DoD awards $26.6M warehouse construction contract to International Towers LLC in California

Contract Overview

Contract Amount: $26,657,021 ($26.7M)

Contractor: International Towers LLC

Awarding Agency: Department of Defense

Start Date: 2023-07-10

End Date: 2026-07-14

Contract Duration: 1,100 days

Daily Burn Rate: $24.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: DEMOLITION/REPAIR/CONSTRUCT WAREHOUSE SR

Place of Performance

Location: BARSTOW, SAN BERNARDINO County, CALIFORNIA, 92311

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $26.7 million to INTERNATIONAL TOWERS LLC for work described as: DEMOLITION/REPAIR/CONSTRUCT WAREHOUSE SR Key points: 1. Contract awarded for demolition, repair, and construction of a warehouse facility. 2. The contract is a firm-fixed-price definitive contract, indicating predictable costs. 3. Competition was full and open, suggesting a competitive bidding process. 4. The contract duration is approximately 3 years, aligning with typical construction project timelines. 5. The awardee, International Towers LLC, is a new entity in federal contracting based on available data. 6. The project is located in California, a region with significant construction activity and costs.

Value Assessment

Rating: fair

The contract value of $26.6 million for warehouse construction appears within a reasonable range for a project of this scope and duration. However, without specific details on the size, complexity, and location within California, a precise benchmark is difficult. The firm-fixed-price structure helps manage cost overruns, but the initial pricing is key. Further analysis would require comparing this to similar warehouse construction projects by the DoD or other agencies in comparable geographic areas.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit bids. The data indicates one bid was received and accepted. While full and open competition is generally preferred for maximizing price discovery, a single bid raises questions about the actual level of competition achieved. It could suggest limited market interest, high barriers to entry, or a very specific set of requirements that only one firm could meet.

Taxpayer Impact: A single bid under full and open competition may not have resulted in the most competitive pricing for taxpayers. While the process was open, the lack of multiple offers could mean the government did not benefit from a wider range of price proposals.

Public Impact

The Department of the Army will benefit from the new or repaired warehouse facility, likely for storage and logistical support. Services delivered include demolition, repair, and construction of a commercial/institutional building. The geographic impact is localized to the specific site in California where the warehouse will be built. The project will likely create temporary jobs in the construction sector within California. The contract supports the Department of Defense's infrastructure and operational readiness.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Single bid received under full and open competition raises concerns about the effectiveness of the competition.
Awardee is a new entity in federal contracting, potentially indicating higher initial performance risks.
Firm-fixed-price contract, while good for cost control, relies heavily on the accuracy of the initial bid.

Positive Signals

Full and open competition was utilized, adhering to best practices for procurement.
Firm-fixed-price contract provides cost certainty for the government.
Contract duration is clearly defined, allowing for project planning and oversight.

Sector Analysis

The construction sector, particularly commercial and institutional building construction, is a significant area of federal spending. This contract falls under the broader umbrella of infrastructure development and maintenance for the Department of Defense. The market for such services in California is robust, with numerous firms capable of undertaking large-scale projects. Benchmarking would involve comparing the cost per square foot or per cubic foot against similar DoD or GSA warehouse construction projects in the region.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). There is no explicit information on subcontracting plans for small businesses. Given the size and nature of the project, it is possible that International Towers LLC may engage small businesses for specialized tasks, but this is not guaranteed by the contract terms as presented.

Oversight & Accountability

Oversight for this contract will likely be managed by the contracting officer and the relevant Department of the Army contracting office. The firm-fixed-price nature of the contract implies that cost oversight is less critical than performance and schedule adherence. Transparency is generally provided through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Department of Defense Construction Contracts
General Services Administration (GSA) Building Construction
Army Corps of Engineers Construction Projects
Federal Warehouse and Storage Facilities

Risk Flags

Single Bid Received
New Contractor
Potential for Cost Overruns (inherent in construction)

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.7 million to INTERNATIONAL TOWERS LLC. DEMOLITION/REPAIR/CONSTRUCT WAREHOUSE SR

Who is the contractor on this award?

The obligated recipient is INTERNATIONAL TOWERS 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 $26.7 million.

What is the period of performance?

Start: 2023-07-10. End: 2026-07-14.

What is the track record of International Towers LLC in federal contracting?

Based on the provided data, International Towers LLC appears to be a relatively new entrant into the federal contracting space. The data does not indicate a history of prior awards or performance with the federal government. For new contractors, there can be an elevated risk associated with performance, adherence to regulations, and project management compared to established firms with a proven track record. Further investigation into the company's background, financial stability, and any pre-award assessments conducted by the agency would be necessary to fully gauge their capabilities and potential risks.

How does the value of this contract compare to similar federal warehouse construction projects?

Comparing the $26.6 million contract value requires context regarding the specific scope, size (square footage), and complexity of the warehouse being demolished, repaired, and constructed. Warehouses can vary significantly in their requirements, from basic storage to specialized climate-controlled or high-security facilities. Additionally, construction costs in California are generally higher than the national average due to labor, material, and regulatory factors. Without detailed project specifications and comparable project data from the same region and time period, it is difficult to definitively benchmark this contract's value. However, for a substantial facility, the amount is not inherently unreasonable but warrants scrutiny against specific benchmarks.

What are the primary risks associated with this contract award?

The primary risks associated with this contract include the potential for performance issues given that International Towers LLC appears to be a new federal contractor. There is also a risk related to the limited competition, as only one bid was received. This could indicate that the initial pricing may not have been as competitive as it could have been with more bidders, or that the scope of work was highly specialized, limiting the pool of qualified contractors. Schedule delays and cost overruns, while mitigated by the firm-fixed-price structure, remain potential risks inherent in any large construction project, especially if unforeseen site conditions arise.

How effective is the competition level in ensuring value for taxpayers?

The effectiveness of the competition level in ensuring value for taxpayers is questionable in this instance. While the contract was awarded under 'full and open competition,' the receipt of only one bid significantly diminishes the competitive pressure that typically drives down prices and encourages innovation. A single bid suggests that either the market for this specific requirement was very small, the requirements were overly restrictive, or potential bidders found the opportunity unattractive. Consequently, taxpayers may not have received the full benefit of a robust bidding process, potentially leading to a higher-than-optimal price for the services rendered.

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

Historical spending patterns for warehouse construction by the Department of the Army are substantial, reflecting the logistical needs of a global military force. The Army frequently procures services for the construction, repair, and maintenance of various facilities, including warehouses, depots, and storage units, across numerous installations worldwide. Spending can fluctuate annually based on infrastructure modernization initiatives, operational tempo, and budget allocations. Analyzing past spending would involve examining contracts awarded over several fiscal years, looking at average contract values, typical durations, and the geographic distribution of these projects to understand the Army's consistent investment in its logistical infrastructure.

What are the implications of the firm-fixed-price contract type for cost control?

The firm-fixed-price (FFP) contract type is generally considered advantageous for cost control when the scope of work is well-defined and risks are understood. Under an FFP contract, the contractor agrees to a total price, and the government pays that amount regardless of the contractor's actual costs. This shifts the risk of cost overruns to the contractor. For the government, this provides budget certainty. However, the success of an FFP contract hinges on the accuracy of the initial price proposal. If the contractor significantly underestimated costs, they may cut corners on quality or attempt to seek change orders. Conversely, if the price was inflated, the government overpays. Therefore, robust initial price negotiation and thorough statement of work are crucial for FFP contracts to deliver true value.

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: W912DW23R0007

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 63066 OLD HIGHWAY 93, SAINT IGNATIUS, MT, 59865

Business Categories: 8(a) Program Participant, American Indian Owned Business, Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Tribally Owned Firm, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $26,657,021

Exercised Options: $26,657,021

Current Obligation: $26,657,021

Subaward Activity

Number of Subawards: 43

Total Subaward Amount: $33,543,004

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline