DoD's $32.2M Roofing Contract for Puerto Rico: A Look at Value and Competition

Contract Overview

Contract Amount: $32,201,106 ($32.2M)

Contractor: Venegas Construction Corp

Awarding Agency: Department of Defense

Start Date: 2017-12-14

End Date: 2018-02-28

Contract Duration: 76 days

Daily Burn Rate: $423.7K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF TEMPORARY ROOFING REPAIRS

Place of Performance

Location: DORADO, DORADO County, PUERTO RICO, 00646

Plain-Language Summary

Department of Defense obligated $32.2 million to VENEGAS CONSTRUCTION CORP for work described as: IGF::OT::IGF TEMPORARY ROOFING REPAIRS Key points: 1. The contract's value appears reasonable given the urgency and location, but detailed benchmarking is needed. 2. Full and open competition was utilized, suggesting a potentially competitive pricing environment. 3. The short duration and fixed-price nature may mitigate some performance risks. 4. This contract addresses immediate infrastructure needs following a natural disaster. 5. The award to a single contractor warrants scrutiny regarding market capacity and pricing. 6. Oversight mechanisms for disaster relief contracts are crucial for ensuring accountability.

Value Assessment

Rating: fair

The contract value of $32.2 million for temporary roofing repairs in Puerto Rico is substantial. Benchmarking against similar disaster relief roofing contracts is difficult due to unique logistical challenges and the emergency nature of the work. The firm-fixed-price structure suggests a defined cost expectation, but without detailed cost breakdowns or comparisons to market rates for emergency services in the region, a definitive value-for-money assessment is challenging. The relatively low number of bids received under full and open competition could indicate limited contractor availability or a pricing strategy that deterred broader participation.

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 offers. However, the data shows only 423,699 bids were received, which is a very low number for a contract of this magnitude and type. This limited number of bidders, despite the open competition, raises questions about the actual level of competition achieved and whether it was sufficient to drive optimal pricing. It could suggest that only a few contractors were capable of or willing to undertake the work under the specified conditions and timeline.

Taxpayer Impact: While open competition is generally beneficial for taxpayers, the low bid count suggests that the government may not have received the full benefit of a robustly competitive process, potentially leading to higher costs than might have been achieved with more bidders.

Public Impact

Residents of Puerto Rico, particularly those affected by natural disasters, benefited from the restoration of temporary roofing. The services delivered were critical for immediate shelter and protection from the elements. The geographic impact was concentrated in Puerto Rico, addressing urgent local needs. The contract supported the construction workforce involved in emergency repairs.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited number of bidders despite full and open competition may indicate pricing inefficiencies.
The 'temporary' nature of the repairs could imply future costs for permanent solutions.
Geographic isolation and logistical challenges in Puerto Rico may have increased costs.
Short contract duration might have limited the scope for economies of scale.

Positive Signals

Awarded under full and open competition, adhering to procurement best practices.
Firm-fixed-price contract type helps control costs and manage budget certainty.
Short performance period (76 days) suggests a focus on rapid deployment and completion.
Contract addresses critical infrastructure needs in a disaster-stricken area.

Sector Analysis

This contract falls within the construction and emergency services sector, specifically focusing on roofing. The market for disaster response and temporary infrastructure repair can be highly specialized and geographically constrained. The size of this contract is significant for a single delivery order, reflecting the scale of damage and the urgency of the need. Comparable spending benchmarks are difficult to establish due to the unique circumstances of disaster relief, which often command premium pricing due to logistical hurdles and rapid deployment requirements.

Small Business Impact

The provided data does not indicate any small business set-aside provisions (ss: false, sb: false). Therefore, this contract was not specifically targeted towards small businesses. The prime contractor, Venegas Construction Corp, is not explicitly identified as a small business in the provided data. There is no information on subcontracting plans, so the impact on the small business ecosystem is unknown, but it is unlikely to have directly benefited from set-aside goals.

Oversight & Accountability

The contract was awarded by the Department of the Army, part of the Department of Defense. Oversight would typically involve contract officers, contracting specialists, and potentially program managers within the Army. Given the nature of disaster relief, Inspector General (IG) oversight is highly probable to ensure funds are used appropriately and efficiently. Transparency is generally maintained through contract award databases like FPDS, where basic details are published, but detailed performance and cost oversight reports are often internal or specific to IG investigations.

Related Government Programs

FEMA Disaster Relief Funding
Army Corps of Engineers Construction Contracts
Emergency Infrastructure Repair Programs
Post-Hurricane Recovery Efforts

Risk Flags

Limited Competition Despite Open Bidding
Potential for Cost Overruns in Disaster Zones
Durability and Effectiveness of Temporary Repairs
Logistical Challenges in Remote/Island Locations

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $32.2 million to VENEGAS CONSTRUCTION CORP. IGF::OT::IGF TEMPORARY ROOFING REPAIRS

Who is the contractor on this award?

The obligated recipient is VENEGAS 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 $32.2 million.

What is the period of performance?

Start: 2017-12-14. End: 2018-02-28.

What is the track record of Venegas Construction Corp with federal contracts, particularly in disaster relief?

Venegas Construction Corp has a history of federal contracting, primarily with the Department of Defense and other agencies involved in infrastructure and construction. While specific details on their disaster relief performance require deeper database analysis, their involvement in this significant roofing repair contract in Puerto Rico suggests capability in handling large-scale projects. Examining past performance evaluations, any contract disputes, or awards for similar emergency response work would provide a clearer picture of their reliability and effectiveness in high-pressure situations. A review of their contract history might reveal patterns in project completion times, cost overruns, or quality of work, which are crucial for assessing their suitability for future emergency contracts.

How does the per-square-foot cost of these temporary repairs compare to industry averages for similar emergency work?

Determining a precise per-square-foot cost for these temporary repairs and comparing it to industry averages is challenging without more granular data on the scope of work, materials used, and the specific types of damage addressed. Emergency roofing in disaster zones often incurs higher costs due to logistical complexities, the need for rapid mobilization, and potentially limited availability of materials and labor. The contract value of $32.2 million spread over an unspecified roof area makes a direct per-square-foot calculation difficult. Industry benchmarks for standard roofing are not directly applicable to emergency, temporary repairs in a location like Puerto Rico, which likely faced significant supply chain and transportation challenges post-disaster. A detailed cost analysis would be needed, breaking down labor, materials, and overhead specific to this contract.

What were the primary risks associated with this contract, and how were they mitigated?

Key risks for this contract likely included logistical challenges in delivering materials and personnel to Puerto Rico, potential for further weather-related damage during repairs, contractor performance issues (delays, quality), and cost overruns due to unforeseen site conditions. Mitigation strategies would typically involve a firm-fixed-price contract to cap costs, a short performance schedule to expedite completion, clear performance standards, and potentially pre-qualification of contractors with experience in disaster zones. The Department of the Army would have also implemented oversight mechanisms, including site inspections and progress monitoring, to ensure work was proceeding as planned and to address any emerging issues promptly. The choice of a firm-fixed-price contract inherently shifts some risk to the contractor.

What is the historical spending pattern for temporary roofing repairs by the Department of Defense in disaster-affected areas?

Historical spending by the Department of Defense (DoD) on temporary roofing repairs in disaster-affected areas, particularly following major hurricanes or earthquakes, tends to be significant and episodic. Following large-scale natural disasters, the DoD, often through the Army Corps of Engineers, mobilizes substantial resources for immediate life-saving and life-sustaining missions, which include infrastructure repair. Spending patterns are characterized by rapid, large-value contract awards for emergency services, often under expedited procurement procedures. While specific figures for 'temporary roofing repairs' as a distinct category are not readily aggregated, the overall DoD expenditure on disaster response and recovery can run into hundreds of millions or even billions of dollars in the aftermath of severe events. Contracts are typically firm-fixed-price due to the urgency and need for cost certainty.

How many other contracts of similar size and scope for emergency roofing were awarded by the DoD in the period surrounding this contract?

To assess the uniqueness of this $32.2 million contract for temporary roofing repairs, a comparative analysis of other DoD contracts awarded around the same period (late 2017) for similar emergency roofing services is necessary. Searching federal procurement databases for contracts with comparable dollar values, service descriptions (emergency roofing, temporary repairs), and geographic focus (disaster-affected areas) would reveal if this was an isolated award or part of a broader response effort. If numerous similar contracts were awarded, it might indicate a widespread need and a competitive market for such services. Conversely, if this contract stands out due to its size or the limited number of bidders, it could suggest specific market conditions or a particularly acute need in Puerto Rico.

What is the long-term implication of relying on temporary repairs funded by such contracts?

The long-term implication of relying on temporary repairs, like those funded by this $32.2 million contract, is that they often represent a stop-gap measure rather than a permanent solution. While essential for immediate relief, temporary fixes can lead to recurring costs if not followed by permanent repairs or rebuilding. This can strain budgets over time, as funds may be allocated repeatedly for temporary measures. Furthermore, the effectiveness and durability of temporary repairs might be limited, potentially leading to further damage or necessitating additional repairs sooner than anticipated. Ultimately, a strategy focused on permanent infrastructure resilience is usually more cost-effective in the long run than continuous reliance on temporary solutions.

Industry Classification

NAICS: Construction › Foundation, Structure, and Building Exterior Contractors › Roofing Contractors

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W9127818R0015

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 472 AVE TITO CASTRO STE 201, PONCE, PR, 00716

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Hispanic American Owned Business, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $32,201,106

Exercised Options: $32,201,106

Current Obligation: $32,201,106

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W9127818D0028

IDV Type: IDC

Timeline