Army contract for building renovation awarded at $31.7M, with a 4-year duration

Contract Overview

Contract Amount: $31,765,555 ($31.8M)

Contractor: Bundesministerium FÜR Umwelt, Naturschutz UND Reaktorsicherheit

Awarding Agency: Department of Defense

Start Date: 2016-09-26

End Date: 2027-09-30

Contract Duration: 4,021 days

Daily Burn Rate: $7.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF RENOVATE BLDG. 2301

Plain-Language Summary

Department of Defense obligated $31.8 million to BUNDESMINISTERIUM FÜR UMWELT, NATURSCHUTZ UND REAKTORSICHERHEIT for work described as: IGF::OT::IGF RENOVATE BLDG. 2301 Key points: 1. The contract value of $31.7 million for building renovation appears to be within a reasonable range for large-scale construction projects of this nature. 2. Full and open competition was utilized, suggesting a robust bidding process that should have yielded competitive pricing. 3. The contract's duration of over 4,000 days (approximately 11 years) indicates a long-term commitment, potentially exposing the government to price fluctuations over time. 4. The fixed-price contract type offers cost certainty to the government, shifting performance risks to the contractor. 5. The absence of small business set-aside flags suggests this contract was not specifically targeted for small business participation. 6. The project falls under the 'Other Building Equipment Contractors' NAICS code, indicating a focus on specialized building services rather than general construction.

Value Assessment

Rating: good

Benchmarking this $31.7 million contract against similar large-scale federal building renovation projects is challenging without more specific details on the scope of work and location. However, for a project spanning over a decade, the total value suggests a significant undertaking. The firm fixed-price structure provides a degree of cost control for the government, assuming the initial pricing was competitive. Without comparable per-unit costs or detailed project specifications, a precise value-for-money assessment is difficult, but the competitive award process is a positive indicator.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The 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 moderate level of competition for this project. While more bidders would typically lead to greater price discovery and potentially lower prices, three bids generally signify that the market was sufficiently engaged to provide a competitive outcome.

Taxpayer Impact: A competitive award process helps ensure that taxpayer funds are used efficiently by driving down costs through market forces. The three bids received suggest that the government likely secured a fair price for the renovation services.

Public Impact

The primary beneficiaries are likely military personnel and civilian employees who will utilize the renovated Building 2301. The services delivered include comprehensive renovation of a federal building, enhancing its functionality, safety, and potentially its energy efficiency. The geographic impact is localized to the specific facility where Building 2301 is located, likely a military installation. Workforce implications could include employment opportunities for construction workers, project managers, and specialized trades involved in the renovation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 11 years) increases exposure to potential cost overruns due to inflation or unforeseen project complexities.
Firm Fixed Price contracts can lead to contractor disputes or change orders if the scope of work is not perfectly defined upfront.
Lack of specific details on the renovation scope makes it difficult to assess if the $31.7M is fully justified for the work performed.
The NAICS code 'Other Building Equipment Contractors' is broad and may not fully capture the specific nature or complexity of the renovation.

Positive Signals

Awarded under full and open competition, indicating a fair and transparent procurement process.
Firm Fixed Price contract type provides cost certainty for the government.
The contract has a defined start and end date, providing a clear project timeline.
The award was made by a major federal agency (Department of the Army), suggesting adherence to established procurement standards.

Sector Analysis

This contract falls within the broader construction and facilities maintenance sector, specifically focusing on building equipment and renovation. The federal government is a significant consumer of these services, with substantial annual spending on infrastructure upgrades and maintenance across various agencies. Comparable spending benchmarks would typically involve analyzing the cost per square foot for similar renovation projects within federal facilities or large commercial buildings, adjusted for scope and location. The $31.7 million award is substantial, indicative of a major renovation project.

Small Business Impact

The data indicates that this contract was not awarded as a small business set-aside (ss: false, sb: false). This suggests that the procurement was open to businesses of all sizes, and the primary focus was on selecting the best value offeror through full and open competition. There is no explicit information on subcontracting plans for small businesses. Without specific subcontracting goals or reporting, the direct impact on the small business ecosystem is unclear, though larger prime contractors are often encouraged or required to utilize small businesses in their supply chains.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program office within the Department of the Army. Accountability measures are embedded in the firm fixed-price contract terms, requiring the contractor to deliver the specified renovation within the agreed-upon price. Transparency is facilitated through federal procurement databases where contract awards are recorded. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to the contract were suspected.

Related Government Programs

Military Construction
Facilities Maintenance and Repair
Building and Infrastructure Modernization
Department of Defense Procurement

Risk Flags

Long-term contract duration may increase risk of cost escalation or scope creep.
Lack of detailed scope information hinders precise value assessment.
Potential for contractor performance issues over an extended period.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $31.8 million to BUNDESMINISTERIUM FÜR UMWELT, NATURSCHUTZ UND REAKTORSICHERHEIT. IGF::OT::IGF RENOVATE BLDG. 2301

Who is the contractor on this award?

The obligated recipient is BUNDESMINISTERIUM FÜR UMWELT, NATURSCHUTZ UND REAKTORSICHERHEIT.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $31.8 million.

What is the period of performance?

Start: 2016-09-26. End: 2027-09-30.

What is the specific scope of work for the renovation of Building 2301, and how does it justify the $31.7 million cost?

The provided data does not detail the specific scope of work for the renovation of Building 2301. The $31.7 million cost is associated with the overall contract award for 'Other Building Equipment Contractors' with a definitive contract type. To justify this cost, a detailed breakdown of the renovation activities would be necessary. This would typically include elements such as structural repairs, HVAC system upgrades, electrical and plumbing work, interior finishes, potential asbestos abatement, and compliance with modern building codes and accessibility standards. Without this granular information, it is impossible to definitively assess if the cost is fully justified. However, given the duration and the firm fixed-price nature, it implies a comprehensive project.

How does the $31.7 million contract value compare to historical spending on similar building renovations by the Department of the Army?

Comparing the $31.7 million contract value to historical spending on similar renovations by the Department of the Army requires access to historical procurement data and a clear definition of 'similar' projects. Factors such as the size of the building, the extent of the renovation (e.g., cosmetic vs. complete overhaul), geographic location, and the specific type of equipment being upgraded or installed all influence cost. While $31.7 million is a substantial sum, it may be within the expected range for major renovations of significant federal facilities. A thorough analysis would involve identifying comparable projects awarded over the past 5-10 years by the Army or other branches of the DoD, normalizing for inflation and project scope, to establish a relevant benchmark.

What are the key performance indicators (KPIs) and deliverables expected under this contract, and how will they be monitored?

The provided data does not specify the key performance indicators (KPIs) or detailed deliverables for this contract. However, for a building renovation project of this magnitude, typical KPIs would likely include adherence to project schedule milestones, quality of workmanship, compliance with safety regulations, and successful completion of specific renovation phases. Deliverables would encompass completed renovation work, updated building systems, final inspections, and as-built drawings. Monitoring would be conducted by the Army's contracting officer's representative (COR) or a designated project manager, who would conduct site visits, review progress reports, and verify that the work meets contract specifications and quality standards.

What is the risk profile associated with a contract of this duration (over 11 years), and what mitigation strategies are in place?

A contract duration exceeding 11 years presents several risks, including potential cost escalation due to inflation, changes in technology or building codes, contractor performance degradation over time, and shifts in government requirements. Mitigation strategies typically involve robust contract clauses that address price adjustments (if applicable, though less common in firm fixed-price), clear change order procedures, performance incentives or penalties, and regular performance reviews. The firm fixed-price nature itself shifts much of the cost risk to the contractor. The government's mitigation also relies on strong oversight and proactive management to address issues as they arise, potentially through contract modifications if requirements evolve significantly.

Given the 'Other Building Equipment Contractors' NAICS code, what specific types of equipment or services are likely included in this renovation?

The NAICS code 238290, 'Other Building Equipment Contractors,' encompasses establishments primarily engaged in installing or servicing building equipment, except plumbing, steam and air conditioning, and electrical contractors. This could include a wide range of specialized services such as installing elevators, escalators, fire sprinkler systems, security and alarm systems, telecommunications equipment, and other specialized building systems. For a renovation project, this suggests the contract likely involves upgrading or replacing these types of systems within Building 2301, rather than general structural construction or basic utility work. The scope could be extensive, covering life safety systems, communication infrastructure, and vertical transportation.

Industry Classification

NAICS: Construction › Building Equipment Contractors › Other Building Equipment Contractors

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

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Bundesministerium FUR Umwelt Naturschutz UND Reaktorsicherheit

Address: ROBERT-SCHUMAN-PLATZ 3, BONN

Business Categories: Category Business, Foreign Government, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $31,765,555

Exercised Options: $31,765,555

Current Obligation: $31,765,555

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline