Navy awards $18.7M hangar recapitalization contract to Travelers Casualty & Surety Co. of America

Contract Overview

Contract Amount: $18,691,643 ($18.7M)

Contractor: Travelers Casualty & Surety CO. of America

Awarding Agency: Department of Defense

Start Date: 2008-01-24

End Date: 2010-04-09

Contract Duration: 806 days

Daily Burn Rate: $23.2K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: TAKEOVER CONTRACT PP-207 HANGAR RECAPIALIZATION

Place of Performance

Location: EL CENTRO, IMPERIAL County, CALIFORNIA, 92243

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $18.7 million to TRAVELERS CASUALTY & SURETY CO. OF AMERICA for work described as: TAKEOVER CONTRACT PP-207 HANGAR RECAPIALIZATION Key points: 1. Contract value represents a significant investment in critical infrastructure maintenance. 2. The contract was awarded under full and open competition, suggesting a competitive bidding process. 3. Fixed-price contract type helps mitigate cost overrun risks for the government. 4. The duration of the contract (806 days) indicates a substantial project scope. 5. The project is located in California, a key hub for naval operations. 6. The award to a surety company suggests a focus on financial guarantees and risk management.

Value Assessment

Rating: good

The contract value of $18.7 million for hangar recapitalization appears reasonable given the scope and duration. Benchmarking against similar large-scale industrial building construction projects for the Department of Defense would provide a more precise value-for-money assessment. The firm-fixed-price structure is generally favorable for controlling costs on construction projects of this nature, especially when 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,' which implies that while the competition was open, certain sources were initially excluded, possibly due to specific requirements or prior performance issues. The fact that it was still 'full and open' suggests multiple bidders were considered and evaluated. The level of competition, even with initial exclusions, likely contributed to price discovery and a competitive award.

Taxpayer Impact: This competitive approach aims to ensure that taxpayer funds are used efficiently by securing the best possible price and value for the required construction services.

Public Impact

Naval operations at the specified California base will benefit from improved hangar facilities. The project delivers essential infrastructure upgrades to support military readiness. The geographic impact is concentrated in California, supporting regional economic activity through construction. The project will likely involve a workforce of construction professionals and skilled trades.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for delays in construction impacting operational readiness.
Ensuring the quality of construction meets stringent military standards.
Managing the financial aspects and performance bonds provided by the surety company.

Positive Signals

Firm-fixed-price contract provides cost certainty.
Award to a reputable surety company suggests robust financial backing and risk mitigation.
Competition likely drove a favorable price for the government.

Sector Analysis

This contract falls within the Industrial Building Construction sector, a critical component of the broader construction industry that supports government infrastructure. The Department of Defense is a major client for such services, with significant annual spending on facility maintenance and upgrades. Comparable spending benchmarks would involve analyzing other large-scale construction projects awarded by military branches for similar facility types.

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 if the prime contractor, Travelers Casualty & Surety Co. of America, chooses to engage them. The absence of a set-aside suggests the primary contract was awarded based on best value or lowest price to a large business or a company that did not meet small business criteria.

Oversight & Accountability

Oversight for this contract would typically involve the Department of the Navy's contracting officers and potentially the Defense Contract Management Agency (DCMA). Accountability measures are embedded in the firm-fixed-price contract terms, requiring completion of work to specifications. Transparency is facilitated through contract award databases, though detailed project progress and specific oversight activities may not be publicly disclosed.

Related Government Programs

Department of Defense Military Construction
Naval Facilities Engineering Command Contracts
Industrial Facility Maintenance
Government Construction Projects

Risk Flags

Potential for schedule delays impacting operational readiness.
Ensuring quality of construction meets stringent military standards.
Contract awarded after exclusion of sources requires careful monitoring of competition fairness.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.7 million to TRAVELERS CASUALTY & SURETY CO. OF AMERICA. TAKEOVER CONTRACT PP-207 HANGAR RECAPIALIZATION

Who is the contractor on this award?

The obligated recipient is TRAVELERS CASUALTY & SURETY CO. OF AMERICA.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $18.7 million.

What is the period of performance?

Start: 2008-01-24. End: 2010-04-09.

What is the track record of Travelers Casualty & Surety Co. of America in performing large-scale federal construction contracts?

Travelers Casualty & Surety Co. of America is primarily known as a surety bond provider, offering financial guarantees for construction projects. While they may not be a direct construction firm, their involvement as a surety indicates they are financially backing a contractor or managing the risk associated with the project. Their track record in the surety market is extensive, suggesting a strong capacity to manage financial obligations and performance risks. However, direct performance data for construction execution would typically reside with the actual construction entity they are bonding. Assessing their performance in this specific contract would require examining project completion reports, any claims filed against the bond, and client satisfaction feedback, which are not readily available in the provided data.

How does the $18.7 million award compare to similar hangar recapitalization projects by the Navy?

Without specific data on comparable hangar recapitalization projects by the Navy, a direct comparison is challenging. However, $18.7 million for a project spanning 806 days (approximately 2.2 years) suggests a significant undertaking. Factors influencing cost include the size and complexity of the hangars, the extent of structural repairs, upgrades to utilities and environmental systems, and the specific location's labor and material costs. The Department of Defense awards numerous construction contracts annually, and this figure would need to be benchmarked against projects of similar scope, age of facility, and geographic region to determine if it represents excellent, good, or fair value.

What are the primary risks associated with this firm-fixed-price construction contract?

The primary risks for the government in a firm-fixed-price (FFP) contract are generally lower compared to cost-plus contracts, as the price is set. However, risks can still exist. For this hangar recapitalization, potential risks include the contractor underestimating the scope or complexity of the work, leading to potential quality issues or disputes if they attempt to cut corners to maintain profitability. There's also the risk of contractor default, though this is mitigated by the involvement of a surety company like Travelers. Schedule delays are another common risk in construction, which can impact operational readiness. Ensuring the contractor has adequate resources and expertise to complete the project to specification within the fixed price is crucial.

What is the expected effectiveness of this hangar recapitalization in supporting naval operations?

The effectiveness of this hangar recapitalization is expected to be high, assuming successful completion according to specifications. Modernized hangars are crucial for the maintenance, repair, and storage of naval aircraft. Improved facilities can enhance operational readiness by reducing downtime for aircraft maintenance, providing better environmental controls for sensitive equipment, and ensuring compliance with safety and security standards. The recapitalization likely addresses aging infrastructure, which can be prone to failures that disrupt operations. Therefore, this investment is directly tied to maintaining and improving the Navy's capability to deploy and sustain its air assets.

How has Navy spending on industrial building construction trended over the past five years?

Analyzing the specific trend of Navy spending on industrial building construction over the past five years requires access to detailed historical contract data, which is not provided here. Generally, such spending can fluctuate based on military readiness requirements, aging infrastructure assessments, and budget allocations. Major recapitalization efforts like this one often represent significant, albeit periodic, investments. To understand the trend, one would typically look at aggregate data from sources like the Federal Procurement Data System (FPDS) or agency budget reports, examining the total dollar value awarded for construction services categorized under industrial facilities or similar NAICS codes by the Department of the Navy over recent fiscal years.

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Industrial 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: ALTERNATIVE SOURCES

Solicitation ID: N6247308R2303

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: ST Paul Travelers Companies Inc, the (UEI: 006963540)

Address: 1 TOWER SQUARE, HARTFORD, CT, 01

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $18,691,643

Exercised Options: $18,691,643

Current Obligation: $18,691,643

Contract Characteristics

Cost or Pricing Data: NO

Timeline