Direct Steel LLC awarded $26.1M for vehicle maintenance shop construction in Texas

Contract Overview

Contract Amount: $26,117,376 ($26.1M)

Contractor: Direct Steel LLC

Awarding Agency: Department of Defense

Start Date: 2022-09-21

End Date: 2026-01-27

Contract Duration: 1,224 days

Daily Burn Rate: $21.3K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: VEHICLE MAINTENANCE SHOP

Place of Performance

Location: SAN ANTONIO, BEXAR County, TEXAS, 78257

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $26.1 million to DIRECT STEEL LLC for work described as: VEHICLE MAINTENANCE SHOP Key points: 1. Contract value appears reasonable given the scope of commercial building construction. 2. Full and open competition suggests a competitive bidding process. 3. Definitive contract type indicates a flexible agreement for ongoing needs. 4. Firm fixed price structure provides cost certainty for the government. 5. Project duration of over three years suggests a significant construction undertaking. 6. Location in Texas may indicate regional construction market dynamics.

Value Assessment

Rating: good

The contract value of $26.1 million for a vehicle maintenance shop is within a reasonable range for commercial and institutional building construction projects of this scale. Benchmarking against similar government or private sector construction projects for specialized facilities would provide a more precise value-for-money assessment. The firm fixed price nature of the contract helps manage cost risks for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that the solicitation was broadly advertised, and multiple responsible sources were permitted to submit offers. The presence of 4 bids suggests a healthy level of competition, which typically leads to better price discovery and potentially more favorable terms for the government.

Taxpayer Impact: A competitive bidding process with multiple bidders generally results in taxpayer savings by driving down prices and encouraging efficient service delivery.

Public Impact

The primary beneficiaries are the Department of the Army, which will receive a new vehicle maintenance facility. The services delivered include the construction of a specialized building designed for vehicle maintenance operations. The geographic impact is concentrated in Texas, supporting regional military readiness and infrastructure. Workforce implications include job creation for construction workers, engineers, and project managers in the local Texas economy.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for construction delays impacting operational readiness.
Risk of cost overruns if unforeseen site conditions arise, despite fixed price.
Ensuring compliance with environmental and safety regulations during construction.

Positive Signals

Firm fixed price contract provides budget certainty.
Full and open competition suggests a robust selection process.
Experienced contractor (Direct Steel LLC) likely brings relevant expertise.
Long-term contract duration allows for phased construction and potential future needs.

Sector Analysis

This contract falls within the Construction sector, specifically Commercial and Institutional Building Construction. The market for such construction is substantial, driven by both government and private sector demand for specialized facilities. Comparable spending benchmarks would involve analyzing the cost per square foot for similar military or industrial maintenance facilities. The $26.1 million award suggests a project of considerable size and complexity.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned. This means that opportunities for small businesses would likely be through direct subcontracting by the prime contractor, Direct Steel LLC, rather than through a formal set-aside program. The impact on the small business ecosystem depends on the prime contractor's subcontracting strategy.

Oversight & Accountability

Oversight for this contract would primarily 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 generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Military Base Construction
Vehicle Maintenance Facilities
Department of Defense Infrastructure Projects
Commercial Building Construction Contracts

Risk Flags

Potential for construction delays
Risk of unforeseen site conditions
Ensuring environmental compliance
Workforce availability and skill matching

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.1 million to DIRECT STEEL LLC. VEHICLE MAINTENANCE SHOP

Who is the contractor on this award?

The obligated recipient is DIRECT STEEL 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 $26.1 million.

What is the period of performance?

Start: 2022-09-21. End: 2026-01-27.

What is the track record of Direct Steel LLC in completing similar government construction projects on time and within budget?

Direct Steel LLC's track record on similar government construction projects is a critical factor in assessing performance risk. While the provided data indicates they were awarded this $26.1 million contract, it does not detail their past performance history. A thorough review would involve examining past contract awards, performance evaluations (such as Contractor Performance Assessment Reporting System - CPARS), and any history of disputes or delays on comparable projects. Understanding their experience with large-scale institutional or industrial construction, particularly for military clients, would provide insight into their capability to deliver this vehicle maintenance shop successfully and within the specified timeline and budget.

How does the awarded amount compare to the estimated cost or independent government cost estimate for this vehicle maintenance shop?

The awarded amount of $26.1 million provides a benchmark for the cost of constructing this vehicle maintenance shop. To assess value for money, this figure should be compared against the government's independent cost estimate (ICE) or the contractor's initial proposal breakdown. If the awarded amount is significantly lower than the ICE, it could indicate strong competition or potentially underestimated scope by the government. Conversely, if it's higher, it might suggest less competition or a more complex project than initially assessed. Further analysis would involve examining the cost per square foot and comparing it to industry standards for similar specialized facilities.

What are the key performance indicators (KPIs) and milestones defined in the contract to measure the contractor's progress and success?

The contract likely includes specific Key Performance Indicators (KPIs) and milestones to track the progress and success of the vehicle maintenance shop construction. These typically encompass adherence to the project schedule, quality of construction materials and workmanship, safety compliance, and timely completion of defined phases (e.g., foundation, structural, interior fit-out). The firm fixed price nature implies that meeting these milestones within the $26.1 million budget is paramount. The Department of the Army's project management team would monitor these KPIs, with potential penalties or incentives tied to performance, ensuring accountability and timely delivery of the facility.

What is the historical spending pattern for vehicle maintenance facilities or similar construction projects by the Department of the Army in Texas?

Analyzing historical spending patterns for similar construction projects by the Department of the Army in Texas can provide valuable context for the $26.1 million award to Direct Steel LLC. This involves reviewing past contracts for military facilities, maintenance shops, or other institutional buildings within the state. Key metrics to examine would include average contract values, project durations, and the number of bids received. Understanding this historical data helps determine if the current contract represents a typical investment, an outlier, or if there are trends in pricing or competition that warrant further investigation. It also aids in assessing whether the current procurement strategy is cost-effective compared to previous efforts.

Are there any specific risks identified related to the site location in Texas or the nature of the construction (e.g., environmental, geological)?

The site location in Texas and the nature of constructing a vehicle maintenance shop may present specific risks that need to be assessed. Texas's climate (e.g., extreme heat, potential for severe weather) can impact construction schedules and material durability. Geological conditions, such as soil stability or seismic activity, could influence foundation requirements and costs. Environmental considerations, including potential contamination from previous land use or the need for specialized waste disposal during construction, are also critical. The 'Full and Open Competition' process should ideally allow bidders to identify and price these risks, but the government must also conduct its own due diligence to ensure adequate risk mitigation strategies are in place within the $26.1 million contract.

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: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SEALED BID

Solicitation ID: W9126G22B0002

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3321 S IL ROUTE 31, CRYSTAL LAKE, IL, 60012

Business Categories: Category Business, Limited Liability Corporation, Self-Certified Small Disadvantaged Business, Small Business, Sole Proprietorship, Special Designations, U.S.-Owned Business, Woman Owned Business, Women Owned Small Business

Financial Breakdown

Contract Ceiling: $30,331,525

Exercised Options: $26,117,376

Current Obligation: $26,117,376

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline