DOD Awards $165M for Minot Housing, Facing Potential Cost Overruns
Contract Overview
Contract Amount: $165,261,960 ($165.3M)
Contractor: RMR Joint Venture
Awarding Agency: Department of Defense
Start Date: 2007-05-17
End Date: 2014-06-04
Contract Duration: 2,575 days
Daily Burn Rate: $64.2K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Construction
Official Description: M REPLACE FMLY HSG MINOT PHASE 13
Place of Performance
Location: MINOT, WARD County, NORTH DAKOTA, 58701
Plain-Language Summary
Department of Defense obligated $165.3 million to RMR JOINT VENTURE for work described as: M REPLACE FMLY HSG MINOT PHASE 13 Key points: 1. Significant investment in military family housing infrastructure. 2. Competition was full and open, suggesting potential for competitive pricing. 3. Project duration is long, increasing risk of cost escalation and scope creep. 4. Construction sector is subject to material and labor cost volatility.
Value Assessment
Rating: questionable
The award of $165.26 million for housing construction appears substantial. Benchmarking against similar large-scale military housing projects is necessary to determine if the pricing is competitive, especially given the long duration and potential for cost increases.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which typically facilitates price discovery and competitive bidding. However, the long contract duration (2575 days) could allow for significant price adjustments over time, potentially eroding initial cost savings.
Taxpayer Impact: Taxpayer funds are being used for essential military family housing. While competition is positive, the long-term nature of the contract necessitates careful monitoring to ensure value for money and prevent excessive cost growth.
Public Impact
Provides much-needed housing for military families at Minot Air Force Base. Supports the construction industry and associated jobs in North Dakota. Long-term project may impact local infrastructure and community resources during its execution.
Waste & Efficiency Indicators
Waste Risk Score: 60 / 10
Warning Flags
- Long contract duration increases risk of cost overruns.
- Potential for material and labor price fluctuations over 7 years.
- Lack of small business participation noted.
Positive Signals
- Full and open competition utilized.
- Addresses critical need for family housing.
- Firm fixed price contract structure provides some cost certainty.
Sector Analysis
This contract falls within the construction sector, specifically new single-family housing. Large-scale government construction projects often face challenges related to material costs, labor availability, and project management over extended periods. Benchmarks for similar military housing projects would provide further context.
Small Business Impact
The data indicates that small businesses were not involved in this contract (ss: false, sb: false). This represents a missed opportunity to support small business participation in federal contracting, particularly in the construction sector.
Oversight & Accountability
Oversight will be critical given the contract's long duration and the potential for cost escalation. The Department of Defense and the Army must ensure robust contract management, regular performance reviews, and timely identification of any deviations from the planned schedule or budget.
Related Government Programs
- New Single-Family Housing Construction (except For-Sale Builders)
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Long contract duration (2575 days).
- Potential for material and labor cost escalation.
- No small business participation.
- Project spans multiple fiscal years, requiring sustained funding.
- Geographic location may present logistical challenges.
Tags
new-single-family-housing-construction-e, department-of-defense, nd, dca, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $165.3 million to RMR JOINT VENTURE. M REPLACE FMLY HSG MINOT PHASE 13
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 $165.3 million.
What is the period of performance?
Start: 2007-05-17. End: 2014-06-04.
What is the projected cost per housing unit, and how does it compare to similar military housing projects completed recently?
The total award is $165.26 million over 2575 days. Without knowing the exact number of units, a precise per-unit cost cannot be calculated. However, this figure should be benchmarked against recent military housing construction contracts to assess its competitiveness and identify potential cost efficiencies or overruns.
What specific risks are associated with the 7-year duration of this construction project, and what mitigation strategies are in place?
The primary risks of a 7-year duration include significant fluctuations in material and labor costs, potential for outdated construction methods or materials by project end, and increased likelihood of scope creep or design changes. Mitigation strategies should include robust contingency planning, regular contract reviews, and clear change order protocols.
How effectively will the Department of the Army ensure this project delivers value for money given the long timeline and potential for unforeseen challenges?
Effective value delivery hinges on stringent oversight, proactive risk management, and transparent reporting. The Army must employ experienced project managers, conduct regular site inspections, and maintain open communication with the contractor to address issues promptly. Performance metrics and clear deliverables are essential to track progress and ensure accountability.
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: W9128F07R0008
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 1800 VALLEY ST, MINOT, ND, 00
Business Categories: Category Business, Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $165,261,960
Exercised Options: $165,261,960
Current Obligation: $165,261,960
Contract Characteristics
Cost or Pricing Data: NO
Timeline
Start Date: 2007-05-17
Current End Date: 2014-06-04
Potential End Date: 2014-06-04 00:00:00
Last Modified: 2014-06-04
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