DoD's $43.2M Minot AFB housing project awarded to RMR Joint Venture, facing potential cost overruns

Contract Overview

Contract Amount: $43,212,807 ($43.2M)

Contractor: RMR Joint Venture

Awarding Agency: Department of Defense

Start Date: 2006-08-01

End Date: 2010-05-21

Contract Duration: 1,389 days

Daily Burn Rate: $31.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: REPLACE FAMILY HOUSING PH 12 MINOT AFB

Place of Performance

Location: MINOT, WARD County, NORTH DAKOTA, 58701

State: North Dakota Government Spending

Plain-Language Summary

Department of Defense obligated $43.2 million to RMR JOINT VENTURE for work described as: REPLACE FAMILY HOUSING PH 12 MINOT AFB Key points: 1. The contract value of $43.2 million for new housing construction at Minot AFB represents a significant investment in military family accommodations. 2. Competition dynamics for this contract were favorable, indicating a potentially robust market for construction services in the region. 3. Risk indicators suggest potential for cost overruns, necessitating close monitoring of project execution and financial management. 4. Performance context is crucial, as the successful delivery of quality housing directly impacts the morale and retention of military personnel. 5. The sector positioning of this contract is within the broader defense construction market, which is subject to fluctuating government budgets and priorities.

Value Assessment

Rating: fair

The total contract value of $43.2 million for new single-family housing construction at Minot AFB appears substantial. Benchmarking against similar military housing projects would be necessary to definitively assess value for money. However, the duration of the contract (1389 days) and the number of units (implied by the NAICS code and project description) suggest a significant undertaking. Without specific per-unit cost data or comparable project costs, a precise value assessment is challenging, but the scale indicates a considerable expenditure.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple bidders were likely solicited and evaluated. The presence of two bids indicates a degree of competition, which generally favors price discovery and potentially better pricing for the government. The specific number of bidders and the details of the bidding process would provide further insight into the competitiveness of this award.

Taxpayer Impact: Full and open competition is generally beneficial for taxpayers as it encourages a wider range of potential contractors to bid, leading to more competitive pricing and potentially better value for the government's investment.

Public Impact

Military families stationed at Minot Air Force Base are the primary beneficiaries, receiving improved housing quality and availability. The contract delivers new single-family housing units, directly addressing infrastructure needs at a key military installation. The geographic impact is concentrated at Minot AFB in North Dakota, supporting the operational readiness and quality of life for personnel in that region. Workforce implications include job creation for construction workers, engineers, and project managers involved in the building process.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns due to the long duration and complexity of new construction projects.
Dependence on a single contractor (RMR Joint Venture) for the entirety of the project scope.
Risks associated with construction timelines and potential delays impacting military family housing availability.
The fixed-price contract type could lead to disputes if unforeseen issues arise that significantly impact costs.
Ensuring adherence to quality standards for new housing construction is critical for long-term durability and resident satisfaction.

Positive Signals

Awarded under full and open competition, suggesting a competitive bidding process.
The contract aims to provide essential family housing, directly supporting military personnel and their families.
The project addresses a clear need for infrastructure improvement at Minot AFB.
The firm fixed-price contract type provides cost certainty for the government, assuming no significant change orders.

Sector Analysis

This contract falls within the Defense Construction sector, specifically focusing on new single-family housing. The market for military construction is often characterized by large, complex projects awarded through competitive bidding processes. Spending in this area is driven by military readiness requirements, personnel support, and infrastructure modernization efforts. Comparable spending benchmarks would typically involve analyzing the cost per square foot or per unit for similar military housing projects across different bases and agencies.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (sb: false) and does not appear to have specific small business subcontracting goals explicitly mentioned (ss: false). This suggests that the primary award went to a larger entity, RMR Joint Venture. The implications for the small business ecosystem are that opportunities for subcontracting may exist, but they are not mandated by the contract's primary structure. Further analysis would be needed to determine if RMR Joint Venture has its own small business subcontracting plan.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army and the Department of Defense. Mechanisms likely include contract performance monitoring, site inspections, and financial reviews. Accountability measures are embedded in the contract terms, including performance standards and payment schedules. Transparency is generally facilitated through contract award databases and reporting requirements, though specific project-level details may vary. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arise.

Related Government Programs

Military Family Housing Construction
Department of Defense Construction Projects
New Residential Construction
Air Force Base Infrastructure

Risk Flags

Potential for cost overruns
Construction project delays
Contractor performance risk
Long project duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $43.2 million to RMR JOINT VENTURE. REPLACE FAMILY HOUSING PH 12 MINOT AFB

Who is the contractor on this award?

The obligated recipient is RMR JOINT VENTURE.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $43.2 million.

What is the period of performance?

Start: 2006-08-01. End: 2010-05-21.

What is the track record of RMR Joint Venture in completing similar large-scale military housing projects?

Information regarding RMR Joint Venture's specific track record on similar large-scale military housing projects is not directly provided in the abbreviated data. To assess their capability, a review of past performance evaluations, contract completion history, and any reported issues on previous government contracts would be necessary. This would involve searching federal procurement databases and performance rating systems. A joint venture's track record can also be influenced by the experience and performance of its individual member companies. Understanding their history with firm fixed-price contracts and projects of comparable duration and complexity is crucial for evaluating their reliability in executing this Minot AFB housing project.

How does the total contract value of $43.2 million compare to the average cost of constructing single-family housing units at military bases?

The total contract value of $43.2 million for new single-family housing at Minot AFB requires further context to benchmark effectively. The NAICS code 236115 indicates 'New Single-Family Housing Construction (except For-Sale Builders)', and the contract duration is 1389 days. Without knowing the exact number of housing units to be constructed, a precise per-unit cost comparison is impossible. However, military housing construction often incurs higher costs than private sector development due to stringent security, infrastructure, and quality requirements. To assess value, one would compare the cost per square foot or per unit against similar Department of Defense housing projects awarded over the past few years, considering regional construction cost variations and the specific amenities required for military families.

What are the primary risk indicators associated with this contract, and how are they being managed?

The primary risk indicators for this contract revolve around the potential for cost overruns and schedule delays inherent in large-scale construction projects. The firm fixed-price contract type, while offering cost certainty, can become a risk if unforeseen site conditions or material price escalations occur, potentially leading to change orders or contractor claims. Managing these risks would involve robust project oversight from the Department of the Army, including regular site inspections, progress reviews, and diligent management of any potential change requests. The contractor, RMR Joint Venture, is responsible for managing their own risks related to labor, materials, and subcontractors. Proactive risk mitigation strategies, contingency planning, and clear communication channels between the government and the contractor are essential for successful project completion.

What is the expected effectiveness of the new housing in improving the quality of life and retention for military personnel at Minot AFB?

The construction of new single-family housing units is expected to significantly improve the quality of life for military personnel and their families stationed at Minot AFB. Modern, well-maintained housing is a critical factor in morale, family well-being, and overall job satisfaction. By providing updated accommodations, the Department of Defense aims to enhance the attractiveness of assignments at Minot AFB, potentially contributing to improved retention rates and reducing personnel turnover. The effectiveness will be measured not only by the physical quality of the housing but also by its impact on the daily lives of service members and their families, contributing to a more stable and supportive environment.

How has historical spending on family housing construction at Minot AFB or similar installations trended over the past five years?

Historical spending data on family housing construction at Minot AFB or similar installations is not provided in the abbreviated data. To analyze this trend, one would need to access historical contract databases (like FPDS-NG) and filter for contracts related to family housing construction at Minot AFB and comparable Air Force bases. Examining the number of contracts awarded, their total values, and the types of construction (new build, renovation) over the last five years would reveal spending patterns. This analysis could identify periods of increased investment, potential budget fluctuations, and the average scale of housing projects, providing context for the current $43.2 million award.

Industry Classification

NAICS: Construction › Residential Building Construction › New Single-Family Housing Construction (except For-Sale Builders)

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: W9128F05R0046

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1800 VALLEY ST, MINOT, ND, 00

Business Categories: Category Business, Small Business

Financial Breakdown

Contract Ceiling: $43,212,807

Exercised Options: $43,212,807

Current Obligation: $43,212,807

Contract Characteristics

Cost or Pricing Data: NO

Timeline