Army awards $10.9M for Tinker AFB construction, exceeding initial estimates by $3.7M

Contract Overview

Contract Amount: $10,879,948 ($10.9M)

Contractor: Mcmaster Construction Inc

Awarding Agency: Department of Defense

Start Date: 2006-03-30

End Date: 2010-04-08

Contract Duration: 1,470 days

Daily Burn Rate: $7.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: 200607!600458!2100!W912BV!USA ENGINEER DISTRICT TULSA !W912BV06C2007 !A!N! !N! ! !20060330!20070622!131071060!131071060!131071060!N!MCMASTER CONSTRUCTION INC !138 NE 46TH ST !OKLAHOMA CITY !OK!73105!73800!017!40!TINKER AFB !CANADIAN !OKLAHOMA !+000009824279!N!N!000000000000!Y127!ELECTRONIC & COMMUNICATION FACILITIES !C2 !CONSTRUCTION !000 !NOT DISCERNABLE !236220!E! !3! ! ! ! ! !99990909!B! ! !A! !A!N!J!2!002!B! !D!N!C! ! !N!B!N!N! ! !C! !A!A!000!A!B!Y!T!N! ! ! ! !0001! !

Place of Performance

Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73145

State: Oklahoma Government Spending

Plain-Language Summary

Department of Defense obligated $10.9 million to MCMASTER CONSTRUCTION INC for work described as: 200607!600458!2100!W912BV!USA ENGINEER DISTRICT TULSA !W912BV06C2007 !A!N! !N! ! !20060330!20070622!131071060!131071060!131071060!N!MCMASTER CONSTRUCTION INC !138 NE 46TH ST !OKLAHOMA CITY !OK!73105!73800!017!40!TINKER AFB !CANA… Key points: 1. Contract value significantly surpassed the initial estimate, suggesting potential cost overruns or scope expansion. 2. The contract was awarded through full and open competition, indicating a robust bidding process. 3. The contractor, McMaster Construction Inc., has a track record with federal contracts, warranting a review of past performance. 4. The project's duration of 1470 days (approx. 4 years) is substantial, requiring sustained oversight. 5. The specific nature of 'Electronic & Communication Facilities' construction suggests a specialized requirement. 6. The contract's fixed-price nature aims to control costs, but the initial estimate variance is a concern.

Value Assessment

Rating: fair

The awarded value of $10,879,947.96 is considerably higher than the initial estimate of $7,178,947.96 (implied by the difference between awarded and 'br' value, which is likely a bid range or estimate). This significant variance of over 50% warrants scrutiny. While fixed-price contracts aim for cost certainty, such a large deviation suggests potential issues with the initial estimation process, scope creep, or unforeseen market conditions. Benchmarking against similar construction projects for electronic and communication facilities at military bases would be necessary for a more precise 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 a bid. The data shows 'no' bidders, which is unusual for a full and open competition and might indicate an error in the data or a very niche requirement that attracted limited interest. Typically, multiple bidders would be expected, leading to competitive pricing. The lack of explicit bidder count in the provided data makes a definitive assessment of price discovery challenging.

Taxpayer Impact: A full and open competition is generally favorable for taxpayers as it encourages multiple companies to bid, driving down prices. However, the apparent lack of bidders in this instance raises questions about the effectiveness of the competition in achieving the best possible price for the government.

Public Impact

The primary beneficiary is the Department of the Army, which will receive upgraded electronic and communication facilities at Tinker AFB. The project will likely involve a significant construction workforce, potentially creating jobs in the Oklahoma City area. The services delivered are specialized construction for critical infrastructure at a military installation. The geographic impact is localized to Tinker Air Force Base in Oklahoma.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Significant variance between initial estimate and awarded contract value.
Unclear number of bidders despite 'Full and Open Competition' designation.
Long contract duration (1470 days) increases risk of cost escalation and performance issues.
Potential for scope creep given the large difference between estimate and award.

Positive Signals

Awarded under 'Full and Open Competition,' suggesting an attempt to maximize bidder participation.
Contract type is 'Firm Fixed Price,' which aims to provide cost certainty.
The contractor, McMaster Construction Inc., is an established entity in the construction sector.

Sector Analysis

This contract falls within the Construction sector, specifically Commercial and Institutional Building Construction (NAICS 236220). This sub-sector involves the construction of non-residential buildings. Federal spending in this area often supports infrastructure development, facility upgrades, and specialized construction needs for government operations. The market for such specialized construction, particularly at military installations, can be competitive but also requires contractors with specific security clearances and expertise. Comparable spending benchmarks would involve analyzing other construction contracts for similar facilities at Department of Defense installations.

Small Business Impact

The data indicates that this contract was not set aside for small businesses ('sb': false). There is no explicit information regarding subcontracting plans for small businesses. Without this information, it is difficult to assess the direct impact on the small business ecosystem for this specific contract. However, the absence of a small business set-aside suggests that larger firms were likely the primary participants in the bidding process.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army, likely managed by the USA Engineer District Tulsa. The contract's long duration necessitates robust project management and regular performance reviews. Transparency is generally facilitated through contract databases like FPDS. Accountability measures would include adherence to the firm-fixed-price terms, quality control, and timely completion. The Inspector General's office for the Department of Defense would have jurisdiction over any potential fraud, waste, or abuse.

Related Government Programs

Military Construction
Base Realignment and Closure (BRAC) projects
Department of Defense Facilities Management
Tinker Air Force Base Operations Support

Risk Flags

High Variance Between Estimate and Award
Potential Lack of Competition Despite Full and Open Designation
Long Contract Duration Increases Risk Exposure
Specialized Construction Requirements May Limit Contractor Pool

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $10.9 million to MCMASTER CONSTRUCTION INC. 200607!600458!2100!W912BV!USA ENGINEER DISTRICT TULSA !W912BV06C2007 !A!N! !N! ! !20060330!20070622!131071060!131071060!131071060!N!MCMASTER CONSTRUCTION INC !138 NE 46TH ST !OKLAHOMA CITY !OK!73105!73800!017!40!TINKER AFB !CANADIAN !OKLAHOMA !+000009824279!N!N!000000000000!Y127!ELECTRONIC & COMMUNICATION FACILITIES !C2 !CONSTRUCTION !000 !NOT DISCERNABLE !236220!E! !3! ! ! ! ! !999

Who is the contractor on this award?

The obligated recipient is MCMASTER CONSTRUCTION INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $10.9 million.

What is the period of performance?

Start: 2006-03-30. End: 2010-04-08.

What is the historical performance record of McMaster Construction Inc. with federal contracts, particularly those involving electronic and communication facilities?

McMaster Construction Inc. has a history of receiving federal contracts. A detailed review of their past performance, accessible through federal procurement databases, would reveal the types of projects they have undertaken, their on-time and on-budget delivery rates, and any documented issues or disputes. For contracts related to electronic and communication facilities, it's crucial to assess if they possess the specialized expertise and certifications required. Examining past performance ratings and any contract modifications or terminations can provide further insight into their reliability and capability for complex projects like the one at Tinker AFB.

How does the awarded price of $10.9M compare to similar construction projects for electronic and communication facilities at other military bases?

Benchmarking this contract's value requires comparing it to similar projects in terms of scope, complexity, location, and time of award. Data on other 'Electronic & Communication Facilities' construction contracts awarded by the Department of Defense or other federal agencies to similar-sized contractors would be essential. Factors such as square footage, specific technological requirements (e.g., data centers, secure communication lines), and prevailing labor and material costs in the respective geographic regions need to be considered. The significant difference between the initial estimate and the final award price ($3.7M) suggests that a direct comparison might be skewed if the initial estimate was inaccurate or if the scope evolved significantly.

What factors contributed to the substantial variance between the initial estimate and the final awarded amount for this contract?

The variance of over 50% between the initial estimate and the awarded value of $10.9M warrants a deep dive. Potential contributing factors include: 1) Inaccurate initial cost estimation due to incomplete project scope definition, outdated cost data, or insufficient market research. 2) Unforeseen increases in material costs, labor rates, or specialized equipment prices between the estimation and bidding phases. 3) Significant changes or clarifications in project requirements (scope creep) during the procurement process that were not reflected in the initial estimate. 4) A highly competitive bidding environment where initial estimates were intentionally conservative, or conversely, a lack of competition leading to higher bids. Reviewing the procurement documentation, including the original estimate justification and any pre-bid communications, would shed light on the reasons for this discrepancy.

What are the potential risks associated with the 1470-day duration of this construction contract?

A contract duration of 1470 days (approximately 4 years) for a construction project introduces several risks. Firstly, there's an increased likelihood of cost escalation due to inflation affecting labor, materials, and equipment over an extended period, even with a fixed-price contract, if contingencies were not adequately factored. Secondly, the risk of project delays increases due to potential weather disruptions, unforeseen site conditions, or contractor performance issues. Thirdly, technological obsolescence could become a factor if the 'electronic and communication facilities' being built are intended for cutting-edge systems; by the time of completion, newer technologies might be available. Finally, maintaining consistent oversight and quality control over such a long duration requires sustained effort and resources from the contracting agency.

Given the 'Full and Open Competition' designation, why does the data indicate 'no' bidders, and what does this imply for price discovery?

The indication of 'no' bidders under a 'Full and Open Competition' is contradictory and requires clarification. It could stem from a data entry error in the Federal Procurement Data System (FPDS) or represent a scenario where the solicitation was issued, but no bids were ultimately received. If no bids were received, it might suggest that the requirements were too stringent, the estimated price was too low, the solicitation period was inadequate, or there was a lack of interested contractors capable of meeting the specific needs. This situation severely undermines price discovery, as the government did not benefit from competitive offers. It could lead to a sole-source negotiation or re-solicitation, potentially at a higher cost.

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

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 138 NE 46TH ST, OKLAHOMA CITY, OK, 90

Business Categories: Category Business, Small Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline