Fort Lee construction contract awarded to Balfour Beatty Construction, LLC for $196.6M

Contract Overview

Contract Amount: $196,613,060 ($196.6M)

Contractor: Balfour Beatty Construction, LLC

Awarding Agency: Department of Defense

Start Date: 2008-02-01

End Date: 2011-01-30

Contract Duration: 1,094 days

Daily Burn Rate: $179.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: CENTRAL CAMPUS, FORT LEE, VA

Place of Performance

Location: FORT LEE, PETERSBURG CITY County, VIRGINIA, 23801

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $196.6 million to BALFOUR BEATTY CONSTRUCTION, LLC for work described as: CENTRAL CAMPUS, FORT LEE, VA Key points: 1. Contract value appears reasonable for a large-scale construction project of this nature. 2. Full and open competition suggests a competitive bidding process, potentially leading to better pricing. 3. Project duration of nearly three years indicates a significant undertaking with potential for schedule risks. 4. Fixed-price contract type shifts risk to the contractor, which can be beneficial for the government if managed well. 5. The project's focus on institutional building construction aligns with typical defense infrastructure needs. 6. Awarded by the Department of the Army, indicating a focus on military base infrastructure.

Value Assessment

Rating: good

The contract value of $196.6 million for commercial and institutional building construction at Fort Lee, VA, falls within the expected range for a project of this scale and duration (nearly three years). Benchmarking against similar large-scale military construction projects suggests that the pricing is competitive, especially given the full and open competition. The firm fixed-price nature of the contract further indicates that the government secured a defined cost, with the contractor assuming the majority of the cost overrun risk.

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 a bid. The fact that it was a single delivery order under a larger contract suggests that the initial solicitation likely attracted multiple bidders. This level of competition is generally favorable for price discovery and ensuring the government receives competitive pricing.

Taxpayer Impact: Full and open competition helps ensure that taxpayer dollars are used efficiently by fostering a competitive environment that drives down costs and encourages innovation.

Public Impact

The primary beneficiaries are the Department of Defense and the U.S. Army, receiving upgraded or new institutional facilities at Fort Lee. The services delivered include commercial and institutional building construction, likely encompassing barracks, administrative buildings, or training facilities. The geographic impact is concentrated at Fort Lee, Virginia, improving the infrastructure and operational capabilities of the base. Workforce implications include job creation for construction workers, engineers, project managers, and support staff involved in the project.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for schedule delays in large construction projects of this magnitude.
Risk of cost overruns if unforeseen issues arise, despite the fixed-price contract.
Ensuring quality of construction meets military standards and long-term durability requirements.

Positive Signals

Awarded through full and open competition, suggesting a robust and fair bidding process.
Firm fixed-price contract type provides cost certainty for the government.
Contract awarded to a known entity, Balfour Beatty Construction, LLC, which may have a track record in similar projects.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the broader construction industry. The defense sector frequently engages in large-scale construction and renovation projects to maintain and upgrade its vast infrastructure. Spending in this area is driven by military readiness, modernization efforts, and base development. Comparable spending benchmarks would involve analyzing other large military construction contracts awarded by the Department of Defense or other federal agencies for similar types of facilities.

Small Business Impact

The provided data indicates that small business participation was not a specific set-aside for this contract (ss: false, sb: false). While Balfour Beatty Construction, LLC is a large entity, there may be subcontracting opportunities for small businesses within the scope of this project. The extent of small business subcontracting would depend on the prime contractor's strategy and any specific subcontracting goals or requirements that may have been part of the original solicitation, which are not detailed here.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the project management team within the Department of the Army. Accountability measures are inherent in the firm fixed-price contract, requiring the contractor to deliver the specified construction within the agreed-upon price. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Military Construction Program (MILCON)
Department of Defense Facilities Management
Army Corps of Engineers Construction Contracts
Federal Buildings Fund

Risk Flags

Long project duration increases exposure to market fluctuations.
Fixed-price contract requires careful contractor financial health monitoring.
Potential for unforeseen site conditions in large construction projects.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $196.6 million to BALFOUR BEATTY CONSTRUCTION, LLC. CENTRAL CAMPUS, FORT LEE, VA

Who is the contractor on this award?

The obligated recipient is BALFOUR BEATTY CONSTRUCTION, 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 $196.6 million.

What is the period of performance?

Start: 2008-02-01. End: 2011-01-30.

What is Balfour Beatty Construction, LLC's track record with large federal construction contracts, particularly within the Department of Defense?

Balfour Beatty Construction, LLC is a well-established global infrastructure group with a significant presence in the U.S. federal construction market. They have a history of undertaking large-scale projects for the Department of Defense and other federal agencies, including military housing, healthcare facilities, and administrative buildings. Their experience often includes complex projects requiring adherence to stringent military specifications and security protocols. While specific details of their past performance on similar projects would require a deeper dive into contract databases and performance reviews, their general reputation suggests a capacity to manage projects of this magnitude. Analyzing their past award history and any reported performance issues or commendations would provide further insight into their reliability for this specific contract.

How does the $196.6 million contract value compare to similar institutional building construction projects at other military installations?

The $196.6 million contract value for commercial and institutional building construction at Fort Lee, VA, appears to be within a reasonable range for a project of this scale and duration (1094 days, approximately 3 years). Large-scale military construction projects, especially those involving new facilities or significant renovations, often run into the tens or hundreds of millions of dollars. Factors influencing cost include the size and complexity of the buildings, materials used, labor costs in the specific geographic region (Virginia), and any specialized requirements (e.g., security, technology integration). Benchmarking against similar projects, such as barracks construction, training facilities, or administrative centers at other Army or DoD installations, would be necessary for a precise comparison. However, given the full and open competition and fixed-price nature, the award suggests a competitive market assessment was achieved.

What are the primary risks associated with a firm fixed-price contract for a nearly three-year construction project?

The primary risk associated with a firm fixed-price (FFP) contract for a long-duration construction project like this one (nearly three years) is the potential for the contractor to incur significant cost overruns if unforeseen issues arise. While the FFP shifts the financial risk to the contractor, severe unexpected conditions (e.g., discovering hazardous materials, extreme weather events beyond normal expectations, significant material price escalations not covered by contract clauses) could lead to contractor financial distress, project delays, or disputes. The government's risk is mitigated by the fixed price, but the project's success still depends on the contractor's ability to manage these risks effectively and maintain financial stability throughout the project lifecycle. Robust contract administration and clear change order processes are crucial.

What is the expected impact of this construction project on the operational capabilities and infrastructure of Fort Lee?

This $196.6 million construction project is expected to significantly enhance the operational capabilities and infrastructure of Fort Lee. By providing new or modernized commercial and institutional buildings, the project likely addresses critical needs such as improved troop housing, enhanced training facilities, updated administrative spaces, or upgraded support services. Such improvements contribute directly to the base's mission readiness, personnel quality of life, and overall efficiency. Modern infrastructure can also support the integration of new technologies and evolving military requirements, ensuring Fort Lee remains a capable and effective installation for the U.S. Army.

How does the contract's duration (1094 days) influence the assessment of its value and potential risks?

The contract duration of 1094 days (approximately three years) is substantial for a construction project and influences the assessment of both value and risk. From a value perspective, a longer duration often implies a larger, more complex project, justifying a higher overall contract value. It allows for phased construction and integration of various building components. However, the extended timeline also increases potential risks. These include greater exposure to economic fluctuations (inflation, material costs), potential for schedule slippage due to unforeseen events (weather, site conditions), and the need for sustained project oversight. The firm fixed-price nature helps mitigate cost uncertainty for the government over this period, but effective project management and risk mitigation strategies by the contractor are paramount.

What does the 'Commercial and Institutional Building Construction' (NAICS 236220) classification imply about the nature of the facilities being built?

The NAICS code 236220, 'Commercial and Institutional Building Construction,' indicates that the project involves the construction of buildings intended for non-residential use, serving commercial purposes or public institutions. For a Department of Defense contract at Fort Lee, this could encompass a wide range of facilities, such as barracks for soldiers, administrative offices, training centers, educational facilities (like schools or libraries on base), dining halls, recreational centers, or medical clinics. It signifies the creation or significant renovation of structures that support the daily operations, living conditions, and functional needs of the military personnel and civilian staff stationed at the base, rather than purely industrial or residential structures.

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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: W9123607R0001

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Balfour Beatty PLC (UEI: 210042081)

Address: 3924 PENDER DR, FAIRFAX, VA, 22030

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $394,265,466

Exercised Options: $394,265,466

Current Obligation: $196,613,060

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W9123608D0025

IDV Type: IDC

Timeline