Tip Top Construction Corp awarded $28.7M contract for building construction in Puerto Rico

Contract Overview

Contract Amount: $28,683,055 ($28.7M)

Contractor: TIP TOP Construction Corp

Awarding Agency: Department of Defense

Start Date: 2025-09-30

End Date: 2030-09-30

Contract Duration: 1,826 days

Daily Burn Rate: $15.7K/day

Competition Type: COMPETED UNDER SAP

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: VIARNG STX CST READY BUILDING

Place of Performance

Location: SAN JUAN, SAN JUAN County, PUERTO RICO, 00918

Plain-Language Summary

Department of Defense obligated $28.7 million to TIP TOP CONSTRUCTION CORP for work described as: VIARNG STX CST READY BUILDING Key points: 1. Contract awarded for construction services, indicating a need for infrastructure development. 2. The contract is a firm-fixed-price type, which shifts cost risk to the contractor. 3. Awarded under Simplified Acquisition Procedures (SAP), suggesting a focus on efficiency for smaller procurements. 4. The duration of the contract is approximately 5 years, allowing for phased development or long-term maintenance. 5. The contract is not set aside for small businesses, potentially limiting opportunities for smaller firms. 6. The geographic focus on Puerto Rico may address specific regional infrastructure needs or recovery efforts.

Value Assessment

Rating: fair

The contract value of $28.7 million for a 5-year building construction project appears within a reasonable range for large-scale infrastructure development. However, without specific details on the scope of work, it's difficult to benchmark against precisely similar contracts. The firm-fixed-price nature suggests the government has a clear understanding of the requirements and has transferred cost overrun risk to the contractor. Further analysis would require comparing the cost per square foot or per unit of construction against similar projects in the region or for the Department of Defense.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was competed under Simplified Acquisition Procedures (SAP), which typically allows for a broader range of competition than sole-source or limited solicitations, though it may not involve the full breadth of a large-scale open competition. The data indicates two bids were received. While two bidders suggest some level of competition, it is on the lower end and may not fully explore the market's price discovery potential. The SAP process aims for efficiency, but a higher number of bids would generally be preferred to ensure the most competitive pricing.

Taxpayer Impact: The competition level, while indicating some market engagement, could mean that taxpayers may not have benefited from the lowest possible price achievable through a more extensive bidding process.

Public Impact

The primary beneficiaries are the Department of the Army and potentially military personnel or operations in Puerto Rico requiring new or improved facilities. The contract will deliver commercial and institutional building construction services. The geographic impact is concentrated in Puerto Rico, potentially stimulating local economic activity and employment. Workforce implications include job creation for construction workers, engineers, and project managers in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition (2 bidders) may have resulted in a higher price than if more firms had participated.
The firm-fixed-price contract places all cost overrun risk on the contractor, which could lead to quality compromises if not adequately monitored.
Lack of small business set-aside means fewer opportunities for local small construction firms in Puerto Rico to participate directly.

Positive Signals

The firm-fixed-price contract provides cost certainty for the government.
The contract duration allows for sustained development and potential long-term planning for facilities.
Awarding to Tip Top Construction Corp suggests they met the technical and performance requirements of the Army.

Sector Analysis

The construction sector is a significant part of the federal procurement landscape, encompassing a wide range of projects from infrastructure to facility maintenance. This contract falls under Commercial and Institutional Building Construction, a segment that supports government operations by providing necessary physical spaces. Federal spending in this area is often driven by modernization needs, base improvements, and support for personnel. Comparable spending benchmarks would involve analyzing the average cost of similar military construction projects or institutional buildings within the Department of Defense or other federal agencies.

Small Business Impact

This contract was not awarded as a small business set-aside, nor does it appear to have specific subcontracting goals for small businesses mentioned in the provided data. This means that the primary award went to Tip Top Construction Corp without a mandate to prioritize smaller entities. Consequently, the direct impact on the small business ecosystem in Puerto Rico may be limited unless the prime contractor voluntarily engages small businesses for subcontracting opportunities. Further investigation into subcontracting plans would be necessary to fully assess the impact.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Army contracting and project management offices. Accountability measures are inherent in the firm-fixed-price contract type, which holds the contractor responsible for delivering the specified work within the agreed-upon price. Transparency is generally facilitated through federal procurement databases like FPDS-NG, where contract awards are reported. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected during the contract's performance.

Related Government Programs

Military Construction Program (MILCON)
General Services Administration (GSA) Public Buildings Service
Department of Homeland Security (DHS) Facilities Management
Army Corps of Engineers Construction Contracts

Risk Flags

Potential for limited price competition due to low bidder count.
Risk of quality compromise in FFP contracts if not properly overseen.
Unusual contract value for Simplified Acquisition Procedures (SAP) requires verification of applicable thresholds and exceptions.
Geographic concentration may limit broader economic benefits.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.7 million to TIP TOP CONSTRUCTION CORP. VIARNG STX CST READY BUILDING

Who is the contractor on this award?

The obligated recipient is TIP TOP CONSTRUCTION CORP.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $28.7 million.

What is the period of performance?

Start: 2025-09-30. End: 2030-09-30.

What is the track record of Tip Top Construction Corp with federal contracts, particularly with the Department of Defense?

A review of federal procurement data would be necessary to ascertain Tip Top Construction Corp's track record. Key metrics to examine would include the number of previous federal awards, their total value, the agencies they have contracted with, and their performance history. Specifically, looking at past performance evaluations and any instances of contract disputes, terminations, or penalties would provide insight into their reliability and capability. Understanding their experience with similar construction projects, especially those for the Department of Defense or in similar geographic locations, would be crucial for assessing their suitability for this $28.7 million contract.

How does the awarded price compare to market rates for similar construction projects in Puerto Rico?

Benchmarking this $28.7 million contract against market rates requires detailed analysis of the project's scope, size (e.g., square footage), and specific construction types. Data points such as cost per square foot, cost per unit (e.g., per housing unit, per office space), and the complexity of the build are essential. Comparing these metrics to recent commercial and institutional building projects of similar scale in Puerto Rico, considering local labor costs, material availability, and economic conditions, would provide a clearer picture of value for money. Without these specifics, a definitive comparison is challenging, but the firm-fixed-price nature suggests the government aimed for cost certainty.

What are the potential risks associated with a firm-fixed-price contract for building construction in Puerto Rico?

A firm-fixed-price (FFP) contract shifts the primary risk of cost overruns to the contractor, Tip Top Construction Corp. While this offers cost certainty to the government, risks include potential compromises in quality if the contractor seeks to reduce costs, delays if the contractor faces unforeseen financial difficulties, or disputes over scope interpretation. For Puerto Rico, specific risks might involve supply chain disruptions for materials, labor availability challenges, or unforeseen site conditions (e.g., seismic activity, environmental concerns) that could strain the contractor's ability to adhere to the fixed price without impacting quality or schedule. Robust government oversight is critical to mitigate these risks.

What is the historical spending pattern for building construction by the Department of the Army in Puerto Rico?

Analyzing historical spending patterns for building construction by the Department of the Army in Puerto Rico would involve examining past contract awards over several fiscal years. This would reveal trends in contract values, types of construction projects undertaken, and the frequency of awards. Understanding this history can help contextualize the current $28.7 million award – is it typical, an increase, or a decrease in spending for such services? It can also highlight which contractors have been historically successful in securing these types of awards in the region and identify any recurring needs or challenges faced by the Army in its facility development efforts there.

How does the competition level (2 bidders) impact the government's ability to ensure optimal value?

A competition with only two bidders, as indicated for this contract, generally provides less assurance of optimal value compared to a scenario with multiple competitive offers. With fewer bidders, the government has a reduced ability to leverage market forces to drive down prices. The two bidders may have had less incentive to offer their most aggressive pricing, knowing the pool of competitors was small. While the government still aims for fair and reasonable pricing, a limited competition increases the risk that the awarded price might be higher than what could have been achieved with broader participation. This underscores the importance of thorough price analysis by the contracting officer.

What are the implications of this contract being awarded under Simplified Acquisition Procedures (SAP)?

Awarding this $28.7 million contract under Simplified Acquisition Procedures (SAP) is unusual, as SAP is typically intended for purchases not exceeding the simplified acquisition threshold (SAT), which is $250,000 for most supplies and services, though it can be higher for certain agencies or circumstances (e.g., construction). If this contract truly exceeded the standard SAT, it might have been processed under specific exceptions or higher thresholds applicable to certain agencies or types of procurements. Generally, SAP aims for efficiency and reduced administrative burden, potentially leading to faster award times. However, it may involve less stringent documentation and competition requirements than full and open competition, which could have implications for transparency and achieving the best possible price.

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: COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Solicitation ID: W51DQV25RA008

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 5064 MOUNT WELCOME ST, CHRISTIANSTED, VI, 00820

Business Categories: Black American Owned Business, Category Business, Corporate Entity Tax Exempt, DoT Certified Disadvantaged Business Enterprise, HUBZone Firm, Minority Owned Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $29,998,055

Exercised Options: $28,683,055

Current Obligation: $28,683,055

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline