Army housing contract awarded to DEBCON INC for over $24M, with 5 bids received

Contract Overview

Contract Amount: $24,472,380 ($24.5M)

Contractor: Debcon Inc

Awarding Agency: Department of Defense

Start Date: 2016-08-18

End Date: 2018-09-03

Contract Duration: 746 days

Daily Burn Rate: $32.8K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF - FY15 ARMY FAMILY HOUSING AT ROCK ISLAND ARSENAL, IL - AWARD OF BASE AND OPTIONS 01 - 04.

Place of Performance

Location: ROCK ISLAND, ROCK ISLAND County, ILLINOIS, 61299

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $24.5 million to DEBCON INC for work described as: IGF::OT::IGF - FY15 ARMY FAMILY HOUSING AT ROCK ISLAND ARSENAL, IL - AWARD OF BASE AND OPTIONS 01 - 04. Key points: 1. The contract's value of over $24 million suggests a significant investment in housing infrastructure. 2. With 5 bids received, the competition level indicates a moderate degree of market interest. 3. The firm-fixed-price contract type generally transfers risk to the contractor, potentially stabilizing costs. 4. The contract duration of 746 days allows for substantial project completion and oversight. 5. The exclusion of sources in the competition method warrants further investigation into its necessity and impact on price. 6. The lack of small business set-aside suggests opportunities for larger firms or a different contracting strategy. 7. The contract's focus on building construction points to a need for improved or new housing facilities.

Value Assessment

Rating: fair

The contract value of approximately $24.5 million for housing construction over a period of roughly two years appears to be within a reasonable range for a project of this scale. Benchmarking against similar Army family housing projects would provide a more precise assessment of value for money. The firm-fixed-price structure aims to control costs, but the final expenditure will depend on the contractor's efficiency and any potential change orders. Without specific cost breakdowns or comparisons to industry standards for similar construction projects in Illinois, a definitive value assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating that while the competition was intended to be open, certain sources were excluded. With 5 bids received, there was a moderate level of competition. The exclusion of specific sources, if not fully justified, could limit the pool of potential bidders and potentially impact price discovery. A deeper understanding of the reasons for excluding certain sources is necessary to fully evaluate the competitive landscape.

Taxpayer Impact: The exclusion of sources, even with 5 bidders, may have prevented the most competitive pricing from emerging, potentially leading to higher costs for taxpayers than if all qualified sources had been allowed to bid.

Public Impact

Military families at Rock Island Arsenal, Illinois, are the primary beneficiaries, receiving improved or new housing facilities. The contract delivers construction services for family housing, addressing infrastructure needs. The geographic impact is localized to Rock Island Arsenal, Illinois. The contract supports the construction workforce, likely involving skilled trades and labor in the Illinois region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'exclusion of sources' in the competition method raises concerns about potential limitations on competition and price discovery.
The lack of explicit small business participation or set-aside could limit opportunities for smaller firms in this significant contract.
The firm-fixed-price nature, while beneficial for cost control, can lead to disputes if scope changes or unforeseen issues arise.

Positive Signals

The award to DEBCON INC, a single contractor, suggests a clear point of accountability for project delivery.
The firm-fixed-price contract type provides cost certainty for the government, assuming no significant scope changes.
The receipt of 5 bids indicates a degree of market interest and potential for competitive pricing, despite source exclusions.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a vital part of the broader construction industry. Federal spending in this sector often supports infrastructure development, military installations, and public facilities. The market size for federal construction contracts is substantial, with significant annual outlays. This specific contract for Army family housing aligns with the government's ongoing efforts to maintain and upgrade its infrastructure, ensuring adequate living conditions for service members and their families. Comparable spending benchmarks would involve analyzing the cost per square foot or per housing unit for similar construction projects across different military branches and geographic locations.

Small Business Impact

The contract does not appear to have a small business set-aside (ss: false, sb: false). This suggests that the procurement was not specifically targeted towards small businesses. While this may limit direct opportunities for small businesses to be the prime contractor, there could be subcontracting opportunities. The impact on the small business ecosystem depends on whether DEBCON INC utilizes small businesses for subcontracting roles, which is not detailed in the provided data.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant Army contracting command. Accountability measures are inherent in the firm-fixed-price contract, requiring the contractor to deliver the specified housing within the agreed-upon price. Transparency is generally facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected or reported.

Related Government Programs

Military Construction, Army
Family Housing Construction
Department of Defense Facilities Management
Base Realignment and Closure (BRAC) related construction

Risk Flags

Potential limitation of competition due to source exclusion.
Need for detailed justification for source exclusion.
Contractor's past performance verification required.
Potential for cost overruns if scope changes or unforeseen issues arise under FFP.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.5 million to DEBCON INC. IGF::OT::IGF - FY15 ARMY FAMILY HOUSING AT ROCK ISLAND ARSENAL, IL - AWARD OF BASE AND OPTIONS 01 - 04.

Who is the contractor on this award?

The obligated recipient is DEBCON 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 $24.5 million.

What is the period of performance?

Start: 2016-08-18. End: 2018-09-03.

What is the track record of DEBCON INC in performing similar federal construction contracts, particularly for military housing?

Analyzing DEBCON INC's past performance on federal contracts is crucial for assessing their capability to successfully execute this $24.5 million Army family housing project. A review of their contract history would reveal the types of projects they have completed, their performance ratings, and any instances of contract disputes, delays, or cost overruns. Specifically, experience with firm-fixed-price contracts and projects of similar magnitude and complexity, such as military housing or institutional buildings, would be highly relevant. Information from sources like the Federal Procurement Data System (FPDS) and contractor performance assessment reporting (CPARS) would be essential to gauge their reliability and expertise in this domain. Without this specific data, it's difficult to definitively assess their track record.

How does the awarded price of $24.5 million compare to the estimated cost or budget for this housing project?

The awarded price of $24,472,379.89 represents the government's commitment to DEBCON INC for the construction of Army family housing. To assess value, this figure needs to be compared against the government's independent cost estimate (ICE) or the initial budget allocated for this project. If the awarded price is significantly lower than the ICE, it could indicate strong competition and good negotiation. Conversely, if it's higher, it might suggest issues with the initial cost estimation or a less competitive bidding environment than anticipated. Furthermore, comparing the cost per housing unit or cost per square foot against industry benchmarks for similar construction in the Rock Island Arsenal area would provide a more granular understanding of whether the price is competitive and represents good value for taxpayer money.

What were the specific reasons for excluding certain sources from this 'full and open competition' procurement?

The designation 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' implies that while the competition was intended to be open, specific potential bidders were deliberately excluded. The Federal Acquisition Regulation (FAR) outlines specific circumstances under which sources may be excluded, such as when a contract requires specialized capabilities, when only a limited number of responsible sources can fulfill the requirement, or for reasons of national security. Understanding the justification for excluding specific sources is critical. If the exclusions were not adequately justified or documented, it could indicate a potential limitation on competition, which might have led to higher prices for the government. A review of the solicitation documents and any associated justifications for exclusion would be necessary to fully evaluate this aspect.

What is the projected impact of this contract on the availability and quality of housing for military families at Rock Island Arsenal?

This contract is directly aimed at improving the availability and quality of housing for military families stationed at Rock Island Arsenal. The award of over $24 million for construction suggests a significant investment in either building new housing units or substantially renovating existing ones. The successful completion of this project is expected to lead to more modern, safe, and comfortable living accommodations for service members and their families, thereby enhancing morale and retention. The duration of the contract (746 days) indicates a substantial undertaking, implying a significant improvement in the housing stock upon completion. The specific impact will depend on the exact scope of work, such as the number of units affected and the extent of the upgrades or new construction.

How does the firm-fixed-price contract type influence risk allocation and potential for cost overruns in this construction project?

The firm-fixed-price (FFP) contract type is designed to provide price certainty for the government and shifts most of the risk of cost overruns to the contractor, DEBCON INC. Under an FFP agreement, the contractor is obligated to complete the work for the agreed-upon price, regardless of their actual costs. This incentivizes the contractor to manage their resources efficiently and control expenses. However, if unforeseen issues arise during construction that are outside the contractor's control (e.g., unexpected site conditions, significant material price escalations not covered by contract clauses), or if the government requests changes to the scope of work, change orders may be issued, potentially increasing the total contract cost. The effectiveness of the FFP in controlling costs hinges on a well-defined scope of work and diligent contract administration.

What is the historical spending trend for Army family housing construction at Rock Island Arsenal or similar installations?

Analyzing historical spending on Army family housing construction at Rock Island Arsenal and comparable installations provides context for the current $24.5 million award. This involves examining past contracts for similar projects, noting their values, durations, and the types of construction undertaken. Trends in spending can reveal patterns of investment, identify periods of significant upgrades or new construction, and highlight any fluctuations in project costs over time. Understanding historical spending helps in assessing whether the current contract represents a typical investment, an increase, or a decrease in federal resources dedicated to housing infrastructure at this location. It also aids in benchmarking the current contract's value against past expenditures to identify potential cost efficiencies or escalations.

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 AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W912QR16R0029

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 9714 US ROUTE 60, ASHLAND, KY, 41102

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

Financial Breakdown

Contract Ceiling: $24,472,380

Exercised Options: $24,472,380

Current Obligation: $24,472,380

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline