Department of the Navy awards $141.8M contract for restoration activities, highlighting potential value concerns

Contract Overview

Contract Amount: $22,758,484 ($22.8M)

Contractor: Spensieri Painting, LLC

Awarding Agency: Department of Defense

Start Date: 2006-05-18

End Date: 2009-01-09

Contract Duration: 967 days

Daily Burn Rate: $23.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: 200608!700319!1700!N69272!NAVFAC ENG FIELD ACT SOUTHEAST J!N6927206C0002 !A!N! !N! ! !20060518!20070805!141872627!141872627!141872627!N!SPENSIERI PAINTING, LLC !101 DWIGHT PARK DR !SYRACUSE !NY!13209!54362!039!13!KINGS BAY !CAMDEN !GEORGIA !+000016412985!N!N!000017118170!Y300!RESTORATION ACTIVITIES !C2 !CONSTRUCTION !000 !NOT DISCERNABLE !238320!E! !3! ! ! ! ! !99990909!B! ! !A! !A!U!J!2!002!B! !D!N!Z! ! !N!B!N!N! ! !Z! !A!A!000!A!B!Y!R!Y! ! !1700!N42237!0001! !

Place of Performance

Location: KINGS BAY, CAMDEN County, GEORGIA, 31547

State: Georgia Government Spending

Plain-Language Summary

Department of Defense obligated $22.8 million to SPENSIERI PAINTING, LLC for work described as: 200608!700319!1700!N69272!NAVFAC ENG FIELD ACT SOUTHEAST J!N6927206C0002 !A!N! !N! ! !20060518!20070805!141872627!141872627!141872627!N!SPENSIERI PAINTING, LLC !101 DWIGHT PARK DR !SYRACUSE !NY!13209!54362!039!13!KINGS BAY !CAMD… Key points: 1. The contract's duration of 967 days suggests a long-term commitment, requiring careful monitoring of performance and cost. 2. The firm fixed-price contract type indicates that the contractor bears the risk of cost overruns, which can incentivize efficiency. 3. The absence of small business set-aside flags raises questions about opportunities for smaller enterprises in this significant project. 4. The contract's focus on restoration activities points to a need for specialized construction services within a specific geographic area. 5. The significant dollar value warrants scrutiny of the pricing structure and comparison against similar restoration projects.

Value Assessment

Rating: questionable

The awarded amount of $141,872,627 for restoration activities appears substantial. Without specific benchmarks for similar large-scale restoration projects within the Department of the Navy or comparable agencies, it is difficult to definitively assess value for money. The duration of the contract (967 days) also suggests a significant scope of work. Further analysis would require comparing the per-unit costs of specific restoration tasks against industry standards or historical data for similar projects to determine if the pricing is competitive and reflects fair market value.

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 data shows two bids were received. While full and open competition is generally preferred for maximizing competition and achieving best value, a low number of bids (two) could suggest potential limitations in the market for this specific type of restoration work or challenges in the solicitation process that may have deterred broader participation.

Taxpayer Impact: Full and open competition is intended to drive down prices through market forces. However, with only two bids, taxpayers may not have benefited from the full competitive pressure that could have been achieved with a larger pool of bidders, potentially leading to a higher-than-optimal price.

Public Impact

The primary beneficiaries are likely the Department of the Navy, which receives essential restoration services for its facilities. The contract delivers restoration activities, crucial for maintaining and improving naval infrastructure. The geographic impact is centered in Camden, Georgia, specifically at Kings Bay, indicating a localized economic effect. The contract supports the construction workforce, potentially creating or sustaining jobs for skilled laborers and tradespeople in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition (2 bids) may have suppressed price discovery.
Long contract duration (967 days) increases risk of cost escalation or performance degradation if not managed tightly.
Lack of specific details on the restoration tasks makes it hard to benchmark value effectively.
No indication of small business subcontracting goals could limit opportunities for smaller firms.

Positive Signals

Awarded under full and open competition, adhering to best practices for procurement.
Firm fixed-price contract type shifts cost risk to the contractor, incentivizing efficiency.
Contract is for essential restoration activities, supporting critical infrastructure maintenance.

Sector Analysis

This contract falls within the Construction sector, specifically focusing on restoration activities. The market for large-scale facility restoration can be specialized, often involving significant expertise and bonding capacity. The Department of the Navy, as a major federal agency, frequently procures such services to maintain its extensive real estate portfolio. Comparable spending benchmarks would typically involve analyzing other large federal or state government contracts for similar restoration projects, considering factors like building type, age, and the complexity of the required work.

Small Business Impact

The contract data indicates that this was not set aside for small businesses (ss: false, sb: false). With only two bids received under full and open competition, there's a missed opportunity to specifically encourage small business participation through set-asides or subcontracting requirements. The impact on the small business ecosystem is neutral to negative, as there's no explicit mechanism to ensure they benefit from this substantial contract, though they could potentially be lower-tier subcontractors if not directly solicited.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. Accountability measures are inherent in the firm fixed-price structure, which penalizes the contractor for cost overruns. Transparency is facilitated by the contract award being publicly available, but detailed performance reports and Inspector General involvement would depend on specific project milestones and any identified issues. The contract's duration necessitates ongoing oversight to ensure compliance and quality.

Related Government Programs

Naval Facilities Engineering Command (NAVFAC) Contracts
Department of Defense Construction Contracts
Federal Restoration and Renovation Projects
Large Value Firm Fixed-Price Contracts

Risk Flags

Limited Competition
Potential for Cost Overruns (despite FFP)
Scope Ambiguity ('Restoration Activities')

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.8 million to SPENSIERI PAINTING, LLC. 200608!700319!1700!N69272!NAVFAC ENG FIELD ACT SOUTHEAST J!N6927206C0002 !A!N! !N! ! !20060518!20070805!141872627!141872627!141872627!N!SPENSIERI PAINTING, LLC !101 DWIGHT PARK DR !SYRACUSE !NY!13209!54362!039!13!KINGS BAY !CAMDEN !GEORGIA !+000016412985!N!N!000017118170!Y300!RESTORATION ACTIVITIES !C2 !CONSTRUCTION !000 !NOT DISCERNABLE !238320!E! !3! ! ! ! ! !999

Who is the contractor on this award?

The obligated recipient is SPENSIERI PAINTING, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $22.8 million.

What is the period of performance?

Start: 2006-05-18. End: 2009-01-09.

What is the specific nature of the 'restoration activities' covered by this contract, and what is the estimated breakdown of costs for different types of work?

The provided data identifies the work as 'RESTORATION ACTIVITIES' under the Product Service Code (PSC) '238320' (Painting and Wall Covering Contractors), and the North American Industry Classification System (NAICS) code '238320' also points to painting and wall covering. However, the term 'restoration activities' is broad. Without further details in the contract award notice, it's difficult to ascertain the specific scope beyond painting and wall covering. This could include surface preparation, repair of damaged surfaces, application of protective coatings, or aesthetic restoration. A detailed breakdown of costs for different sub-tasks (e.g., surface preparation vs. painting vs. specialized coatings) is not available in this summary data. Such a breakdown would be crucial for a thorough value analysis and for understanding the allocation of the $141.8 million budget.

How does the per-square-foot cost of painting and wall covering in this contract compare to industry benchmarks for similar government facilities?

Benchmarking the per-square-foot cost for this contract is challenging without knowing the total square footage being restored and the specific types of materials and labor involved. The contract value is $141,872,627. If we assume the PSC 238320 (Painting and Wall Covering) is the primary focus, we would need the total area covered. Industry benchmarks for commercial painting can range widely, from $2 to $10 per square foot, depending on surface preparation, paint quality, and labor rates. For large government contracts, especially those involving specialized coatings or historical restoration, costs can be higher. Given the lack of specific area data and the potential complexity implied by 'restoration activities,' a direct comparison is not feasible with the provided information. A detailed cost analysis would require access to the contract's line-item details and the specific square footage involved.

What is the track record of SPENSIERI PAINTING, LLC in performing large-scale federal restoration contracts of this magnitude?

Information regarding SPENSIERI PAINTING, LLC's track record with large-scale federal restoration contracts of this magnitude ($141.8 million) is not detailed in the provided summary data. The data indicates this is a definitive contract awarded on May 18, 2006, with an end date of January 9, 2009 (though the duration is listed as 967 days, which aligns with this period). To assess their track record, one would need to examine past performance reviews, other federal contract awards to this company, and their experience with projects of similar scope, complexity, and value. Without this historical performance data, it's difficult to gauge their capability and reliability in executing such a significant undertaking for the Department of the Navy.

Given the full and open competition resulted in only two bids, what factors might have limited broader participation, and how could this impact long-term value?

Several factors could have limited broader participation in this full and open competition, resulting in only two bids. These might include stringent pre-qualification requirements (e.g., specific experience, bonding capacity, or security clearances) that screened out many potential bidders. The geographic location (Kings Bay, Georgia) might also have limited the pool of contractors willing or able to travel and mobilize for the project. Furthermore, the complexity and specialized nature of 'restoration activities' could mean only a few firms possess the necessary expertise. If the limited competition led to a higher-than-necessary price, the long-term value for taxpayers could be diminished. It might also indicate a lack of robust market engagement by the agency prior to solicitation, potentially missing out on more competitive pricing from a wider range of qualified vendors.

What are the potential risks associated with a firm fixed-price contract for extensive restoration work, and what mitigation strategies are typically employed?

A firm fixed-price (FFP) contract shifts the primary cost risk to the contractor. For extensive restoration work, potential risks include the contractor underestimating the complexity or cost of unforeseen conditions (e.g., hidden structural damage, hazardous materials), leading to potential disputes, claims for equitable adjustments, or even contractor default if the project becomes unprofitable. Conversely, if the contractor significantly overestimates costs to buffer against risk, taxpayers may pay a premium. Mitigation strategies typically involve thorough pre-bid site investigations, detailed scope definition, robust contract language addressing unforeseen conditions, and strong government oversight to monitor progress and ensure quality. The government also relies on the contractor's incentive to perform well to secure future work and maintain profitability, but vigilance is key.

How does the $141.8 million contract value compare to historical spending patterns for restoration activities by the Department of the Navy or NAVFAC?

Comparing the $141.8 million contract value to historical spending patterns requires access to historical contract databases and spending reports for the Department of the Navy and specifically the Naval Facilities Engineering Command (NAVFAC). Without this data, it's difficult to determine if this award represents a typical, high, or low value for similar restoration projects. Large-scale facility restoration can be episodic, driven by infrastructure age, damage, or modernization initiatives. A single large contract like this might be an outlier, or it could be indicative of a broader trend in infrastructure investment. Analyzing spending over several fiscal years for similar services would provide the necessary context to assess if this contract's value is consistent with historical trends or represents a significant deviation.

Industry Classification

NAICS: Construction › Building Finishing Contractors › Painting and Wall Covering Contractors

Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCT OF RESTORATION ACTIVITIES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 101 DWIGHT PARK DR, SYRACUSE, NY, 13209

Business Categories: Category Business, Emerging Small Business, Small Business, Special Designations

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline