DOD awards $10.1M for Ellsworth construction management, raising value-for-money questions

Contract Overview

Contract Amount: $10,135,663 ($10.1M)

Contractor: Paragon-Jacobs Joint Venture, LLC

Awarding Agency: Department of Defense

Start Date: 2024-03-25

End Date: 2026-03-25

Contract Duration: 730 days

Daily Burn Rate: $13.9K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: ELLSWORTH CONSTRUCTION MANAGEMENT SERVICES

Place of Performance

Location: ELLSWORTH AFB, MEADE County, SOUTH DAKOTA, 57706

State: South Dakota Government Spending

Plain-Language Summary

Department of Defense obligated $10.1 million to PARAGON-JACOBS JOINT VENTURE, LLC for work described as: ELLSWORTH CONSTRUCTION MANAGEMENT SERVICES Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. Limited competition raises concerns about achieving optimal value for taxpayer funds. 3. The contract duration of 730 days suggests a significant, long-term project requirement. 4. Fixed-price contract type aims to control costs, but sole-source nature may negate savings. 5. The engineering services sector is competitive, making the lack of competition notable. 6. Performance period aligns with potential construction phases, indicating a need for ongoing oversight.

Value Assessment

Rating: questionable

Benchmarking the value of this sole-source contract is challenging due to the lack of competitive bids. The awarded amount of $10.1 million for engineering services over two years requires careful scrutiny. Without comparable contract data or a competitive bidding process, it's difficult to definitively assess if this represents a fair market price. The fixed-price nature is a positive indicator for cost control, but the absence of competition is a significant detractor from overall value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor was solicited. This significantly limits the opportunity for price discovery and competitive negotiation. While sole-source awards can be justified in specific circumstances (e.g., unique capabilities, urgent needs), the lack of competition here raises concerns about whether the government secured the best possible price and value. The absence of multiple bidders means potential cost savings that could arise from a competitive environment were not realized.

Taxpayer Impact: Taxpayers may have paid a premium due to the lack of competitive bidding. Without alternative offers, there's less assurance that the price reflects true market value, potentially leading to less efficient use of public funds.

Public Impact

The Department of the Army benefits from specialized engineering services for construction management. Services are likely to support infrastructure development or maintenance at Ellsworth. The contract's geographic impact is focused on South Dakota, where Ellsworth is located. The contract supports a firm-fixed-price model, providing cost certainty for the government. This award contributes to the specialized engineering services sector, supporting skilled labor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential savings.
Lack of transparency in the procurement process due to sole-source nature.
Potential for cost overruns if the sole-source price is not market-aligned.
Limited opportunity for small businesses to participate as prime contractors.

Positive Signals

Fixed-price contract type provides cost certainty.
Contract duration aligns with project needs, ensuring continuity.
Awarded to a joint venture, potentially leveraging diverse expertise.

Sector Analysis

The engineering services sector (NAICS 541330) is a critical component of the construction and defense industries, providing specialized design, consulting, and management expertise. The market is characterized by a mix of large, established firms and smaller, specialized consultancies. Federal spending in this area often supports major infrastructure projects, military base development, and complex research and development initiatives. This contract fits within the broader category of federal support for military infrastructure and base operations.

Small Business Impact

The contract data indicates that small business participation was not a primary consideration, as the 'sb' (small business) flag is false and the contract was sole-source. This means small businesses were not specifically targeted for set-aside or subcontracting opportunities through a competitive process. While the prime contractor is a joint venture, which could include small business members, the overall structure does not appear to prioritize small business engagement. This limits the direct impact on the small business ecosystem for this specific award.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. As a sole-source award, transparency might be reduced compared to a fully competed contract. Accountability measures would be embedded in the contract's performance work statement and delivery schedules. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Military Construction
Base Operations Support
Engineering and Architectural Services
Department of Defense Procurement

Risk Flags

Sole-source award
Limited competition
Potential for non-competitive pricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $10.1 million to PARAGON-JACOBS JOINT VENTURE, LLC. ELLSWORTH CONSTRUCTION MANAGEMENT SERVICES

Who is the contractor on this award?

The obligated recipient is PARAGON-JACOBS JOINT VENTURE, 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 $10.1 million.

What is the period of performance?

Start: 2024-03-25. End: 2026-03-25.

What is the track record of PARAGON-JACOBS JOINT VENTURE, LLC with federal contracts, particularly in engineering services?

A comprehensive review of federal contract databases would be necessary to fully assess the track record of PARAGON-JACOBS JOINT VENTURE, LLC. However, preliminary analysis suggests they have experience with federal projects. For this specific contract, the sole-source nature means the government has pre-selected this entity, implying a perceived capability or existing relationship. Further investigation would involve examining past performance reviews, contract values, and types of services rendered to gauge their reliability and expertise in delivering similar engineering management services, especially within defense contexts. Understanding their history with cost control and schedule adherence on previous federal awards would be crucial for evaluating the risk associated with this current $10.1 million contract.

How does the $10.1 million contract value compare to similar engineering services contracts awarded by the Department of the Army or other DoD components?

Comparing the $10.1 million contract value requires analyzing the scope of work and duration against similar federal engineering services contracts. For a 730-day (2-year) firm-fixed-price contract for construction management services, this amount appears within a reasonable range for large-scale projects. However, without detailed scope information, direct comparisons are difficult. Contracts for similar services at other military installations or for comparable infrastructure projects could serve as benchmarks. The sole-source nature complicates this comparison, as competitive bids often drive prices down. A thorough benchmark analysis would involve identifying contracts with similar NAICS codes (541330), durations, and agencies, while accounting for regional cost variations and the specific complexities of Ellsworth Air Force Base's needs.

What are the primary risks associated with awarding a $10.1 million contract on a sole-source basis?

The primary risk associated with a sole-source award of $10.1 million is the potential for paying a non-competitive price, leading to reduced value for taxpayer money. Without competition, there is less incentive for the contractor to offer the lowest possible price. Another significant risk is the lack of assurance that the selected contractor is the most capable or offers the best overall solution; alternative vendors might have provided superior technical approaches or more efficient management strategies. Furthermore, sole-source awards can create a perception of favoritism or lack of transparency, potentially undermining public trust. Finally, if the contractor's performance falters, the government has limited leverage compared to a situation where multiple bidders were vying for the contract.

What specific engineering services are included under this contract, and how do they contribute to the Army's mission at Ellsworth?

The provided data indicates the contract is for 'Engineering Services' (NAICS 541330) and specifically mentions 'Ellsworth Construction Management Services.' This suggests the contract likely encompasses a range of activities crucial for overseeing and managing construction projects at Ellsworth Air Force Base. These services could include project planning, design review, construction oversight, quality assurance, scheduling, cost control, and coordination with various stakeholders. Such services are vital for ensuring that infrastructure projects, whether new construction or renovations, are completed on time, within budget, and to required specifications, directly supporting the operational readiness and infrastructure needs of the Army (or Air Force, if Ellsworth is an Air Force base, which it is) personnel stationed there.

What is the historical spending pattern for engineering services at Ellsworth Air Force Base, and how does this $10.1M award fit in?

Analyzing historical spending patterns for engineering services at Ellsworth Air Force Base requires access to detailed federal procurement data over several fiscal years. This $10.1 million award for construction management services represents a significant investment. To understand its context, one would need to examine previous contracts for similar services at the base, noting their values, durations, and whether they were competed or sole-sourced. If previous awards were smaller, competed more broadly, or resulted in demonstrably better value, this current sole-source award might appear anomalous or require stronger justification. Conversely, if Ellsworth has consistently required large-scale, specialized construction management support, this award might align with established spending trends, though the sole-source aspect remains a key point of analysis.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: ARCHITECT/ENGINEER SERVICES › ARCH-ENG SVCS - GENERAL

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W9128F22R0045

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3301 C STREET, SUITE 400, ANCHORAGE, AK, 99503

Business Categories: Alaskan Native Corporation Owned Firm, Category Business, Corporate Entity Not Tax Exempt, Minority Owned Business, Native American Owned Business, SBA Certified 8 a Joint Venture, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $15,972,913

Exercised Options: $10,135,663

Current Obligation: $10,135,663

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W9128F22D0041

IDV Type: IDC

Timeline