NORDIC INDUSTRIES INC Awarded $18.3M for Heavy Engineering Construction, Highlighting Firm Fixed Price Contract

Contract Overview

Contract Amount: $18,329,153 ($18.3M)

Contractor: Nordic Industries Inc

Awarding Agency: Department of Defense

Start Date: 2006-07-20

End Date: 2008-10-21

Contract Duration: 824 days

Daily Burn Rate: $22.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: BASE ITEM

Place of Performance

Location: SACRAMENTO, SACRAMENTO County, CALIFORNIA, 95820

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $18.3 million to NORDIC INDUSTRIES INC for work described as: BASE ITEM Key points: 1. Contract value of $18.3 million indicates a significant investment in heavy civil engineering. 2. The firm fixed price contract type suggests a clear scope and budget, potentially mitigating cost overrun risks. 3. Awarded by the Department of the Army, this contract likely supports critical infrastructure or operational needs. 4. The duration of 824 days points to a substantial project requiring sustained effort and resources. 5. The absence of small business set-aside flags suggests the primary contractor is likely a larger entity. 6. The contract's North American Industry Classification System (NAICS) code 237990 points to specialized heavy construction services.

Value Assessment

Rating: good

The contract value of $18.3 million for heavy and civil engineering construction appears reasonable for a project of this scope and duration. Without specific project details or comparable benchmarks, a precise value-for-money assessment is challenging. However, the firm fixed price (FFP) contract type generally provides cost certainty for the government, which is a positive indicator. The contractor, NORDIC INDUSTRIES INC, has secured a substantial award, suggesting a competitive selection process or a strong track record.

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. This approach typically fosters a competitive environment, encouraging multiple bidders to offer their best pricing and technical solutions. The fact that NORDIC INDUSTRIES INC was selected suggests they presented the most advantageous offer among the competitors. The number of bidders is not specified, but full and open competition is generally the preferred method for ensuring fair pricing.

Taxpayer Impact: Full and open competition maximizes the potential for the government to secure the best possible price and quality, ultimately benefiting taxpayers by ensuring funds are used efficiently.

Public Impact

The primary beneficiaries are likely the Department of the Army and its operational readiness, through the completion of essential heavy and civil engineering projects. Services delivered include specialized construction activities falling under the 'Other Heavy and Civil Engineering Construction' category. The geographic impact is centered in California, where the project is presumably located. Workforce implications include the creation of jobs for skilled construction labor and related support personnel during the contract period.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if the initial project definition was not sufficiently detailed, despite the FFP structure.
Dependence on a single contractor for a significant duration could lead to performance risks if issues arise.
The lack of specific small business participation mentioned could mean limited opportunities for smaller firms in the subcontracting chain.

Positive Signals

The firm fixed price contract structure provides budget certainty and incentivizes the contractor to manage costs effectively.
Awarding under full and open competition suggests a robust selection process that likely identified a capable and competitive offeror.
The substantial contract value indicates the government's commitment to a project deemed important for its mission.

Sector Analysis

The heavy and civil engineering construction sector is a critical component of national infrastructure and defense. This contract, under NAICS code 237990, falls into a specialized segment focused on projects like highways, streets, bridges, tunnels, and other large-scale infrastructure. The market is characterized by large, established firms capable of undertaking complex, high-value projects. Government spending in this sector is often driven by infrastructure upgrades, military base development, and disaster recovery efforts. Comparable spending benchmarks would typically involve analyzing other large-scale construction contracts awarded by federal agencies for similar types of work.

Small Business Impact

The contract indicates that small business participation was not a primary set-aside criterion, as 'sb' is false. This suggests the primary contract was likely awarded to a large business. While there's no explicit requirement for small business subcontracting mentioned in the provided data, large federal construction contracts often include provisions for small business participation. The impact on the small business ecosystem would depend on whether NORDIC INDUSTRIES INC actively seeks small business subcontractors for specialized services or materials, which could provide valuable opportunities for smaller firms.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. Given the firm fixed price nature, oversight would focus on ensuring contract compliance, adherence to schedule, and quality of work. Accountability measures are embedded in the contract terms, with potential penalties for non-performance. Transparency is generally facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arise during the contract's lifecycle.

Related Government Programs

Military Construction
Infrastructure Projects
Federal Highway Administration Contracts
Army Corps of Engineers Projects

Risk Flags

Contract Duration
Potential for Unforeseen Site Conditions
Contractor Performance Monitoring

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.3 million to NORDIC INDUSTRIES INC. BASE ITEM

Who is the contractor on this award?

The obligated recipient is NORDIC INDUSTRIES INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $18.3 million.

What is the period of performance?

Start: 2006-07-20. End: 2008-10-21.

What is the specific nature of the 'Other Heavy and Civil Engineering Construction' project awarded to NORDIC INDUSTRIES INC?

The provided data indicates the contract falls under NAICS code 237990, which covers 'Other Heavy and Civil Engineering Construction.' This category typically includes the construction of facilities and infrastructure not elsewhere classified, such as pipelines, communication lines, power lines, and other specialized heavy construction. Without more specific project details, it's difficult to pinpoint the exact nature of the work. However, given the awarding agency is the Department of the Army, potential projects could include airfield improvements, port facilities, training range infrastructure, or other base development projects requiring significant civil engineering expertise. The contract duration of 824 days suggests a project of considerable scale and complexity.

How does the firm fixed price (FFP) contract structure compare to other contract types for similar construction projects?

Firm Fixed Price (FFP) contracts are common for construction projects where the scope of work is well-defined and risks are manageable. In an FFP contract, the price is set and not subject to adjustment based on the contractor's cost experience. This provides the government with maximum price certainty and incentivizes the contractor to control costs efficiently. Compared to cost-reimbursement contracts, FFP shifts more risk to the contractor. For large, complex projects, other contract types like Cost Plus Incentive Fee (CPIF) or Fixed Price Incentive Fee (FPIF) might be used to balance risk and reward, especially if there's uncertainty in the scope or technical requirements. However, for projects with clear specifications, FFP is often preferred for its budgetary predictability.

What is NORDIC INDUSTRIES INC's track record with federal contracts, particularly in heavy civil engineering?

The provided data shows NORDIC INDUSTRIES INC has been awarded a definitive contract valued at $18.3 million by the Department of the Army. This specific award suggests the company has the capacity and qualifications to undertake significant federal projects. To fully assess their track record, a deeper dive into their contract history would be necessary. This would involve examining past performance on similar projects, their history of meeting deadlines and budget requirements, and any past performance evaluations or disputes. A review of their portfolio of completed federal contracts, especially those within the heavy and civil engineering construction domain, would provide a clearer picture of their experience and reliability.

Are there any indications of potential cost overruns or performance issues given the contract's duration and value?

The contract is a Firm Fixed Price (FFP) type, which inherently aims to mitigate cost overrun risks by fixing the price regardless of the contractor's actual costs. This structure places the onus on NORDIC INDUSTRIES INC to manage expenses within the agreed-upon price. The contract duration is 824 days, which is substantial and could present challenges in maintaining performance over time. However, the data does not provide specific performance metrics or any flags for issues. Potential risks for overruns or performance issues in any long-term project include unforeseen site conditions, changes in regulations, or contractor performance degradation. Robust project management and oversight by the Department of the Army would be crucial to identify and address any emerging problems proactively.

How does this $18.3 million contract compare to typical federal spending in the heavy and civil engineering construction sector?

The $18.3 million award to NORDIC INDUSTRIES INC is a significant sum, indicative of a substantial project within the heavy and civil engineering construction sector. Federal spending in this area can range widely, from smaller repair and maintenance contracts to multi-billion dollar infrastructure programs. For context, major federal infrastructure initiatives, such as highway expansions or large-scale military base construction, often involve contracts in the hundreds of millions or even billions of dollars. Therefore, while $18.3 million represents a considerable investment for a single project, it falls within the mid-to-large range for specialized heavy construction contracts awarded by agencies like the Department of the Army. Benchmarking would require comparing it against similar projects awarded by the Army Corps of Engineers or other agencies involved in large-scale construction.

Industry Classification

NAICS: Construction › Other Heavy and Civil Engineering Construction › Other Heavy and Civil Engineering Construction

Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCT NONBUILDING FACILITIES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SEALED BID

Solicitation ID: W9123806B0008

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1437 FURNEAUX RD, MARYSVILLE, CA, 95901

Business Categories: Category Business, Small Business

Financial Breakdown

Contract Ceiling: $18,329,914

Exercised Options: $18,329,914

Current Obligation: $18,329,153

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline