Carolina, potentially impacting local construction workforce. 6. Specialty is Plumbing, Heating, and Air-Conditioning Contractors, aligning with renovation needs.

Value Assessment

Rating: fair

The contract value of $23.9 million for a renovation project of this duration appears within a reasonable range for specialized facility upgrades. Benchmarking against similar large-scale HVAC and plumbing infrastructure projects within the Department of Defense would provide a more precise value-for-money assessment. The firm-fixed-price structure suggests an attempt to control costs, but the absence of detailed cost breakdowns makes a granular price assessment challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition after exclusion of sources,' indicating that while the competition was broad, specific exclusions were applied. The number of bidders is not specified, but the 'full and open' designation suggests a competitive process aimed at achieving fair market prices. The exclusion of certain sources warrants further investigation to understand its impact on the competitive landscape and potential cost savings.

Taxpayer Impact: A full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down prices and encourage innovation. However, the 'exclusion of sources' element could potentially limit the number of competitive bids, which might affect the ultimate cost savings realized.

Public Impact

The primary beneficiaries are the Department of Defense, specifically the Department of the Navy, which will receive upgraded test cell facilities. The services delivered include extensive renovation of Test Cell 1, focusing on plumbing, heating, and air-conditioning systems. The geographic impact is concentrated in North Carolina, where the renovation work will take place. The project will likely involve a significant number of skilled tradespeople, impacting the local construction workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'exclusion of sources' in the competition method requires further scrutiny to ensure it did not unduly limit competition.
Lack of detailed cost breakdowns makes it difficult to fully assess the value for money and identify potential overpricing.
The long duration of the contract (1096 days) increases the risk of cost overruns due to unforeseen issues or market fluctuations.

Positive Signals

The firm-fixed-price contract type shifts cost risk to the contractor, providing budget certainty for the government.
Awarding under a 'full and open competition' generally indicates a robust process to select the best value offer.
The specialized nature of the work suggests the contractor possesses the necessary expertise for this critical renovation.

Sector Analysis

This contract falls within the construction and facilities maintenance sector, specifically focusing on specialized mechanical systems. The market for such services within the defense sector is substantial, driven by the need to maintain and upgrade aging infrastructure and specialized testing facilities. Comparable spending benchmarks would involve analyzing other large-scale HVAC and plumbing renovation contracts awarded by federal agencies, particularly within military branches, to gauge cost-effectiveness.

Small Business Impact

The data indicates that small business participation (ss: false, sb: false) was not a primary set-aside consideration for this contract. This suggests that the primary award was made to a large business. There is no explicit information on subcontracting plans for small businesses, which could be a missed opportunity to engage the small business ecosystem in this significant project. Further investigation into subcontracting goals would be necessary.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Accountability measures are inherent in the firm-fixed-price structure, which penalizes contractor cost overruns. Transparency is facilitated by contract award databases, though detailed project progress and specific cost justifications may not be publicly available. The Inspector General for the Department of Defense may have jurisdiction for audits and investigations if fraud or waste is suspected.

Related Government Programs

Department of Defense Facilities Renovation Programs
Navy Base Infrastructure Modernization
HVAC and Plumbing System Upgrades
Federal Construction Contracts
Test and Evaluation Facility Maintenance

Risk Flags

Potential for limited competition due to source exclusion.
Risk of cost overruns despite firm-fixed-price due to long duration.
Need for detailed review of contractor's past performance.
Uncertainty regarding small business subcontracting opportunities.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $23.9 million to NORTH STATE MECHANICAL INC. X013 FRCE - RENOVATE TEST CELL 1 FOR T-408

Who is the contractor on this award?

The obligated recipient is NORTH STATE MECHANICAL 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 $23.9 million.

What is the period of performance?

Start: 2021-09-23. End: 2024-09-23.

What is the track record of North State Mechanical Inc. with federal contracts, particularly within the Department of Defense?

A review of North State Mechanical Inc.'s federal contract history would be necessary to assess their performance on similar projects. Key indicators would include past performance ratings, any history of contract disputes or terminations, and their experience with projects of comparable size and complexity. Understanding their prior success with firm-fixed-price contracts and their ability to manage large-scale renovations, especially those involving specialized systems like those in test cells, is crucial for evaluating their suitability and the reliability of this award. Data on their past federal awards, including agencies served and contract types, would provide context for their capabilities and potential risks associated with this specific contract.

How does the $23.9 million contract value compare to similar renovation projects for military test cells?

Benchmarking this $23.9 million contract against similar renovation projects for military test cells is essential for assessing value for money. This would involve identifying comparable contracts awarded by the Department of Defense or other federal agencies for facilities with similar testing capabilities and renovation scope. Factors to consider include the size and complexity of the test cells, the specific systems being upgraded (e.g., HVAC, power, safety), the duration of the project, and the geographic location. Without specific comparable data, it is difficult to definitively state whether this contract represents excellent, good, or fair value. However, the firm-fixed-price nature suggests an effort to contain costs, and the 'full and open competition' aims to leverage market forces.

What are the specific risks associated with a 1096-day (approximately 3-year) renovation project of this nature?

A 1096-day renovation project carries several inherent risks. Firstly, the extended duration increases the likelihood of encountering unforeseen site conditions (e.g., hazardous materials, structural issues) that could lead to change orders and cost increases, despite the firm-fixed-price structure. Secondly, market fluctuations in material costs and labor availability over a three-year period can impact the contractor's profitability and potentially lead to delays or quality compromises if not managed effectively. Thirdly, the long timeline raises the risk of technological obsolescence for certain systems being installed, although this is less likely for core mechanical systems. Finally, maintaining consistent government oversight and project management continuity over such an extended period can be challenging.

What does the 'full and open competition after exclusion of sources' designation imply for cost and efficiency?

The 'full and open competition after exclusion of sources' designation implies a competitive process that aimed for broad participation but also involved specific criteria for excluding certain potential bidders. This approach suggests the agency identified specific requirements or concerns that led them to limit the pool of eligible contractors, perhaps related to specialized expertise, security clearances, or past performance issues with certain entities. While 'full and open' generally promotes competitive pricing, the exclusion of sources could potentially reduce the number of bids received, thereby limiting the downward pressure on price. The efficiency implications depend on whether the exclusions were justified and necessary to secure the best technical solution, or if they inadvertently constrained competition and potentially increased costs for taxpayers.

What is the potential impact of this contract on the local North Carolina construction market and workforce?

This $23.9 million contract, with a duration of approximately three years, is likely to have a notable positive impact on the local North Carolina construction market and workforce. It will create demand for skilled tradespeople, including plumbers, pipefitters, HVAC technicians, electricians, and general laborers. This influx of work can lead to increased employment opportunities, potentially higher wages, and stimulate business for local suppliers of materials and equipment. The project's scale suggests it could support a significant number of jobs throughout its duration, contributing to the regional economy. However, it's also important to consider if the demand generated by this contract could strain the existing skilled labor pool, potentially leading to wage inflation or project delays if not managed carefully.

Industry Classification

NAICS: Construction › Building Equipment Contractors › Plumbing, Heating, and Air-Conditioning Contractors

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: N4008519R8057

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 225 ELLIS BLVD, JACKSONVILLE, NC, 28540

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

Financial Breakdown

Contract Ceiling: $23,906,282

Exercised Options: $23,906,282

Current Obligation: $23,906,282

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N4008520D0077

IDV Type: IDC

Timeline