DoD's $25.5M C4ISR contract awarded to L.R. Costanzo Company, Inc. for construction services

Contract Overview

Contract Amount: $25,533,141 ($25.5M)

Contractor: L.R. Costanzo Company, Incorporated

Awarding Agency: Department of Defense

Start Date: 2009-08-06

End Date: 2011-06-30

Contract Duration: 693 days

Daily Burn Rate: $36.8K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: COMMAND CONTROL COMMUNICATION COMPUTERS INTELLIGENCE SURVEILLANCE RECONNAISSANCE (C4ISR) FINISHING CENTER, TOBYHANNA, PA

Place of Performance

Location: TOBYHANNA, MONROE County, PENNSYLVANIA, 18466

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $25.5 million to L.R. COSTANZO COMPANY, INCORPORATED for work described as: COMMAND CONTROL COMMUNICATION COMPUTERS INTELLIGENCE SURVEILLANCE RECONNAISSANCE (C4ISR) FINISHING CENTER, TOBYHANNA, PA Key points: 1. The contract value of $25.5 million represents a significant investment in critical C4ISR infrastructure. 2. Competition dynamics for this contract were characterized by 'full and open competition after exclusion of sources,' suggesting a potentially complex procurement process. 3. The firm-fixed-price contract type generally shifts risk to the contractor, potentially leading to more predictable costs. 4. Performance occurred over a 693-day period, indicating a substantial construction project timeline. 5. The contract was awarded to L.R. Costanzo Company, Inc., a single entity, highlighting the need to assess their capacity and past performance. 6. The project's location in Tobyhanna, Pennsylvania, suggests a focus on regional defense infrastructure development.

Value Assessment

Rating: fair

Benchmarking the value of this $25.5 million contract is challenging without specific details on the scope of work for the C4ISR Finishing Center. However, the duration of 693 days suggests a substantial project. The firm-fixed-price nature implies that the contractor bore the risk of cost overruns, which can be a positive indicator for the government if the price was competitive. Further analysis would require comparing the cost per square foot or per unit of capability delivered against similar construction projects in the defense sector.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'full and open competition after exclusion of sources.' This specific procurement method indicates that while the competition was intended to be broad, certain sources were excluded for reasons not detailed in the provided data. The number of bids received (2) is relatively low for a full and open competition, suggesting that the exclusion of sources may have significantly narrowed the field of potential bidders. This limited competition could impact price discovery and potentially lead to higher costs for the government.

Taxpayer Impact: A limited number of bidders, even after an initial broad solicitation, may mean that taxpayers did not benefit from the most competitive pricing achievable through a wider range of offers. The government may have paid a premium due to the restricted competition.

Public Impact

The primary beneficiaries are the Department of Defense and its personnel who rely on enhanced C4ISR capabilities. The contract delivered construction services for a C4ISR Finishing Center, crucial for modern military operations. The geographic impact is localized to Tobyhanna, Pennsylvania, supporting regional defense infrastructure. The project likely involved a significant construction workforce, contributing to local employment and the skilled trades sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition (2 bidders) could indicate potential for higher costs.
The 'exclusion of sources' clause requires further investigation to understand its impact on fairness and cost.
Contract duration of 693 days requires careful monitoring for potential delays or cost escalations, despite the FFP structure.

Positive Signals

Firm-fixed-price contract type shifts cost risk to the contractor.
Award to a single contractor (L.R. Costanzo Company, Inc.) suggests they met all requirements.
The project addresses critical C4ISR infrastructure needs for national security.

Sector Analysis

This contract falls within the broader construction sector, specifically focusing on institutional and commercial building construction for defense purposes. The market for defense construction is substantial, driven by the need for specialized facilities to support advanced military technologies like C4ISR systems. Comparable spending benchmarks would involve analyzing the cost per square foot for similar government facilities or specialized construction projects within the defense industrial base.

Small Business Impact

The provided data indicates that small business participation (sb) was false, and there was no specific small business set-aside (ss) for this contract. This suggests that the contract was not specifically targeted towards small businesses, and larger, established firms were likely the primary participants. There is no information on subcontracting plans, so the impact on the small business ecosystem is unclear but likely minimal unless the prime contractor voluntarily engaged small businesses.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Army contracting and program management offices. Accountability measures are inherent in the firm-fixed-price contract type, which obligates the contractor to deliver the specified work within the agreed price. Transparency would be enhanced through contract award databases and potentially through Inspector General reviews if any performance issues or fraud were suspected. The specific Inspector General jurisdiction would likely be that of the Department of Defense.

Related Government Programs

Military Construction
Defense Infrastructure Projects
C4ISR Systems Procurement
Federal Building Construction Contracts
Department of Defense Facilities

Risk Flags

Limited Competition
Potential for Non-Competitive Pricing
Unclear Justification for Source Exclusion

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $25.5 million to L.R. COSTANZO COMPANY, INCORPORATED. COMMAND CONTROL COMMUNICATION COMPUTERS INTELLIGENCE SURVEILLANCE RECONNAISSANCE (C4ISR) FINISHING CENTER, TOBYHANNA, PA

Who is the contractor on this award?

The obligated recipient is L.R. COSTANZO COMPANY, INCORPORATED.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $25.5 million.

What is the period of performance?

Start: 2009-08-06. End: 2011-06-30.

What is the track record of L.R. Costanzo Company, Inc. with the Department of Defense?

L.R. Costanzo Company, Inc. has a history of contracts with the Department of Defense, as indicated by this award. To fully assess their track record, a deeper dive into their past performance on similar projects would be necessary. This would include examining metrics such as on-time delivery, adherence to budget (especially relevant for fixed-price contracts), quality of work, and any history of disputes or contract modifications. A review of their contract history within the Federal Procurement Data System (FPDS) or similar databases would provide a more comprehensive picture of their reliability and expertise in executing defense-related construction projects.

How does the awarded price compare to market rates for similar construction projects?

Determining if the $25.5 million awarded price is competitive requires detailed benchmarking against similar construction projects. Key metrics would include cost per square foot, cost per facility type, and specific cost breakdowns for specialized components like C4ISR infrastructure. Without access to the detailed scope of work and project specifications, a direct comparison is difficult. However, the fact that only two bids were received under a 'full and open competition after exclusion of sources' procurement method might suggest that the price could be higher than if broader competition had been achieved. Further analysis would involve consulting industry cost estimating databases and reviewing publicly available data on comparable government construction projects.

What are the primary risks associated with this contract?

The primary risks associated with this contract include potential cost overruns if the scope of work was not perfectly defined (though mitigated by the firm-fixed-price structure), delays in project completion due to unforeseen site conditions or contractor performance issues, and the risk of subpar quality in construction. The limited competition (two bidders) also presents a risk of paying a non-competitive price. Furthermore, the 'exclusion of sources' aspect of the procurement could introduce risks if it inadvertently excluded highly capable contractors, potentially impacting overall project success or cost-effectiveness.

How effective is the firm-fixed-price contract type in managing costs for this type of project?

The firm-fixed-price (FFP) contract type is generally considered effective for managing costs in construction projects where the scope of work is well-defined and risks can be reasonably anticipated. Under an FFP contract, the contractor assumes the primary responsibility for cost overruns, providing a strong incentive for efficient project management and cost control. This shifts the financial risk from the government to the contractor. However, for highly complex or uncertain projects, an FFP contract might lead contractors to inflate their bids to account for potential risks, potentially resulting in a higher initial price. For a C4ISR Finishing Center, where specific technological integration might be involved, careful definition of requirements is crucial for the FFP to be truly effective.

What is the historical spending trend for C4ISR-related construction at Tobyhanna, PA?

Analyzing historical spending trends for C4ISR-related construction at Tobyhanna, PA, would require accessing historical contract data for that specific location and facility type. This would involve querying databases like FPDS for contracts awarded to the Tobyhanna Army Depot or related entities for construction services related to command, control, communication, intelligence, surveillance, and reconnaissance (C4ISR) systems. Understanding past spending patterns could reveal whether this $25.5 million contract represents an increase, decrease, or continuation of previous investment levels, and whether costs have been trending upwards or downwards over time for similar projects.

What does the 'exclusion of sources' clause imply for the procurement process?

The 'exclusion of sources' clause in a 'full and open competition' context implies that while the initial solicitation was broad, specific potential bidders were intentionally disqualified or not considered. The reasons for exclusion are critical and could range from failure to meet specific technical qualifications, past performance issues, security concerns, or even specific statutory or regulatory requirements. This clause can significantly limit the number of actual competitors, as seen with only two bidders in this case. It suggests a more tailored approach to competition, potentially justified by unique project needs or risks, but it also raises questions about whether the most competitive outcome was achieved for the taxpayer.

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: W912DR09R0025

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 123 N MAIN AVE, SCRANTON, PA, 18504

Business Categories: Category Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $25,533,141

Exercised Options: $25,533,141

Current Obligation: $25,533,141

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline