Navy awards $14.4M contract for heat exchanger replacement in North Carolina, highlighting building infrastructure needs

Contract Overview

Contract Amount: $14,377,885 ($14.4M)

Contractor: Whiting-Turner Contracting Company, the

Awarding Agency: Department of Defense

Start Date: 2023-09-25

End Date: 2026-03-26

Contract Duration: 913 days

Daily Burn Rate: $15.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: X024 FRCE - REPLACE 300 PSIG FUEL FIRED HEAT EXCHANGER, BUILDING

Place of Performance

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

State: North Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $14.4 million to WHITING-TURNER CONTRACTING COMPANY, THE for work described as: X024 FRCE - REPLACE 300 PSIG FUEL FIRED HEAT EXCHANGER, BUILDING Key points: 1. Contract addresses critical infrastructure maintenance for naval facilities. 2. Competition was robust, suggesting potential for competitive pricing. 3. Fixed-price contract type mitigates cost overrun risks for the government. 4. Project duration of over two years indicates a significant scope of work. 5. Focus on building systems underscores ongoing investment in facility upkeep.

Value Assessment

Rating: good

The contract value of $14.4 million for a heat exchanger replacement appears reasonable given the scope and duration. Benchmarking against similar large-scale HVAC or building system replacement projects within the Department of Defense would provide a more precise value-for-money assessment. The firm fixed-price structure is a positive indicator for cost control. Without specific details on the complexity of the existing infrastructure or the new equipment's specifications, a definitive comparison is challenging, but the award seems aligned with typical infrastructure upgrade costs.

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 offers. The presence of two bidders suggests a moderate level of competition for this specific project. While two bidders are better than one, a higher number of bids typically leads to more aggressive pricing and a wider range of technical solutions. The government likely received competitive proposals, but further analysis could explore if the market could have supported more interested parties.

Taxpayer Impact: Full and open competition, even with two bidders, generally benefits taxpayers by driving down prices through a competitive bidding process. This ensures the government is not overpaying for essential services and infrastructure.

Public Impact

Naval personnel and operations in North Carolina will benefit from improved facility functionality and reliability. The contract delivers essential building maintenance services, ensuring operational readiness. The geographic impact is localized to the naval facility in North Carolina where the work will be performed. The contract supports the construction and maintenance workforce, likely through the prime contractor and any subcontractors involved.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for schedule delays given the project's multi-year duration and complexity of infrastructure work.
Ensuring the selected heat exchanger meets all current and future operational demands of the facility.

Positive Signals

Firm fixed-price contract type helps control costs and provides budget certainty.
Full and open competition suggests a fair market price was likely achieved.
Award to a reputable contractor like Whiting-Turner Contracting Company indicates a focus on experienced execution.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, specifically addressing critical infrastructure upgrades for a government facility. The market for large-scale construction and facility maintenance is substantial, with significant government spending allocated annually to maintain and modernize its vast real estate portfolio. This project represents a typical investment in ensuring the operational integrity and longevity of essential government buildings, comparable to spending on similar infrastructure projects across various federal agencies.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Therefore, the primary impact on small businesses would be through potential subcontracting opportunities. The prime contractor, Whiting-Turner Contracting Company, may engage small businesses for specialized construction services, materials, or labor. The extent of small business participation will depend on the prime contractor's subcontracting plan and the specific needs of the project.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy's contracting and facilities management divisions. The firm fixed-price nature of the contract provides a degree of accountability by fixing the total cost. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected during the contract's performance or closeout.

Related Government Programs

Naval Facilities Engineering Command (NAVFAC) Contracts
Department of Defense Facilities Maintenance
Military Construction Projects
Energy Infrastructure Upgrades

Risk Flags

Potential for schedule slippage on multi-year infrastructure projects.
Ensuring long-term operational suitability of the replacement equipment.
Adequate oversight required for complex construction projects.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.4 million to WHITING-TURNER CONTRACTING COMPANY, THE. X024 FRCE - REPLACE 300 PSIG FUEL FIRED HEAT EXCHANGER, BUILDING

Who is the contractor on this award?

The obligated recipient is WHITING-TURNER CONTRACTING COMPANY, THE.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $14.4 million.

What is the period of performance?

Start: 2023-09-25. End: 2026-03-26.

What is the track record of Whiting-Turner Contracting Company with the Department of Defense?

Whiting-Turner Contracting Company has a significant history of performing work for the Department of Defense and other federal agencies. While specific contract details for this analysis are limited, their extensive experience in large-scale construction projects suggests a strong understanding of government contracting requirements, including compliance, safety, and quality standards. Their portfolio often includes complex projects similar to infrastructure upgrades, indicating a capacity to manage the technical and logistical challenges associated with this heat exchanger replacement. Further review of their past performance ratings and any documented issues on previous DoD contracts would provide a more granular assessment of their reliability for this specific project.

How does the awarded amount compare to similar heat exchanger replacement projects in the federal sector?

Directly comparing the $14.4 million award for this specific heat exchanger replacement is challenging without detailed project specifications and scope. However, large-scale HVAC and building system replacements within federal facilities can range from several million to tens of millions of dollars, depending on the size of the facility, the complexity of the existing systems, the type of equipment installed, and the labor costs in the specific geographic region. Given that this is a Department of the Navy project in North Carolina and involves a significant duration (over two years), the awarded amount appears to be within a plausible range for such infrastructure work. Benchmarking against similar projects managed by Naval Facilities Engineering Command (NAVFAC) or other DoD entities would offer a more precise comparison.

What are the primary risks associated with this contract, and how are they being mitigated?

The primary risks associated with this contract include potential schedule delays due to the multi-year duration and the complexities inherent in replacing critical building infrastructure, as well as ensuring the new equipment meets long-term operational needs. Mitigation strategies are evident in the contract structure: the firm fixed-price (FFP) award caps the government's financial exposure, transferring most cost overrun risk to the contractor. The full and open competition, even with two bidders, suggests a competitive environment that should incentivize timely performance. The contract's duration also implies phased execution, potentially allowing for work to proceed while minimizing disruption to facility operations. Robust project management and oversight by the Department of the Navy will be crucial for monitoring progress and addressing any emerging issues.

How effective is the firm fixed-price contract type in ensuring value for taxpayers on this project?

The firm fixed-price (FFP) contract type is generally considered effective in ensuring value for taxpayers on projects like this heat exchanger replacement. It establishes a ceiling price, meaning the contractor is responsible for any costs exceeding that amount. This incentivizes the contractor to manage costs efficiently and complete the work within budget. For the government, it provides budget certainty and predictability, reducing the risk of unexpected cost increases. While FFP contracts can sometimes lead to higher initial bid prices compared to cost-reimbursement contracts, the reduced risk of cost overruns and the contractor's incentive for efficiency often result in better overall value and cost control for taxpayer-funded projects, especially for well-defined scopes of work.

What does the competition level (2 bidders) imply about the market for this type of construction service?

A competition level of two bidders for this heat exchanger replacement contract suggests a moderately competitive market for this specific type of construction service in the relevant geographic area and for the scale of the project. While full and open competition was utilized, indicating the process was accessible, the number of actual bidders implies that perhaps only a limited number of firms possessed the necessary qualifications, capacity, or interest to pursue this particular opportunity. This could be due to specialized requirements, the project's location, or the overall workload of potential contractors. A higher number of bidders typically leads to more aggressive pricing and innovation, whereas two bidders may still yield competitive pricing but potentially less market pressure than a larger pool.

What historical spending patterns exist for heat exchanger replacements or similar infrastructure at this naval facility?

Analyzing historical spending patterns for heat exchanger replacements or similar infrastructure at this specific naval facility would require access to detailed procurement data beyond the scope of this summary. Generally, federal agencies, including the Department of the Navy, allocate significant annual budgets towards maintaining and upgrading aging infrastructure. Spending on such projects can be cyclical, influenced by facility age, operational demands, and available funding appropriations. Without specific historical data for this installation, it's difficult to establish a precise pattern. However, the recurring need for such replacements suggests that infrastructure maintenance is an ongoing operational cost for naval facilities, often managed through multi-year capital improvement plans and periodic contract awards.

Industry Classification

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

Product/Service Code: MAINT/REPAIR SHOP EQPT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N4008519R9048

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 300 E JOPPA RD, BALTIMORE, MD, 21286

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

Financial Breakdown

Contract Ceiling: $14,377,885

Exercised Options: $14,377,885

Current Obligation: $14,377,885

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N4008520D0036

IDV Type: IDC

Timeline