Osborne Construction Co. awarded $47.4M contract by Department of the Army for Alaska-based construction services

Contract Overview

Contract Amount: $47,387,868 ($47.4M)

Contractor: Osborne Construction CO

Awarding Agency: Department of Defense

Start Date: 2002-08-26

End Date: 2009-08-20

Contract Duration: 2,551 days

Daily Burn Rate: $18.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Place of Performance

Location: ELMENDORF AFB, ANCHORAGE County, ALASKA, 99506

State: Alaska Government Spending

Plain-Language Summary

Department of Defense obligated $47.4 million to OSBORNE CONSTRUCTION CO for work described as: Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract duration of 2551 days (approximately 7 years) indicates a long-term need for services. 3. Firm Fixed Price contract type suggests cost certainty for the government. 4. The contract was awarded to a single entity, Osborne Construction Co. 5. The geographic location in Alaska may present unique logistical and operational challenges. 6. No small business set-aside was utilized for this contract.

Value Assessment

Rating: fair

The total award amount of $47.4 million over approximately 7 years averages to roughly $6.7 million per year. Without specific details on the scope of construction services, it is difficult to benchmark this against similar contracts. The firm fixed-price nature provides cost predictability, but the long duration could introduce risks if market conditions change significantly. Further analysis would require understanding the specific construction projects undertaken.

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. The presence of 5 bids suggests a moderate level of competition for this contract. While not an exhaustive number, it implies that the Army sought multiple proposals and likely received competitive pricing. The specific details of the bidding process and the number of bidders are crucial for a complete assessment.

Taxpayer Impact: A full and open competition generally benefits taxpayers by encouraging multiple companies to bid, which can drive down prices and ensure the government receives the best value.

Public Impact

The primary beneficiary is the Department of the Army, which receives construction services for its facilities in Alaska. The contract supports the maintenance and potential development of military infrastructure in a remote region. The geographic impact is concentrated in Alaska, potentially supporting local employment and businesses through subcontracting, although no specific set-aside was noted. The workforce implications would involve construction labor and management, likely a mix of local and potentially non-local hires depending on project needs and availability.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (7 years) increases risk of cost escalation or scope creep if not managed tightly.
Firm Fixed Price contracts can be disadvantageous to the contractor if costs rise unexpectedly, potentially leading to disputes or quality compromises if not adequately priced initially.
Lack of small business set-aside may limit opportunities for smaller firms in the Alaskan construction market.
Concentration of award to a single contractor over a long period could reduce future competition if the contractor's capacity is fully utilized.

Positive Signals

Firm Fixed Price contract provides budget certainty for the government.
Full and open competition suggests a deliberate effort to solicit multiple bids and achieve competitive pricing.
The award to Osborne Construction Co. implies they met the technical and financial requirements of the Army.
The contract duration indicates a sustained need and commitment to infrastructure in Alaska.

Sector Analysis

This contract falls within the Construction and Engineering services sector, a significant area of federal spending, particularly for agencies with large physical footprints like the Department of Defense. Federal construction spending is influenced by infrastructure needs, modernization efforts, and geopolitical requirements. Benchmarking this contract's value would require comparison to other large-scale military construction projects, especially those in remote or challenging environments like Alaska.

Small Business Impact

This contract did not include a small business set-aside, meaning it was open to all responsible contractors regardless of size. While this maximizes the pool of potential bidders, it may limit direct opportunities for small businesses unless they are prime contractors on other contracts or are successful subcontractors. The impact on the small business ecosystem depends on whether Osborne Construction Co. actively seeks to subcontract portions of the work to local Alaskan small businesses.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer's representative (COR) within the Department of the Army, responsible for monitoring performance, ensuring compliance with contract terms, and approving payments. The firm fixed-price nature simplifies some aspects of financial oversight but requires vigilance regarding scope adherence. Transparency is generally maintained through contract databases, but detailed project-specific oversight mechanisms are internal to the agency.

Related Government Programs

Military Construction (MILCON)
Base Realignment and Closure (BRAC) projects
Department of Defense Facilities Maintenance
Alaska District, U.S. Army Corps of Engineers projects

Risk Flags

Long-term contract duration may increase risk exposure.
Firm Fixed Price contracts can pose risks to contractors in volatile markets.
Geographic location in Alaska presents unique logistical and cost challenges.
Lack of small business set-aside may limit opportunities for smaller enterprises.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $47.4 million to OSBORNE CONSTRUCTION CO. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is OSBORNE CONSTRUCTION CO.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $47.4 million.

What is the period of performance?

Start: 2002-08-26. End: 2009-08-20.

What specific types of construction services were included in this $47.4 million contract awarded to Osborne Construction Co.?

The provided data does not specify the exact nature of the construction services. However, given the awarding agency (Department of the Army) and the location (Alaska), it likely encompasses a range of activities such as building new facilities, renovating existing structures, infrastructure development (roads, utilities), or specialized construction related to military operations. The firm fixed-price nature suggests well-defined scopes of work for individual projects or task orders issued under this contract. Without access to the contract's statement of work or task orders, a precise breakdown of services is not possible.

How does the average annual value of this contract compare to similar long-term construction contracts awarded by the Department of Defense in remote locations?

The contract's average annual value is approximately $6.7 million ($47.4M / 7 years). Benchmarking this requires detailed comparison with similar large-scale construction contracts awarded by the DoD in geographically challenging or remote areas like Alaska. Factors such as labor costs, material transport, environmental regulations, and specific project complexity significantly influence pricing in such locations. Without comparative data on specific projects (e.g., barracks, hangars, infrastructure upgrades) and their associated costs over similar durations, it's difficult to definitively state if this represents a high, low, or average value. However, construction in Alaska is generally more expensive than in the continental U.S. due to logistical challenges.

What are the primary risks associated with a 7-year firm fixed-price construction contract in Alaska?

A significant risk is the potential for cost overruns for the contractor if material prices, labor rates, or fuel costs escalate substantially over the 7-year period, especially given Alaska's unique economic factors and supply chain vulnerabilities. This could lead to contractor financial distress or pressure to cut corners on quality. For the government, risks include potential disputes if the contractor claims unforeseen conditions or scope creep, and the possibility that the fixed price may not reflect true market value by the end of the contract term if market conditions change dramatically. Additionally, the long duration in a remote location increases logistical complexities and the potential for weather-related delays impacting project timelines and costs.

What does the fact that 5 bids were received imply about the contractor track record and the market for construction services in Alaska?

Receiving 5 bids suggests a moderately competitive market for this type of construction service in Alaska, indicating that multiple firms were capable and interested in undertaking the work. It implies that Osborne Construction Co. was successful in a competitive process, suggesting they likely have a relevant track record and the capacity to meet the government's requirements. The number of bidders doesn't necessarily indicate the quality of the winning contractor's past performance, but it does show they were among the most competitive. The market may have several players, but perhaps only a few possess the specific qualifications or scale needed for this particular DoD contract.

How has federal spending on construction services in Alaska trended over the past decade, and how does this contract fit into that pattern?

Federal spending on construction in Alaska is often driven by military readiness requirements, infrastructure development (like ports and roads), and resource extraction support. Spending can fluctuate based on specific military base needs, congressional appropriations, and national defense priorities. This $47.4 million contract, spanning approximately 7 years, represents a significant but likely not unprecedented level of investment for a single project or set of projects. It fits within the pattern of the Department of Defense maintaining and upgrading its presence in strategic locations like Alaska. Analyzing historical spending data for the Army Corps of Engineers or specific Alaskan bases would provide context on whether this award is typical, higher, or lower than recent trends.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Address: 401PARKPLACE, SUITE 400, KIRKLAND, WA, 01

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline