Harper Construction awarded $73.4M for hangar renovation and addition, with 2 bids received

Contract Overview

Contract Amount: $73,373,604 ($73.4M)

Contractor: Harper Construction Company, Inc.

Awarding Agency: Department of Defense

Start Date: 2020-03-26

End Date: 2023-11-30

Contract Duration: 1,344 days

Daily Burn Rate: $54.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: N62473-17-D-0817 TO N6247320F4476 MCON P-596 - HANGAR 95 RENOVATION&ADDITION

Place of Performance

Location: YUMA, YUMA County, ARIZONA, 85369

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $73.4 million to HARPER CONSTRUCTION COMPANY, INC. for work described as: N62473-17-D-0817 TO N6247320F4476 MCON P-596 - HANGAR 95 RENOVATION&ADDITION Key points: 1. Value for money assessed against similar construction projects. 2. Competition dynamics indicate a moderate level of market interest. 3. Risk indicators include project duration and fixed-price contract type. 4. Performance context is a renovation and addition to existing infrastructure. 5. Sector positioning within commercial and institutional building construction. 6. Spending context is a single delivery order under a larger IDIQ contract.

Value Assessment

Rating: good

The contract value of approximately $73.4 million for a hangar renovation and addition appears reasonable when benchmarked against similar large-scale construction projects. The firm-fixed-price contract type suggests that the contractor assumed the majority of the cost risk. However, without detailed cost breakdowns or comparisons to specific, highly comparable projects, a definitive value assessment is challenging. The price was determined through a competitive bidding process, which generally supports fair pricing.

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. Two bids were received, which suggests a moderate level of competition for this specific project. While two bidders are better than one, a higher number of bids could potentially lead to more aggressive pricing and a wider range of innovative solutions.

Taxpayer Impact: The full and open competition, despite receiving two bids, likely ensured that taxpayer funds were used efficiently by fostering a competitive environment for this significant construction project.

Public Impact

The primary beneficiaries are the Department of the Navy and its personnel, who will gain improved hangar facilities. The services delivered include the renovation and addition to Hangar 95, enhancing operational capabilities. The geographic impact is localized to the facility in Arizona where the hangar is located. Workforce implications include employment opportunities for construction workers and related trades during the project's execution.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen issues arise during renovation, despite fixed-price contract.
Schedule delays could impact operational readiness if the project timeline is not met.
Quality control during construction is crucial to ensure long-term durability and functionality.

Positive Signals

Firm-fixed-price contract shifts cost risk to the contractor.
Awarded under full and open competition, suggesting a competitive bidding process.
Project aims to improve critical infrastructure, supporting military operations.

Sector Analysis

This contract falls within the commercial and institutional building construction sector, a significant segment of the broader construction industry. The market for large-scale government construction projects is often characterized by a mix of large prime contractors and specialized subcontractors. Spending in this sector is influenced by infrastructure needs, modernization efforts, and defense spending priorities. Comparable benchmarks would include other large military facility construction or renovation projects.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, and the prime contractor, Harper Construction Company, Inc., is not explicitly identified as a small business in this context. There is no direct information on subcontracting plans for small businesses. The absence of a small business set-aside means that opportunities for small businesses would likely be through subcontracting, the extent of which is not detailed here.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting and engineering divisions. Accountability measures are inherent in the firm-fixed-price contract, requiring the contractor to deliver the specified work within the agreed-upon price. Transparency is facilitated through contract award data, though detailed project progress and financial reports may be internal. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Construction Contracts
Naval Facilities Engineering Command Contracts
Military Hangar Construction
Large-Scale Renovation Projects

Risk Flags

Potential for cost escalation despite fixed-price contract if unforeseen conditions arise.
Risk of schedule delays impacting operational readiness.
Limited competition (2 bidders) may impact price optimization.
Ensuring quality of renovation and addition to meet long-term needs.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $73.4 million to HARPER CONSTRUCTION COMPANY, INC.. N62473-17-D-0817 TO N6247320F4476 MCON P-596 - HANGAR 95 RENOVATION&ADDITION

Who is the contractor on this award?

The obligated recipient is HARPER CONSTRUCTION COMPANY, 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 $73.4 million.

What is the period of performance?

Start: 2020-03-26. End: 2023-11-30.

What is the track record of Harper Construction Company, Inc. on similar government contracts?

Harper Construction Company, Inc. has a history of performing significant construction projects for the federal government, including work for the Department of Defense and other agencies. Their portfolio often includes large-scale building construction, renovations, and infrastructure development. Analyzing their past performance on similar projects, such as other hangar constructions or major facility upgrades, would provide insight into their ability to manage complex projects, adhere to schedules, and maintain quality standards. Reviewing past contract awards, completion records, and any reported disputes or performance issues would offer a more comprehensive understanding of their reliability and expertise in executing contracts of this magnitude and type.

How does the awarded price compare to the estimated cost or independent government cost estimate?

The awarded price of approximately $73.4 million represents the final negotiated cost for the hangar renovation and addition. To assess value for money, this figure should be compared against the government's independent cost estimate (ICE) or the contractor's initial proposal if available. A significant difference between the awarded price and the ICE could indicate issues with the bidding process, the accuracy of the estimates, or the level of competition. If the awarded price is well below the ICE, it might suggest aggressive bidding or potential risks to scope or quality. Conversely, a price significantly above the ICE could warrant scrutiny of the justification for the award.

What are the key performance risks associated with this specific project?

Key performance risks for this hangar renovation and addition project include potential schedule delays due to unforeseen site conditions common in renovations, the complexity of integrating new additions with existing structures, and ensuring minimal disruption to ongoing base operations. The firm-fixed-price contract shifts financial risk to the contractor, but performance failures could still lead to delays and require contract modifications or corrective actions. Ensuring the contractor has robust project management, experienced personnel, and effective quality control measures is critical to mitigating these risks. The duration of the contract (1344 days) also presents a longer window for potential issues to arise.

What is the historical spending pattern for hangar construction and renovation within the Department of the Navy?

Historical spending patterns for hangar construction and renovation within the Department of the Navy reveal a consistent need for facility upgrades and new builds to support aviation readiness and technological advancements. Spending in this category can fluctuate based on defense budgets, strategic priorities, and the lifecycle of existing infrastructure. The Navy often utilizes various contracting vehicles, including Indefinite Delivery/Indefinite Quantity (IDIQ) contracts, to streamline the procurement of construction services for projects like this. Analyzing past spending data can help benchmark the current contract's value and identify trends in project scope, duration, and average costs per square foot or per project.

What is the potential impact of the limited number of bidders (two) on the final price and project outcome?

A limited number of bidders, such as the two received for this contract, can have several implications. While competition still exists, it may not be as robust as with a larger pool of bidders, potentially leading to a higher final price than if more companies had competed. It could also mean fewer innovative solutions are presented. However, if the two bidders were highly qualified and competitive, the price could still be favorable. The government's evaluation process becomes critical in such scenarios to ensure the selected contractor offers the best value, considering both price and technical qualifications, and that the limited competition does not unduly disadvantage the government.

Are there any specific clauses or requirements in the contract related to sustainability or environmental impact?

While the provided data does not detail specific clauses related to sustainability or environmental impact, federal construction contracts, especially those managed by the Department of Defense, often incorporate requirements aligned with federal environmental regulations and sustainability goals. These can include energy efficiency standards, waste reduction targets, use of sustainable materials, and compliance with environmental protection agency guidelines. The specific scope of work for the hangar renovation and addition would dictate the extent to which these considerations are integrated. Further review of the contract's statement of work and special contract requirements would be necessary to ascertain the presence and nature of such clauses.

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

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N6247316R3201

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2241 KETTNER BLVD STE 300, SAN DIEGO, CA, 92101

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

Financial Breakdown

Contract Ceiling: $73,373,604

Exercised Options: $73,373,604

Current Obligation: $73,373,604

Actual Outlays: $49,614,342

Subaward Activity

Number of Subawards: 1342

Total Subaward Amount: $1,607,980,132

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N6247317D0817

IDV Type: IDC

Timeline