DoD's $348.6M Navy Construction Contract Awarded to EHW Constructors Raises Questions on Value and Competition
Contract Overview
Contract Amount: $348,562,722 ($348.6M)
Contractor: EHW Constructors, a Joint Venture
Awarding Agency: Department of Defense
Start Date: 2012-05-09
End Date: 2017-09-30
Contract Duration: 1,970 days
Daily Burn Rate: $176.9K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 5
Pricing Type: FIRM FIXED PRICE
Sector: Construction
Official Description: P-990 (CONSTRUCTION)
Place of Performance
Location: SILVERDALE, KITSAP County, WASHINGTON, 98315
Plain-Language Summary
Department of Defense obligated $348.6 million to EHW CONSTRUCTORS, A JOINT VENTURE for work described as: P-990 (CONSTRUCTION) Key points: 1. The contract's substantial value of $348.6 million warrants scrutiny for cost-effectiveness. 2. Full and open competition was cited, but the long duration and firm fixed-price nature may limit price discovery. 3. Potential risks include cost overruns and schedule delays common in large-scale construction projects. 4. The sector is heavy civil engineering construction, a complex area requiring specialized expertise.
Value Assessment
Rating: fair
The contract value of $348.6 million is significant for heavy civil engineering construction. Benchmarking against similar large-scale DoD construction projects is necessary to assess if the pricing is competitive and reflects fair market value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a broad solicitation. However, the firm fixed-price structure over a long duration might not fully incentivize cost savings or allow for adjustments based on market fluctuations.
Taxpayer Impact: The significant expenditure of $348.6 million directly impacts taxpayers. Ensuring the project is delivered on time and within budget is crucial for maximizing the value of this public investment.
Public Impact
Taxpayers are funding a major construction project for the Department of the Navy. The project's success impacts military readiness and infrastructure capabilities. Transparency in the bidding and execution phases is essential for public trust.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration (1970 days) increases risk of cost escalation.
- Firm fixed-price contract may not be optimal for long-term, complex construction.
- Lack of specific performance metrics makes value assessment difficult.
Positive Signals
- Awarded under full and open competition.
- Clear contract type (firm fixed price) provides budget certainty if managed well.
Sector Analysis
This contract falls within the heavy and civil engineering construction sector, which is characterized by large-scale projects, specialized labor, and significant material costs. Benchmarks for similar projects are essential for evaluating cost-effectiveness.
Small Business Impact
The data does not indicate whether small businesses were involved as subcontractors. Further analysis is needed to determine the extent of small business participation in this large construction contract.
Oversight & Accountability
Oversight is critical for a contract of this magnitude and duration. Regular progress reviews, quality control inspections, and financial audits by the Department of Defense are necessary to ensure accountability and prevent waste.
Related Government Programs
- Other Heavy and Civil Engineering Construction
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Significant contract value ($348.6M).
- Long contract duration (1970 days).
- Firm Fixed Price (FFP) for a long-term construction project.
- Potential for scope creep or unforeseen issues in heavy civil engineering.
- Limited insight into specific project deliverables and success metrics.
Tags
other-heavy-and-civil-engineering-constr, department-of-defense, wa, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $348.6 million to EHW CONSTRUCTORS, A JOINT VENTURE. P-990 (CONSTRUCTION)
Who is the contractor on this award?
The obligated recipient is EHW CONSTRUCTORS, A JOINT VENTURE.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Navy).
What is the total obligated amount?
The obligated amount is $348.6 million.
What is the period of performance?
Start: 2012-05-09. End: 2017-09-30.
What specific construction project is this contract for, and what are the key performance indicators for its success?
The provided data does not specify the exact construction project. Understanding the project's scope, objectives, and critical success factors is vital for evaluating the contract's value and effectiveness. Without this context, it's difficult to determine if the $348.6 million expenditure is justified and if the project meets the Navy's operational needs.
How does the final cost compare to the initial bid and any subsequent modifications, given the firm fixed-price structure?
A firm fixed-price contract aims to establish a ceiling cost. Analyzing the final cost against the initial bid and any approved modifications is crucial. Deviations could indicate unforeseen issues or scope changes, and understanding the reasons behind them is key to assessing risk management and contractor performance.
What mechanisms were in place to ensure competitive pricing throughout the contract's long duration, despite the fixed-price nature?
While the initial award was under full and open competition, the long duration (1970 days) of a firm fixed-price contract raises questions about sustained price competitiveness. Mechanisms like market research updates, value engineering proposals, or phased pricing reviews could have been employed. Assessing these would reveal how the government ensured ongoing value.
Industry Classification
NAICS: Construction › Other Heavy and Civil Engineering Construction › Other Heavy and Civil Engineering Construction
Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCTION OF BUILDINGS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: TWO STEP
Solicitation ID: N4425511R9004
Offers Received: 5
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 295 BENDIX RD, SUITE 400, VIRGINIA BEACH, VA, 23452
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $348,562,722
Exercised Options: $348,562,722
Current Obligation: $348,562,722
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2012-05-09
Current End Date: 2017-09-30
Potential End Date: 2017-09-30 00:00:00
Last Modified: 2021-07-29
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