DoD's $410M Hurricane Florence Recovery Contract Awarded to Archer Western Federal JV for North Carolina Construction

Contract Overview

Contract Amount: $410,283,090 ($410.3M)

Contractor: Archer Western Federal JV

Awarding Agency: Department of Defense

Start Date: 2020-08-31

End Date: 2026-02-18

Contract Duration: 1,997 days

Daily Burn Rate: $205.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: HURRICANE FLORENCE RECOVERY MILCON PACKAGE 7

Place of Performance

Location: JACKSONVILLE, ONSLOW County, NORTH CAROLINA, 28540

State: North Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $410.3 million to ARCHER WESTERN FEDERAL JV for work described as: HURRICANE FLORENCE RECOVERY MILCON PACKAGE 7 Key points: 1. Contract value represents a significant investment in post-disaster infrastructure resilience. 2. Full and open competition suggests a robust bidding process, potentially leading to competitive pricing. 3. The contract's duration of nearly 2000 days indicates a long-term commitment to recovery efforts. 4. Fixed-price contract type shifts performance risk to the contractor, potentially stabilizing costs. 5. The award to a joint venture may indicate a need for specialized capabilities or capacity. 6. Geographic focus on North Carolina highlights targeted recovery for a specific disaster-impacted region.

Value Assessment

Rating: good

The contract value of approximately $410 million for a large-scale construction project appears within a reasonable range for major military construction (MILCON) packages, especially those involving disaster recovery. Benchmarking against similar MILCON projects of comparable scope and complexity would be necessary for a definitive value-for-money assessment. The firm-fixed-price structure generally provides cost certainty for the government, assuming the contractor can manage their expenses effectively throughout the project lifecycle.

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 4 bidders suggests a healthy level of interest and competition for this significant recovery effort. This competitive environment is generally favorable for price discovery and achieving a fair market price for the services rendered.

Taxpayer Impact: A competitive bidding process for this large contract helps ensure that taxpayer dollars are used efficiently, driving down costs and potentially leading to better value for the government.

Public Impact

The primary beneficiaries are the Department of Defense and its installations in North Carolina, which will receive repaired and potentially improved facilities. Services delivered include the construction and repair of military facilities damaged by Hurricane Florence. The geographic impact is concentrated in North Carolina, specifically at military installations affected by the hurricane. Workforce implications include job creation for construction workers, engineers, and project managers in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen construction challenges arise, despite the fixed-price nature.
Contractor performance risk remains a factor, as delays or quality issues could impact recovery timelines.
Long project duration increases the potential for scope creep or changes in requirements over time.
Dependency on a single joint venture for a critical recovery effort could pose a risk if the JV faces financial or operational difficulties.

Positive Signals

Award under full and open competition suggests a strong initial vetting of potential contractors.
Firm-fixed-price contract type provides cost certainty and incentivizes contractor efficiency.
The contract addresses a critical need for disaster recovery, contributing to military readiness and resilience.
The joint venture structure may bring together diverse expertise to tackle complex construction challenges.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, specifically focusing on large-scale military construction (MILCON) and disaster recovery. The market for MILCON is substantial, driven by defense spending priorities and infrastructure modernization needs. This project represents a significant portion of spending within this niche, addressing post-natural disaster rebuilding efforts which often require specialized construction firms with experience in large, complex projects.

Small Business Impact

The data indicates that small business participation was not a primary set-aside criterion for this contract (ss: false, sb: false). While the prime contractor is a joint venture, the direct impact on small businesses would likely be through subcontracting opportunities. The extent to which Archer Western Federal JV will engage small businesses as subcontractors will determine the contract's overall effect on the small business ecosystem in the region.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and project management offices. Accountability measures are embedded in the firm-fixed-price contract terms, requiring the contractor to deliver specified work within the agreed-upon price. Transparency is generally maintained through contract award databases and reporting requirements, though specific project-level oversight details may not be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Hurricane Recovery Contracts
Military Construction (MILCON)
Disaster Relief and Resilience Projects
Federal Construction Services
Department of Defense Infrastructure

Risk Flags

Long project duration increases risk of cost escalation for contractor and potential delays.
Dependency on a joint venture requires monitoring of partner stability and performance.
Potential for unforeseen site conditions in disaster recovery zones.
Contractor performance risk under a firm-fixed-price model.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $410.3 million to ARCHER WESTERN FEDERAL JV. HURRICANE FLORENCE RECOVERY MILCON PACKAGE 7

Who is the contractor on this award?

The obligated recipient is ARCHER WESTERN FEDERAL JV.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $410.3 million.

What is the period of performance?

Start: 2020-08-31. End: 2026-02-18.

What is the track record of Archer Western Federal JV in completing large-scale federal construction projects, particularly those involving disaster recovery?

Archer Western Federal JV is a joint venture formed by established construction companies. Archer Western Contractors, a principal entity, has a significant history of undertaking large federal and infrastructure projects, including military construction and disaster recovery efforts across various locations. Their experience typically encompasses complex civil engineering, building construction, and renovation projects. Assessing the specific track record of the joint venture itself would require examining past performance on similar contracts awarded to this specific entity. Publicly available data on federal contract awards can provide insights into their past performance ratings, on-time delivery, and adherence to budget on previous projects. A deeper dive would involve reviewing contract close-out data and any reported disputes or claims.

How does the awarded amount of $410 million compare to similar Hurricane Florence recovery or MILCON projects?

Comparing the $410 million award requires identifying comparable projects based on scope, complexity, and geographic location. Hurricane Florence recovery efforts spanned multiple states and involved various types of infrastructure repair, including military installations. Large-scale MILCON projects, especially those involving new construction or extensive renovations, can easily reach hundreds of millions of dollars. For instance, other major MILCON packages for base infrastructure upgrades or new facilities have historically fallen within this range. Disaster recovery projects, particularly those addressing widespread damage like that caused by Hurricane Florence, often incur higher costs due to urgency, specialized materials, and the need for rapid mobilization. Without specific comparable project data for Florence recovery MILCON, it's reasonable to state that $410 million is a substantial but not necessarily outlier figure for a project of this nature and scale.

What are the primary risks associated with a firm-fixed-price contract for a nearly 2000-day construction project?

While firm-fixed-price (FFP) contracts offer cost certainty to the government, they shift significant risk to the contractor, especially on long-duration projects like this one (1997 days). The primary risk is that the contractor may underestimate costs, encounter unforeseen site conditions (e.g., soil issues, hazardous materials), or face escalating material and labor prices over the extended period. If these risks materialize, the contractor might incur losses, potentially leading to quality compromises, delays, or even project abandonment if the financial strain becomes too great. For the government, the risk is less about cost overrun (as the price is fixed) and more about potential contractor performance issues, delays, or disputes arising from the contractor's struggle to manage unforeseen challenges within the fixed price.

What is the expected effectiveness of this contract in achieving Hurricane Florence recovery goals for the Department of the Navy?

The effectiveness of this contract hinges on several factors: timely completion, quality of construction, and the extent to which the repaired facilities meet or exceed pre-disaster operational capabilities. The Department of the Navy's goal is to restore and potentially enhance infrastructure resilience at its North Carolina installations impacted by Hurricane Florence. Successful execution of this contract should lead to restored functionality, improved structural integrity against future weather events, and sustained operational readiness. The firm-fixed-price nature incentivizes the contractor to complete the work efficiently. However, effectiveness will ultimately be measured by the long-term performance and durability of the reconstructed facilities and the contractor's ability to meet all contract specifications and deadlines.

How has federal spending on military construction and disaster recovery evolved in recent years, and where does this contract fit?

Federal spending on Military Construction (MILCON) has historically fluctuated based on defense budgets, geopolitical priorities, and infrastructure needs. In recent years, there has been a sustained focus on modernizing military facilities, addressing deferred maintenance, and enhancing resilience against environmental threats, including natural disasters. Spending on disaster recovery, particularly after major events like hurricanes, floods, and wildfires, has also seen increases due to climate change impacts. This $410 million contract for Hurricane Florence recovery fits within this trend, representing a significant, targeted investment in rebuilding critical defense infrastructure following a major natural disaster. It reflects the government's commitment to ensuring military readiness is not compromised by environmental events and highlights the increasing need for robust recovery and rebuilding capabilities.

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: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N4008519R9257

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 929 W ADAMS ST, CHICAGO, IL, 60607

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

Financial Breakdown

Contract Ceiling: $410,283,090

Exercised Options: $410,283,090

Current Obligation: $410,283,090

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline