Army awards $27.5M for WWTP construction, exceeding initial estimates by $3M

Contract Overview

Contract Amount: $27,456,063 ($27.5M)

Contractor: Ulliman Schutte Construction, LLC

Awarding Agency: Department of Defense

Start Date: 2013-09-23

End Date: 2016-03-05

Contract Duration: 894 days

Daily Burn Rate: $30.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: EA WWTP BASE BID

Place of Performance

Location: GUNPOWDER, HARFORD County, MARYLAND, 21010

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $27.5 million to ULLIMAN SCHUTTE CONSTRUCTION, LLC for work described as: EA WWTP BASE BID Key points: 1. Contract value significantly surpassed the initial estimate, indicating potential cost overruns or scope changes. 2. The award was made under full and open competition, suggesting a robust bidding process. 3. The contractor, ULLIMAN SCHUTTE CONSTRUCTION, LLC, has a history of large-scale construction projects. 4. The project duration of 894 days points to a complex and lengthy construction undertaking. 5. The firm-fixed-price contract type shifts cost risk to the contractor, but potential for change orders exists. 6. The North American Industry Classification System (NAICS) code 237110 identifies the contract's focus on water and sewer infrastructure.

Value Assessment

Rating: fair

The final award amount of $27,456,063.03 is approximately 12% higher than the initial estimate of $24,384,950. This suggests that either the initial estimate was conservative, or unforeseen complexities arose during the bidding or planning phases. Without more detailed cost breakdowns, it's difficult to definitively assess value for money. However, the firm-fixed-price nature of the contract provides some cost certainty for the government, assuming no significant change orders.

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 a bid. The presence of 3 bids suggests a reasonable level of competition for this type of specialized construction project. A higher number of bidders might have potentially driven the price down further, but three bids generally provide a basis for price comparison and negotiation.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages multiple companies to bid, potentially leading to lower prices and better terms for the government.

Public Impact

The primary beneficiaries are the military personnel and their families stationed at the facility requiring the upgraded wastewater treatment plant. The contract delivers essential infrastructure improvements for wastewater management, ensuring environmental compliance and public health. The geographic impact is localized to the specific military installation in Maryland. The project likely created temporary construction jobs in the Maryland region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns beyond the initial estimate.
Scope creep could increase the final cost if not managed tightly.
Contractor performance risks associated with large-scale infrastructure projects.

Positive Signals

Awarded under full and open competition, indicating a competitive bidding process.
Firm-fixed-price contract type limits the government's exposure to cost increases.
The contractor has experience in large construction projects.

Sector Analysis

This contract falls within the construction sector, specifically focusing on heavy civil engineering and infrastructure. The NAICS code 237110 covers the construction of water and sewer lines and related structures. The market for such projects is often specialized, involving a limited number of large construction firms capable of undertaking complex government contracts. Comparable spending benchmarks would typically be found in other large-scale public works projects for water and wastewater treatment facilities.

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 primary award went to a large business. The lack of small business set-aside or specific subcontracting goals may limit the direct participation of small businesses in this particular contract, although they might be involved as lower-tier subcontractors.

Oversight & Accountability

As a definitive contract awarded by the Department of the Army, this project would be subject to standard federal procurement oversight mechanisms. This includes review by the agency's contracting officer, potential audits by the Defense Contract Audit Agency (DCAA), and oversight from the Department of Defense Inspector General. Transparency is generally maintained through contract award databases like FPDS, though detailed project-specific oversight reports are not always publicly available.

Related Government Programs

Military Construction
Environmental Infrastructure Projects
Water and Sewer System Construction
Department of Defense Facilities Management

Risk Flags

Cost variance from estimate
Potential for scope creep
Contractor performance risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $27.5 million to ULLIMAN SCHUTTE CONSTRUCTION, LLC. EA WWTP BASE BID

Who is the contractor on this award?

The obligated recipient is ULLIMAN SCHUTTE CONSTRUCTION, 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 $27.5 million.

What is the period of performance?

Start: 2013-09-23. End: 2016-03-05.

What was the initial estimated cost for the EA WWTP project, and how does the final award compare?

The initial estimated cost for the EA WWTP project was approximately $24,384,950. The final award amount was $27,456,063.03. This represents an increase of $3,071,113.03, or about 12.6% over the initial estimate. This difference could be attributed to various factors including market fluctuations in material costs, unforeseen site conditions, or adjustments in project scope during the procurement process. The firm-fixed-price contract type aims to cap the government's liability, but such variances from estimates warrant scrutiny.

How many bids were received for this contract, and what does this suggest about competition?

Three bids were received for this contract. This indicates a moderate level of competition. While more bidders could potentially lead to a lower price, three bids generally suggest that the market has sufficient capacity and interest to respond to such solicitations. For specialized heavy construction projects like wastewater treatment plants, three competitive bids can be considered a healthy outcome, providing a basis for price evaluation and ensuring that the selected contractor is competitive.

What is the significance of the contract type (Definitive Contract, Firm Fixed Price)?

A definitive contract is a contract that is completed and signed by authorized representatives of both parties. In this case, it signifies a finalized agreement. The 'Firm Fixed Price' (FFP) pricing structure is significant because it places the primary responsibility for cost control on the contractor. Under an FFP contract, the contractor agrees to a total price for a well-defined scope of work. If the contractor's costs exceed the agreed-upon price, their profit margin decreases. Conversely, if costs are lower than anticipated, their profit increases. This structure provides the government with cost certainty, assuming the scope of work remains stable and is not significantly altered by change orders.

What is the contractor's track record with similar projects?

ULLIMAN SCHUTTE CONSTRUCTION, LLC is the awarded contractor. While the provided data does not detail their specific track record with wastewater treatment plants or similar environmental infrastructure projects, their selection for a contract of this magnitude by the Department of the Army suggests they possess the necessary experience, financial capacity, and technical qualifications to undertake such work. Further due diligence would involve reviewing their past performance evaluations and project history.

How does the spending on this contract compare to historical spending on similar Army wastewater treatment projects?

The provided data does not include historical spending figures for similar Army wastewater treatment projects, making a direct comparison difficult. However, a $27.5 million contract for a wastewater treatment plant is a substantial investment, indicative of a significant infrastructure upgrade or new construction. To benchmark this spending, one would need to analyze the average cost of similar projects undertaken by the Army or other federal agencies over the past several years, considering factors like project scale, location, and complexity.

What are the potential risks associated with this contract, and what mitigation strategies are in place?

Potential risks include cost overruns (despite the FFP structure, change orders can occur), schedule delays due to unforeseen site conditions or contractor performance issues, and quality control failures. Mitigation strategies inherent in the contract include the FFP pricing, which incentivizes contractor efficiency. Additionally, government oversight, including contract administration, quality assurance inspections, and potentially the Defense Contract Audit Agency (DCAA) for cost reviews, are in place to monitor performance and manage risks. The number of bids also suggests a level of vetting during the selection process.

Industry Classification

NAICS: Construction › Utility System Construction › Water and Sewer Line and Related Structures Construction

Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR NONBUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W912BU13R0035

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 9111 SPRINGBORO PIKE, MIAMISBURG, OH, 45342

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

Financial Breakdown

Contract Ceiling: $27,456,063

Exercised Options: $27,456,063

Current Obligation: $27,456,063

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline