DoD awards $26.6M for tactical equipment facility construction in Colorado

Contract Overview

Contract Amount: $26,647,742 ($26.6M)

Contractor: HHI Corporation

Awarding Agency: Department of Defense

Start Date: 2023-07-21

End Date: 2025-10-27

Contract Duration: 829 days

Daily Burn Rate: $32.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: CONSTRUCT SOF TACTICAL EQUIPMENT MAINTENANCE FACILITY

Place of Performance

Location: COLORADO SPRINGS, EL PASO County, COLORADO, 80913

State: Colorado Government Spending

Plain-Language Summary

Department of Defense obligated $26.6 million to HHI CORPORATION for work described as: CONSTRUCT SOF TACTICAL EQUIPMENT MAINTENANCE FACILITY Key points: 1. Contract awarded to HHI Corporation for construction services. 2. Project aims to enhance tactical equipment maintenance capabilities. 3. Definitive contract type with a firm fixed price. 4. Duration of 829 days indicates a significant construction timeline. 5. Facility located in Colorado, supporting regional military readiness. 6. Construction falls under Commercial and Institutional Building Construction NAICS code. 7. No small business set-aside noted, suggesting a focus on larger prime contractors.

Value Assessment

Rating: good

The contract value of $26.6 million for a tactical equipment maintenance facility appears reasonable given the scope of construction. Benchmarking against similar large-scale institutional building projects suggests that the price is within expected ranges. The firm fixed-price structure provides cost certainty for the government, although it places the risk of cost overruns on the contractor. Without detailed cost breakdowns or comparisons to specific, directly analogous projects, a precise value-for-money assessment is challenging, but the award appears to be a fair price for the services rendered.

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 bids. The presence of two bids suggests a moderate level of competition for this project. While two bidders is better than a sole-source award, a higher number of bids would typically lead to more aggressive pricing and potentially better value for the government. The competition level here suggests that the market for this type of specialized construction is not overly saturated.

Taxpayer Impact: Full and open competition, even with two bidders, is generally favorable for taxpayers as it encourages competitive pricing. However, a limited number of bids may mean that taxpayers did not benefit from the most aggressive pricing achievable in a more robustly contested market.

Public Impact

The primary beneficiaries are the Department of Defense and its personnel who will utilize the new facility for tactical equipment maintenance. The services delivered include the construction of a specialized facility designed to support military operations. The geographic impact is concentrated in Colorado, enhancing local military readiness and potentially supporting the regional economy through construction jobs. Workforce implications include employment opportunities for construction workers, engineers, and project managers during the construction phase.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen construction challenges arise, given the firm fixed-price nature.
Dependence on a single prime contractor (HHI Corporation) for successful project completion.
Limited competition (2 bidders) may have resulted in a higher-than-optimal price.
Construction timelines can be subject to delays due to weather, supply chain issues, or site-specific problems.

Positive Signals

Firm fixed-price contract provides budget certainty for the government.
Full and open competition ensures a broad base of potential contractors were considered.
Award to HHI Corporation, assuming a track record of successful project delivery.
Project supports critical military maintenance functions, enhancing operational readiness.
Location in Colorado supports regional defense infrastructure.

Sector Analysis

The construction sector, particularly for specialized government facilities, is a significant part of the broader construction industry. This contract falls under commercial and institutional building construction, which includes a wide range of projects from office buildings to specialized industrial facilities. The market for military construction is often characterized by specific security, environmental, and operational requirements, which can limit the pool of qualified contractors. Comparable spending benchmarks for similar military facility construction projects would typically be in the multi-million dollar range, depending on size, complexity, and location.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of specific subcontracting requirements for small businesses in the provided data. This suggests that the prime contract was awarded to a larger entity capable of undertaking the full scope of the project. The absence of small business set-asides means that opportunities for small businesses would likely be through subcontracting, if HHI Corporation chooses to engage them. The impact on the small business ecosystem is neutral to potentially negative if small businesses are not actively included as subcontractors.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Army contracting and project management offices. Accountability measures are embedded in the firm fixed-price contract terms, requiring HHI Corporation to deliver the facility within the agreed-upon scope and price. Transparency is generally facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

Military Construction Program
Tactical Equipment Maintenance Facilities
Department of Defense Facilities Management
General Building Construction Services

Risk Flags

Potential for cost overruns under FFP if contractor mismanages risks.
Limited competition may impact price competitiveness.
Dependence on contractor performance for timely and quality delivery.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.6 million to HHI CORPORATION. CONSTRUCT SOF TACTICAL EQUIPMENT MAINTENANCE FACILITY

Who is the contractor on this award?

The obligated recipient is HHI CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $26.6 million.

What is the period of performance?

Start: 2023-07-21. End: 2025-10-27.

What is HHI Corporation's track record with similar Department of Defense construction projects?

HHI Corporation's track record with similar Department of Defense construction projects would need to be assessed through a review of their past performance evaluations and contract history. This would involve examining previous awards, project types, completion success rates, and any documented performance issues. A positive track record with comparable projects, especially those involving military facilities or specialized construction, would increase confidence in their ability to successfully execute this contract. Conversely, a history of delays, cost overruns, or quality issues on similar contracts would raise concerns about their suitability for this project.

How does the awarded price compare to industry benchmarks for similar tactical equipment maintenance facilities?

Comparing the $26.6 million award to industry benchmarks for similar tactical equipment maintenance facilities requires access to detailed cost data and market analysis reports. Factors such as square footage, complexity of systems (HVAC, electrical, security), site preparation requirements, and regional construction cost indices would be critical. Generally, large-scale institutional or industrial construction projects of this nature can range widely, but a facility of this type could plausibly fall within this price range. A more precise benchmark would involve analyzing cost-per-square-foot data for recently completed, comparable military or industrial construction projects in the Colorado region.

What are the primary risks associated with the firm fixed-price contract type for this project?

The primary risk associated with a firm fixed-price (FFP) contract for a construction project like this is the potential for cost overruns to be borne by the contractor, HHI Corporation. If unforeseen issues arise during construction (e.g., unexpected site conditions, material price escalations beyond projections, labor shortages), the contractor may incur losses if they cannot complete the project within the agreed-upon price. This risk can sometimes lead contractors to build higher contingency into their bids, potentially increasing the initial price. For the government, the main risk is that the contractor might cut corners on quality to manage costs, although quality assurance measures should mitigate this.

What is the expected impact of this facility on the operational readiness of the supported military units?

The construction of a new tactical equipment maintenance facility is expected to significantly enhance the operational readiness of the supported military units. Such a facility provides a dedicated, modern, and potentially more efficient space for the maintenance, repair, and servicing of critical tactical equipment. This can lead to reduced downtime for equipment, improved quality of repairs, and better organization of maintenance operations. Ultimately, by ensuring that equipment is well-maintained and readily available, the facility directly contributes to the ability of military units to deploy and execute their missions effectively.

How has spending on similar construction projects by the Department of the Army trended over the past five years?

Analyzing spending trends on similar construction projects by the Department of the Army over the past five years would require access to historical contract data. Generally, military construction spending can fluctuate based on defense budgets, modernization priorities, and infrastructure replacement needs. There might be an increasing trend if the Army is undertaking a significant modernization or recapitalization of its facilities. Conversely, spending could be stable or decreasing if existing infrastructure is deemed adequate or if priorities shift to other areas. Specific data would reveal whether this $26.6 million award is part of a larger investment or a standalone project.

What are the key performance indicators (KPIs) likely to be used to measure the success of this construction project?

Key performance indicators (KPIs) for this construction project would likely focus on schedule adherence, cost control (within the FFP framework), quality of workmanship, and safety compliance. Specific KPIs might include: completion by the scheduled end date (October 27, 2025), adherence to the $26.6 million budget, number of quality defects identified and rectified, incident rates for workplace safety, and successful completion of all specified construction requirements and inspections. Meeting these KPIs ensures the facility is delivered on time, within budget, and to the required standards.

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

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W9128F22R0086

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 736 W HARRISVILLE RD, OGDEN, UT, 84404

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

Financial Breakdown

Contract Ceiling: $26,647,742

Exercised Options: $26,647,742

Current Obligation: $26,647,742

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline