Navy awards $107.5M contract for facility replacement, highlighting construction sector activity

Contract Overview

Contract Amount: $107,500,213 ($107.5M)

Contractor: Harper Construction Company, Inc.

Awarding Agency: Department of Defense

Start Date: 2024-04-04

End Date: 2027-06-28

Contract Duration: 1,180 days

Daily Burn Rate: $91.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: DBB P525, NRL FACILITY REPLACEMENT?

Place of Performance

Location: OXNARD, VENTURA County, CALIFORNIA, 93035

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $107.5 million to HARPER CONSTRUCTION COMPANY, INC. for work described as: DBB P525, NRL FACILITY REPLACEMENT? Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The firm-fixed-price structure aims to control costs for the Department of the Navy. 3. Project duration of 1180 days indicates a significant, long-term construction undertaking. 4. The contract falls under commercial and institutional building construction, a key sector for infrastructure development. 5. Awarded to Harper Construction Company, Inc., a participant in the federal contracting landscape. 6. Geographically located in California, impacting local construction workforce and material suppliers.

Value Assessment

Rating: good

The contract value of $107.5 million for a facility replacement project appears within a reasonable range for large-scale construction. Benchmarking against similar large federal building construction projects would provide a more precise value-for-money assessment. The firm-fixed-price contract type suggests that cost overruns are primarily the contractor's responsibility, which is a positive indicator for cost control. However, without detailed cost breakdowns or comparisons to independent cost estimates, a definitive value assessment is challenging.

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 3 bidders suggests a moderate level of competition for this project. A higher number of bidders typically leads to more competitive pricing and a wider selection of qualified contractors. The fact that it was competed openly is a positive sign for price discovery and ensuring taxpayer funds are used efficiently.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down prices through robust bidding. It ensures that the government receives proposals from a broad range of qualified contractors, increasing the likelihood of securing the best value.

Public Impact

The primary beneficiaries are the Department of the Navy, which will receive upgraded or new facilities, and the contractor, Harper Construction Company, Inc. The project will deliver essential construction services for facility replacement, likely involving new building construction or significant renovation. The geographic impact is concentrated in California, potentially creating jobs and economic activity within the state's construction sector. Workforce implications include employment opportunities for construction laborers, tradespeople, project managers, and support staff in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions or material price escalations occur, despite the fixed-price nature.
Dependence on the contractor's ability to manage complex construction schedules and quality control effectively.
Risk of delays impacting the Navy's operational readiness if the project timeline is not met.
Ensuring compliance with environmental regulations and sustainable building practices throughout the construction process.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Full and open competition suggests a competitive environment that should yield fair pricing.
The contractor, Harper Construction Company, Inc., has experience in federal construction projects.
The project addresses a critical need for facility replacement, enhancing long-term infrastructure.
Awarded to a single entity, simplifying contract management and oversight.

Sector Analysis

The federal construction sector is a significant market for building and infrastructure projects. This contract falls under commercial and institutional building construction, which includes a wide range of facilities such as administrative buildings, research facilities, and operational support structures. The Department of Defense is a major client within this sector, consistently awarding large contracts for base improvements and new construction. Comparable spending benchmarks for similar-sized facility replacement projects within the DoD can range from tens to hundreds of millions of dollars, depending on scope and complexity.

Small Business Impact

This contract was not set aside for small businesses and was awarded under full and open competition. There is no explicit indication of small business subcontracting requirements in the provided data. The absence of a small business set-aside suggests that the primary award went to a large business. The impact on the small business ecosystem will depend on whether the prime contractor, Harper Construction Company, Inc., actively seeks to subcontract portions of the work to qualified small businesses, which is a common practice but not guaranteed without specific set-aside provisions.

Oversight & Accountability

Oversight for this contract will likely be managed by the contracting officer and relevant program managers 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 project within the agreed-upon price. Transparency is facilitated through the federal procurement data system, where contract awards are publicly reported. Inspector General jurisdiction may apply if any allegations of fraud, waste, or abuse arise during the contract's performance.

Related Government Programs

Military Construction
Naval Facilities Engineering Command Contracts
Department of Defense Construction Projects
Federal Building Construction
Infrastructure Modernization Programs

Risk Flags

Potential for schedule delays
Risk of cost overruns (contractor responsibility)
Unforeseen site conditions
Material price fluctuations

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $107.5 million to HARPER CONSTRUCTION COMPANY, INC.. DBB P525, NRL FACILITY REPLACEMENT?

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 $107.5 million.

What is the period of performance?

Start: 2024-04-04. End: 2027-06-28.

What is the track record of Harper Construction Company, Inc. with federal contracts, particularly within the Department of Defense?

Harper Construction Company, Inc. has a history of performing federal construction contracts. While specific details on past performance metrics, past due amounts, or past performance evaluations are not provided in this summary, their ability to win a $107.5 million contract indicates they have met the necessary qualifications and demonstrated capability to the Department of the Navy. A deeper dive into their contract history, including past performance reviews and any disputes or claims, would offer a more comprehensive understanding of their reliability and effectiveness as a federal contractor. Examining their portfolio of completed DoD projects would reveal their experience with similar facility types and scales.

How does the awarded price of $107.5 million compare to similar facility replacement projects undertaken by the Navy or other DoD branches?

Benchmarking the $107.5 million award against similar facility replacement projects requires access to a broader dataset of federal construction contracts. Factors such as project scope, location, specific facility type (e.g., barracks, research labs, administrative offices), and prevailing market conditions at the time of award significantly influence pricing. Generally, large-scale construction projects for the DoD can range widely, but a contract of this magnitude suggests a substantial undertaking. Without specific comparable projects with detailed cost breakdowns, it's difficult to definitively state if this represents excellent, fair, or concerning value. However, the firm-fixed-price structure and full and open competition are positive indicators for achieving competitive pricing.

What are the primary risks associated with a large-scale construction project of this nature, and how are they being mitigated?

Key risks in large construction projects include unforeseen site conditions (e.g., soil issues, hazardous materials), material price volatility, labor shortages, weather delays, and contractor performance issues. For this contract, the firm-fixed-price (FFP) structure mitigates financial risk for the government by capping the total cost, placing the burden of cost overruns on the contractor. The full and open competition process aims to select a contractor with a proven ability to manage these risks. Mitigation strategies likely involve detailed project planning, contingency allowances within the contractor's bid, robust quality assurance/quality control plans, and clear communication protocols between the Navy and Harper Construction Company, Inc. Specific risk mitigation plans would be detailed in the contract's statement of work and associated documents.

What is the expected impact of this facility replacement on the Navy's operational capabilities or readiness in the region?

The primary impact of this facility replacement project on the Navy's operational capabilities will be the modernization and improvement of its infrastructure. Replacing aging or inadequate facilities can lead to enhanced safety, increased efficiency, better working conditions for personnel, and improved support for mission-critical operations. Depending on the specific facility being replaced (e.g., administrative, research, maintenance, or housing), the upgrade could directly contribute to improved readiness by providing state-of-the-art resources or by ensuring the reliability of essential support functions. The project's successful and timely completion is crucial for realizing these benefits and maintaining the operational effectiveness of the naval base or installation.

How has federal spending on commercial and institutional building construction trended over the past five years, and where does this contract fit?

Federal spending on commercial and institutional building construction has generally remained robust, driven by ongoing needs for infrastructure modernization, military base improvements, and upgrades to federal agency facilities. While specific year-over-year trends fluctuate based on budget allocations and national priorities, the Department of Defense consistently represents a significant portion of this spending. This $107.5 million contract for facility replacement fits within the typical range for major construction projects awarded by the DoD. It reflects the government's continued investment in maintaining and upgrading its physical assets to support its diverse missions. Analyzing historical spending data for the Navy's facilities command would provide context on the frequency and scale of similar awards.

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: N6247319R1237

Offers Received: 3

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: $107,500,213

Exercised Options: $107,500,213

Current Obligation: $107,500,213

Actual Outlays: $492,453

Subaward Activity

Number of Subawards: 37

Total Subaward Amount: $73,203,763

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N6247321D1206

IDV Type: IDC

Timeline