Federal Insurance Company awarded $27.4M contract for commercial and institutional building construction in New Jersey

Contract Overview

Contract Amount: $27,413,453 ($27.4M)

Contractor: Federal Insurance Company

Awarding Agency: Department of Defense

Start Date: 2009-11-12

End Date: 2013-01-09

Contract Duration: 1,154 days

Daily Burn Rate: $23.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 10

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: LAKEHURST, NJ

Place of Performance

Location: FORT DIX, BURLINGTON County, NEW JERSEY, 08640, UNITED STATES OF AMERICA

State: New Jersey Government Spending

Plain-Language Summary

Department of Defense obligated $27.4 million to FEDERAL INSURANCE COMPANY for work described as: LAKEHURST, NJ Key points: 1. Contract value represents a significant investment in infrastructure maintenance and development. 2. Full and open competition suggests a robust market for construction services. 3. Contract duration of over three years indicates a need for sustained support. 4. Fixed-price contract type shifts risk to the contractor, potentially stabilizing costs. 5. The award to a single entity highlights the scale and complexity of the project. 6. Geographic focus on New Jersey points to specific regional infrastructure needs.

Value Assessment

Rating: good

The contract value of $27.4 million for commercial and institutional building construction appears reasonable given the duration and scope. Without specific benchmarks for similar projects in the Lakehurst, NJ area, a direct per-unit cost comparison is difficult. However, the firm fixed-price nature of the contract suggests that the contractor has factored in potential cost overruns, providing a degree of cost certainty for the government. The number of bids received (10) indicates a competitive environment that likely drove pricing towards market rates.

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. Ten bids were received, indicating a healthy level of interest and a competitive marketplace for these construction services. The presence of multiple bidders generally leads to more favorable pricing and better quality offerings as contractors vie for the award.

Taxpayer Impact: The extensive competition for this contract is beneficial for taxpayers, as it likely resulted in a lower overall price than would have been achieved through a less competitive process. It also ensures that the government is receiving services from qualified contractors who can offer the best value.

Public Impact

The primary beneficiaries are the Department of the Army and potentially other entities within the Department of Defense requiring construction services. Services delivered include commercial and institutional building construction, likely encompassing new builds, renovations, repairs, and maintenance. The geographic impact is concentrated in Lakehurst, New Jersey, addressing specific infrastructure needs in that locality. Workforce implications include job creation for construction workers, project managers, engineers, and support staff in the New Jersey region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the scope of work expands beyond initial estimates, despite the fixed-price structure.
Ensuring the contractor maintains quality standards throughout the multi-year duration of the contract.
Dependency on a single contractor for critical construction services in the specified region.

Positive Signals

Firm fixed-price contract provides cost certainty and limits the government's exposure to price fluctuations.
Full and open competition suggests a strong pool of qualified bidders, likely leading to competitive pricing.
The award to a single, presumably capable, contractor streamlines project management and execution.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a vital part of the broader construction industry. This sector encompasses a wide range of projects, from office buildings and schools to hospitals and government facilities. The market size for federal construction is substantial, with significant annual spending across various agencies. This specific contract contributes to the overall federal investment in maintaining and upgrading its physical assets, ensuring operational readiness and facility functionality.

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 requirements mandated for small businesses within this award. The primary contractor, Federal Insurance Company, will likely manage the project with its own resources or through larger subcontractors, potentially limiting direct opportunities for small businesses on this specific contract. However, the overall construction ecosystem in New Jersey may still see indirect benefits through the supply chain.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant contracting command within the Department of the Army. Performance monitoring, quality assurance, and compliance checks would be standard procedures. Given the nature of construction contracts, there may be specific inspection protocols and milestones to ensure adherence to specifications and safety standards. Transparency is generally maintained through contract award databases and reporting requirements.

Related Government Programs

Department of Defense Construction Contracts
Federal Building and Infrastructure Projects
Commercial Construction Services
Institutional Facility Maintenance
New Jersey Construction Spending

Risk Flags

Potential for cost overruns if scope is not well-defined.
Contractor performance and capacity risks.
Volatility in material and labor costs.
Unforeseen site conditions.
Adequacy of government oversight.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $27.4 million to FEDERAL INSURANCE COMPANY. LAKEHURST, NJ

Who is the contractor on this award?

The obligated recipient is FEDERAL INSURANCE COMPANY.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $27.4 million.

What is the period of performance?

Start: 2009-11-12. End: 2013-01-09.

What is the track record of Federal Insurance Company in securing and executing federal construction contracts?

Information regarding the specific track record of Federal Insurance Company in securing and executing federal construction contracts is not detailed in the provided data. A comprehensive assessment would require reviewing past performance evaluations, contract history, and any reported issues or successes on previous government projects. Federal agencies typically maintain performance databases (like the Contractor Performance Assessment Reporting System - CPARS) that provide insights into a contractor's reliability, quality of work, and adherence to schedule and budget on prior awards. Without access to such detailed performance data, it is difficult to definitively assess their track record for this specific $27.4 million contract.

How does the awarded amount compare to similar commercial and institutional building construction contracts awarded by the Department of the Army?

Comparing the $27.4 million award to similar contracts requires access to a broader dataset of federal procurement. However, for a multi-year construction project of this nature, the value appears within a reasonable range, especially considering potential variations in project scope, location, and specific requirements. The Department of the Army undertakes numerous construction projects annually, varying significantly in scale and cost. To provide a precise benchmark, one would need to analyze contracts with comparable project types (commercial/institutional building construction), geographic locations (New Jersey or similar regions), and contract durations (over 1000 days). The fact that 10 bids were received suggests the contract value was perceived as adequate by the market.

What are the primary risk indicators associated with a contract of this size and duration?

Key risk indicators for a contract of this size ($27.4 million) and duration (1154 days) include potential scope creep, where the project's requirements expand beyond the initial agreement, leading to cost overruns or schedule delays. Contractor performance risk is also significant; ensuring the Federal Insurance Company has the capacity, expertise, and financial stability to execute the project successfully is crucial. Material and labor cost volatility can pose a risk, although the firm fixed-price structure aims to mitigate this for the government. Furthermore, unforeseen site conditions or regulatory changes could introduce complexities. Finally, effective government oversight is essential to manage these risks proactively.

How effective is the firm fixed-price contract type in ensuring value for money for this construction project?

The firm fixed-price (FFP) contract type is generally considered effective in ensuring value for money for construction projects when the scope of work is well-defined and unlikely to change significantly. Under an FFP contract, the contractor assumes the primary risk for cost overruns, which incentivizes them to manage costs efficiently and complete the project within the agreed-upon price. This provides the government with cost certainty. For taxpayers, this means the final price is largely predictable. However, if the initial scope is poorly defined, the contractor may build in significant contingencies, potentially leading to a higher initial price than a cost-reimbursable contract might have offered, though with less risk of unexpected increases.

What are the historical spending patterns for commercial and institutional building construction by the Department of the Army in New Jersey?

Analyzing historical spending patterns for commercial and institutional building construction by the Department of the Army in New Jersey would require access to historical federal procurement data. This contract, valued at $27.4 million over approximately three years, represents a significant but singular investment. To understand broader patterns, one would need to examine spending trends over multiple fiscal years, identifying the average contract values, the frequency of such awards, and the specific types of facilities being constructed or maintained. This would help contextualize whether this award is typical, an outlier, or indicative of a shift in investment priorities for the Army in the region.

What is the significance of 'Commercial and Institutional Building Construction' as a contract category for the Department of Defense?

The 'Commercial and Institutional Building Construction' category is highly significant for the Department of Defense (DoD) as it directly relates to the maintenance, modernization, and expansion of its vast real property inventory. This includes everything from barracks and administrative buildings to training facilities, research labs, and support structures. Ensuring these facilities are safe, functional, and up-to-date is critical for troop readiness, operational effectiveness, and the well-being of military personnel and civilian employees. Spending in this category reflects the DoD's commitment to infrastructure upkeep and its ability to support its mission requirements through adequate facilities.

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: W912QR09R0050

Offers Received: 10

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Chubb Corporation, the (UEI: 044168144)

Address: 15 MOUNTAINVIEW RD, WARREN, NJ, 07059

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $27,413,453

Exercised Options: $27,413,453

Current Obligation: $27,413,453

Contract Characteristics

Cost or Pricing Data: NO

Timeline