DoD awards $17M design-build contract for Holston Army Ammunition Plant laundry facility

Contract Overview

Contract Amount: $17,021,678 ($17.0M)

Contractor: Richard Group LLC

Awarding Agency: Department of Defense

Start Date: 2025-09-24

End Date: 2027-11-17

Contract Duration: 784 days

Daily Burn Rate: $21.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: DESIGN BUILD CONTRACT FOR THE DESIGN AND CONSTRUCTION OF A NEW LAUNDRY FACILITY AT THE HOLSTON ARMY AMMUNITION PLANT IN KINGSPORT, TN

Place of Performance

Location: KINGSPORT, SULLIVAN County, TENNESSEE, 37660

State: Tennessee Government Spending

Plain-Language Summary

Department of Defense obligated $17.0 million to RICHARD GROUP LLC for work described as: DESIGN BUILD CONTRACT FOR THE DESIGN AND CONSTRUCTION OF A NEW LAUNDRY FACILITY AT THE HOLSTON ARMY AMMUNITION PLANT IN KINGSPORT, TN Key points: 1. Contract awarded to Richard Group LLC for a new laundry facility. 2. Project duration is approximately 784 days. 3. The contract type is Firm Fixed Price, indicating price certainty. 4. Competition was full and open, suggesting a competitive bidding process. 5. The facility is located at the Holston Army Ammunition Plant in Tennessee. 6. This contract supports industrial building construction needs for the Army. 7. The award value is over $17 million.

Value Assessment

Rating: fair

The award value of $17,021,678 for a design-build laundry facility appears within a reasonable range for industrial construction projects of this nature. Benchmarking against similar government contracts for specialized facilities would provide a more precise value-for-money assessment. The firm fixed-price structure helps control costs, but the absence of detailed cost breakdowns makes a granular price assessment difficult. The contract's success will hinge on the contractor's ability to deliver the facility within the set price and timeline.

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 solicitation resulted in four bids, suggesting a moderate level of competition. While four bidders is generally positive, a higher number could potentially drive prices lower. The specific details of the bidding process and the evaluation criteria would further illuminate the effectiveness of the competition in achieving the best value for the government.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to more favorable pricing and innovative solutions. The presence of four bidders suggests that the government received multiple offers, increasing the likelihood of a fair market price being established.

Public Impact

The primary beneficiaries are the U.S. Army personnel and operations at the Holston Army Ammunition Plant, who will gain a modern and efficient laundry facility. The contract delivers essential infrastructure for supporting military readiness and operational efficiency. The geographic impact is concentrated in Kingsport, Tennessee, providing local economic stimulus through construction activities. Workforce implications include job creation for construction workers and related trades in the region during the project's lifecycle.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions arise during design or construction.
Risk of schedule delays due to contractor performance or external factors.
Ensuring the facility meets all operational and environmental standards throughout its lifecycle.

Positive Signals

Firm Fixed Price contract type mitigates cost uncertainty for the government.
Full and open competition suggests a robust selection process.
The contractor, Richard Group LLC, will be responsible for both design and construction, potentially streamlining the process.

Sector Analysis

This contract falls within the Industrial Building Construction sector, a segment of the broader construction industry focused on specialized facilities for manufacturing, processing, and storage. The market for government industrial construction is significant, driven by the need to maintain and modernize critical infrastructure. Comparable spending benchmarks for similar-sized industrial facilities, particularly those with design-build components for defense installations, would provide further context for assessing the value of this award.

Small Business Impact

This contract was awarded under full and open competition and does not indicate any specific small business set-aside provisions. Therefore, the direct impact on small business set-asides is minimal. However, the prime contractor, Richard Group LLC, may engage small businesses as subcontractors for various aspects of the design and construction work, contributing indirectly to the small business ecosystem.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Army contracting and project management offices. Accountability measures are embedded in the firm fixed-price contract terms, requiring delivery of the specified facility. Transparency is facilitated through the Federal Procurement Data System (FPDS) where contract awards are reported. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Army Ammunition Plant Modernization Programs
Department of Defense Facilities Construction
Industrial Infrastructure Development
Design-Build Construction Contracts

Risk Flags

Potential for scope creep if design requirements are not clearly defined upfront.
Risk of contractor default or performance failure.
Dependency on timely government approvals during design and construction phases.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.0 million to RICHARD GROUP LLC. DESIGN BUILD CONTRACT FOR THE DESIGN AND CONSTRUCTION OF A NEW LAUNDRY FACILITY AT THE HOLSTON ARMY AMMUNITION PLANT IN KINGSPORT, TN

Who is the contractor on this award?

The obligated recipient is RICHARD GROUP LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $17.0 million.

What is the period of performance?

Start: 2025-09-24. End: 2027-11-17.

What is the track record of Richard Group LLC in executing similar design-build industrial construction projects for the federal government?

Assessing the track record of Richard Group LLC requires a review of their past performance on federal contracts, particularly those involving design-build delivery for industrial facilities. Information on their past performance, including project scope, timeliness, budget adherence, and client satisfaction, can often be found in federal databases like the Contractor Performance Assessment Reporting System (CPARS). A history of successful, on-time, and within-budget completions of comparable projects would indicate a lower risk profile for this current award. Conversely, a history of significant delays, cost overruns, or performance issues would raise concerns about their capacity to deliver this specific laundry facility effectively.

How does the awarded amount of $17,021,678 compare to the estimated cost or market rates for similar laundry facility construction projects?

A precise comparison of the $17,021,678 award to market rates for similar laundry facility construction is challenging without detailed project specifications and regional cost data. However, the firm fixed-price nature of the contract suggests that the bids received were considered competitive by the Department of the Army. Benchmarking against publicly available data for industrial building construction, factoring in square footage, complexity, and location, can provide a general sense of value. For instance, if similar projects in Tennessee or comparable industrial areas typically cost between $300-$500 per square foot, this award could be evaluated against that range, assuming the facility's size and features are known. The number of bids received (four) also suggests a degree of market validation for the price.

What are the primary risks associated with this design-build contract, and what mitigation strategies are in place?

Key risks for this design-build contract include potential design deficiencies, unforeseen site conditions, contractor performance issues, and schedule delays. Mitigation strategies are inherent in the contract type and procurement process. The firm fixed-price structure shifts much of the cost risk to the contractor. The full and open competition process aims to select a capable contractor. The government will likely employ project management oversight, requiring regular progress reports, site inspections, and adherence to design and construction standards. Performance bonds are typically required to ensure project completion. Clear contract terms and defined milestones also serve as risk mitigation tools.

What is the expected effectiveness of the new laundry facility in meeting the operational needs of the Holston Army Ammunition Plant?

The effectiveness of the new laundry facility will be determined by its ability to meet the specific operational demands of the Holston Army Ammunition Plant, which likely include processing large volumes of work uniforms, linens, and potentially specialized protective gear. The design-build approach should ensure that the facility is tailored to these needs, integrating efficient workflows and modern equipment. Its effectiveness will be measured by its capacity, reliability, energy efficiency, and compliance with environmental and safety regulations. Successful completion according to the contract specifications will directly translate to improved operational support and potentially enhanced safety and hygiene for personnel.

How does historical spending on similar industrial building construction projects at Army Ammunition Plants inform the assessment of this contract's value?

Historical spending data on similar industrial building construction projects at Army Ammunition Plants provides a crucial benchmark for assessing the value of this $17 million contract. Analyzing past awards for facilities of comparable size, complexity, and function (e.g., maintenance shops, storage depots, processing centers) can reveal trends in cost per square foot, project durations, and the prevalence of different contract types (like design-build vs. design-then-build). If historical data shows similar projects consistently awarded in the $15-$20 million range with similar competition levels, this award appears consistent with past spending. Significant deviations, either higher or lower, would warrant further investigation into the specific project requirements, market conditions, or contractor efficiencies.

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Industrial Building Construction

Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCTION OF BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: TWO STEP

Solicitation ID: W9123625RA006

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 566 W LAKE STREET, CHICAGO, IL, 60661

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Not Designated a Small Business, Service Disabled Veteran Owned Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $17,021,678

Exercised Options: $17,021,678

Current Obligation: $17,021,678

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline