Navy awards $5.2M contract for barracks repairs, highlighting potential for cost overruns in sole-source construction

Contract Overview

Contract Amount: $5,234,160 ($5.2M)

Contractor: Heritage Construction LLC

Awarding Agency: Department of Defense

Start Date: 2025-05-23

End Date: 2026-10-20

Contract Duration: 515 days

Daily Burn Rate: $10.2K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: REPAIRS TO NETC BARRACKS

Place of Performance

Location: MERIDIAN, LAUDERDALE County, MISSISSIPPI, 39309

State: Mississippi Government Spending

Plain-Language Summary

Department of Defense obligated $5.2 million to HERITAGE CONSTRUCTION LLC for work described as: REPAIRS TO NETC BARRACKS Key points: 1. The contract's sole-source nature raises concerns about price competitiveness and potential value for money. 2. Limited competition suggests a higher risk of inflated pricing compared to open market procurements. 3. The fixed-price contract type offers some cost certainty, but scope creep could still impact final expenditure. 4. The duration of the contract (over 1.5 years) requires careful monitoring for performance and adherence to schedule. 5. The award to a single contractor may limit opportunities for small businesses to participate in subcontracting. 6. The specific need for masonry repairs indicates a focus on essential infrastructure maintenance.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and lack of publicly available comparable bids. The fixed-price contract aims to control costs, but without competitive pressure, the initial price may not reflect the best possible value. The contract amount of $5.2 million for repairs to barracks over a 515-day period warrants scrutiny to ensure it aligns with industry standards for similar projects in Mississippi.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning it was not openly competed. This approach is typically reserved for situations where only one responsible source can provide the required services. The lack of multiple bidders means there was no direct price competition, potentially leading to higher costs for the government than if the contract had been competed.

Taxpayer Impact: Taxpayers may be paying a premium for this contract due to the absence of competitive bidding. The government missed an opportunity to leverage market forces to secure a lower price.

Public Impact

Service members stationed at NETC facilities will benefit from improved living conditions through barracks repairs. The contract delivers essential infrastructure maintenance services, ensuring the longevity and habitability of military housing. The geographic impact is localized to Mississippi, where the NETC facilities are located. The contract supports the construction and skilled trades workforce in the Mississippi region through Heritage Construction LLC.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and potentially increases costs.
Lack of transparency in the bidding process.
Potential for cost overruns if scope is not tightly managed.
Limited opportunity for small business participation.
Contract duration may lead to extended disruption if not managed efficiently.

Positive Signals

Fixed-price contract provides cost certainty for the base scope.
Focus on essential infrastructure maintenance addresses critical needs.
Award to a single contractor streamlines project management for this specific requirement.
Contract duration is defined, allowing for planning and oversight.

Sector Analysis

The construction sector, particularly for government facilities, involves significant spending on maintenance and repair. This contract falls within the general building and infrastructure repair category. Comparable spending benchmarks for similar barracks repair projects can vary widely based on location, scope, and the level of competition. The Department of the Navy, like other branches of the military, regularly procures construction services to maintain its vast real estate portfolio.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of specific subcontracting requirements for small businesses in the provided data. This means that opportunities for small businesses to participate in this project are limited to those that may be engaged by the prime contractor, Heritage Construction LLC. The absence of a small business set-aside or subcontracting plan could mean a reduced positive impact on the small business ecosystem for this particular award.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy's contracting and facilities management divisions. Accountability measures will be tied to the terms of the fixed-price contract, including performance milestones and quality standards. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction may apply if any fraud, waste, or abuse is suspected during the contract's performance.

Related Government Programs

Military Housing Construction
Base Realignment and Closure (BRAC) Facilities Maintenance
Department of Defense Infrastructure Projects
Naval Facilities Engineering Command (NAVFAC) Contracts

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for cost overruns
Limited small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $5.2 million to HERITAGE CONSTRUCTION LLC. REPAIRS TO NETC BARRACKS

Who is the contractor on this award?

The obligated recipient is HERITAGE CONSTRUCTION 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 $5.2 million.

What is the period of performance?

Start: 2025-05-23. End: 2026-10-20.

What is the track record of Heritage Construction LLC in performing similar government contracts, particularly sole-source awards?

Information regarding Heritage Construction LLC's specific track record with government contracts, especially sole-source awards of this magnitude, is not detailed in the provided data. A comprehensive review would require accessing contract databases like SAM.gov or FPDS to analyze past performance, past performance evaluations, and any history of disputes or contract modifications. Understanding their experience with masonry repairs and barracks construction is crucial for assessing their capability to deliver this project successfully and within budget. Without this data, the assessment of risk associated with the contractor's performance remains incomplete.

How does the awarded amount of $5.2 million compare to industry benchmarks for similar barracks repair projects in Mississippi?

Directly comparing the $5.2 million award to industry benchmarks for similar barracks repair projects in Mississippi is challenging without more specific project details and access to a robust database of comparable construction costs. Factors such as the extent of masonry work, the size and condition of the barracks, the complexity of the repairs, and prevailing labor and material costs in the specific region of Mississippi significantly influence project pricing. Given the sole-source nature of this award, it is difficult to ascertain if the price reflects competitive market rates. A thorough benchmark analysis would typically involve reviewing bids from multiple contractors on similar projects or consulting cost estimating databases specific to construction in that geographic area.

What are the primary risks associated with a sole-source award for construction services, and how are they mitigated in this contract?

The primary risks associated with a sole-source award for construction services include a lack of price competition, potentially leading to inflated costs, and reduced incentive for the contractor to perform efficiently or innovate. There's also a risk that the chosen contractor may not be the most qualified or experienced for the specific task. In this contract, the mitigation of these risks relies heavily on the government's pre-award due diligence in justifying the sole-source selection and the robust oversight during contract performance. The fixed-price contract type provides some cost control, but effective project management, clear scope definition, and diligent monitoring of progress and quality are essential to ensure value for money and successful project completion.

What is the historical spending pattern for repairs and maintenance of NETC barracks, and how does this $5.2 million award fit within that trend?

Historical spending data for repairs and maintenance of NETC barracks is not provided in the current dataset. To understand this $5.2 million award's context, one would need to analyze past contract awards for similar services at NETC facilities over several fiscal years. This analysis would reveal trends in spending, identify periods of increased or decreased investment in infrastructure, and highlight any recurring issues or needs. Without this historical perspective, it's difficult to determine if this award represents a typical expenditure, an increase due to deferred maintenance, or a significant investment in upgrades. Such context is vital for strategic budget planning and assessing the long-term financial commitment to facility upkeep.

What are the potential implications of this contract on the local small business construction ecosystem in Mississippi?

The implications of this $5.2 million contract on the local small business construction ecosystem in Mississippi are likely limited, given that it was awarded on a sole-source basis and does not appear to include specific small business subcontracting requirements. Typically, competitive solicitations with set-aside provisions or mandatory subcontracting goals actively engage small businesses. In this instance, Heritage Construction LLC, the prime contractor, would need to voluntarily engage small businesses as subcontractors. Without explicit directives or incentives, the direct benefit to the local small business construction sector may be minimal, representing a missed opportunity to foster broader participation and economic development within the community.

Industry Classification

NAICS: Construction › Foundation, Structure, and Building Exterior Contractors › Masonry Contractors

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

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N6945025R0070

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 4720 8TH ST, MERIDIAN, MS, 39307

Business Categories: 8(a) Program Participant, Category Business, Limited Liability Corporation, Minority Owned Business, Partnership or Limited Liability Partnership, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Indian (Subcontinent) American Owned Business, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $5,234,160

Exercised Options: $5,234,160

Current Obligation: $5,234,160

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline