DoD awards $8.6M construction contract to Markon LLC, raising questions about value and competition

Contract Overview

Contract Amount: $8,647,415 ($8.6M)

Contractor: Markon LLC

Awarding Agency: Department of Defense

Start Date: 2021-09-24

End Date: 2026-06-30

Contract Duration: 1,740 days

Daily Burn Rate: $5.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: CNS & MGMT SUPPORT (BASE YEAR)

Place of Performance

Location: AURORA, ARAPAHOE County, COLORADO, 80011

State: Colorado Government Spending

Plain-Language Summary

Department of Defense obligated $8.6 million to MARKON LLC for work described as: CNS & MGMT SUPPORT (BASE YEAR) Key points: 1. The contract's value appears reasonable given the duration and scope, but detailed benchmarking is needed. 2. Full and open competition was utilized, suggesting a potentially competitive bidding process. 3. The fixed-price contract type mitigates cost overrun risks for the government. 4. Performance is being tracked by the Department of the Army, indicating specific oversight. 5. This contract falls within the broader construction and facilities management sector for defense. 6. The contract's duration of nearly five years warrants scrutiny of long-term cost-effectiveness.

Value Assessment

Rating: fair

The contract value of $8.6 million over approximately 4.8 years (1740 days) averages to roughly $1.8 million per year. Without specific details on the scope of construction and management support, direct comparison is difficult. However, this annual figure is within a plausible range for significant facility projects. The benchmarked value of $4,970 (br) is unclear in its context and requires further explanation to assess pricing accuracy. Further analysis of the specific deliverables and market rates for similar services in Colorado would be necessary for a more definitive value assessment.

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. The presence of 3 bids (no) suggests a degree of competition, though the optimal number for price discovery can vary. A higher number of bidders typically leads to more competitive pricing, but the quality and relevance of the bids are also crucial factors. The specific details of the bidding process and the evaluation criteria used would provide further insight into the effectiveness of the competition.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down prices and improve the quality of services received. It ensures that the government is not limited to a single provider, increasing the likelihood of obtaining the best value.

Public Impact

The Department of Defense, specifically the Department of the Army, is the primary beneficiary, receiving construction and management support services. The contract supports the maintenance and potentially the development of military facilities. Services are being delivered in Colorado (sn), impacting the local economy and workforce. The contract likely supports jobs in the construction and facility management sectors within the specified geographic area.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of detailed scope of work makes it difficult to assess if the $8.6M is competitive.
The long contract duration (nearly 5 years) could lead to price escalation or reduced flexibility if needs change.
The benchmarked value (br: 4970) is not clearly defined and needs context for proper evaluation.
Limited information on contractor past performance for similar large-scale DoD projects.

Positive Signals

Awarded under full and open competition, maximizing potential bidder pool.
Fixed-price contract type helps control government costs.
Awarded by the Department of the Army, a major defense entity with established procurement processes.
Contract includes base year plus options, allowing for phased funding and potential adjustments.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction (NAICS 236220) sector, a significant segment of the broader construction industry. The federal government is a major consumer of construction services, particularly for infrastructure, facilities, and specialized projects like those required by the Department of Defense. Market size for federal construction is substantial, with annual spending often in the tens of billions. This contract represents a specific instance of federal investment in facility maintenance and development, contributing to the overall spending within this sector.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a result, small businesses are unlikely to be direct recipients of this prime contract. However, there may be opportunities for small businesses to participate as subcontractors to the prime contractor, Markon LLC, depending on the specific requirements and subcontracting plans outlined in the contract. The extent of small business subcontracting will be a key factor in assessing the broader impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract is managed by the Department of the Army. As a delivery order under a larger contract vehicle, the specific oversight mechanisms may be detailed within the parent contract's terms. Transparency is facilitated through contract award databases, but detailed performance reports and specific Inspector General (IG) involvement would require further investigation into the contract's lifecycle and any issued task orders. The fixed-price nature of the contract provides some level of cost control, but ongoing monitoring of performance and adherence to scope is crucial.

Related Government Programs

Department of Defense Facilities Construction
Army Corps of Engineers Construction Contracts
General Building Construction Services
Commercial and Institutional Building Construction
Federal Construction Contracts
Base Operations Support Contracts

Risk Flags

Potential for cost escalation over long contract duration.
Ambiguity in benchmarked value requires clarification.
Need for detailed scope of work to assess value for money.
Limited information on contractor's specific past performance for similar projects.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $8.6 million to MARKON LLC. CNS & MGMT SUPPORT (BASE YEAR)

Who is the contractor on this award?

The obligated recipient is MARKON LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $8.6 million.

What is the period of performance?

Start: 2021-09-24. End: 2026-06-30.

What is the specific scope of 'CNS & MGMT SUPPORT (BASE YEAR)' and how does it align with the $8.6 million award value?

The provided data abbreviates the scope as 'CNS & MGMT SUPPORT (BASE YEAR)' and lists the award value as $8,647,414.70. This suggests the contract covers base year operations and management support, likely related to construction or facilities. However, the acronym 'CNS' is not explicitly defined in the provided snippet, leaving ambiguity. To assess the value, a detailed breakdown of the services included under 'CNS & MGMT SUPPORT' is necessary. This would involve understanding the specific tasks, deliverables, labor hours, material costs, and overhead associated with the contract. Without this granular detail, it's challenging to benchmark the $8.6 million against industry standards for similar support services, especially considering the contract duration extends to June 2026.

How does the benchmarked value (br: 4970) relate to the total contract award and what does it signify?

The provided data includes a 'br' field with a value of '4970'. The meaning of this benchmarked value is not immediately clear from the provided snippet. It could represent a cost per square foot, a cost per unit of service, or a comparison to a specific industry benchmark index. If it represents a cost per unit, and the total contract value is $8.6 million, then the number of units procured would be approximately $8.6M / $4970 ≈ 1730 units. Alternatively, if '4970' is a benchmark index or a specific cost component, its relevance to the overall $8.6 million award needs further clarification. Understanding the context and calculation methodology behind this benchmark is crucial for assessing the contract's value for money.

What is Markon LLC's track record with similar large-scale construction and management support contracts for the Department of Defense?

Assessing Markon LLC's track record is crucial for understanding the potential risks and performance reliability associated with this $8.6 million contract. Information regarding their past performance on similar Department of Defense (DoD) contracts, particularly those involving construction and management support, would provide valuable insights. This includes examining the size and complexity of previous projects, client satisfaction, adherence to schedule and budget, and any history of disputes or contract modifications. A review of federal procurement databases and contractor performance assessment reports (CPARS) would be necessary to gather this information. A strong track record suggests a lower risk of performance issues, while a history of challenges might indicate potential concerns for this current award.

Given the 'full and open competition' and 3 bids received, what is the likely impact on pricing and overall value for taxpayers?

The award of this $8.6 million contract under 'full and open competition' with 3 bids suggests a potentially competitive environment. Full and open competition theoretically allows any qualified vendor to bid, maximizing the pool of potential offerors and encouraging competitive pricing. The fact that 3 bids were received indicates that there was interest from multiple companies. Generally, a higher number of bids correlates with better price discovery and potentially lower prices for the government. However, the quality and competitiveness of those 3 bids are critical. If the bids were closely aligned or if the scope was highly specialized, the competition might have been less intense than if there were numerous, diverse offers. For taxpayers, this level of competition aims to ensure that the government is not overpaying and is receiving services at a fair market price.

What are the potential risks associated with the long contract duration (2021-2026) for construction and management support services?

A contract duration spanning from September 24, 2021, to June 30, 2026 (approximately 4 years and 9 months) presents several potential risks. Firstly, the cost of materials and labor in the construction sector can fluctuate significantly over such a period, potentially impacting the fixed-price nature of the contract if not adequately accounted for in the initial pricing. Secondly, the needs and priorities of the Department of the Army could evolve, making the originally defined scope of support less relevant or requiring costly modifications. Thirdly, long-term contracts can sometimes reduce flexibility for the government to adopt new technologies or more efficient methods that emerge during the contract period. Finally, maintaining consistent oversight and ensuring sustained performance quality over an extended duration requires diligent management.

How does this contract fit within the broader context of federal spending on construction and facilities management for the Department of Defense?

This $8.6 million contract for construction and management support is a component of the Department of Defense's (DoD) substantial annual spending on facilities and infrastructure. The DoD is one of the largest federal agencies, with a vast portfolio of real property requiring ongoing maintenance, repair, and new construction. Federal spending in the construction sector, particularly for defense, often runs into tens of billions of dollars annually. Contracts like this one, even if seemingly large individually, represent a fraction of the total DoD facilities budget. Understanding this contract's place within the larger DoD spending picture helps contextualize its significance and assess whether its value aligns with broader spending patterns and priorities for military infrastructure.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 400 S MAPLE AVE, FALLS CHURCH, VA, 22046

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

Financial Breakdown

Contract Ceiling: $8,647,415

Exercised Options: $8,647,415

Current Obligation: $8,647,415

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS00F0012Y

IDV Type: FSS

Timeline