DoD awards $8.9M contract for Norfolk Naval Shipyard building demolition, highlighting construction sector activity

Contract Overview

Contract Amount: $8,922,394 ($8.9M)

Contractor: Encon Desbuild JV 3 LLC

Awarding Agency: Department of Defense

Start Date: 2025-11-26

End Date: 2028-02-14

Contract Duration: 810 days

Daily Burn Rate: $11.0K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 7

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: DEMOLITION OF BUILDING 195 LOCATED AT NORFOLK NAVAL SHIPYARD, PORTSMOUTH, VIRGINIA

Place of Performance

Location: PORTSMOUTH, PORTSMOUTH CITY County, VIRGINIA, 23709

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $8.9 million to ENCON DESBUILD JV 3 LLC for work described as: DEMOLITION OF BUILDING 195 LOCATED AT NORFOLK NAVAL SHIPYARD, PORTSMOUTH, VIRGINIA Key points: 1. Contract awarded to ENCON DESBUILD JV LLC for demolition services. 2. Project located at Norfolk Naval Shipyard in Portsmouth, Virginia. 3. Firm Fixed Price contract type indicates defined scope and cost. 4. Delivery Order under a larger contract vehicle. 5. Project duration spans over two years. 6. Competition was full and open after exclusion of sources.

Value Assessment

Rating: good

The contract value of $8.9 million for the demolition of a single building appears reasonable within the context of large-scale construction and demolition projects, especially for a naval shipyard which often involves specialized environmental and safety considerations. Benchmarking against similar demolition projects for institutional or industrial buildings would provide a more precise value-for-money assessment. The firm fixed-price structure suggests that the contractor bears the risk of cost overruns, which can be a positive indicator for the government if the scope is well-defined.

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 sources may have been excluded based on pre-qualification or other criteria. The presence of multiple bidders (7) suggests a competitive environment, which typically leads to better pricing and value for the government. The specific nature of the exclusion of sources would need further review to fully understand its impact on the competitive landscape.

Taxpayer Impact: A competitive bidding process helps ensure that taxpayer funds are used efficiently by driving down costs and encouraging the selection of the most capable and cost-effective contractor.

Public Impact

The Department of the Navy benefits from the removal of an outdated or hazardous structure, improving shipyard infrastructure. The demolition services will be performed in Portsmouth, Virginia, supporting the local economy. The project contributes to the modernization and safety of the Norfolk Naval Shipyard. The contract supports jobs within the construction and demolition sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for unforeseen hazardous materials requiring costly remediation.
Scope creep if demolition requirements are not precisely defined.
Contractor performance risks associated with specialized demolition techniques.

Positive Signals

Firm Fixed Price contract limits cost uncertainty for the government.
Competitive award process suggests potential for good value.
Experienced contractor likely selected through a rigorous process.

Sector Analysis

The construction sector, particularly demolition services, is a critical component of infrastructure development and maintenance. This contract falls within the Commercial and Institutional Building Construction NAICS code. The market for demolition services is competitive, with specialized firms capable of handling complex projects like those found in military installations. Spending in this area is often driven by facility modernization, decommissioning, and site preparation for new construction. Benchmarks for similar projects vary widely based on building size, materials, and environmental considerations.

Small Business Impact

The contract was awarded to ENCON DESBUILD JV LLC, and there is no explicit indication of a small business set-aside. The 'JV' in the contractor's name suggests a joint venture, which could potentially include small business participation. Further analysis would be needed to determine if subcontracting opportunities exist for small businesses within the scope of this demolition project.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy, with specific contract officers and technical representatives ensuring compliance with terms and conditions. The firm fixed-price nature of the contract provides a degree of cost control. Transparency is facilitated through contract award databases, though detailed project-specific oversight mechanisms are internal to the agency.

Related Government Programs

Naval Facilities Engineering Command (NAVFAC) Contracts
Department of Defense Construction Projects
Shipyard Infrastructure Modernization Programs
Building Demolition and Decommissioning Services

Risk Flags

Potential for hazardous material discovery
Environmental compliance risks
Schedule adherence challenges
Contract scope definition adequacy

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $8.9 million to ENCON DESBUILD JV 3 LLC. DEMOLITION OF BUILDING 195 LOCATED AT NORFOLK NAVAL SHIPYARD, PORTSMOUTH, VIRGINIA

Who is the contractor on this award?

The obligated recipient is ENCON DESBUILD JV 3 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 $8.9 million.

What is the period of performance?

Start: 2025-11-26. End: 2028-02-14.

What is the track record of ENCON DESBUILD JV LLC in performing similar demolition contracts for the federal government?

A review of federal contract databases indicates that ENCON DESBUILD JV LLC has been awarded contracts for demolition and construction services. Specific details on past performance for projects of similar scale and complexity to the Norfolk Naval Shipyard demolition would require a deeper dive into contract award histories and performance reports. It is common for joint ventures to be formed for large projects, leveraging the combined expertise of their constituent companies. Assessing their experience with environmental remediation and hazardous material abatement, often critical in shipyard environments, would be a key factor in evaluating their suitability for this specific task.

How does the awarded amount of $8.9 million compare to the estimated cost or bids from other competitors?

The awarded amount of $8,922,394 represents the final price agreed upon after a competitive bidding process. While the exact bid amounts from the other six competitors are not publicly detailed in this summary, the fact that it was a 'full and open competition after exclusion of sources' with seven bidders suggests a market-driven price. To assess value for money, this figure would ideally be compared against a government cost estimate or a benchmark of similar demolition projects. Without that comparative data, it's difficult to definitively state if it was exceptionally high or low, but the competitive nature provides some assurance of reasonableness.

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

Key risks for this demolition project include the potential discovery of hazardous materials (e.g., asbestos, lead paint, PCBs), unforeseen structural complexities, environmental contamination, and schedule delays. Mitigation strategies typically involve thorough pre-demolition surveys, robust environmental testing, detailed site assessments, and a well-defined contract scope with clear procedures for handling unexpected findings. The firm fixed-price contract shifts some financial risk to the contractor, incentivizing them to manage these risks effectively. The Navy's oversight and the contractor's specialized expertise are also crucial mitigation factors.

What is the expected impact of this demolition on the overall operational capacity or future development plans for Norfolk Naval Shipyard?

The demolition of Building 195 is likely a component of a larger infrastructure modernization or space optimization plan for the Norfolk Naval Shipyard. Removing an outdated or underutilized structure can free up valuable land for new construction, improve site layout, enhance safety, or address environmental concerns. The specific impact depends on the building's original function and its location within the shipyard's operational footprint. This project contributes to the long-term strategic goals of maintaining and upgrading critical naval facilities.

What has been the historical spending trend for demolition and construction services at Norfolk Naval Shipyard over the past five years?

Analyzing historical spending trends for demolition and construction at Norfolk Naval Shipyard over the past five years would provide valuable context. This would involve aggregating contract data for similar NAICS codes (e.g., 236220) awarded to the shipyard. A rising trend might indicate increased investment in facility upgrades or decommissioning, while a stable or declining trend could suggest a different pace of modernization. Understanding this historical context helps in evaluating whether the current $8.9 million award is consistent with past investment levels or represents a significant shift.

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 AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N4008525R2674

Offers Received: 7

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 8201 CORPORATE DRIVE, SUITE 720, HYATTSVILLE, MD, 20785

Business Categories: Category Business, Corporate Entity Tax Exempt, Limited Liability Corporation, Minority Owned Business, Small Business, Special Designations, Indian (Subcontinent) American Owned Business, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $8,922,394

Exercised Options: $8,922,394

Current Obligation: $8,922,394

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N4008524D0033

IDV Type: IDC

Timeline