Navy awards $130M construction task order to Harper Construction Company, Inc. for Michelson Mission S

Contract Overview

Contract Amount: $129,979,355 ($130.0M)

Contractor: Harper Construction Company, Inc.

Awarding Agency: Department of Defense

Start Date: 2020-09-17

End Date: 2024-01-02

Contract Duration: 1,202 days

Daily Burn Rate: $108.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: X007 (CONSTRUCTION MACC TASK ORDER) | P1903 - MICHELSON MISSION S

Place of Performance

Location: RIDGECREST, KERN County, CALIFORNIA, 93555

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $130.0 million to HARPER CONSTRUCTION COMPANY, INC. for work described as: X007 (CONSTRUCTION MACC TASK ORDER) | P1903 - MICHELSON MISSION S Key points: 1. Contract value of $130M for construction services indicates significant project scope. 2. Full and open competition suggests a robust bidding process. 3. Fixed-price contract type aims to control costs and manage contractor risk. 4. Project duration of over 3 years implies a complex and lengthy undertaking. 5. Awarded by the Department of the Navy, highlighting defense infrastructure needs. 6. Geographic focus on California suggests regional construction activity.

Value Assessment

Rating: good

The contract value of approximately $130 million for a construction task order is substantial. Benchmarking against similar large-scale construction projects awarded by the Department of Defense, this value appears within a reasonable range for complex infrastructure development. The firm fixed-price structure suggests an effort to establish a clear cost ceiling, which is a positive indicator for value for money, assuming the scope was well-defined. Further analysis would require comparing the specific deliverables and unit costs to industry standards for similar construction types.

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 4 bids suggests a competitive environment, which typically leads to better price discovery and potentially more favorable terms for the government. The level of competition is a positive sign for ensuring taxpayer dollars are used efficiently.

Taxpayer Impact: The full and open competition with multiple bidders is beneficial for taxpayers as it fosters a competitive environment, driving down prices and encouraging contractors to offer their best value. This process helps ensure that the government is not overpaying for services.

Public Impact

The primary beneficiaries are the Department of the Navy and its personnel, who will receive improved facilities. The contract delivers commercial and institutional building construction services. The project is geographically located in California, impacting the regional construction market. The award supports jobs within the construction industry, including skilled trades and project management.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the fixed-price scope is not meticulously managed.
Risk of schedule delays impacting operational readiness for the Navy.
Dependency on a single contractor for a large, multi-year project.

Positive Signals

Firm fixed-price contract provides cost certainty.
Full and open competition suggests a competitive bid process.
Award to an established construction company with a track record.
Project duration allows for thorough planning and execution.

Sector Analysis

The construction sector is a significant area of federal spending, particularly for infrastructure development and facility maintenance. This contract falls under commercial and institutional building construction, a broad category encompassing a wide range of projects. Federal spending in this sector is often driven by the needs of agencies like the Department of Defense for base improvements, new facilities, and upgrades. Benchmarking against similar construction contracts reveals that projects of this magnitude are common within defense spending, reflecting the ongoing need to maintain and modernize military infrastructure.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, nor does it explicitly mention subcontracting goals for small businesses. While the primary award went to Harper Construction Company, Inc., a larger entity, the implications for the small business ecosystem depend on the subcontracting plans of the prime contractor. Without specific subcontracting data, it's difficult to assess the direct impact on small businesses, though large prime contracts often create opportunities for specialized small business subcontractors.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program office within the Department of the Navy. Accountability measures are embedded in the firm fixed-price contract terms, which hold the contractor responsible for delivering the specified scope within the agreed-upon price. Transparency is facilitated through contract award databases, though detailed project-specific oversight reports may not always be publicly available. 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 Base Infrastructure Projects
Commercial Building Construction
Large-Scale Construction Task Orders

Risk Flags

Potential for cost overruns due to fixed-price nature on a long-term project.
Risk of schedule delays impacting military readiness or operational needs.
Quality control concerns if contractor faces financial pressure.
Dependency on a single prime contractor for a large scope of work.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $130.0 million to HARPER CONSTRUCTION COMPANY, INC.. X007 (CONSTRUCTION MACC TASK ORDER) | P1903 - MICHELSON MISSION S

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 $130.0 million.

What is the period of performance?

Start: 2020-09-17. End: 2024-01-02.

What is Harper Construction Company, Inc.'s track record with the federal government, particularly with the Department of Defense?

Harper Construction Company, Inc. has a history of securing contracts with the federal government, including significant awards from the Department of Defense. Their portfolio often includes large-scale construction projects, such as barracks, training facilities, and administrative buildings. Analyzing their past performance on similar firm fixed-price contracts, especially those with durations exceeding one year, would provide insight into their ability to manage complex projects, adhere to schedules, and control costs. Reviewing contract close-out data and any reported performance issues or awards would offer a comprehensive view of their reliability and effectiveness as a federal contractor.

How does the $130 million value compare to other similar construction task orders awarded by the Navy in the last five years?

The $130 million value for this construction task order is substantial, placing it among the larger awards for individual projects within the Department of the Navy. While the Navy frequently awards construction contracts, task orders of this magnitude are less common than smaller, more routine maintenance or repair contracts. Comparing this award to similar 'Commercial and Institutional Building Construction' task orders issued by the Naval Facilities Engineering Command (NAVFAC) or other Navy commands over the past five years would reveal its relative size. If similar large-scale projects have been awarded at comparable or lower price points, it could indicate a competitive market or efficient pricing for this specific contract. Conversely, if this value is significantly higher than comparable projects, it might warrant further investigation into the scope, complexity, or market conditions.

What are the primary risks associated with a firm fixed-price contract of this size and duration?

The primary risks associated with a firm fixed-price contract of this magnitude ($130 million) and duration (over 3 years) primarily fall on the contractor. The contractor assumes the risk of cost overruns if actual expenses exceed the fixed price. This can occur due to unforeseen site conditions, material price escalations, labor shortages, or inefficient project management. For the government, the main risk is that the contractor might cut corners on quality or scope to maintain profitability if they encounter cost issues, potentially leading to subpar facilities or future repair needs. Effective government oversight is crucial to monitor progress, ensure quality, and manage any scope changes rigorously to mitigate these risks.

What is the expected impact of this contract on the construction workforce in California?

A contract of this size and duration is expected to have a positive impact on the construction workforce in California. It will likely generate a significant number of direct and indirect jobs, ranging from skilled trades (electricians, plumbers, carpenters, heavy equipment operators) to project managers, engineers, and administrative support staff. The demand for labor could lead to increased employment opportunities and potentially higher wages in the region where the project is located. Furthermore, it may stimulate demand for local suppliers of construction materials and equipment, creating a broader economic ripple effect within the state's construction ecosystem.

How does the 'full and open competition' with 4 bidders influence the government's ability to secure favorable pricing?

The 'full and open competition' with four bidders is a strong indicator that the government is likely to secure favorable pricing. A competitive environment encourages bidders to submit their most aggressive and cost-effective proposals to win the contract. With multiple companies vying for the award, the government benefits from the interplay of market forces, where each bidder strives to offer the best value proposition. The presence of four bids suggests sufficient market interest and capacity, reducing the likelihood of a contractor having excessive market power. This level of competition typically leads to prices that are closer to the true market cost of the services provided, maximizing the value of taxpayer dollars.

Are there any specific performance metrics or deliverables outlined in the contract that can be used to assess program effectiveness?

While the provided data does not detail specific performance metrics or deliverables, federal contracts of this nature typically include detailed statements of work (SOW) and performance standards. These documents outline the required quality, scope, schedule, and functional requirements for the construction project. Effectiveness would be assessed by comparing the completed facility against these requirements, ensuring it meets all specifications, is delivered on time and within budget (as per the fixed-price agreement), and is fit for its intended purpose. Post-occupancy evaluations or warranty period performance could also serve as indicators of long-term effectiveness and contractor quality.

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: N6247316R1868

Offers Received: 4

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: $129,979,355

Exercised Options: $129,979,355

Current Obligation: $129,979,355

Actual Outlays: $100,235,593

Subaward Activity

Number of Subawards: 1333

Total Subaward Amount: $3,357,103,475

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N6247318D5853

IDV Type: IDC

Timeline