Wesco Construction awarded $5.5M contract for Navy office reconfiguration, raising questions on competition and value

Contract Overview

Contract Amount: $5,531,281 ($5.5M)

Contractor: Wesco Construction

Awarding Agency: Department of Defense

Start Date: 2024-09-27

End Date: 2026-08-19

Contract Duration: 691 days

Daily Burn Rate: $8.0K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: B-547 PRIVATE OFFICE RECONFIGURATION

Place of Performance

Location: NORCO, RIVERSIDE County, CALIFORNIA, 92860

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $5.5 million to WESCO CONSTRUCTION for work described as: B-547 PRIVATE OFFICE RECONFIGURATION Key points: 1. The contract's value of $5.5 million for office reconfiguration appears high relative to the scope, warranting a closer look at unit costs. 2. The absence of a competitive bidding process for this significant contract raises concerns about potential overpricing and limited market testing. 3. The firm-fixed-price contract type suggests that cost overruns are unlikely, but the initial price may not reflect optimal value. 4. The contract duration of nearly two years for office reconfiguration seems lengthy, potentially indicating inefficiencies or scope creep. 5. The geographic location in California, a high-cost area, may contribute to the overall contract value, but benchmarking is still crucial. 6. The lack of small business involvement, as indicated by 'sb': false, suggests missed opportunities for economic inclusion.

Value Assessment

Rating: questionable

The $5.5 million price tag for office reconfiguration, especially without clear details on the scale of the project, appears substantial. Benchmarking against similar government or private sector office renovation projects of comparable size and complexity is essential to determine if this represents a fair market price. The absence of competitive bids makes it difficult to assess if the pricing reflects optimal value for the taxpayer. Without more granular data on the specific work involved (e.g., square footage, types of renovations), a definitive value assessment is challenging, but the initial figure warrants scrutiny.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not openly competed. This approach limits the number of potential bidders and can reduce price discovery. While sole-source awards are sometimes justified for specific circumstances, the lack of competition here raises concerns about whether the government secured the best possible price and value. The absence of multiple bids means there is no direct market comparison to gauge the competitiveness of the awarded price.

Taxpayer Impact: Taxpayers may have paid a premium due to the lack of competition, as there was no incentive for multiple contractors to offer their lowest possible prices.

Public Impact

The primary beneficiaries of this contract are the personnel within the Department of the Navy who will utilize the reconfigured private offices. The services delivered include construction and renovation of office spaces, aiming to improve functionality and potentially the work environment. The geographic impact is localized to the specific Navy facility in California where the reconfiguration will take place. Workforce implications include employment opportunities for construction workers and potentially project managers involved in the renovation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competitive bidding may lead to inflated costs.
Sole-source award limits transparency and potential for cost savings.
The contract duration appears long for an office reconfiguration, suggesting potential for delays or scope creep.
High contract value without detailed scope raises concerns about value for money.

Positive Signals

Firm-fixed-price contract type mitigates risk of cost overruns for the government.
Contract awarded to a known entity (Wesco Construction), potentially indicating a pre-existing relationship or specialized capability.
Project aims to improve facilities, which can indirectly benefit operational efficiency.

Sector Analysis

The Commercial and Institutional Building Construction sector is a significant part of the broader construction industry. Federal spending in this area often involves renovations, new builds, and facility maintenance for government agencies. This contract falls within the typical scope of services provided by construction firms specializing in commercial and institutional projects. Comparable spending benchmarks would involve analyzing other federal contracts for similar office renovations or reconfigurations, considering factors like square footage, complexity of work, and geographic location.

Small Business Impact

The data indicates that this contract was not set aside for small businesses ('sb': false) and there is no indication of subcontracting requirements for small businesses. This suggests that the primary contractor, Wesco Construction, will likely handle the majority of the work, and opportunities for small businesses to participate in this project may be limited. This could represent a missed opportunity to leverage the small business ecosystem for government contracts.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and facilities management divisions. Accountability measures are inherent in the firm-fixed-price contract type, which obligates the contractor to complete the work for the agreed-upon price. Transparency could be enhanced by making the detailed scope of work and justification for the sole-source award publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Facilities Modernization Programs
Navy Base Infrastructure Improvement Projects
Federal Building Renovation Contracts
Commercial Construction Services

Risk Flags

Lack of Competition
Potential for Overpricing
Extended Duration for Scope
Unclear Scope of Work

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $5.5 million to WESCO CONSTRUCTION. B-547 PRIVATE OFFICE RECONFIGURATION

Who is the contractor on this award?

The obligated recipient is WESCO CONSTRUCTION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $5.5 million.

What is the period of performance?

Start: 2024-09-27. End: 2026-08-19.

What is the specific scope of work for this $5.5 million office reconfiguration, and how does it compare to industry standards for similar projects?

The provided data does not detail the specific scope of work for the B-547 Private Office Reconfiguration. A $5.5 million budget for office reconfiguration is substantial and could encompass a wide range of activities, from minor cosmetic updates to significant structural changes, including new layouts, upgraded systems (HVAC, electrical, IT), and modern finishes. To assess its alignment with industry standards, a detailed breakdown of the project's components (e.g., square footage affected, types of renovations, materials used, duration) is necessary. Industry benchmarks for office renovations vary significantly based on location, complexity, and the level of finish. Without this granular information, it is difficult to definitively state whether the scope aligns with typical projects of this value. However, for a project of this magnitude, one would expect extensive work, potentially involving multiple floors or a significant portion of a building, rather than a simple refresh.

What is the justification for awarding this contract on a sole-source basis, and were any alternatives considered?

The justification for a sole-source award is critical for understanding why this contract was not competed. Common reasons include urgency of need, unique capabilities of a specific contractor, or a lack of other responsible sources. For this contract, the data simply states 'NOT AVAILABLE FOR COMPETITION' and 'SOLE SOURCE'. Without further documentation, such as a Justification and Approval (J&A) document, it's impossible to ascertain the specific rationale. The government is generally required to explore alternatives and document why competition is not feasible. The absence of this information raises concerns about whether the government adequately explored competitive options or if there were specific, documented reasons that precluded competition. Taxpayers benefit from competition through lower prices and better quality, so sole-source awards require strong justification.

How does Wesco Construction's track record and past performance on similar government contracts inform the risk assessment for this project?

Wesco Construction is listed as the contractor, but their specific track record, past performance ratings on similar government contracts, and history with the Department of the Navy are not detailed in the provided data. A thorough risk assessment would involve reviewing Wesco's performance history, including any past issues with schedule adherence, cost control, quality of work, or contract disputes. Positive past performance on similar projects would reduce perceived risk, suggesting a higher likelihood of successful project completion within budget and schedule. Conversely, a history of performance issues could indicate a higher risk for this reconfiguration project. Accessing contract performance reports (CPARS) or similar databases would provide crucial insights into Wesco's reliability and capability.

What are the potential risks associated with the firm-fixed-price contract type for this specific office reconfiguration project?

The firm-fixed-price (FFP) contract type is generally favored by the government as it shifts most of the cost risk to the contractor. For an office reconfiguration, the primary risk with an FFP contract is that the initial price might be inflated to cover unforeseen issues the contractor anticipates. If the scope of work is not meticulously defined and potential complexities are underestimated by the contractor, they may seek change orders, which can increase the total cost, albeit through a formal modification process. Conversely, if the contractor significantly underestimates the work or costs, they could face financial losses, potentially impacting their ability to complete the project or leading to disputes. For the government, the main risk is paying a premium upfront to mitigate cost overrun possibilities, especially if the initial price was not competitively determined.

How does the contract duration of 691 days (approximately 23 months) compare to typical timelines for similar government office reconfiguration projects?

A contract duration of 691 days, or roughly 23 months, for an office reconfiguration project seems lengthy, especially when compared to typical timelines for such projects. While the exact scope is unknown, standard office renovations or reconfigurations, even substantial ones, often fall within a 6-12 month timeframe, depending on size, complexity, and site-specific constraints. A duration approaching two years might suggest a very large-scale project, phased construction, significant logistical challenges, or potential inefficiencies in planning or execution. It could also indicate that the project is part of a larger, multi-phase initiative. Without more context on the specific requirements and potential disruptions (e.g., occupied spaces, security protocols), it's difficult to definitively label this duration as excessive, but it warrants scrutiny to ensure efficient use of taxpayer funds and timely delivery of improved facilities.

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: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N6426724R0223

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 430 JENNILEAH LN, SAN MARCOS, CA, 92069

Business Categories: 8(a) Program Participant, Asian Pacific American Owned Business, Category Business, Corporate Entity Not Tax Exempt, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $5,531,281

Exercised Options: $5,531,281

Current Obligation: $5,531,281

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline