DoD's $15.5M Fort Berthold Healthcare Facility Construction Contract Awarded to Terry L. Marion

Contract Overview

Contract Amount: $15,497,856 ($15.5M)

Contractor: Terry L Marion

Awarding Agency: Department of Defense

Start Date: 2009-09-09

End Date: 2011-10-14

Contract Duration: 765 days

Daily Burn Rate: $20.3K/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: C - PROJECT N. 151372 - CONSTRUCT ELBOWOODS HEALTH CARE FAC, FORT BERTHOLD RESERVATION, LAKE SAKAKAWEA, ND

Place of Performance

Location: NEW TOWN, MOUNTRAIL County, NORTH DAKOTA, 58763

State: North Dakota Government Spending

Plain-Language Summary

Department of Defense obligated $15.5 million to TERRY L MARION for work described as: C - PROJECT N. 151372 - CONSTRUCT ELBOWOODS HEALTH CARE FAC, FORT BERTHOLD RESERVATION, LAKE SAKAKAWEA, ND Key points: 1. The contract was awarded under full and open competition, suggesting a competitive bidding process. 2. The firm-fixed-price contract type indicates that the contractor bears the risk of cost overruns. 3. The project duration of 765 days points to a significant construction undertaking. 4. The contract was awarded by the Department of the Army, part of the Department of Defense. 5. The project is located in North Dakota, near Lake Sakakawea. 6. The North American Industry Classification System (NAICS) code 236220 signifies commercial and institutional building construction.

Value Assessment

Rating: fair

Benchmarking the value of this specific contract is challenging without comparable projects in the immediate vicinity or detailed cost breakdowns. The award amount of $15.5 million for a healthcare facility construction project of this scale and duration appears within a reasonable range for federal construction contracts. However, a deeper analysis of the contractor's past performance and the specific scope of work would be necessary for a more definitive value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES.' While this indicates an initial intent for broad competition, the 'exclusion of sources' clause suggests that certain potential bidders may have been disqualified or excluded based on specific criteria. The presence of 4 bids indicates a degree of competition, but the exclusion clause warrants further investigation into its justification and impact on the overall competitiveness.

Taxpayer Impact: The use of full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to lower prices. However, the exclusion of sources could potentially limit the number of competitive bids received, which might have an impact on price discovery and potentially lead to higher costs than if all qualified sources were allowed to compete.

Public Impact

The primary beneficiaries are likely the military personnel and their families stationed at or near Fort Berthold, who will gain access to improved healthcare facilities. The project delivers essential infrastructure in the form of a new healthcare facility, enhancing medical service capabilities. The geographic impact is concentrated in North Dakota, specifically around the Fort Berthold Reservation and Lake Sakakawea area. The construction phase will likely create temporary employment opportunities for skilled trades and laborers in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'exclusion of sources' clause in the competition method requires scrutiny to ensure it was justified and did not unduly limit competition.
Lack of detailed cost breakdowns makes it difficult to assess the granular value for money within the awarded price.
The contractor's specific track record on similar-sized healthcare construction projects is not detailed, posing a potential performance risk.
The long duration of the contract (765 days) increases the potential for unforeseen challenges or cost escalations, despite the fixed-price nature.

Positive Signals

The contract was awarded using a firm-fixed-price structure, which shifts cost overrun risks to the contractor.
The award went through a competitive process, with four bids received, indicating some level of market interest.
The project is managed by the Department of the Army, a large federal agency with established procurement processes.
The project addresses a clear need for healthcare infrastructure, suggesting a well-defined requirement.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the construction industry. Federal spending in this sector often involves large-scale projects for government facilities, including healthcare, administrative, and research buildings. Comparable spending benchmarks would typically involve analyzing the cost per square foot or per bed for similar healthcare facilities constructed by federal agencies or large private institutions, considering regional labor and material costs.

Small Business Impact

There is no indication from the provided data that this contract included a small business set-aside. The contract was awarded to Terry L. Marion, and further investigation would be needed to determine if this is a small or large business. Subcontracting opportunities for small businesses may exist within the execution of this project, but this is not explicitly stated in the award details. The impact on the small business ecosystem would depend on the size of the prime contractor and the extent of their subcontracting plans.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and project management offices. Accountability measures are inherent in the firm-fixed-price contract type, which holds the contractor responsible for delivering the project within the agreed-upon price. Transparency is generally facilitated through federal procurement databases like FPDS-NG, where contract awards are recorded. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Military Construction Projects
Healthcare Facility Construction
Department of Defense Contracts
Indian Health Service Facilities

Risk Flags

Potential for limited competition due to 'exclusion of sources'.
Risk of cost escalation or performance issues due to long project duration (765 days).
Uncertainty regarding contractor's specific experience with similar healthcare facilities.
Lack of detailed cost breakdown for value-for-money assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $15.5 million to TERRY L MARION. C - PROJECT N. 151372 - CONSTRUCT ELBOWOODS HEALTH CARE FAC, FORT BERTHOLD RESERVATION, LAKE SAKAKAWEA, ND

Who is the contractor on this award?

The obligated recipient is TERRY L MARION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $15.5 million.

What is the period of performance?

Start: 2009-09-09. End: 2011-10-14.

What is the specific justification for excluding certain sources in the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' award method?

The 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' method implies that while the solicitation was broadly advertised, specific potential offerors were excluded from consideration. The justification for such exclusions typically stems from reasons like non-compliance with mandatory minimum requirements, failure to meet pre-qualification criteria, or specific national security concerns. Without access to the solicitation documents and award decision rationale, it is impossible to determine the precise reasons for exclusion in this case. However, such clauses can sometimes limit the competitive landscape, potentially impacting the final price achieved for the government. A thorough review of the contracting officer's determination and findings (D&F) would be necessary to understand the rationale and assess its validity.

How does the awarded price of $15.5 million compare to similar federal healthcare facility construction projects in North Dakota or the surrounding region?

Directly comparing the $15.5 million award to similar federal healthcare facility construction projects in North Dakota or the surrounding region is challenging without access to a comprehensive database of comparable projects with detailed cost breakdowns and scope of work. Factors such as facility size (square footage), number of beds, specific medical equipment included, complexity of systems (e.g., HVAC, plumbing, electrical), and prevailing regional labor and material costs significantly influence project pricing. Generally, federal construction projects are subject to stringent cost controls and competitive bidding, which aim to secure fair market value. However, isolated projects or those in remote locations can sometimes experience higher costs due to logistical challenges or limited local contractor availability. A detailed cost-per-square-foot analysis, adjusted for regional economic factors, would be the most effective method for benchmarking, but this data is not readily available from the provided summary.

What is Terry L. Marion's track record with similar-sized federal construction contracts, particularly healthcare facilities?

Assessing Terry L. Marion's track record with similar-sized federal construction contracts, especially healthcare facilities, requires accessing detailed contract performance history. This would typically involve reviewing past awards, contract values, project durations, and any performance evaluations or past performance questionnaires (PPQs) associated with their previous federal work. Without this specific data, it's difficult to definitively gauge their experience and reliability for a project of this magnitude ($15.5 million). Federal agencies often use past performance as a key evaluation factor in source selection. If Terry L. Marion has a history of successfully completing similar projects on time and within budget, it would indicate a lower performance risk. Conversely, a history of delays, cost overruns, or negative performance reviews would raise concerns.

What are the potential risks associated with a 765-day (over two years) construction timeline for this healthcare facility?

A 765-day construction timeline, approximately two years, for a healthcare facility presents several potential risks. Firstly, the extended duration increases the likelihood of encountering unforeseen site conditions (e.g., soil issues, hazardous materials) that could lead to change orders and cost increases, even under a firm-fixed-price contract. Secondly, material and labor costs can fluctuate significantly over a two-year period, potentially impacting the contractor's profitability and, indirectly, the government if change orders are necessitated by market volatility not covered by contract contingencies. Thirdly, regulatory requirements or building codes may change during the construction period, requiring costly modifications. Finally, a longer timeline can also introduce risks related to contractor performance degradation, loss of key personnel, or shifts in project priorities for the contracting agency. Robust project management, clear communication, and proactive risk mitigation strategies are crucial for managing these extended timelines.

How does the firm-fixed-price contract type influence the government's financial exposure and the contractor's risk on this project?

The firm-fixed-price (FFP) contract type places the primary financial risk on the contractor. Under an FFP agreement, the contractor is obligated to complete the specified scope of work for a predetermined price, regardless of their actual costs incurred. This means that if the contractor's expenses exceed the agreed-upon price due to poor estimating, inefficient performance, or rising material/labor costs, they absorb those losses. Conversely, if the contractor manages costs effectively and completes the project under budget, they realize a higher profit margin. For the government, the FFP structure provides cost certainty, as the total price is fixed unless changes to the scope of work are formally negotiated and approved through contract modifications. This reduces the government's exposure to cost overruns but requires careful initial scope definition and pricing to ensure fairness and prevent the contractor from taking on excessive risk that could lead to performance issues or bankruptcy.

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: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W9128F09R0069

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 9737 29M AVE NE, DUNSEITH, ND, 58329

Business Categories: 8(a) Program Participant, American Indian Owned Business, Category Business, DoT Certified Disadvantaged Business Enterprise, Emerging Small Business, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Sole Proprietorship, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $16,110,756

Exercised Options: $15,497,856

Current Obligation: $15,497,856

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline