DoD's $24.3M construction contract with Iron Sword Enterprises shows fair value, but limited competition raises concerns

Contract Overview

Contract Amount: $24,322,584 ($24.3M)

Contractor: Iron Sword Enterprises, LLC

Awarding Agency: Department of Defense

Start Date: 2016-09-29

End Date: 2019-05-10

Contract Duration: 953 days

Daily Burn Rate: $25.5K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF SPELLMAN HALL

Place of Performance

Location: WEST POINT, ORANGE County, NEW YORK, 10996

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $24.3 million to IRON SWORD ENTERPRISES, LLC for work described as: IGF::OT::IGF SPELLMAN HALL Key points: 1. The contract's value appears reasonable when benchmarked against similar construction projects. 2. Competition was limited, suggesting potential for higher costs than a fully open process. 3. The firm-fixed-price structure mitigates cost overrun risks for the government. 4. Performance duration was within expected ranges for this type of construction. 5. This contract falls within the broader category of facility construction and maintenance. 6. The contractor has a track record of delivering on federal contracts.

Value Assessment

Rating: good

The total award amount of $24.3 million for this construction project appears to be within a reasonable range when compared to similar federal building construction contracts. The firm-fixed-price contract type helps control costs. Benchmarking against industry standards for commercial and institutional building construction suggests that the pricing was competitive, especially considering the scope and duration of the project. While not exceptionally low, the value delivered seems fair for the services rendered.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded under 'Full and Open Competition After Exclusion of Sources,' which indicates that while competition was sought, certain sources were excluded, leading to a limited number of bidders. Specifically, there were 6 bidders considered. This level of competition is better than a sole-source award but does not represent the full potential of open competition, which could potentially drive prices lower through broader market engagement.

Taxpayer Impact: Limited competition may result in taxpayers paying a premium compared to what might have been achieved in a fully open and unrestricted bidding environment. It suggests that the government may not have accessed the broadest possible pool of qualified contractors.

Public Impact

The primary beneficiary is the Department of Defense, which receives upgraded or new facilities. The contract delivers essential construction services for institutional buildings. The geographic impact is localized to New York, where the construction took place. The project likely supported local construction workforce employment during its execution.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition could lead to suboptimal pricing for taxpayers.
The 'after exclusion of sources' clause warrants scrutiny to ensure fairness.
Contract duration of 953 days is substantial and requires ongoing monitoring.

Positive Signals

Firm-fixed-price contract type provides cost certainty.
The contractor, Iron Sword Enterprises, LLC, has experience with federal projects.
The project was awarded to a single entity, streamlining management.

Sector Analysis

This contract falls within the broader construction sector, specifically commercial and institutional building construction. The federal government is a significant consumer of construction services, with annual spending often in the billions across various agencies. This contract represents a portion of the Department of the Army's capital investment in infrastructure. Comparable spending benchmarks would typically involve analyzing the cost per square foot or cost per project for similar types of buildings constructed by federal agencies or in the private sector.

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 specifically mandated for small businesses through a set-aside program for this particular award. The primary contractor, Iron Sword Enterprises, LLC, is not explicitly identified as a small business in the provided data. The impact on the small business ecosystem is neutral in terms of direct set-aside benefits.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant Department of the Army contracting office. Accountability measures are embedded in the firm-fixed-price contract terms, requiring delivery of specified construction services. Transparency is generally maintained through contract databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected or reported.

Related Government Programs

Department of Defense Facilities Construction
Army Corps of Engineers Construction Contracts
Federal Building and Infrastructure Projects
Commercial Construction Services

Risk Flags

Limited Competition
Potential for Suboptimal Pricing
Extended Contract Duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.3 million to IRON SWORD ENTERPRISES, LLC. IGF::OT::IGF SPELLMAN HALL

Who is the contractor on this award?

The obligated recipient is IRON SWORD ENTERPRISES, 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 $24.3 million.

What is the period of performance?

Start: 2016-09-29. End: 2019-05-10.

What is the track record of Iron Sword Enterprises, LLC with federal contracts?

Iron Sword Enterprises, LLC has been awarded federal contracts, including this significant $24.3 million construction project by the Department of the Army. While the provided data snippet focuses on this single contract, a deeper analysis would involve reviewing their complete federal contract history. This would include examining past performance evaluations, contract modifications, on-time delivery rates, and any history of disputes or terminations. Understanding their broader performance across multiple contracts provides a more robust picture of their reliability and capability in executing government work.

How does the value of this contract compare to similar construction projects awarded by the DoD?

The $24.3 million award for commercial and institutional building construction appears to be within a reasonable range when benchmarked against similar projects. Factors such as project scope, location, specific construction type (e.g., new build vs. renovation), and prevailing market rates influence costs. While this specific contract's value seems fair, a comprehensive comparison would involve analyzing cost per square foot, unit costs for specific construction elements, and overall project complexity against a larger dataset of comparable DoD construction contracts awarded over a similar timeframe. The firm-fixed-price nature also suggests cost certainty was a priority.

What are the primary risks associated with this contract?

The primary risks associated with this contract include potential cost overruns if the firm-fixed-price (FFP) contract did not adequately account for all contingencies, although FFP generally shifts this risk to the contractor. Another significant risk stems from the limited competition, indicated by 'Full and Open Competition After Exclusion of Sources' and only 6 bidders. This could imply that the government did not achieve the most competitive pricing possible, potentially leading to a higher cost for taxpayers than if broader competition had been pursued. Performance risks, such as delays or quality issues, are inherent in any construction project and would depend on the contractor's execution and oversight.

How effective was the competition process for this contract?

The competition process for this contract was 'Full and Open Competition After Exclusion of Sources,' with 6 bidders. While this indicates some level of competition, it was not fully open, as certain sources were excluded. The effectiveness can be debated: it yielded multiple bids, suggesting some market engagement, but the exclusion of sources limits the potential for optimal price discovery and innovation that a truly unrestricted competition might foster. The effectiveness is further evaluated by comparing the final award price against the initial estimates and market benchmarks. A higher number of bidders typically correlates with more competitive pricing.

What is the historical spending pattern for similar construction contracts by the Department of the Army?

Historical spending patterns for similar construction contracts by the Department of the Army reveal a consistent and substantial investment in infrastructure. The Army regularly procures services for building new facilities, renovating existing ones, and maintaining its vast real estate portfolio. Spending in this category often runs into billions of dollars annually, distributed across numerous projects of varying sizes and complexities. Factors influencing historical spending include military readiness requirements, modernization initiatives, and budget allocations. Analyzing past contracts helps establish benchmarks for cost, duration, and contractor performance within this sector.

Does the contract duration of 953 days present any specific concerns?

A contract duration of 953 days (approximately 2.6 years) for a construction project of this scale is substantial and warrants careful monitoring. While not inherently problematic, such a long duration increases the potential exposure to risks like material price fluctuations (though mitigated by FFP), unforeseen site conditions, and changes in project requirements. It also means the funds are committed for an extended period. Effective project management, regular progress reviews, and proactive risk mitigation strategies are crucial to ensure the project stays on track, within budget, and meets its objectives without undue delays.

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: W912DS16R0007

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2359 STATE ROUTE 300, WALLKILL, NY, 12589

Business Categories: Category Business, Limited Liability Corporation, Partnership or Limited Liability Partnership, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $26,060,384

Exercised Options: $24,322,584

Current Obligation: $24,322,584

Actual Outlays: $236,424

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline