Navy awards $117M F-35 hangar construction contract to Harper Construction Company, Inc

Contract Overview

Contract Amount: $117,247,217 ($117.2M)

Contractor: Harper Construction Company, Inc.

Awarding Agency: Department of Defense

Start Date: 2021-08-31

End Date: 2024-06-20

Contract Duration: 1,024 days

Daily Burn Rate: $114.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: MCON P-391 F-35C HANGAR 6, PHASE 2

Place of Performance

Location: LEMOORE, KINGS County, CALIFORNIA, 93246

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $117.2 million to HARPER CONSTRUCTION COMPANY, INC. for work described as: MCON P-391 F-35C HANGAR 6, PHASE 2 Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract is for construction services, specifically a hangar for F-35C aircraft. 3. The duration of the contract is substantial, spanning over 1000 days. 4. The firm-fixed-price contract type aims to control costs for the government. 5. The project is located in California, a significant hub for defense activities. 6. The contractor, Harper Construction Company, Inc., has secured this significant award.

Value Assessment

Rating: good

The contract value of $117.2 million for a large-scale hangar construction project appears within a reasonable range for major defense infrastructure. Benchmarking against similar large-scale construction projects for military aviation facilities would provide a more precise value-for-money assessment. The firm-fixed-price structure is generally favorable for cost control, though the final cost can be influenced by change orders. Without specific cost breakdowns or comparisons to similar projects, a definitive assessment of exceptional value is difficult, but the competitive award suggests a reasonable price was achieved.

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. The presence of 4 bidders suggests a healthy level of competition for this significant construction project. A competitive process like this generally leads to better price discovery and potentially lower costs for the government compared to sole-source or limited competition scenarios. The number of bidders provides some assurance that the government received multiple proposals to evaluate.

Taxpayer Impact: The full and open competition for this hangar construction likely resulted in a more competitive price, benefiting taxpayers by ensuring funds were not overspent due to a lack of viable alternatives.

Public Impact

The primary beneficiaries are the U.S. Navy and its F-35C Joint Strike Fighter program, ensuring operational readiness. The contract delivers essential infrastructure: a new hangar facility designed to support advanced aircraft. The geographic impact is concentrated in California, likely supporting naval aviation operations in the region. The project will have workforce implications, creating jobs in the construction sector in California. The successful completion of this hangar will enhance the Navy's ability to maintain and deploy its F-35C fleet.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen construction challenges arise, despite the firm-fixed-price structure.
Delays in construction could impact the Navy's operational readiness timelines for the F-35C.
Ensuring compliance with stringent military construction standards requires robust oversight.

Positive Signals

Awarded through full and open competition, indicating a competitive market for these services.
Firm-fixed-price contract type provides cost certainty for the government.
The project addresses a critical need for advanced aviation infrastructure.

Sector Analysis

The defense construction sector is characterized by large, complex projects often awarded through competitive bidding processes. This contract for an F-35C hangar falls within the commercial and institutional building construction category, specifically tailored for advanced military aviation needs. The market for such specialized construction is significant, driven by ongoing modernization of military infrastructure and fleet upgrades. Comparable spending benchmarks would involve analyzing other large-scale military facility construction projects, particularly those for advanced fighter jet support, to gauge cost-effectiveness.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). While the prime contractor is Harper Construction Company, Inc., there may be opportunities for small businesses to participate as subcontractors. The extent of small business subcontracting will depend on the prime contractor's strategy and any specific requirements or goals set by the Department of the Navy. Without explicit subcontracting plans, the direct impact on the small business ecosystem is limited to potential indirect opportunities.

Oversight & Accountability

Oversight for this construction contract would typically be managed by the Department of the Navy's contracting and engineering divisions. Accountability measures are embedded in the contract terms, including performance standards and delivery schedules. Transparency is facilitated through contract award announcements and public contract databases. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arise during the contract's lifecycle.

Related Government Programs

F-35 Program Infrastructure
Naval Air Station Construction
Military Hangar Development
Defense Construction Contracts
Large-Scale Building Projects

Risk Flags

Potential for schedule delays
Risk of cost overruns due to unforeseen conditions
Ensuring compliance with stringent military specifications

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $117.2 million to HARPER CONSTRUCTION COMPANY, INC.. MCON P-391 F-35C HANGAR 6, PHASE 2

Who is the contractor on this award?

The obligated recipient is HARPER CONSTRUCTION COMPANY, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $117.2 million.

What is the period of performance?

Start: 2021-08-31. End: 2024-06-20.

What is Harper Construction Company, Inc.'s track record with large-scale defense construction projects?

Harper Construction Company, Inc. has a history of undertaking significant construction projects, including those for the Department of Defense. Their portfolio often includes large-scale commercial and institutional buildings, aligning with the requirements for military infrastructure. Specific details on their past performance with projects of similar complexity and scale to an F-35 hangar would require a deeper dive into their contract history, including on-time delivery, budget adherence, and quality of work on previous defense contracts. Their ability to secure this $117 million award suggests a demonstrated capability and a positive performance record with the Navy or other defense agencies.

How does the awarded price of $117.2 million compare to similar F-35 hangar construction projects?

Benchmarking the $117.2 million award requires comparing it to the costs of constructing similar F-35 hangars or comparable advanced aviation facilities. Factors influencing cost include size, specific technological requirements (e.g., specialized maintenance equipment, environmental controls), location (labor costs, material availability), and the specific phase of construction. Without access to detailed cost data for other similar projects, a precise comparison is challenging. However, the firm-fixed-price award under full and open competition suggests that the price was deemed competitive and reasonable by the Department of the Navy at the time of award, relative to the bids received.

What are the primary risks associated with this firm-fixed-price construction contract?

The primary risks associated with this firm-fixed-price construction contract, despite its cost control benefits, include potential for scope creep if contract modifications are not managed tightly, and unforeseen site conditions or material price escalations that could strain the contractor's ability to deliver within the fixed price. While the firm-fixed-price structure shifts much of the cost risk to the contractor, significant issues could lead to disputes or contractor performance problems. Robust government oversight, clear contract specifications, and proactive risk management by both parties are crucial to mitigate these potential challenges and ensure successful project completion within budget and schedule.

How effective is the firm-fixed-price contract type in ensuring program effectiveness for military construction?

The firm-fixed-price (FFP) contract type is generally considered effective for ensuring program effectiveness in military construction when project requirements are well-defined and stable. It incentivizes the contractor to control costs and manage the project efficiently to maximize profit within the agreed-upon price. This can lead to timely completion and adherence to specifications. However, if requirements change significantly, the FFP structure can lead to costly change orders or disputes. For complex, long-term construction projects like hangars, the effectiveness of FFP relies heavily on thorough upfront planning, detailed specifications, and diligent contract administration by the government to manage any necessary modifications.

What are the historical spending patterns for F-35 hangar construction by the Department of the Navy?

Historical spending patterns for F-35 hangar construction by the Department of the Navy reflect the ongoing build-out and modernization of infrastructure to support the F-35 program across various naval air stations. Spending in this category typically involves significant capital investments, with individual project costs varying widely based on size, complexity, and location. The Navy has awarded numerous contracts for F-35 support facilities, including hangars, maintenance depots, and training infrastructure, over the past decade. Analyzing aggregate spending data for similar construction projects can reveal trends in contract values, competition levels, and the types of contractors awarded work, providing context for the current $117 million award.

What is the typical duration for constructing a large military hangar, and how does this contract's duration compare?

The typical duration for constructing a large military hangar can range significantly, often from 18 to 36 months, depending on factors such as size, complexity, site preparation requirements, and the specific technological systems to be integrated. This contract, with a duration of 1024 days (approximately 34 months), falls within the higher end of this typical range. This extended duration may be indicative of a particularly large or complex facility, or it could incorporate phases for specialized equipment installation, testing, and integration, or account for potential weather delays in California. The duration suggests a substantial undertaking requiring meticulous planning and execution.

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: N6247320R0069

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2241 KETTNER BLVD STE 300, SAN DIEGO, CA, 92101

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

Financial Breakdown

Contract Ceiling: $117,247,217

Exercised Options: $117,247,217

Current Obligation: $117,247,217

Actual Outlays: $58,938,230

Subaward Activity

Number of Subawards: 1428

Total Subaward Amount: $2,885,810,343

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline