DoD awards $21.6M construction contract to HSU Development, Inc. for building construction in Maryland

Contract Overview

Contract Amount: $21,617,800 ($21.6M)

Contractor: HSU Development, Inc.

Awarding Agency: Department of Defense

Start Date: 2008-09-29

End Date: 2010-08-06

Contract Duration: 676 days

Daily Burn Rate: $32.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: CONSTRUCTION AWARD TBUP

Place of Performance

Location: FORT GEORGE G MEADE, ANNE ARUNDEL County, MARYLAND, 20755

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $21.6 million to HSU DEVELOPMENT, INC. for work described as: CONSTRUCTION AWARD TBUP Key points: 1. The contract value of $21.6 million represents a significant investment in infrastructure. 2. Full and open competition suggests a potentially competitive bidding process. 3. The fixed-price contract type shifts performance risk to the contractor. 4. The duration of 676 days indicates a substantial construction project. 5. The North American Industry Classification System (NAICS) code 236220 points to commercial and institutional building construction. 6. The award was made by the Department of the Army, a major component of the Department of Defense.

Value Assessment

Rating: fair

Benchmarking the value of this specific construction award is challenging without detailed project specifications and comparable market data for the Maryland region during the 2008-2010 period. However, the award amount of $21.6 million for a definitive contract suggests a substantial project. The firm fixed-price nature indicates that the contractor assumed the risk for cost overruns, which can sometimes lead to higher initial bids to account for contingencies. Further analysis would require comparing the cost per square foot or per unit of construction against similar government or private sector projects of comparable complexity and location.

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 6 bidders, as noted in the data, suggests a reasonable level of competition for this project. A higher number of bidders generally correlates with more competitive pricing and a greater likelihood of selecting the best value offer. The specific details of the evaluation criteria and the winning proposal are not provided, but the competitive nature is a positive indicator for price discovery.

Taxpayer Impact: Taxpayers benefit from full and open competition as it typically drives down costs through market forces. The presence of multiple bidders increases the likelihood that the government secured a fair price for the construction services.

Public Impact

The primary beneficiaries are the Department of the Army and its personnel who will utilize the constructed facilities. The contract delivers essential commercial and institutional building construction services. The geographic impact is localized to Maryland, where the construction project is situated. The project likely created temporary employment opportunities for construction workers and related trades in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the fixed-price contract did not adequately account for unforeseen construction challenges.
Risk of schedule delays impacting the operational readiness of the facility.
Ensuring the quality of construction meets the stringent standards required by the Department of Defense.

Positive Signals

Awarded under full and open competition, suggesting a robust bidding process.
Firm fixed-price contract shifts cost risk to the contractor.
The contractor, HSU DEVELOPMENT, INC., has a track record of performing government contracts.
The project is located in Maryland, potentially supporting local economic activity.

Sector Analysis

This contract falls within the Construction sector, specifically Commercial and Institutional Building Construction (NAICS 236220). The federal government is a significant consumer of construction services for military bases, government facilities, and infrastructure projects. Spending in this area is influenced by defense readiness needs, infrastructure modernization initiatives, and economic stimulus programs. Comparable spending benchmarks would involve analyzing the average cost of similar-sized institutional buildings constructed for federal agencies or large private entities in similar geographic locations and timeframes.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses arising from a set-aside provision. However, the prime contractor, HSU DEVELOPMENT, INC., may voluntarily subcontract portions of the work to small businesses as part of its overall business operations, which could indirectly benefit the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program office within the Department of the Army. Quality assurance surveillance plans (QASPs) would likely be in place to monitor the contractor's performance, adherence to specifications, and timely completion. Transparency is generally maintained through contract award databases like FPDS-NG (Federal Procurement Data System - Next Generation). Inspector General (IG) jurisdiction would apply if any allegations of fraud, waste, or abuse related to the contract were raised.

Related Government Programs

Military Construction
Base Realignment and Closure (BRAC) Projects
Department of Defense Facilities Management
Federal Building Construction

Risk Flags

Potential for cost overruns due to fixed-price nature.
Risk of schedule delays impacting facility readiness.
Quality assurance concerns in large-scale construction.
Contract duration may be subject to unforeseen challenges.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.6 million to HSU DEVELOPMENT, INC.. CONSTRUCTION AWARD TBUP

Who is the contractor on this award?

The obligated recipient is HSU DEVELOPMENT, 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 $21.6 million.

What is the period of performance?

Start: 2008-09-29. End: 2010-08-06.

What is the track record of HSU DEVELOPMENT, INC. in performing federal construction contracts?

HSU DEVELOPMENT, INC. has a history of performing federal construction contracts, as indicated by its involvement in this Department of the Army award. To fully assess their track record, a deeper dive into their contract history would be necessary. This would involve examining the number of federal contracts awarded to them, their performance ratings on past projects, any instances of contract disputes or terminations, and the types and values of projects they have successfully completed. A review of past performance information, if available in government databases, would provide crucial insights into their reliability, quality of work, and ability to meet deadlines and budgets for federal clients.

How does the awarded amount of $21.6 million compare to similar institutional building construction projects by the DoD?

Comparing the $21.6 million award to similar projects requires access to a database of comparable federal construction contracts, ideally with detailed project scopes, sizes (e.g., square footage), and specific functionalities. Without such a database, a precise benchmark is difficult. However, for a definitive contract awarded in 2008 for institutional building construction, $21.6 million is a substantial sum, suggesting a project of considerable scale or complexity. Factors like location, specific building type (e.g., barracks, administrative facility, training center), and the prevailing construction market conditions in Maryland during that period would influence its relative cost. A thorough analysis would involve normalizing costs by square footage or other relevant metrics across a range of similar projects.

What are the primary risks associated with a firm fixed-price construction contract of this magnitude?

The primary risk with a firm fixed-price (FFP) contract of this magnitude ($21.6 million) is that the contractor, HSU DEVELOPMENT, INC., bears the financial burden of any cost overruns. While this shifts risk from the government, it can incentivize the contractor to cut corners on quality or safety to maintain profitability if unforeseen issues arise. Conversely, the government risks paying a premium if the contractor's initial bid included significant contingency due to perceived risks. For the government, risks also include potential schedule delays if the contractor struggles with cost management, and ensuring that the final product meets all specified requirements and quality standards despite the contractor's focus on cost control.

How effective is 'full and open competition' in ensuring value for money in federal construction contracts?

Full and open competition is generally considered the most effective method for ensuring value for money in federal construction contracts. By allowing all responsible sources to compete, it maximizes the pool of potential offerors, thereby increasing the likelihood of receiving competitive pricing. The presence of multiple bidders drives down costs as contractors vie for the award. Furthermore, it allows the government to select the offer that represents the best overall value, considering not just price but also technical approach, past performance, and other evaluation factors. While it requires more administrative effort to manage the solicitation and evaluation process, the potential savings and improved outcomes typically outweigh these costs.

What are the historical spending patterns for commercial and institutional building construction by the Department of the Army?

Historical spending patterns for commercial and institutional building construction by the Department of the Army (DoA) are substantial and fluctuate based on military readiness requirements, base infrastructure needs, and broader federal budget allocations. The DoA, as a major component of the DoD, consistently invests in constructing and renovating facilities across numerous installations worldwide. Spending is often influenced by strategic initiatives such as troop deployment changes, modernization of aging infrastructure, and specific operational requirements. Analyzing historical data would reveal trends in contract values, types of construction projects prioritized (e.g., barracks, training facilities, administrative buildings), and geographic distribution of awards. This contract, awarded in 2008, falls within a period where infrastructure investment was a significant focus.

What is the significance of the contract duration (676 days) in assessing project performance?

The contract duration of 676 days (approximately 22 months) is a critical factor in assessing project performance for this $21.6 million construction award. It indicates a project of significant scale and complexity, requiring substantial time for planning, execution, and completion. A longer duration inherently increases the potential for encountering unforeseen challenges, such as weather delays, material availability issues, or changes in project requirements, which can impact cost and schedule. Evaluating performance requires monitoring the contractor's progress against this timeline. Significant deviations from the planned schedule could signal underlying issues with project management, resource allocation, or unforeseen site conditions, potentially impacting the overall value delivered.

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: W912DR08R0063

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1335 RCKVLLE PIKE STE 255, ROCKVILLE, MD, 20852

Business Categories: Asian Pacific American Owned Business, Category Business, Corporate Entity Not Tax Exempt, HUBZone Firm, Minority Owned Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $21,617,800

Exercised Options: $21,617,800

Current Obligation: $21,617,800

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline