DoD's $52M potable water plant contract awarded to CDM Constructors, Inc. shows fair value with 3 bidders

Contract Overview

Contract Amount: $52,140,431 ($52.1M)

Contractor: CDM Constructors, Inc.

Awarding Agency: Department of Defense

Start Date: 2018-09-29

End Date: 2023-02-15

Contract Duration: 1,600 days

Daily Burn Rate: $32.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF P-192 POTABLE WATER TREATMENT PLANT

Place of Performance

Location: TWENTYNINE PALMS, SAN BERNARDINO County, CALIFORNIA, 92278

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $52.1 million to CDM CONSTRUCTORS, INC. for work described as: IGF::OT::IGF P-192 POTABLE WATER TREATMENT PLANT Key points: 1. The contract's value appears reasonable given the scope of constructing a potable water treatment plant. 2. Full and open competition suggests a healthy market for this type of specialized construction. 3. The fixed-price contract type mitigates cost overrun risks for the government. 4. Performance was rated 'Satisfactory' (ST), indicating the contractor met basic requirements. 5. The contract falls within the broader water and sewer infrastructure construction sector. 6. The duration of the contract (1600 days) is substantial, reflecting the project's complexity.

Value Assessment

Rating: good

The contract value of $52.14 million for a potable water treatment plant appears to be within a reasonable range for such a significant infrastructure project. While specific benchmarking data for identical facilities is not provided, the presence of three bidders in a full and open competition suggests that the pricing was likely competitive. The firm fixed-price structure further supports value for money by transferring risk to the contractor. The 'Satisfactory' performance rating indicates the project was executed without major issues that would suggest poor value.

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 solicitation attracted three bidders, which suggests a moderate level of competition for this specialized construction service. While three bidders are better than one or two, a higher number could potentially drive prices down further. However, the presence of multiple bidders does provide a basis for price comparison and ensures that the government is not unduly disadvantaged.

Taxpayer Impact: The full and open competition with three bidders likely resulted in a fair market price for taxpayers, preventing excessive costs that might arise from a less competitive environment.

Public Impact

The primary beneficiaries are the military personnel and their families stationed at the facility in California, who will receive a reliable supply of potable water. The contract delivered the construction of a critical potable water treatment plant, ensuring compliance with health and safety standards. The geographic impact is localized to the naval facility in California where the plant was constructed. The project likely supported construction jobs and related trades within the local California economy during its execution.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'Satisfactory' performance rating, while meeting minimum requirements, leaves room for improvement and could indicate potential areas where the contractor did not exceed expectations.
The contract duration of 1600 days (approximately 4.4 years) is lengthy, which can sometimes be associated with potential for scope creep or unforeseen delays if not managed meticulously.

Positive Signals

The award was made under full and open competition, demonstrating a commitment to leveraging market forces for the best possible outcome.
The firm fixed-price contract type effectively caps the government's financial exposure, providing cost certainty.
The contract was awarded to CDM Constructors, Inc., a company with experience in construction, suggesting a degree of contractor capability.

Sector Analysis

This contract falls within the Construction sector, specifically related to heavy civil construction for water and sewer infrastructure. The North American Industry Classification System (NAICS) code 237110, 'Water and Sewer Line and Related Structures Construction,' encompasses the building of water treatment plants, pipelines, and related facilities. The market for such projects is often characterized by large, specialized firms capable of handling complex engineering and construction requirements, with significant government spending allocated to maintaining and upgrading aging water infrastructure nationwide.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Given the scale and specialized nature of constructing a potable water treatment plant, it is common for such large federal contracts to be awarded to larger, established construction firms rather than small businesses, unless specific subcontracting goals are mandated. There is no explicit information on subcontracting plans or performance, so the direct impact on the small business ecosystem is not detailed here, but it is unlikely to have directly benefited small businesses through a set-aside.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and their representatives within the Department of the Navy. Performance monitoring, quality assurance, and compliance checks are standard oversight mechanisms. The 'Satisfactory' performance rating suggests that these mechanisms were in place and functioning to ensure basic contract requirements were met. Transparency is generally maintained through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Military Construction
Water Infrastructure Projects
Public Utilities Construction
Naval Facilities Engineering Command Contracts

Risk Flags

Potential for schedule delays due to contract length
Risk of unforeseen site conditions impacting cost/schedule
Performance rating of 'Satisfactory' suggests adequate but not exceptional execution

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $52.1 million to CDM CONSTRUCTORS, INC.. IGF::OT::IGF P-192 POTABLE WATER TREATMENT PLANT

Who is the contractor on this award?

The obligated recipient is CDM CONSTRUCTORS, 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 $52.1 million.

What is the period of performance?

Start: 2018-09-29. End: 2023-02-15.

What is the track record of CDM Constructors, Inc. on similar federal contracts?

CDM Constructors, Inc. has a history of performing construction services for the federal government. While this specific contract for a potable water treatment plant is a significant undertaking, their experience in the broader construction sector, particularly in infrastructure, suggests a foundational capability. Further analysis would require examining their past performance ratings on other contracts, the types of projects they have completed (e.g., other water-related facilities, large-scale civil works), and any history of disputes or contract modifications. Without access to a detailed contract performance database for CDM Constructors, Inc., it's difficult to provide a comprehensive assessment of their specific track record on similar projects, but the 'Satisfactory' rating on this contract indicates they met the minimum requirements.

How does the awarded value compare to similar potable water treatment plant construction contracts?

Benchmarking the $52.14 million award for this potable water treatment plant against similar contracts requires access to a comprehensive database of federal construction awards with detailed project scopes and locations. Factors such as plant capacity, technological complexity, site conditions, and regional labor costs significantly influence pricing. Given that this was a full and open competition with three bidders, the price is presumed to be competitive within its market. However, without specific comparable contract data, a precise value-for-money assessment relative to market rates is challenging. The 'Satisfactory' performance rating suggests the value was acceptable for the delivered outcome.

What are the primary risks associated with a contract of this duration and scope?

Contracts with a duration of 1600 days (over four years) and a significant scope like constructing a potable water treatment plant carry inherent risks. These include potential cost escalations due to unforeseen site conditions, material price fluctuations, or labor shortages, although the firm fixed-price structure mitigates some of this. Schedule delays are also a risk, which can arise from permitting issues, weather, or contractor performance problems. Scope creep, where the project's requirements expand beyond the original agreement, is another concern. Additionally, ensuring the long-term quality and functionality of a critical infrastructure asset like a water treatment plant requires robust oversight and quality control throughout the construction process.

How effective was the competition in ensuring a fair price for taxpayers?

The contract was awarded under full and open competition, attracting three bidders. This level of competition is generally considered adequate to promote price discovery and ensure that the government receives a fair market price. While more bidders could potentially lead to even lower prices, three bidders suggest that the market has multiple capable providers for this type of specialized construction. The firm fixed-price nature of the contract further protects taxpayers by establishing a ceiling on costs. The absence of significant performance issues or contract disputes suggests the competition was effective enough to secure a reasonably priced and adequately performed service.

What is the historical spending pattern for water and sewer line construction by the Department of the Navy?

Historical spending by the Department of the Navy on water and sewer line construction, categorized under NAICS code 237110, would typically fluctuate based on infrastructure needs, modernization efforts, and budget allocations. Analyzing past spending would involve reviewing contract awards over several fiscal years. This contract, valued at approximately $52 million, represents a significant investment in a single project. Trends might show periods of increased spending during major base upgrades or new construction initiatives, and lower spending during maintenance-focused periods. Understanding these patterns helps contextualize the scale of this particular award within the Navy's broader infrastructure investment strategy.

What does the 'Satisfactory' performance rating imply about the contractor's execution?

A 'Satisfactory' performance rating indicates that the contractor, CDM Constructors, Inc., met the contract's requirements and fulfilled its obligations in a generally acceptable manner. It signifies that the project was completed without major deficiencies or significant deviations from the contract terms. However, 'Satisfactory' is not the highest possible rating; it suggests that while the contractor performed adequately, there may not have been exceptional performance or proactive problem-solving that would warrant a higher rating like 'Very Good' or 'Outstanding.' For taxpayers, this rating implies that the delivered infrastructure meets the necessary standards, but it doesn't necessarily indicate superior execution or cost-saving innovations by the contractor.

Industry Classification

NAICS: Construction › Utility System Construction › Water and Sewer Line and Related Structures Construction

Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCTION OF BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N6247318R1002

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 703 PALOMAR AIRPORT ROAD STE 300, CARLSBAD, CA, 92011

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

Financial Breakdown

Contract Ceiling: $52,140,431

Exercised Options: $52,140,431

Current Obligation: $52,140,431

Actual Outlays: $3,365,887

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline