DoD's $20.8M highway construction contract awarded to Head Inc. shows fair value with 3 bidders

Contract Overview

Contract Amount: $20,806,777 ($20.8M)

Contractor: Head Inc

Awarding Agency: Department of Defense

Start Date: 2014-06-19

End Date: 2015-06-27

Contract Duration: 373 days

Daily Burn Rate: $55.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF DESIGN PACKAGES #7A AND #8

Place of Performance

Location: NEW ORLEANS, ORLEANS County, LOUISIANA, 70143, UNITED STATES OF AMERICA

State: Louisiana Government Spending

Plain-Language Summary

Department of Defense obligated $20.8 million to HEAD INC for work described as: IGF::OT::IGF DESIGN PACKAGES #7A AND #8 Key points: 1. Contract value appears reasonable given the scope of highway, street, and bridge construction. 2. Full and open competition suggests a healthy market for these services. 3. Fixed-price contract type limits cost overrun risks for the government. 4. Contract duration of over a year indicates a substantial project. 5. Award to Head Inc. represents a single instance of contractor performance in this specific project. 6. Geographic focus on Louisiana highlights regional infrastructure investment.

Value Assessment

Rating: good

The contract's total value of approximately $20.8 million for highway, street, and bridge construction appears to be within a reasonable range for a project of this nature. Benchmarking against similar large-scale infrastructure projects awarded by the Department of Defense or other federal agencies would provide a more precise value-for-money assessment. The firm fixed-price contract type suggests that the contractor assumed the primary risk for cost overruns, which is generally favorable for the government.

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 competitive environment, though the exact number of bids received is not detailed. A higher number of bidders typically leads to more competitive pricing and better value for the government.

Taxpayer Impact: The full and open competition process ensures that taxpayer dollars are used efficiently by fostering a competitive environment that drives down prices.

Public Impact

Benefits the Department of the Navy by providing necessary infrastructure improvements. Services delivered include the construction and repair of highways, streets, and bridges. Geographic impact is concentrated in Louisiana, supporting regional development. Workforce implications include employment opportunities for construction laborers, engineers, and project managers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for schedule delays given the project duration and complexity of construction.
Ensuring compliance with environmental regulations during construction activities.

Positive Signals

Firm fixed-price contract mitigates financial risk for the government.
Full and open competition suggests a robust bidding process.
Award to a single contractor streamlines project management and accountability.

Sector Analysis

This contract falls within the construction sector, specifically focusing on heavy civil engineering projects like highways, streets, and bridges. The market for such services is typically characterized by a mix of large, established construction firms and smaller specialized contractors. Federal spending in this area often supports national infrastructure initiatives and can be influenced by economic conditions and government funding priorities. Comparable spending benchmarks would involve analyzing other large federal construction contracts for similar infrastructure projects.

Small Business Impact

The data indicates that this contract was not specifically set aside for small businesses (ss: false, sb: false). While Head Inc. is the prime contractor, there is no explicit information on subcontracting plans for small businesses. The absence of a small business set-aside suggests that the competition was open to all eligible firms, and the prime contractor's subcontracting practices will determine the extent of small business participation.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting officers and project managers. 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 databases, though detailed project progress and specific oversight activities may not be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Military Construction
Federal Highway Administration Projects
Department of Transportation Infrastructure Grants

Risk Flags

Potential for scope creep if not managed tightly.
Risk of schedule delays in large construction projects.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.8 million to HEAD INC. IGF::OT::IGF DESIGN PACKAGES #7A AND #8

Who is the contractor on this award?

The obligated recipient is HEAD 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 $20.8 million.

What is the period of performance?

Start: 2014-06-19. End: 2015-06-27.

What is the track record of Head Inc. with federal contracts, particularly in highway construction?

Information regarding Head Inc.'s specific track record with federal contracts, especially in highway construction, is not detailed in the provided data. To assess their performance history, one would need to consult federal procurement databases like SAM.gov or FPDS-NG to review past awards, contract performance evaluations (e.g., CPARS), and any history of disputes or terminations. A thorough review would involve looking at the number and value of previous contracts, the types of services rendered, and client satisfaction ratings to gauge their reliability and expertise in executing similar projects.

How does the awarded price of $20.8 million compare to similar highway construction projects by the DoD?

Direct comparison of the $20.8 million award to similar DoD highway construction projects requires access to a broader dataset of federal contracts. However, the firm fixed-price nature of this contract and the presence of three bidders suggest a competitive pricing environment. Without specific project details (e.g., scope, complexity, location, duration) for comparable contracts, it's difficult to definitively state if this price is high or low. Generally, larger, more complex projects with extensive engineering requirements will command higher prices. The value is considered 'good' in the absence of red flags, implying it's not excessively high relative to the presumed scope.

What are the primary risks associated with this firm fixed-price contract for highway construction?

The primary risks for the government in a firm fixed-price (FFP) contract are generally minimal concerning cost overruns, as the contractor assumes most of the financial risk. However, risks can emerge if the contract scope is not clearly defined, leading to change orders that increase the total cost. Other risks include potential quality compromises if the contractor seeks to cut costs, schedule delays if the contractor underbids or faces unforeseen challenges, and contractor default. For the contractor, the risk lies in underestimating costs or encountering unforeseen conditions, which could lead to losses.

How effective is full and open competition in ensuring value for money for infrastructure projects like this one?

Full and open competition is widely considered the most effective method for ensuring value for money in federal contracting. By allowing all responsible sources to compete, it fosters a robust marketplace where contractors are incentivized to offer their best prices and most efficient solutions to win the contract. The presence of multiple bidders, as indicated by the 3 bidders in this case, increases the likelihood of receiving competitive bids. This process helps prevent price gouging and ensures that the government obtains goods and services at the most advantageous prices reasonably achievable, thereby maximizing the return on taxpayer investment.

What is the historical spending trend for highway, street, and bridge construction contracts within the Department of the Navy?

Analyzing the historical spending trend for highway, street, and bridge construction contracts within the Department of the Navy requires access to historical contract data over several fiscal years. This specific contract, awarded in 2014 for $20.8 million, represents a single data point. To identify trends, one would need to aggregate data on the number of contracts, total obligated amounts, average contract values, and the frequency of awards within this specific North American Industry Classification System (NAICS) code (237310) for the Navy. Such an analysis could reveal whether spending in this category is increasing, decreasing, or remaining stable, and identify any significant shifts in contract values or award volumes.

Are there any specific performance concerns or positive indicators associated with Head Inc. based on this contract's award details?

The award details provided do not include specific performance concerns or positive indicators for Head Inc. The data indicates the contract was awarded under full and open competition with 3 bidders, and it is a firm fixed-price type. These factors suggest a standard procurement process. To assess performance, one would need to examine post-award data, such as Contractor Performance Assessment Reporting System (CPARS) reports, which document the contractor's actual performance regarding quality, timeliness, cost control, and management. Without such post-award data, the assessment remains neutral.

Industry Classification

NAICS: Construction › Highway, Street, and Bridge Construction › Highway, Street, and Bridge Construction

Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N6945014R1759

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: HZE

Contractor Details

Address: 4477 E 5TH AVE, COLUMBUS, OH, 43219

Business Categories: Category Business, Corporate Entity Not Tax Exempt, HUBZone Firm, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $20,806,777

Exercised Options: $20,806,777

Current Obligation: $20,806,777

Contract Characteristics

Cost or Pricing Data: NO

Timeline