DoD's $200.75M Navy contract to Archer Western Federal JV for construction services shows strong competition

Contract Overview

Contract Amount: $200,750,874 ($200.8M)

Contractor: Archer Western Federal JV

Awarding Agency: Department of Defense

Start Date: 2020-12-22

End Date: 2026-05-29

Contract Duration: 1,984 days

Daily Burn Rate: $101.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 9

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: BASE BID - P1800 (BASE,OPTIONS 1-5)

Place of Performance

Location: CAMP LEJEUNE, ONSLOW County, NORTH CAROLINA, 28547

State: North Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $200.8 million to ARCHER WESTERN FEDERAL JV for work described as: BASE BID - P1800 (BASE,OPTIONS 1-5) Key points: 1. The contract's base value of $200.75 million, with options, represents a significant investment in infrastructure. 2. Full and open competition suggests a healthy market for these construction services. 3. The firm-fixed-price contract type shifts risk to the contractor, potentially stabilizing costs. 4. The contract duration of 1984 days indicates a substantial, long-term project. 5. The geographic location in North Carolina may have implications for regional economic development. 6. The absence of small business set-aside flags potential impacts on smaller firms in the supply chain.

Value Assessment

Rating: good

Benchmarking the value of this construction contract requires detailed cost breakdowns and comparisons to similar large-scale federal building projects. However, the firm-fixed-price structure generally indicates that the contractor has provided a price that accounts for anticipated costs and profit, suggesting a degree of value certainty for the government. The bid amount of $200.75 million for a project spanning nearly 2000 days should be assessed against the scope of work, complexity, and prevailing market rates for construction in the specified region.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. With 9 bidders participating, the level of competition appears robust. This suggests that the Department of the Navy received a range of proposals, likely leading to competitive pricing and a selection based on the best value. The presence of multiple bidders generally fosters price discovery and encourages contractors to offer their most competitive terms.

Taxpayer Impact: The high level of competition for this contract is beneficial for taxpayers, as it likely drove down the final price and ensured the government secured services at a favorable rate. It also signals that taxpayer funds are being used efficiently by selecting from a broad pool of qualified contractors.

Public Impact

The primary beneficiaries are the Department of the Navy and its personnel, who will receive improved or new facilities. The contract delivers essential construction and building services, likely for military installations. The geographic impact is concentrated in North Carolina, potentially stimulating the local economy through job creation and material sourcing. Workforce implications include employment opportunities for construction laborers, tradespeople, and project management professionals in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions or material price escalations occur, despite the fixed-price nature.
Dependence on a single prime contractor, Archer Western Federal JV, could pose risks if performance issues arise.
Limited visibility into subcontracting opportunities for small businesses due to the absence of specific set-asides.
The long duration of the contract may lead to challenges in adapting to evolving construction technologies or environmental regulations.

Positive Signals

The firm-fixed-price contract type provides cost certainty and transfers risk to the contractor.
Full and open competition with 9 bidders suggests a strong market and competitive pricing.
The contractor, Archer Western Federal JV, is likely experienced in large-scale federal construction projects.
The contract's substantial value indicates a significant project with potentially high-quality deliverables.
The specified location in North Carolina may leverage regional expertise and resources.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a vital part of the broader construction industry. This sector encompasses the building of non-residential structures such as government facilities, offices, and educational institutions. The market size for federal construction is substantial, driven by the need to maintain and upgrade aging infrastructure and build new facilities. This specific contract represents a significant investment within this sector, likely contributing to the economic activity of construction firms and associated supply chains in North Carolina.

Small Business Impact

The contract data indicates that small business set-asides were not utilized for this procurement, and the prime contractor is not a small business. This suggests that the primary focus was on full and open competition to secure the best value. While this approach can lead to competitive pricing, it may limit direct subcontracting opportunities for small businesses unless they are part of larger teams or are independently competitive. The impact on the small business ecosystem will depend on whether the prime contractor actively seeks out small business subcontractors for specialized services or materials.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy's contracting officers and project managers, ensuring adherence to the contract terms and specifications. Accountability measures are embedded in the firm-fixed-price structure, which incentivizes the contractor to manage costs effectively. Transparency is typically maintained through contract award databases and reporting requirements. Inspector General jurisdiction may apply if allegations of fraud, waste, or abuse arise during the contract's performance.

Related Government Programs

Military Construction
Naval Facilities Engineering Command Contracts
General Building Construction Services
Federal Infrastructure Projects

Risk Flags

Potential for cost escalation despite fixed-price contract
Contractor performance risk
Limited small business participation visibility
Long contract duration challenges

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $200.8 million to ARCHER WESTERN FEDERAL JV. BASE BID - P1800 (BASE,OPTIONS 1-5)

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 $200.8 million.

What is the period of performance?

Start: 2020-12-22. End: 2026-05-29.

What is the track record of Archer Western Federal JV in performing large-scale federal construction contracts?

Archer Western Federal JV is a joint venture that has likely been involved in numerous large-scale construction projects, including those for federal agencies. To assess their track record, one would typically review past performance evaluations, project completion history, and any documented instances of disputes or contract terminations. Federal procurement data often includes past performance information, which contracting officers use to evaluate bidders. A review of their portfolio would reveal their experience with similar project types, complexities, and contract values, providing insight into their capability to successfully execute this $200.75 million contract for the Department of the Navy.

How does the $200.75 million contract value compare to similar construction projects awarded by the Department of the Navy?

Comparing the $200.75 million value requires benchmarking against recent, similar construction contracts awarded by the Department of the Navy or other Department of Defense branches. Factors such as project scope (e.g., new construction vs. renovation), facility type (e.g., barracks, administrative buildings, specialized facilities), and geographic location significantly influence cost. A preliminary assessment suggests this is a substantial contract, indicative of a major infrastructure undertaking. Detailed analysis would involve identifying comparable projects within the last 2-3 years, adjusting for inflation and regional cost differences, to determine if the awarded amount represents a competitive market rate.

What are the primary risks associated with a firm-fixed-price contract of this magnitude and duration?

The primary risk with a firm-fixed-price (FFP) contract of this magnitude ($200.75 million) and duration (1984 days) is the potential for the contractor to incur losses if costs escalate beyond their projections. While FFP shifts cost risk to the contractor, unforeseen circumstances like extreme material price volatility, significant labor shortages, or unexpected site conditions (e.g., environmental hazards, subsurface issues) can strain their ability to deliver within the fixed price. For the government, the risk is less about cost overruns and more about potential contractor default or performance deficiencies if they struggle financially or operationally. Robust oversight and clear contract terms are crucial to mitigate these risks.

How effective is full and open competition in ensuring value for money in large federal construction contracts?

Full and open competition is generally considered the most effective method for ensuring value for money in large federal construction contracts. By allowing all responsible sources to bid, it maximizes the pool of potential offerors, fostering a competitive environment that drives down prices and encourages innovation. The presence of 9 bidders in this case suggests a healthy market response. Value for money is achieved not just through the lowest price, but through the best overall value, considering factors like technical approach, past performance, and price. Effective competition ensures that the government selects a contractor capable of delivering high-quality work at a fair and reasonable price, thereby maximizing the return on taxpayer investment.

What are the historical spending patterns for commercial and institutional building construction by the Department of the Navy?

Historical spending patterns for commercial and institutional building construction by the Department of the Navy typically show consistent investment in maintaining and upgrading its vast network of facilities worldwide. This spending is often driven by military readiness requirements, modernization initiatives, and infrastructure lifecycle management. Annual outlays can fluctuate based on major construction programs, congressional appropriations, and geopolitical needs. Analyzing past spending data, often available through federal procurement databases and agency budget reports, would reveal trends in contract values, types of construction projects prioritized, and key geographic areas of investment, providing context for the current $200.75 million award.

What are the potential implications of the contract's location in North Carolina for local economies and workforce?

A contract of this scale ($200.75 million) awarded in North Carolina has significant positive implications for the local economy and workforce. It is expected to generate numerous direct and indirect jobs in construction trades, project management, engineering, and related support services. Local businesses, including suppliers of materials (e.g., concrete, steel, lumber) and equipment rental companies, are likely to benefit from subcontracting or direct purchasing. Furthermore, the increased economic activity can lead to higher tax revenues for local and state governments, contributing to broader community development and infrastructure improvements.

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: TWO STEP

Solicitation ID: N4008519R9147

Offers Received: 9

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: $206,896,781

Exercised Options: $200,782,427

Current Obligation: $200,750,874

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline