DoD awards $31.8M for Puerto Rico housing, with 6 bidders vying for design-build contract

Contract Overview

Contract Amount: $31,816,555 ($31.8M)

Contractor: Design Build, LLC.

Awarding Agency: Department of Defense

Start Date: 2021-10-15

End Date: 2024-11-12

Contract Duration: 1,124 days

Daily Burn Rate: $28.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: CONSTRUCTION OF 27 FAMILY HOUSING AT BUCHANAN, PUERTO RICO.

Place of Performance

Location: SAN JUAN, SAN JUAN County, PUERTO RICO, 00931

Plain-Language Summary

Department of Defense obligated $31.8 million to DESIGN BUILD, LLC. for work described as: CONSTRUCTION OF 27 FAMILY HOUSING AT BUCHANAN, PUERTO RICO. Key points: 1. Contract awarded to Design Build, LLC for construction of 27 family housing units. 2. Competition was robust with 6 bidders, suggesting potential for competitive pricing. 3. The contract type is Firm Fixed Price, which shifts cost risk to the contractor. 4. Project duration is 1124 days, indicating a significant, multi-year construction effort. 5. Location in Puerto Rico may present unique logistical and supply chain considerations. 6. The North American Industry Classification System (NAICS) code 236115 points to new single-family housing construction.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific cost breakdowns or comparable project data in Puerto Rico. The total award amount of $31.8 million for 27 housing units averages approximately $1.18 million per unit. This figure needs to be assessed against local construction costs, material prices, and labor rates in Puerto Rico, which can differ significantly from the continental U.S. The firm fixed-price nature of the contract implies that the contractor is responsible for cost overruns, which can be a positive indicator of value if the price was set competitively.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, with six bidders submitting proposals. This level of competition is generally positive, as it allows for a wider range of potential contractors to participate and can drive down prices through market forces. The presence of multiple bidders suggests that the opportunity was attractive and that the government received a range of options to consider, potentially leading to a better-value outcome.

Taxpayer Impact: A competitive bidding process for this housing construction project helps ensure that taxpayer dollars are used efficiently by encouraging contractors to offer their best pricing and performance to win the award.

Public Impact

Military families stationed at Buchanan, Puerto Rico, will benefit from new, modern housing. The project will deliver 27 new single-family housing units, improving living conditions. Geographic impact is concentrated in Puerto Rico, supporting local infrastructure development. Construction activities will likely create temporary employment opportunities for local labor and trades.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions or material price escalations occur, despite the FFP contract.
Logistical challenges in Puerto Rico could impact project timelines and material delivery.
Ensuring quality of construction to meet military housing standards requires diligent oversight.

Positive Signals

Robust competition with 6 bidders indicates market interest and potential for competitive pricing.
Firm Fixed Price contract shifts cost risk to the contractor.
Project aims to improve quality of life for military personnel and their families.

Sector Analysis

This contract falls within the construction sector, specifically new single-family housing. The market for military housing construction is a specialized niche within the broader construction industry, often involving design-build capabilities and adherence to specific government standards. The total federal spending on construction varies annually but represents a significant portion of the federal budget, with housing projects for military installations being a recurring requirement for the Department of Defense.

Small Business Impact

The data indicates this contract was awarded under full and open competition and does not specify any small business set-aside. While the prime contractor is Design Build, LLC, there is no explicit information regarding subcontracting plans or goals for small businesses. Further analysis would be needed to determine if small businesses will be involved in the project through subcontracting opportunities and their potential impact on the small business ecosystem in Puerto Rico.

Oversight & Accountability

Oversight for this Department of the Army construction project would typically involve contracting officers, project managers, and potentially quality assurance representatives from the Army Corps of Engineers. Accountability measures are inherent in the firm fixed-price contract, which holds the contractor responsible for delivering the project within the agreed-upon cost and schedule. Transparency is generally maintained through contract award databases, though detailed project progress reports may not always be publicly available.

Related Government Programs

Military Family Housing Construction
Department of Defense Construction Projects
Puerto Rico Infrastructure Development
Design-Build Contracts

Risk Flags

Potential for schedule delays due to island logistics.
Risk of unforeseen site conditions impacting cost and schedule.
Ensuring compliance with stringent military housing quality standards.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $31.8 million to DESIGN BUILD, LLC.. CONSTRUCTION OF 27 FAMILY HOUSING AT BUCHANAN, PUERTO RICO.

Who is the contractor on this award?

The obligated recipient is DESIGN BUILD, 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 $31.8 million.

What is the period of performance?

Start: 2021-10-15. End: 2024-11-12.

What is the track record of Design Build, LLC in completing similar federal construction projects, particularly in challenging environments like Puerto Rico?

Assessing the track record of Design Build, LLC requires a review of their past performance on federal contracts. This would involve examining contract databases (like SAM.gov or FPDS) for previous awards, their value, and performance ratings. Specific attention should be paid to projects of similar scope (e.g., housing construction, design-build) and location. Experience in Puerto Rico is particularly relevant due to potential logistical, environmental, and regulatory differences compared to the continental U.S. A history of timely completion, adherence to budget, and positive performance reviews would indicate a lower risk profile for this current contract. Conversely, past issues with performance, disputes, or defaults would raise concerns about the contractor's ability to successfully execute this project.

How does the per-unit cost of $1.18 million compare to similar military housing construction projects awarded by the DoD in recent years?

The average cost of approximately $1.18 million per housing unit is a significant figure that warrants comparison with similar projects. To benchmark this value, one would need to analyze recent DoD contracts for new single-family housing construction, ideally in comparable geographic regions or with similar design-build requirements. Factors such as square footage, amenities, material costs, and labor rates in the specific region of award (Puerto Rico in this case) must be considered. If comparable projects in similar markets have costs significantly lower than $1.18 million per unit, it could indicate potential overpricing or inefficiencies in this contract. Conversely, if costs are in line with or lower than benchmarks, it suggests competitive pricing for the scope of work and location.

What are the primary risks associated with constructing family housing in Puerto Rico, and how are they mitigated in this contract?

Constructing family housing in Puerto Rico presents several risks, including susceptibility to hurricanes and seismic activity, potential supply chain disruptions due to island logistics, higher transportation costs for materials, and a specialized labor market. The contract's firm fixed-price (FFP) structure mitigates financial risk for the government by placing the burden of cost overruns on the contractor. However, risks related to schedule delays due to weather or logistical issues remain. Mitigation strategies likely involve detailed site assessments, robust construction plans accounting for environmental factors, contingency planning for material delivery, and potentially performance bonds to ensure project completion. The government's oversight will be crucial in monitoring these risks throughout the project lifecycle.

What is the historical spending pattern for military family housing construction by the Department of the Army, and how does this contract fit within that trend?

The Department of the Army, like other branches of the DoD, has a consistent need for military family housing construction and renovation to maintain adequate living standards for service members and their families. Historical spending patterns would reveal cyclical investments in infrastructure, often driven by military readiness needs, base realignment and closure (BRAC) actions, and aging housing stock. This $31.8 million contract for 27 units in Puerto Rico represents a specific investment in addressing housing requirements at Buchanan. To understand its place in the trend, one would analyze the total annual budget allocated by the Army for housing construction over the past decade, looking at the average project size, cost per unit, and geographic distribution of these investments. This contract appears to be a standard, albeit substantial, project within the ongoing effort to modernize military housing.

Given the firm fixed-price nature, what mechanisms are in place to ensure the quality of the 27 housing units meets DoD standards?

Even with a firm fixed-price (FFP) contract, ensuring quality is paramount, especially for military housing. The government typically employs several oversight mechanisms. These include the appointment of a Contracting Officer's Representative (COR) or a Quality Assurance (QA) specialist who monitors the contractor's work progress and adherence to specifications. The contract itself will detail specific quality standards, materials, and construction methods required. Regular site inspections, material testing, and review of the contractor's quality control plan are standard procedures. Acceptance of final payment is contingent upon the successful completion and inspection of all work according to the contract's quality requirements, providing a strong incentive for the contractor to deliver a high-quality product.

Industry Classification

NAICS: Construction › Residential Building Construction › New Single-Family Housing Construction (except For-Sale Builders)

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: W912EP20R0039

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: PR 865 KM 3 HM3, TOA BAJA, PR, 00949

Business Categories: Category Business, Corporate Entity Not Tax Exempt, DoT Certified Disadvantaged Business Enterprise, Hispanic American Owned Business, HUBZone Firm, Limited Liability Corporation, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $31,816,555

Exercised Options: $31,816,555

Current Obligation: $31,816,555

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline