Fort Lewis rail upgrade contract awarded to Pease Construction for over $12.6 million

Contract Overview

Contract Amount: $12,605,041 ($12.6M)

Contractor: Pease Construction, Inc

Awarding Agency: Department of Defense

Start Date: 2008-06-30

End Date: 2010-12-30

Contract Duration: 913 days

Daily Burn Rate: $13.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: FY08 RAIL UPGARD AND LOCOMOTIVE MAINTENANCE FACILITY, PN 62077, FORT LEWIS, WASHINGTON

Place of Performance

Location: FORT LEWIS, PIERCE County, WASHINGTON, 98433

State: Washington Government Spending

Plain-Language Summary

Department of Defense obligated $12.6 million to PEASE CONSTRUCTION, INC for work described as: FY08 RAIL UPGARD AND LOCOMOTIVE MAINTENANCE FACILITY, PN 62077, FORT LEWIS, WASHINGTON Key points: 1. Contract value appears reasonable for a multi-year infrastructure project of this scale. 2. Full and open competition suggests a competitive bidding process. 3. Project duration of 913 days indicates a significant undertaking. 4. Fixed-price contract type shifts risk to the contractor. 5. Geographic focus on Washington state. 6. No small business set-aside noted, potentially limiting small business participation.

Value Assessment

Rating: good

The contract value of approximately $12.6 million for rail upgrades and locomotive maintenance facilities at Fort Lewis appears to be within a reasonable range for a project of this scope and duration. Benchmarking against similar large-scale civil engineering construction projects for military installations would provide a more precise value-for-money assessment. The firm fixed-price contract structure suggests that the government secured a defined cost, with the contractor assuming the risk of cost overruns.

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 6 bidders suggests a healthy level of competition for this project. A competitive bidding process generally leads to better price discovery and potentially more favorable pricing for the government.

Taxpayer Impact: The full and open competition likely resulted in a more competitive bid landscape, potentially saving taxpayer dollars compared to a less competitive procurement.

Public Impact

The primary beneficiaries are the U.S. Army's logistical operations at Fort Lewis, Washington, through improved rail infrastructure. The project delivers essential upgrades to locomotive maintenance facilities, enhancing operational readiness. The geographic impact is concentrated at Fort Lewis, Washington. The contract supports the construction workforce involved in heavy civil engineering projects.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions arise, despite fixed-price contract.
Dependence on contractor's ability to manage complex construction schedule over 913 days.
Limited visibility into specific small business subcontracting opportunities.

Positive Signals

Firm fixed-price contract shifts cost risk to the contractor.
Full and open competition suggests a robust bidding process.
Project duration is clearly defined, allowing for structured planning.

Sector Analysis

This contract falls within the heavy and civil engineering construction sector, specifically related to transportation infrastructure. The North American Industry Classification System (NAICS) code 237990 covers other heavy and civil engineering construction. Spending in this sector is often driven by government infrastructure needs, military base modernization, and transportation network improvements. Comparable projects might include upgrades to other military rail yards, port facilities, or large-scale transportation hubs.

Small Business Impact

The contract was not awarded as a small business set-aside, and there is no explicit indication of a small business subcontracting goal. This suggests that large businesses were the primary focus of the competition. While Pease Construction, Inc. may utilize small businesses as subcontractors, the absence of a set-aside or specific subcontracting plan means direct opportunities for small businesses may be limited unless they are part of a larger bid or approach the prime contractor independently.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant project management office within the Department of the Army. Accountability measures are inherent in the firm fixed-price contract, requiring the contractor to deliver the specified work within the agreed-upon price. Transparency is generally maintained through contract award databases and public reporting, though detailed project-specific oversight reports may not always be publicly available.

Related Government Programs

Military Base Infrastructure Modernization
Transportation Facility Construction
Heavy Civil Engineering Projects
Department of Defense Construction Contracts

Risk Flags

Potential for cost overruns due to unforeseen site conditions.
Contractor performance risk over a long duration (913 days).
Lack of explicit small business subcontracting requirements.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.6 million to PEASE CONSTRUCTION, INC. FY08 RAIL UPGARD AND LOCOMOTIVE MAINTENANCE FACILITY, PN 62077, FORT LEWIS, WASHINGTON

Who is the contractor on this award?

The obligated recipient is PEASE CONSTRUCTION, 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 $12.6 million.

What is the period of performance?

Start: 2008-06-30. End: 2010-12-30.

What is the track record of Pease Construction, Inc. with federal contracts, particularly within the Department of Defense?

Pease Construction, Inc. has a history of federal contracting, primarily with the Department of Defense. Analyzing their past performance on similar construction projects, including their on-time and on-budget delivery rates, would provide insight into their reliability. Examining any past performance evaluations or contract disputes would further inform an assessment of their track record. Specific data on their prior DoD contracts, including value and scope, would be necessary for a comprehensive analysis.

How does the awarded amount of $12.6 million compare to similar rail upgrade projects at other military installations?

Benchmarking this $12.6 million contract against similar rail upgrade and locomotive facility projects at other military installations is crucial for assessing value for money. Factors such as project scope, complexity, geographic location (which influences labor and material costs), and the specific year of award need to be considered for a fair comparison. Without access to a database of comparable projects with detailed cost breakdowns, it is difficult to definitively state if this contract represents excellent, good, or fair value. However, for a multi-year infrastructure project at a major base, the amount appears within a plausible range.

What are the primary risks associated with this firm fixed-price contract for rail upgrades?

The primary risks associated with this firm fixed-price contract lie in potential cost overruns for the contractor if unforeseen site conditions are encountered (e.g., soil issues, underground utilities not previously identified) or if material and labor costs escalate significantly beyond initial projections. For the government, the risk is ensuring the contractor meets all quality and performance specifications within the fixed price. Delays, while the contractor bears the cost impact, can still affect the operational readiness of the facility. Contractor default or bankruptcy, though less common, would also pose a significant risk.

How effective are firm fixed-price contracts in ensuring project completion for large-scale construction like this?

Firm fixed-price (FFP) contracts are generally considered effective for large-scale construction projects when the scope of work is well-defined and risks are understood. They incentivize the contractor to control costs and manage the project efficiently to maximize profit. For the government, FFP provides cost certainty. However, effectiveness can be diminished if the initial scope is poorly defined, leading to change orders, or if the contractor lacks the financial stability or expertise to manage the project, potentially resulting in delays or quality issues despite the price being fixed.

What has been the historical spending trend for rail infrastructure upgrades at Fort Lewis or similar Army installations?

Analyzing historical spending trends for rail infrastructure upgrades at Fort Lewis and comparable Army installations would provide context for the $12.6 million award. This involves examining past contracts for similar work, their values, durations, and the frequency of such upgrades. A trend of consistent, significant investment might indicate ongoing needs and a stable budget allocation for infrastructure. Conversely, sporadic or declining spending could suggest deferred maintenance or shifting priorities. Understanding these patterns helps assess whether this contract represents a typical investment or an anomaly.

What are the implications of awarding this contract under 'full and open competition' versus a sole-source or limited competition?

Awarding this contract under 'full and open competition' implies that multiple companies were eligible to bid, and the government received bids from at least two responsible sources. This process is designed to foster price competition, potentially leading to lower costs for the government and taxpayers compared to sole-source or limited competition where fewer bidders are involved. It also increases the likelihood of selecting a contractor with the best overall value proposition, considering both price and technical capabilities. Limited competition might be justified if only a few firms possess the necessary specialized skills, while sole-source is typically reserved for emergencies or unique situations.

Industry Classification

NAICS: Construction › Other Heavy and Civil Engineering Construction › Other Heavy and Civil Engineering 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: W912DW08R0024

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3815 100TH ST SW STE 3A, LAKEWOOD, WA, 10

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Subchapter S Corporation, Woman Owned Business

Financial Breakdown

Contract Ceiling: $12,605,041

Exercised Options: $12,605,041

Current Obligation: $12,605,041

Contract Characteristics

Cost or Pricing Data: NO

Timeline