Mac and cheese go together.
In a similar way, the military construction contract called a MACC needs something more to make it complete.
When a construction firm learns it’s part of a multimillion-dollar MACC, it’s high-fives all around. Then proposal writers need to boot up their computers and get back to the job of pulling in specific projects.
That’s because receipt of an indefinite-delivery/indefinite-quantity multiple award construction contract, or MACC, is part of a two-step process.
In the first step, the U.S. Navy sorts through proposals from a large number of contractors that want to build structures at shore bases. The Navy evaluates their qualifications — including experience and safety record — and creates a short list of contractors.
In the second step, the Navy awards specific projects to businesses on that list.
Word that a company has successfully completed the first step doesn’t guarantee the winner a cent.
But it’s still good news.
“If you’re not invited up to the plate, you can’t swing at the pitch,” said George Rogers, CEO of Carlsbad-based RQ Construction.
Seeking Piece Of $900M Pie
RQ, which has 225 employees, is waiting for the final word that it’s gotten into a $900 million commercial and institutional MACC program. It received a promising letter from the Navy last week.
Ultimately, RQ and its competitors want a chance to compete for a piece of this large pie. In this instance, the Navy plans to dole out the funds to build maintenance facilities, training facilities and schools, child development centers and warehouses. The money may also be used to modernize older buildings. The contract will last five years.
Rogers says 80 contractors applied to be on that particular short list. They included Department of Defense specialists as well as big-name general contractors.
These days, building contractors are attracted to military work since the federal government has money to spend. Banks aren’t lending, Rogers says, and private projects aren’t moving forward.
The biggest names in military construction receive MACCs. They include Barnhart of San Diego, a unit of Heery International, Harper Construction of San Diego, R.A. Burch Construction of Ramona, Soltek Pacific of San Diego, Straub Construction of Fallbrook and T.B. Penick & Sons of San Diego.
The Navy’s San Diego-based construction office, Naval Facilities Engineering Command Southwest, has been awarding MACC contracts for 10 years, says Dennis Wilkins, a civilian executive with the command.
“The benefit to the federal government, as well as the taxpayer, is that we still obtain competition on all of our projects,” said Wilkins. “We just go to a smaller group of contractors that have been predetermined to be the best qualified.”
The government considers a construction firm’s experience, past performance and safety record — as well as price — for a particular type of work, Wilkins says, adding that when the government decided on price alone, “We would not necessarily get a good contractor.”
In a scenario where the bargain-basement bidder wins, the contractor may not be able to deliver for the price it quoted, and the Navy might not get the best product, Rogers asserts. “Everybody loses,” he said.
Rogers also suggests that the Defense Department’s two-step award system is a pragmatic way to handle an amount of work that would otherwise be burdensome. Without the two-step system, he says, 40 contractors might submit proposals for every building project.
A Small-Business Bid
MACCs are not just for big firms. San Diego-based Rore, a woman-owned small disadvantaged business, just received a similar deal.
Rore is part of a joint venture that will compete with five other teams for $400 million worth of Navy construction work through July 2014. Sixteen teams applied to be on that short list. Rore’s joint venture partner is Northern California-based Innovative Technical Solutions, or ITSI.
As for RQ, it’s celebrating the receipt of other multiple-award contracts.
In July, a team that includes RQ received a five-year, $900 million global MACC. Led by URS Group of San Antonio, the URS/RQ team is one of four teams that will bid on chances to build medical, energy, water conservation and waterfront projects through July 2014.
Early this month, the Carlsbad business got on an Army Corps of Engineers short list. Under the deal, the Corps of Engineers will distribute $370 million worth of work to seven teams over five years. The Army uses the MACC concept, but calls the deal a MATOC, for multiple award task order contract.
Still, a MACC isn’t much without the cheese.
The good news is that the government takes the other step in the two-phase competition.
Case in point: The Defense Department said Sept. 11 that Straub successfully pulled in a $16.7 million task order under its MACC to build an administration building at Marine Corps Air Station Miramar. Five other firms on the short list competed for the work.
The Navy wants its new building completed by March 2011.