Department of the Air Force awards $168.6M contract for fleet modernization in Saudi Arabia

Contract Overview

Contract Amount: $168,635,620 ($168.6M)

Contractor: Gilbane Federal

Awarding Agency: Department of Defense

Start Date: 2014-11-10

End Date: 2017-03-31

Contract Duration: 872 days

Daily Burn Rate: $193.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF F15 FLEET MODERNIZATION, KING KHALID AB, SAUDI ARABIA

Plain-Language Summary

Department of Defense obligated $168.6 million to GILBANE FEDERAL for work described as: IGF::OT::IGF F15 FLEET MODERNIZATION, KING KHALID AB, SAUDI ARABIA Key points: 1. Contract awarded to Gilbane Federal for construction services. 2. Project involves fleet modernization at King Khalid Air Base. 3. Significant investment in overseas military infrastructure. 4. Contract duration spans over two years. 5. Fixed-price contract type aims to control costs. 6. Full and open competition suggests a competitive bidding process.

Value Assessment

Rating: good

The contract value of $168.6 million for fleet modernization at King Khalid Air Base appears reasonable given the scope and duration. While direct comparisons are difficult without specific project details, construction projects of this magnitude in overseas locations often incur significant logistical and operational costs. The firm fixed-price structure provides cost certainty for the government, suggesting a well-defined scope and a focus on value for money. Benchmarking against similar overseas construction projects would provide further insight into the pricing.

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 5 bidders suggests a healthy level of competition for this significant overseas construction project. A competitive process generally leads to better price discovery and potentially more favorable terms for the government, as contractors vie for the award.

Taxpayer Impact: The full and open competition likely resulted in a more competitive bid, potentially saving taxpayer dollars compared to a sole-source or limited competition award.

Public Impact

Benefits the Department of the Air Force by modernizing critical fleet infrastructure. Services delivered include construction and potentially related support for fleet operations. Geographic impact is concentrated at King Khalid Air Base in Saudi Arabia. Workforce implications may include both U.S. and local labor for construction activities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions arise in overseas construction.
Logistical challenges associated with procuring and transporting materials to Saudi Arabia.
Geopolitical risks associated with operating in a foreign country.
Ensuring compliance with local labor laws and regulations.
Quality control for construction in a remote location.

Positive Signals

Firm fixed-price contract provides cost certainty.
Full and open competition suggests competitive pricing.
Experienced contractor (Gilbane Federal) likely has established processes for overseas projects.
Modernization efforts can improve operational efficiency and readiness.
Long-term strategic importance of the base for U.S. operations.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, specifically supporting defense infrastructure. The global defense construction market is substantial, with significant spending on overseas bases and facilities. This project represents a specific investment in modernizing a key air base, aligning with broader defense strategies for maintaining operational readiness and projecting power in strategic regions. Comparable spending benchmarks would involve analyzing other large-scale military construction projects in similar geographic or operational contexts.

Small Business Impact

The contract details indicate that small business participation was not a primary set-aside consideration for this award, as the prime contractor is Gilbane Federal. There is no explicit information regarding subcontracting plans for small businesses within this award notice. The impact on the small business ecosystem would depend on whether Gilbane Federal actively seeks small business subcontractors for specialized services or materials, which is not detailed here.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and project management offices. Accountability measures are inherent in the firm fixed-price contract type, which incentivizes the contractor to complete the work within budget. Transparency is facilitated by the public award notice, though detailed project progress reports are typically internal. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Overseas Military Construction
Air Base Modernization
Defense Infrastructure Projects
Foreign Military Sales Support
Global Construction Services

Risk Flags

Overseas Construction Risk
Logistical Complexity
Geopolitical Factors
Firm Fixed Price Contract Risk
Schedule Delay Potential

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $168.6 million to GILBANE FEDERAL. IGF::OT::IGF F15 FLEET MODERNIZATION, KING KHALID AB, 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 $168.6 million.

What is the period of performance?

Start: 2014-11-10. End: 2017-03-31.

What is the specific nature of the 'fleet modernization' being undertaken at King Khalid Air Base?

The term 'fleet modernization' in this context likely refers to the upgrading or replacement of infrastructure supporting the Air Force's aircraft and associated operational assets at King Khalid Air Base. This could encompass a range of construction activities such as hangar upgrades, apron and taxiway improvements, maintenance facility enhancements, or the construction of new support buildings. The specific details of the modernization would be outlined in the detailed Statement of Work (SOW) for the contract, which is not publicly available in this summary. The goal is typically to improve operational efficiency, safety, and the ability to support advanced aircraft.

How does the $168.6 million cost compare to similar overseas Air Force construction projects?

Directly comparing the $168.6 million cost without detailed project specifications and location-specific cost indices is challenging. However, large-scale military construction projects in overseas locations, particularly in the Middle East, often carry a premium due to logistical complexities, security requirements, and the need to comply with both U.S. military standards and local regulations. Projects involving significant upgrades to air bases, including new construction or major renovations of flight lines, hangars, and support facilities, can easily run into the hundreds of millions of dollars. The duration of 872 days (approximately 2.4 years) for this project suggests a substantial scope of work, making the total cost fall within a plausible range for such endeavors.

What are the primary risks associated with this contract for the Department of the Air Force?

The primary risks for the Department of the Air Force (DAF) in this contract include potential cost overruns if the firm fixed-price contract doesn't adequately account for unforeseen site conditions or scope creep, although the fixed-price nature mitigates this risk to some extent. Schedule delays are another significant risk, especially given the overseas location, which can introduce logistical hurdles, potential political instability, or difficulties in securing necessary permits and resources. Performance risk also exists, concerning the quality of construction and adherence to specifications by the contractor, Gilbane Federal. Finally, geopolitical risks inherent in operating in Saudi Arabia could impact project continuity or security.

What is Gilbane Federal's track record with similar large-scale overseas construction projects for the DoD?

Gilbane Federal has a well-established track record of executing large-scale construction and facilities management projects for the Department of Defense (DoD) both domestically and internationally. They have been involved in numerous projects at military installations worldwide, including significant construction efforts in various overseas theaters. Their experience often includes complex projects requiring adherence to stringent military standards, managing remote logistics, and navigating international regulatory environments. While specific project details for King Khalid Air Base are not provided, Gilbane Federal's general history suggests they possess the capability and experience to manage a project of this magnitude and complexity.

How does the competition level (5 bidders) impact the value received by the government?

A competition level involving 5 bidders for a contract of this size and scope is generally considered healthy and is likely to have a positive impact on the value received by the government. More bidders typically lead to more competitive pricing as companies strive to win the contract. It also increases the likelihood that the government will receive proposals that meet or exceed its technical requirements. The presence of multiple bidders allows the contracting agency to compare different approaches and cost structures, potentially leading to a better overall deal. This level of competition suggests that the market has sufficient capacity and interest to undertake such projects.

What are the potential long-term implications of this modernization for U.S. Air Force operations in the region?

The long-term implications of modernizing fleet infrastructure at King Khalid Air Base are significant for U.S. Air Force operations in the region. Upgraded facilities can enhance the efficiency and effectiveness of flight operations, maintenance, and personnel support, potentially allowing for the deployment and sustainment of more advanced aircraft. Improved infrastructure can also increase the base's capacity and resilience, making it a more robust hub for regional power projection and contingency operations. Furthermore, investing in modern facilities signals a long-term commitment to the strategic partnership with Saudi Arabia, reinforcing regional security cooperation and stability.

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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Gilbane, Inc. (UEI: 022726165)

Address: 2730 SHADELANDS DR # 100, WALNUT CREEK, CA, 94598

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Minority Owned Business, Not Designated a Small Business, Small Business, Small Disadvantaged Business, Special Designations, Subchapter S Corporation, Indian (Subcontinent) American Owned Business

Financial Breakdown

Contract Ceiling: $168,635,621

Exercised Options: $168,635,620

Current Obligation: $168,635,620

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA300208D0008

IDV Type: IDC

Timeline