DoD awards $98M construction contract for Saudi Arabia base, highlighting global infrastructure needs

Contract Overview

Contract Amount: $98,084,224 ($98.1M)

Contractor: Gilbane Federal

Awarding Agency: Department of Defense

Start Date: 2024-10-01

End Date: 2026-12-31

Contract Duration: 821 days

Daily Burn Rate: $119.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: THE CONTRACTOR SHALL PERFORM CONSTRUCTION EFFORTS IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THE BASIC WEC CONTRACT AND THE SOW FOR THE STC AND CONTROLLED ASSETS STORAGE PROJECT AT KING ABDULAZIZ AIR BASE, KINGDOM OF SAUDI ARABIA.

Plain-Language Summary

Department of Defense obligated $98.1 million to GILBANE FEDERAL for work described as: THE CONTRACTOR SHALL PERFORM CONSTRUCTION EFFORTS IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THE BASIC WEC CONTRACT AND THE SOW FOR THE STC AND CONTROLLED ASSETS STORAGE PROJECT AT KING ABDULAZIZ AIR BASE, KINGDOM OF SAUDI ARABIA. Key points: 1. Contract value represents a significant investment in overseas military infrastructure. 2. Fixed-price contract type aims to control costs and manage contractor risk. 3. Delivery order structure suggests a phased approach to project execution. 4. Project duration of over two years indicates a substantial construction undertaking. 5. Contractor's experience in large-scale projects is a key performance indicator. 6. Geographic location implies complex logistical and geopolitical considerations.

Value Assessment

Rating: good

The contract value of $98.1 million for construction services appears reasonable given the scope and location. Benchmarking against similar overseas military construction projects would provide a more precise value-for-money assessment. The firm fixed-price structure suggests an expectation of cost control by the government. However, without detailed cost breakdowns or comparisons to similar projects in the region, a definitive value assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. This competitive environment is generally favorable for price discovery and achieving market-based pricing. The presence of two bidders, as indicated, suggests a moderate level of competition for this specific delivery order.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically drives down prices and encourages the most capable contractors to offer their best value.

Public Impact

The primary beneficiaries are the Department of Defense and its personnel stationed at King Abdulaziz Air Base, who will gain improved storage facilities. The project will deliver essential construction services for storage and controlled assets. The geographic impact is concentrated in the Kingdom of Saudi Arabia, supporting U.S. Air Force operations. The contract is expected to create employment opportunities for construction workers, potentially both U.S. and local hires, depending on Gilbane Federal's staffing strategy.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions or logistical challenges arise in Saudi Arabia.
Dependency on timely delivery of materials and equipment to an overseas location.
Geopolitical instability in the region could impact project timelines and execution.
Ensuring compliance with local labor laws and regulations in Saudi Arabia.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Awarded under full and open competition, suggesting a competitive bidding process.
Contractor Gilbane Federal has experience in large-scale construction projects.
Project duration is clearly defined, allowing for structured planning and execution.

Sector Analysis

This contract falls within the commercial and institutional building construction sector, specifically supporting defense infrastructure. The global market for military construction is substantial, driven by geopolitical needs and the maintenance of overseas bases. Comparable spending benchmarks would involve analyzing other large-scale construction projects awarded by the DoD or allied nations for similar facilities in foreign territories.

Small Business Impact

The contract data indicates that small business participation was not a primary set-aside consideration for this specific delivery order (ss: false, sb: false). While the prime contractor, Gilbane Federal, may engage small businesses for subcontracting opportunities, there is no explicit requirement noted in the provided data. The impact on the small business ecosystem will depend on Gilbane Federal's subcontracting strategy and the availability of qualified small businesses for specialized construction services.

Oversight & Accountability

Oversight for this contract will primarily be managed by the Department of the Air Force contracting and project management offices. Accountability measures are embedded within the contract terms, including performance standards and delivery schedules. Transparency is facilitated through contract award announcements and public databases. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Overseas Military Construction
Base Realignment and Closure (BRAC) related construction
Foreign Military Sales (FMS) infrastructure support
Department of Defense Facilities Engineering

Risk Flags

Geopolitical Risk
Logistical Complexity
Foreign Regulatory Compliance
Potential for Unforeseen Site Conditions

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $98.1 million to GILBANE FEDERAL. THE CONTRACTOR SHALL PERFORM CONSTRUCTION EFFORTS IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THE BASIC WEC CONTRACT AND THE SOW FOR THE STC AND CONTROLLED ASSETS STORAGE PROJECT AT KING ABDULAZIZ AIR BASE, KINGDOM OF SAUDI ARABIA.

Who is the contractor on this award?

The obligated recipient is GILBANE FEDERAL.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $98.1 million.

What is the period of performance?

Start: 2024-10-01. End: 2026-12-31.

What is Gilbane Federal's track record with similar overseas construction projects for the Department of Defense?

Gilbane Federal has a significant track record in executing large-scale construction projects, including those for the Department of Defense in overseas locations. Their experience often encompasses complex logistical challenges, adherence to stringent security protocols, and compliance with international building standards. Analyzing their past performance on projects of similar scope and value, particularly within the Middle East, would provide insight into their capability to manage this specific contract effectively. Past performance evaluations and contract close-out data from previous DoD projects would be crucial for a comprehensive assessment of their reliability and efficiency in delivering projects on time and within budget.

How does the $98.1 million contract value compare to similar construction projects at overseas military bases?

The $98.1 million contract value for the STC and Controlled Assets Storage Project at King Abdulaziz Air Base is substantial, reflecting the complexities of overseas construction. To benchmark this value, one would compare it to similar projects such as the construction of hangars, barracks, or specialized storage facilities at other U.S. military installations abroad. Factors influencing cost include location (e.g., cost of labor, materials, transportation in Saudi Arabia), project complexity (e.g., specialized storage requirements), and the overall economic climate. A detailed comparison would involve analyzing the cost per square foot or cost per functional unit (e.g., cost per storage unit) against comparable projects, adjusted for regional economic differences and specific project requirements.

What are the primary risks associated with executing a construction project of this magnitude in Saudi Arabia?

Executing a construction project of this magnitude in Saudi Arabia presents several key risks. Geopolitical instability in the region could lead to unforeseen security challenges or disruptions. Logistical complexities are significant, involving the transportation of materials, equipment, and potentially personnel to the base, which can be time-consuming and costly. Furthermore, navigating local regulations, labor laws, and cultural nuances requires careful management. There's also the risk of encountering unexpected site conditions or material shortages. The firm fixed-price nature of the contract means that the contractor bears much of the financial risk associated with these challenges, but significant delays or cost overruns could still impact project completion and the government's long-term operational readiness.

What is the expected impact of this contract on the operational capabilities at King Abdulaziz Air Base?

This contract is expected to significantly enhance the operational capabilities at King Abdulaziz Air Base by providing essential new or improved facilities for the storage of sensitive and controlled assets. Adequate and secure storage is critical for maintaining the readiness and effectiveness of deployed military assets and equipment. The new facilities will likely improve organization, security, and accessibility of these assets, thereby supporting the overall mission effectiveness of the U.S. Air Force contingent stationed there. The project's completion will contribute to a more robust and secure infrastructure, underpinning sustained operational presence and readiness in the region.

How has spending on overseas military construction projects by the Department of the Air Force trended in recent years?

Spending on overseas military construction projects by the Department of the Air Force can fluctuate based on strategic priorities, geopolitical events, and the lifecycle of existing infrastructure. In recent years, there has been a consistent need for modernization and expansion of facilities at bases worldwide to support evolving mission requirements and enhance operational readiness. Factors such as troop deployments, the need for upgraded living quarters, and the requirement for specialized facilities like hangars or secure storage areas drive this spending. Analyzing historical data for the Air Force's Facilities, Engineering, and Construction (CE) budget, specifically allocations for overseas projects, would reveal trends in investment levels and the types of projects prioritized.

What are the implications of a 'Delivery Order' structure for this large construction project?

A 'Delivery Order' structure, as indicated for this contract, typically implies that the overarching contract (in this case, a Basic WEC Contract) establishes the terms and conditions, while individual delivery orders authorize specific work, quantities, or phases. For this large construction project, it suggests that the $98.1 million represents the value of this particular order, and potentially other delivery orders could be issued under the same basic contract for related work or future phases. This approach allows for flexibility in project phasing and funding allocation. It also means that the full scope and total cost of the eventual project might be larger than this single delivery order, requiring ongoing monitoring of the basic contract's ceiling and remaining authorized work.

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Commercial and Institutional Building Construction

Product/Service Code: ARCHITECT/ENGINEER SERVICES › ARCH-ENG SVCS - CONSTRUCTION

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1655 GRANT ST 12TH FL, CONCORD, CA, 94520

Business Categories: Category Business, Not Designated a Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $98,084,227

Exercised Options: $98,084,227

Current Obligation: $98,084,224

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA890317D0041

IDV Type: IDC

Timeline