Department of the Army awards $20.8M contract for pyrotechnics construction in New Jersey

Contract Overview

Contract Amount: $20,796,565 ($20.8M)

Contractor: M.E.S. Inc

Awarding Agency: Department of Defense

Start Date: 2006-09-29

End Date: 2016-01-13

Contract Duration: 3,393 days

Daily Burn Rate: $6.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: ALL WORK TO CONSTRUCT THE PYROTECHNICS, PICATINNY ARS, NJ

Place of Performance

Location: PICATINNY ARSENAL, MORRIS County, NEW JERSEY, 07806

State: New Jersey Government Spending

Plain-Language Summary

Department of Defense obligated $20.8 million to M.E.S. INC for work described as: ALL WORK TO CONSTRUCT THE PYROTECHNICS, PICATINNY ARS, NJ Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract type is a firm fixed price, which shifts cost risk to the contractor. 3. Duration of over 9 years indicates a long-term project with potential for sustained contractor performance. 4. The contract was awarded to M.E.S. INC, a single entity. 5. The contract falls under industrial building construction, a specific niche within the broader construction sector. 6. The award amount of $20.8 million represents a significant investment in facility infrastructure.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific details on the scope of pyrotechnics construction. However, a firm fixed price contract awarded through full and open competition generally aims for competitive pricing. The long duration suggests that the initial pricing was deemed acceptable for the expected work over nearly a decade. Further analysis would require comparing the cost per square foot or per unit of construction against similar industrial building projects within the Department of Defense or other federal agencies.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 3 bidders suggests a moderate level of competition for this specific construction project. While not an exceptionally high number of bidders, it does provide a basis for price discovery and allows the agency to select the most advantageous offer.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to lower prices and better value for the government.

Public Impact

The primary beneficiaries are the Department of the Army, which will receive the constructed pyrotechnics facility. The services delivered include industrial building construction, specifically for pyrotechnics. The geographic impact is concentrated in Picatinny Arsenal, New Jersey. Workforce implications may include construction jobs in New Jersey during the project's duration.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 9 years) could lead to potential cost overruns if not managed effectively.
Firm fixed price contracts can sometimes lead to contractor disputes if scope changes significantly.
Dependence on a single contractor for a long-term project may limit flexibility.
Specific details on the pyrotechnics construction scope are not provided, making a full risk assessment difficult.

Positive Signals

Awarded through full and open competition, indicating a competitive process.
Firm fixed price contract shifts cost risk to the contractor.
The contract is for a specific industrial construction need, suggesting a clear objective.
The long duration allows for project completion and potential for contractor expertise development.

Sector Analysis

This contract falls within the Industrial Building Construction sector, a subset of the broader Construction industry. The market for specialized construction, particularly for defense-related facilities like those involving pyrotechnics, is often characterized by a smaller pool of highly specialized contractors. Comparable spending benchmarks would typically involve analyzing other construction contracts for military installations or specialized industrial facilities, considering factors like project complexity, location, and specific requirements.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). There is no explicit information regarding subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem from this specific contract award is likely minimal, unless the prime contractor voluntarily engages small businesses for subcontracting opportunities.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and project management offices. Accountability measures are inherent in the firm fixed price contract type, which obligates the contractor to deliver the specified construction within the agreed-upon price. Transparency is generally facilitated through contract award databases, though detailed project oversight reports are not publicly available.

Related Government Programs

Department of Defense Construction Contracts
Industrial Facility Construction
Military Base Infrastructure
Pyrotechnics Manufacturing Support Facilities

Risk Flags

Long contract duration may increase risk of cost escalation or scope creep if not managed meticulously.
Specialized nature of pyrotechnics construction requires specific expertise, potentially limiting contractor pool.
Firm Fixed Price contract shifts significant cost risk to the contractor over a long period.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.8 million to M.E.S. INC. ALL WORK TO CONSTRUCT THE PYROTECHNICS, PICATINNY ARS, NJ

Who is the contractor on this award?

The obligated recipient is M.E.S. 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 $20.8 million.

What is the period of performance?

Start: 2006-09-29. End: 2016-01-13.

What is the specific scope of 'pyrotechnics construction' and how does it differ from standard industrial building construction?

The term 'pyrotechnics construction' likely refers to the building or modification of facilities specifically designed to handle, store, manufacture, or test pyrotechnic materials. This can involve specialized safety features such as blast-resistant structures, ventilation systems for hazardous fumes, fire suppression systems, secure storage areas, and adherence to stringent safety regulations (e.g., ATF, DoD explosives safety standards). Unlike standard industrial building construction, pyrotechnics facilities require a higher degree of specialized engineering, materials, and safety protocols due to the inherent risks associated with explosive materials. The $20.8 million award for such construction suggests a significant project with complex safety and security requirements.

How does the firm fixed price (FFP) contract type impact the risk allocation and potential for cost overruns in this long-term construction project?

A Firm Fixed Price (FFP) contract places the primary responsibility for cost control and managing unforeseen expenses on the contractor, M.E.S. INC. This benefits the Department of the Army by providing cost certainty, as the price is fixed regardless of the contractor's actual costs. However, for a long-term project (over 9 years), the risk of cost overruns is shifted to the contractor. If M.E.S. INC underestimates labor, material costs, or encounters unexpected site conditions, they bear the financial burden. Conversely, if they manage costs efficiently, they retain any savings, which can incentivize performance. The long duration does increase the potential for market fluctuations in material prices or labor rates, which the contractor must absorb under the FFP terms.

What is the historical spending pattern for pyrotechnics construction at Picatinny Arsenal or similar DoD facilities?

Analyzing historical spending patterns for pyrotechnics construction at Picatinny Arsenal or similar DoD facilities requires access to detailed contract databases and budget allocations over time. Without specific historical data for this niche construction type at this location, it's difficult to establish a precise pattern. However, federal agencies like the DoD often undertake multi-year infrastructure projects that can range from tens to hundreds of millions of dollars, depending on the scale and complexity. The $20.8 million awarded to M.E.S. INC appears to be a substantial, but not unprecedented, investment for specialized facility construction within a military installation. Trends in defense spending, modernization efforts, and safety regulation updates would influence such historical spending.

What are the potential implications of a 3-bidder competition for a specialized construction contract of this magnitude?

A competition with three bidders for a specialized construction contract like this one suggests a moderate level of market interest and capability. While more bidders generally lead to more competitive pricing, three offers indicate that the market for this specific type of construction (pyrotechnics facilities) is not overly saturated but also not a sole-source situation. It implies that the government received at least some price discovery and had options to choose from. The quality of the bids, including technical proposals and pricing, would be crucial in determining if the selected offer represented the best value. A very low number of bidders could signal barriers to entry or a lack of market capacity, while a very high number might indicate intense competition driving down prices.

How does the location in New Jersey potentially influence the cost and execution of this industrial building construction contract?

The location in New Jersey, specifically at Picatinny Arsenal, can influence the cost and execution of this industrial building construction contract in several ways. New Jersey generally has higher labor costs compared to many other states due to its cost of living and strong union presence in the construction trades. Material sourcing might also be affected by regional availability and transportation costs. Furthermore, construction projects on federal installations like Picatinny Arsenal are subject to specific federal regulations, security protocols, and environmental reviews, which can add complexity and time to the execution phase. The state's specific building codes and permitting processes, layered with federal requirements, also need to be navigated.

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Industrial Building Construction

Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCTION OF BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SEALED BID

Solicitation ID: W912DS06B0016

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: HZE

Contractor Details

Address: 231 46TH ST, BROOKLYN, NY, 11220

Business Categories: Category Business, Emerging Small Business, HUBZone Firm, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $23,364,279

Exercised Options: $20,796,565

Current Obligation: $20,796,565

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline