DoD awards $19M contract for remote inspection facility, raising questions on value and competition
Contract Overview
Contract Amount: $18,972,551 ($19.0M)
Contractor: Nisou LGC JV II LLC
Awarding Agency: Department of Defense
Start Date: 2023-07-28
End Date: 2025-11-19
Contract Duration: 845 days
Daily Burn Rate: $22.5K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 5
Pricing Type: FIRM FIXED PRICE
Sector: Construction
Official Description: REMOTE INSPECTION FACILITY BASE
Place of Performance
Location: SAINT LOUIS, SAINT LOUIS CITY County, MISSOURI, 63104
State: Missouri Government Spending
Plain-Language Summary
Department of Defense obligated $19.0 million to NISOU LGC JV II LLC for work described as: REMOTE INSPECTION FACILITY BASE Key points: 1. Contract value appears reasonable for a multi-year facility construction project. 2. Competition was limited, potentially impacting price discovery and value for taxpayers. 3. Contract type is firm fixed price, which generally transfers risk to the contractor. 4. Project duration is substantial, indicating a complex scope of work. 5. Geographic location in Missouri may influence labor costs and material availability. 6. The award to NISOU LGC JV II LLC warrants scrutiny of their past performance.
Value Assessment
Rating: fair
The contract value of approximately $19 million for a remote inspection facility appears within a reasonable range for a project of this scope and duration. However, without specific benchmarks for similar facilities or detailed cost breakdowns, a definitive assessment of value for money is challenging. The firm fixed-price structure suggests that cost overruns are primarily the contractor's responsibility, which is a positive risk mitigation factor. Further analysis would require comparing this contract's unit costs (if discernible) to industry standards or similar government projects.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating that while competition was sought, certain sources were excluded. The presence of 5 bidders suggests some level of competition, but the exclusion of other potential sources limits the breadth of that competition. This limited competition could lead to less aggressive pricing than a truly open competition might yield, potentially resulting in a higher cost for the government.
Taxpayer Impact: The limited competition means taxpayers may not have benefited from the most competitive pricing possible. While 5 bidders is not insignificant, the exclusion of other qualified firms could have suppressed the downward pressure on price.
Public Impact
The primary beneficiaries are the Department of Defense and its personnel who will utilize the remote inspection facility. The facility will support critical inspection and maintenance operations, ensuring readiness and operational efficiency. The project's geographic impact is concentrated in Missouri, potentially creating local construction jobs and economic activity. Workforce implications include employment opportunities for construction labor and specialized technical staff for facility operation.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition raises concerns about optimal price discovery.
- The exclusion of sources in the competition process warrants further investigation.
- Lack of detailed cost breakdowns makes value assessment difficult.
- Long project duration increases exposure to potential cost escalation or scope creep.
Positive Signals
- Firm fixed-price contract shifts cost risk to the contractor.
- Multiple bidders (5) indicate some level of market interest.
- Project supports essential defense infrastructure needs.
- Awarded to a joint venture, potentially leveraging diverse expertise.
Sector Analysis
This contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the broader construction industry. The market for specialized government facilities is often characterized by a mix of large prime contractors and specialized subcontractors. Benchmarking this contract's value would involve comparing it to similar construction projects for government agencies, considering factors like facility size, complexity, and location. The total federal spending in this sector can fluctuate based on infrastructure needs and defense priorities.
Small Business Impact
The data indicates 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's difficult to assess the direct impact on the small business ecosystem. However, the prime contractor, NISOU LGC JV II LLC, is a joint venture, which may itself involve small business participation, but this is not detailed in the provided data.
Oversight & Accountability
Oversight for this contract will likely be managed by the Department of the Army contracting and project management offices. Accountability measures are typically embedded in the contract terms, including performance standards and payment schedules. Transparency could be enhanced by making detailed cost breakdowns and performance reports publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- Department of Defense Construction Projects
- Military Base Infrastructure
- Federal Facilities Management
- Commercial Building Construction Contracts
- Remote Operations Support Facilities
Risk Flags
- Limited competition identified.
- Exclusion of sources in competition process.
- Potential for cost escalation due to long duration.
- Lack of detailed cost transparency.
- Contractor's past performance requires verification.
Tags
construction, department-of-defense, department-of-the-army, missouri, definitive-contract, firm-fixed-price, full-and-open-competition-after-exclusion-of-sources, commercial-and-institutional-building-construction, large-project, infrastructure
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $19.0 million to NISOU LGC JV II LLC. REMOTE INSPECTION FACILITY BASE
Who is the contractor on this award?
The obligated recipient is NISOU LGC JV II 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 $19.0 million.
What is the period of performance?
Start: 2023-07-28. End: 2025-11-19.
What is the track record of NISOU LGC JV II LLC with federal contracts, particularly in construction?
NISOU LGC JV II LLC is a joint venture, suggesting a collaborative effort between its constituent companies. A thorough review of their past performance would involve examining individual company histories and any prior joint venture projects. Key areas to investigate include on-time project completion rates, adherence to budget, quality of work, and any history of disputes or contract terminations. Data on previous awards, especially those of similar scale and complexity within the Department of Defense or other federal agencies, would provide crucial context for assessing their capability and reliability for this remote inspection facility project.
How does the cost per square foot of this facility compare to similar government-funded construction projects?
To compare the cost per square foot, we would need the total square footage of the remote inspection facility, which is not provided in the data. Assuming we had this information, we would then research publicly available data on recently awarded federal construction contracts for similar types of facilities (e.g., inspection centers, maintenance depots, specialized operational buildings). We would look for contracts with comparable firm fixed-price structures and from agencies like the Department of Defense or General Services Administration. A significant deviation from the average cost per square foot for comparable projects could indicate either exceptional value or potential overpricing, necessitating further investigation into the specific requirements and complexities of this particular facility.
What specific factors led to the exclusion of certain sources in the competition process?
The designation 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' implies that a broad solicitation was initially considered, but then specific potential bidders were excluded. The reasons for such exclusions typically relate to the inability of a source to meet mandatory minimum qualifications, such as specific technical capabilities, past performance requirements, security clearances, or certifications. Alternatively, exclusions might occur if a source failed to submit a timely or complete proposal. Without further documentation from the agency, the precise rationale for excluding specific sources remains unclear, but it is a critical detail for understanding the true level of competition achieved.
What are the key performance indicators (KPIs) for this contract, and how will they be measured?
Key performance indicators for a construction contract like this typically revolve around schedule adherence, quality of workmanship, safety compliance, and adherence to specifications. For a remote inspection facility, specific KPIs might include the successful installation and testing of specialized inspection equipment, the functionality of communication systems, and the overall structural integrity and environmental controls of the building. Measurement methods would likely involve regular site inspections, progress reports, milestone reviews, testing and commissioning of systems, and final acceptance testing. The contract documents themselves would detail these KPIs and their associated measurement and evaluation criteria.
How does the $18.97 million award compare to historical spending on similar remote inspection or specialized facility projects by the Department of Defense?
To assess this, we would need to analyze historical spending data for the Department of Defense (DoD) on projects categorized as 'remote inspection facilities,' 'specialized operational buildings,' or similar classifications over the past 5-10 years. This analysis would involve identifying contracts with comparable scopes of work, construction types (e.g., firm fixed-price), and durations. We would then calculate average award values and potentially cost per square foot for those historical projects. Comparing the current $18.97 million award against this historical average would indicate whether this contract represents a typical expenditure, a significant increase, or a decrease, providing context for its value proposition.
What are the potential risks associated with the 845-day duration of this contract?
A contract duration of 845 days (approximately 2.3 years) introduces several potential risks. Firstly, there is an increased risk of material cost escalation over such a long period, even with a firm fixed-price contract, as unforeseen market fluctuations can occur. Secondly, labor availability and costs can change significantly, potentially impacting the contractor's ability to maintain the workforce needed. Thirdly, technological advancements or changes in operational requirements during the construction phase could render certain aspects of the facility design obsolete or less efficient by the time of completion. Finally, extended project timelines increase the overall exposure to economic downturns or shifts in government funding priorities.
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 AFTER EXCLUSION OF SOURCES
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: W912DQ22R7003
Offers Received: 5
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 7310 WOODWARD AVE STE 510, DETROIT, MI, 48202
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Economically Disadvantaged Women Owned Small Business, Joint Venture Economically Disadvantaged Women Owned Small Business, Joint Venture Women Owned Small Business, Limited Liability Corporation, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Indian (Subcontinent) American Owned Business, U.S.-Owned Business, Woman Owned Business, Women Owned Small Business
Financial Breakdown
Contract Ceiling: $19,251,091
Exercised Options: $19,041,232
Current Obligation: $18,972,551
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2023-07-28
Current End Date: 2025-11-19
Potential End Date: 2026-05-03 00:00:00
Last Modified: 2026-01-14
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