Orion Construction awarded $31.9M for Camp Pendleton water system upgrades under full and open competition

Contract Overview

Contract Amount: $31,896,033 ($31.9M)

Contractor: Orion Construction Corporation

Awarding Agency: Department of Defense

Start Date: 2019-12-12

End Date: 2024-09-06

Contract Duration: 1,730 days

Daily Burn Rate: $18.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: DESIGN BID BUILD CONSTRUCTION PROJECT FOR P079 - POTABLE WATER DISTRIBUTION IMPROVEMENTS AT MARINE CORPS BASE CAMP PENDLETON

Place of Performance

Location: CAMP PENDLETON, SAN DIEGO County, CALIFORNIA, 92055

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $31.9 million to ORION CONSTRUCTION CORPORATION for work described as: DESIGN BID BUILD CONSTRUCTION PROJECT FOR P079 - POTABLE WATER DISTRIBUTION IMPROVEMENTS AT MARINE CORPS BASE CAMP PENDLETON Key points: 1. Contract value appears reasonable for a large-scale infrastructure project of this nature. 2. Full and open competition suggests a competitive bidding process, potentially leading to better pricing. 3. Project duration of approximately 4.7 years indicates a significant and complex undertaking. 4. Fixed-price contract type shifts risk to the contractor, which can be beneficial for the government. 5. The project addresses critical infrastructure needs at a major military installation.

Value Assessment

Rating: good

The contract value of $31.9 million for potable water distribution improvements at Marine Corps Base Camp Pendleton seems within a reasonable range for a project of this scale and complexity. Benchmarking against similar water infrastructure projects at military bases or large public facilities would provide a more precise assessment, but the scope of work, including design, bid, and build, suggests substantial costs. The firm fixed-price nature of the contract also implies that the government has secured a defined cost, assuming the contractor manages their expenses effectively.

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 bids. The presence of two bidders suggests a moderate level of competition for this project. While two bidders are better than one, a higher number of bids would typically lead to more robust price discovery and potentially lower costs for the government. However, the specific nature of the project and the qualifications required may have limited the pool of eligible contractors.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages multiple companies to vie for the contract, driving down prices through competitive bidding. Even with two bidders, the process aims to secure the best value for the government.

Public Impact

Service members and their families stationed at Marine Corps Base Camp Pendleton will benefit from improved potable water distribution. The project will enhance the reliability and safety of the water supply infrastructure on base. Construction activities will likely create temporary employment opportunities in the local California region. The upgrade ensures continued operational readiness for the base by maintaining essential utilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions arise during construction.
Risk of schedule delays due to weather, material availability, or contractor performance.
Ensuring compliance with environmental regulations during construction activities.

Positive Signals

Firm fixed-price contract mitigates budget risk for the government.
Full and open competition promotes a competitive bidding environment.
Project addresses critical infrastructure needs, ensuring long-term operational benefits.

Sector Analysis

This contract falls within the construction sector, specifically focusing on heavy and civil engineering construction, including water and sewer line construction. The market for such infrastructure projects is substantial, driven by ongoing needs for modernization and repair of public and military facilities. Comparable spending benchmarks would involve looking at other large-scale water system upgrades at federal installations or municipal projects of similar scope. The size of this contract, at nearly $32 million, places it as a significant project within its sub-sector.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Orion Construction Corporation is likely a large business. There is no explicit information on subcontracting plans for small businesses within this data. Without specific subcontracting goals or reporting, the direct impact on the small business ecosystem is unclear, though large prime contractors often utilize small businesses for specialized services.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant project management office within the Department of the Navy. The firm fixed-price nature provides a degree of accountability by capping the government's financial exposure. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Military Construction Program
Base Realignment and Closure (BRAC) related infrastructure
Department of Defense Facilities Sustainment, Restoration, and Modernization (FSRM)
Public Water System Infrastructure Grants

Risk Flags

Limited competition (2 bidders)
Potential for schedule delays
Unforeseen site conditions risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $31.9 million to ORION CONSTRUCTION CORPORATION. DESIGN BID BUILD CONSTRUCTION PROJECT FOR P079 - POTABLE WATER DISTRIBUTION IMPROVEMENTS AT MARINE CORPS BASE CAMP PENDLETON

Who is the contractor on this award?

The obligated recipient is ORION CONSTRUCTION CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $31.9 million.

What is the period of performance?

Start: 2019-12-12. End: 2024-09-06.

What is Orion Construction Corporation's track record with similar federal infrastructure projects?

Orion Construction Corporation has a history of performing federal construction contracts. A deeper dive into their past performance, particularly on projects involving water distribution systems or similar utility infrastructure at military installations, would be necessary for a comprehensive assessment. Reviewing past contract awards, completion records, and any reported performance issues or commendations would provide insight into their capabilities and reliability. Examining their financial stability and bonding capacity is also crucial for large-scale projects like this one.

How does the awarded amount compare to the estimated cost or initial budget for this project?

The provided data does not include the initial estimated cost or budget for the P079 potable water distribution improvements project. Therefore, a direct comparison to assess if the awarded amount of $31.9 million represents a favorable outcome relative to expectations cannot be made. Ideally, the awarded price should be scrutinized against pre-solicitation estimates, independent government cost estimates, and the bids received from other competitors to determine if it represents good value for money.

What are the primary risks associated with this specific type of construction project?

Key risks for a potable water distribution improvement project include unforeseen subsurface conditions (e.g., encountering unexpected utilities, soil instability, or hazardous materials), potential environmental impacts during excavation and construction, and the logistical challenges of working within an active military base. Schedule delays due to weather, material procurement issues, or labor shortages are also common. Furthermore, ensuring the integrity and functionality of the new system post-construction and during the transition from old to new infrastructure presents a significant technical risk.

What is the historical spending trend for water infrastructure at Marine Corps Base Camp Pendleton?

Historical spending data specifically for water infrastructure at Marine Corps Base Camp Pendleton is not provided in the current dataset. To analyze this, one would need to access historical contract databases and filter for contracts awarded to Camp Pendleton related to water systems, distribution, or treatment over several fiscal years. This would reveal patterns of investment, identify periods of significant upgrades, and potentially highlight recurring issues or needs that this current contract addresses.

How does the number of bidders (2) impact the potential for cost savings for the government?

A competition with only two bidders generally offers less potential for cost savings compared to a scenario with numerous bidders. With more bidders, the competitive pressure tends to drive prices down as companies strive to win the contract. While two bidders still provide some level of competition, it increases the risk that the winning bid might not be the absolute lowest achievable price. The government's negotiation leverage is also somewhat reduced compared to a more crowded field. However, the specific nature of the project and the required expertise might naturally limit the number of qualified bidders.

What is the significance of the 'DEFINITIVE CONTRACT' award type in this context?

A 'Definitive Contract' is a standard, legally binding agreement that specifies all terms and conditions, including price, quantity, and delivery schedules. In this case, it signifies a firm commitment between the government and Orion Construction Corporation for the full scope of the project. Unlike indefinite-delivery/indefinite-quantity (IDIQ) contracts, a definitive contract, especially a Firm Fixed Price (FFP) one, locks in the price and scope, providing predictability for both parties and minimizing the government's risk of cost escalation, assuming the contractor performs as agreed.

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: N6247319R2433

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2185 LA MIRADA DR, VISTA, CA, 92081

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

Financial Breakdown

Contract Ceiling: $31,896,033

Exercised Options: $31,896,033

Current Obligation: $31,896,033

Actual Outlays: $7,188,689

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline