Walter Reed Institute of Research renovation contract awarded to Whiting-Turner for over $52 million

Contract Overview

Contract Amount: $52,126,342 ($52.1M)

Contractor: Whiting-Turner Contracting Company, the

Awarding Agency: Department of Defense

Start Date: 2015-09-30

End Date: 2020-02-28

Contract Duration: 1,612 days

Daily Burn Rate: $32.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF RENOVATION AT WALTER REED INSTITUTE OF RESEARCH (WRAIR), BUILDING 501, VACCINE PRODUCTION.

Place of Performance

Location: SILVER SPRING, MONTGOMERY County, MARYLAND, 20910

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $52.1 million to WHITING-TURNER CONTRACTING COMPANY, THE for work described as: IGF::OT::IGF RENOVATION AT WALTER REED INSTITUTE OF RESEARCH (WRAIR), BUILDING 501, VACCINE PRODUCTION. Key points: 1. The contract was awarded using full and open competition, suggesting a competitive bidding process. 2. The firm-fixed-price contract type indicates that the contractor assumes the risk for cost overruns. 3. The project duration of over 1600 days highlights the significant scale and complexity of the renovation. 4. The renovation is located in Maryland, impacting the local construction workforce and economy. 5. The contract falls under the Commercial and Institutional Building Construction NAICS code, placing it within a specific industry segment. 6. The absence of small business set-asides or subcontracting requirements may limit opportunities for smaller firms.

Value Assessment

Rating: fair

The contract value of $52.1 million for a large-scale renovation of a research facility appears within a reasonable range for such projects. However, without specific details on the scope of work, materials, and labor involved, a precise value-for-money assessment is challenging. Benchmarking against similar large-scale institutional building construction projects would provide further context on pricing efficiency. The firm-fixed-price nature of the contract shifts cost risk to the contractor, which can be beneficial for the government if managed effectively.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 4 bidders suggests a moderate level of competition for this project. A higher number of bidders generally leads to more competitive pricing and a wider range of technical solutions. The fact that it was competed openly is a positive sign for price discovery and ensuring the government receives competitive offers.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down prices through robust bidding. It ensures that the government is not limited to a few select contractors, potentially leading to better value and a more efficient use of public funds.

Public Impact

The primary beneficiaries are the researchers and staff at the Walter Reed Institute of Research (WRAIR), who will gain access to modernized vaccine production facilities. The services delivered include the renovation and upgrading of Building 501 at WRAIR to support vaccine production. The geographic impact is concentrated in Maryland, providing economic stimulus through construction jobs and local material sourcing. The project implies a demand for skilled construction labor in the Maryland region, potentially creating or sustaining jobs in the building trades.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen issues arise during the extensive renovation of an older facility.
The long duration of the contract could lead to potential scope creep or changes if project requirements evolve.
Reliance on a single large contractor for a significant renovation project may limit flexibility in adapting to new needs.

Positive Signals

The firm-fixed-price contract type transfers cost risk to the contractor.
Awarded through full and open competition, suggesting a competitive process that should yield fair pricing.
The contractor, Whiting-Turner Contracting Company, is a large and established firm with experience in complex construction projects.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the construction industry. The market for such construction is driven by demand for new facilities and upgrades to existing infrastructure across various sectors, including government, healthcare, and research. Comparable spending benchmarks for large-scale institutional renovations can vary widely based on location, specific requirements, and building age, but projects in the tens of millions of dollars are common for facilities of this nature.

Small Business Impact

This contract does not appear to have included specific small business set-asides, nor does the data indicate any subcontracting requirements for small businesses. This suggests that the primary award went to a large prime contractor. While this can streamline execution for large projects, it may limit direct opportunities for small businesses to participate in this specific federal contract. The overall impact on the small business ecosystem would depend on whether Whiting-Turner engages small businesses as subcontractors, which is not explicitly detailed here.

Oversight & Accountability

The contract is managed by the Department of the Army, which has established oversight mechanisms for construction projects. The firm-fixed-price nature of the contract provides a degree of accountability for the contractor to deliver the project within the agreed-upon price. Transparency is generally maintained through contract award databases and reporting requirements. The Inspector General's office for the Department of Defense would have jurisdiction over potential fraud, waste, or abuse related to this contract.

Related Government Programs

Walter Reed National Military Medical Center Construction Projects
Department of Defense Research Facility Renovations
Vaccine Production Facility Upgrades
Federal Building Construction Contracts
Army Corps of Engineers Construction Oversight

Risk Flags

Potential for cost overruns due to unforeseen site conditions or material price fluctuations.
Risk of schedule delays given the project's long duration and complexity.
Ensuring quality control and adherence to standards in a large-scale renovation.
Contractor performance risk, despite the contractor's experience.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $52.1 million to WHITING-TURNER CONTRACTING COMPANY, THE. IGF::OT::IGF RENOVATION AT WALTER REED INSTITUTE OF RESEARCH (WRAIR), BUILDING 501, VACCINE PRODUCTION.

Who is the contractor on this award?

The obligated recipient is WHITING-TURNER CONTRACTING COMPANY, THE.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $52.1 million.

What is the period of performance?

Start: 2015-09-30. End: 2020-02-28.

What was the specific scope of work for the Building 501 renovation at WRAIR?

The provided data indicates the renovation was for 'IGF::OT::IGF RENOVATION AT WALTER REED INSTITUTE OF RESEARCH (WRAIR), BUILDING 501, VACCINE PRODUCTION.' While this specifies the location and purpose, detailed scope of work documents are typically found in the full contract award files. Generally, such renovations for vaccine production facilities would involve upgrading infrastructure, HVAC systems, laboratory spaces, clean rooms, and safety features to meet current standards for biological research and production. This could include structural modifications, installation of specialized equipment, and ensuring compliance with stringent regulatory requirements for pharmaceutical and biological manufacturing environments.

How does the $52.1 million contract value compare to similar large-scale research facility renovations?

Benchmarking the $52.1 million contract value requires comparing it to similar projects in terms of size, scope, and complexity. Large-scale renovations of research and development facilities, especially those involving specialized infrastructure like vaccine production capabilities, can range significantly. Factors such as the age of the building, the extent of structural work, the sophistication of required systems (e.g., clean rooms, specialized ventilation, advanced utilities), and the specific regulatory compliance needs heavily influence costs. Without detailed project specifications, a direct comparison is difficult, but for a facility of this nature, a contract in the tens of millions is not unusual. Further analysis would involve looking at cost per square foot or cost per specialized function compared to other government or private sector research facility upgrades.

What are the primary risks associated with a firm-fixed-price contract for a long-duration construction project?

For a firm-fixed-price (FFP) contract, the primary risk for the contractor is managing costs to stay within the agreed-upon price, especially over a long duration like the 1612 days for this project. Risks include unforeseen site conditions (e.g., hazardous materials, unexpected structural issues), material price escalations, labor shortages, or design changes. If these risks materialize and are not covered by contract modifications, the contractor's profit margin can be significantly eroded, or they could incur a loss. For the government, the risk is that the contractor might cut corners on quality to manage costs, or that the fixed price might not reflect the true value if market conditions change drastically. However, FFP contracts are generally favored for their cost certainty for the government.

What is the significance of the contract being awarded to Whiting-Turner Contracting Company?

Whiting-Turner Contracting Company is a large, well-established construction firm with a significant track record in managing complex projects across various sectors, including institutional and government facilities. Awarding the contract to such a company suggests that the Department of the Army assessed them as having the capacity, experience, and financial stability to successfully execute this large-scale renovation. Their experience likely includes navigating the complexities of government contracting, adhering to strict quality and safety standards, and managing large workforces and supply chains. This reduces the perceived risk of contractor default or significant performance issues, although diligent oversight remains crucial.

How does the lack of small business participation impact the overall value proposition of this contract?

The absence of explicit small business set-asides or subcontracting requirements means that opportunities for small businesses to directly participate in this $52.1 million contract are limited. While the prime contractor, Whiting-Turner, may engage small businesses as subcontractors, this is not mandated by the contract data provided. This can reduce the potential for broader economic impact and competition within the small business sector for federal construction projects. However, for the government, focusing on a single, experienced large contractor can sometimes lead to more streamlined project management and potentially faster execution, which could be seen as a value proposition in terms of project delivery efficiency, assuming the prime contractor performs adequately.

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Commercial and Institutional Building Construction

Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR NONBUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: TWO STEP

Solicitation ID: W9127S15R6006

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 300 E JOPPA RD, BALTIMORE, MD, 21286

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $52,126,342

Exercised Options: $52,126,342

Current Obligation: $52,126,342

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline