DoD awards $20.3M for German base construction, with 2 bidders competing for specialty trade services

Contract Overview

Contract Amount: $20,312,613 ($20.3M)

Contractor: Miscellaneous Foreign Awardees

Awarding Agency: Department of Defense

Start Date: 2012-06-20

End Date: 2024-12-31

Contract Duration: 4,577 days

Daily Burn Rate: $4.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: DESIGN CONSTRUCTION 28 AFH AT VILSECK, GERMANY

Plain-Language Summary

Department of Defense obligated $20.3 million to MISCELLANEOUS FOREIGN AWARDEES for work described as: DESIGN CONSTRUCTION 28 AFH AT VILSECK, GERMANY Key points: 1. Contract value appears reasonable given the scope of construction services for a military installation. 2. Competition was robust, with two bidders vying for the contract, suggesting fair market pricing. 3. The contract duration is extensive, spanning over 12 years, which may introduce performance risks. 4. This contract falls within the specialty trade contracting sector, supporting infrastructure development. 5. The firm-fixed-price structure shifts cost risk to the contractor, potentially impacting final price. 6. No small business set-aside was utilized, indicating a focus on larger, specialized firms.

Value Assessment

Rating: good

The contract value of $20.3 million for the design and construction of 28 family housing units at Vilseck, Germany, seems aligned with typical military infrastructure projects of this scale. Benchmarking against similar foreign military construction contracts would provide a more precise value-for-money assessment. The firm-fixed-price nature of the award suggests that the initial bid was considered competitive and that cost overruns are primarily the contractor's responsibility.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. Two bidders participated in this competition, which is a moderate level of competition. While more bidders could potentially drive prices lower, two bidders suggest that the market has at least some capacity and interest in performing this type of work for the Department of Defense.

Taxpayer Impact: The full and open competition with two bidders suggests a reasonable level of price discovery, likely resulting in a fair price for taxpayers. It indicates that the government did not unduly restrict the bidding pool, allowing for a competitive environment.

Public Impact

Military families stationed at Vilseck, Germany, will benefit from improved housing facilities. The contract delivers essential design and construction services for military infrastructure. The geographic impact is localized to the Vilseck military installation in Germany. The contract will likely support employment for construction workers and specialty tradespeople in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Extended contract duration (over 12 years) increases the risk of scope creep or unforeseen cost increases if not managed tightly.
Reliance on foreign awardees may introduce logistical or geopolitical risks not present with domestic contractors.
The firm-fixed-price contract, while beneficial for cost control, could lead to quality compromises if the contractor seeks to minimize costs aggressively.

Positive Signals

Full and open competition suggests a robust bidding process and potential for competitive pricing.
The contract is for essential infrastructure, directly supporting military readiness and personnel welfare.
The firm-fixed-price contract structure provides cost certainty for the government.

Sector Analysis

This contract falls within the construction sector, specifically specialty trade contracting, supporting the development of military housing. The market for military construction is often characterized by large, complex projects requiring specialized expertise and adherence to stringent government standards. Spending in this area is driven by military readiness requirements, base modernization efforts, and the need to provide adequate facilities for service members and their families, often in overseas locations.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. This suggests that the scope and complexity of the project were likely beyond the capacity or specialization of most small businesses, or that the competition focused on larger firms with extensive experience in overseas military construction.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Army contracting and project management offices responsible for overseas construction. Accountability measures are embedded in the firm-fixed-price contract terms, requiring the contractor to deliver the specified design and construction. Transparency is generally maintained through contract award databases, though specific project details and ongoing oversight activities may not be publicly detailed.

Related Government Programs

Military Housing Construction
Overseas Military Construction
Specialty Trade Services Contracts
Department of Defense Infrastructure Projects

Risk Flags

Long contract duration
Foreign awardee
Limited competition (2 bidders)

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.3 million to MISCELLANEOUS FOREIGN AWARDEES. DESIGN CONSTRUCTION 28 AFH AT VILSECK, GERMANY

Who is the contractor on this award?

The obligated recipient is MISCELLANEOUS FOREIGN AWARDEES.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $20.3 million.

What is the period of performance?

Start: 2012-06-20. End: 2024-12-31.

What is the historical spending pattern for similar housing construction projects at overseas military bases?

Historical spending on similar housing construction projects at overseas military bases can vary significantly based on location, scale, and specific requirements. Projects like the design and construction of family housing units often involve substantial investment due to the need for specialized materials, labor, and compliance with both U.S. military standards and local regulations. For instance, similar projects in Europe have ranged from a few million to tens of millions of dollars. Factors such as the number of units, the complexity of the design, and the prevailing economic conditions in the host country influence the overall cost. Analyzing past awards for projects of comparable size and scope, particularly within the European theater, would provide a benchmark for assessing the $20.3 million award for Vilseck.

How does the per-unit cost of housing compare to other recent military housing projects?

To assess the per-unit cost, we divide the total contract value by the number of housing units. In this case, $20,312,613.11 divided by 28 units equals approximately $725,450 per unit. This figure represents the total cost, including design and construction. Benchmarking this against other recent military housing projects requires access to comparable data. However, per-unit costs for military housing, especially overseas, can be significantly higher than domestic construction due to logistical challenges, security requirements, and specialized materials. Projects in high-cost-of-living areas or those with unique environmental considerations can push costs even higher. Without specific comparable contract data, it's difficult to definitively state if this is high or low, but it falls within a plausible range for complex overseas military construction.

What are the specific risks associated with a contract duration exceeding 12 years?

A contract duration of over 12 years presents several significant risks. Firstly, there's an increased likelihood of scope creep, where project requirements may evolve or expand over such a long period, potentially leading to cost overruns if not managed through formal change orders. Secondly, material costs and labor rates can fluctuate considerably over more than a decade, impacting the contractor's ability to maintain profitability under a firm-fixed-price agreement, potentially leading to disputes or contractor performance issues. Thirdly, the long duration increases the risk of technological obsolescence in design or construction methods. Finally, personnel turnover within both the government oversight team and the contractor's organization can lead to a loss of institutional knowledge, hindering effective project management and quality control.

What is the track record of the 'MISCELLANEOUS FOREIGN AWARDEES' group for similar projects?

The designation 'MISCELLANEOUS FOREIGN AWARDEES' is a broad category and does not refer to a single, identifiable contractor with a specific track record. This suggests that the award may have been made to multiple foreign entities or a joint venture, or that the data aggregation system has categorized the awardee in this manner. Without knowing the specific entities involved, it is impossible to assess their track record for similar projects. A detailed analysis would require identifying the actual prime contractor(s) and researching their past performance on Department of Defense contracts, particularly those involving construction and infrastructure development in overseas locations. This lack of specific awardee information hinders a thorough assessment of contractor reliability and past performance.

How does the firm-fixed-price contract type influence potential cost savings or overruns?

A firm-fixed-price (FFP) contract type is designed to provide cost certainty for the buyer (the government). Under an FFP contract, the price is set and not subject to adjustment based on the contractor's cost experience. This means the contractor assumes the primary risk for any cost overruns incurred during performance. If the contractor can complete the work for less than the agreed-upon price, they realize a higher profit. Conversely, if costs exceed the fixed price, the contractor absorbs the loss. This structure incentivizes the contractor to manage costs efficiently and control performance. However, it can also lead to potential issues such as the contractor cutting corners on quality to maintain profitability, or demanding significant price increases through change orders if unforeseen issues arise that were not adequately accounted for in the initial bid.

Industry Classification

NAICS: Construction › Other Specialty Trade Contractors › All Other Specialty Trade Contractors

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1275 FIRST ST NE, WASHINGTON, DC, 20417

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $20,312,613

Exercised Options: $20,312,613

Current Obligation: $20,312,613

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline