Army awards $68M design-build contract for Alaska aviation hangar to Watterson Construction

Contract Overview

Contract Amount: $67,997,737 ($68.0M)

Contractor: Watterson Construction CO

Awarding Agency: Department of Defense

Start Date: 2011-05-10

End Date: 2014-09-30

Contract Duration: 1,239 days

Daily Burn Rate: $54.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 11

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: DESIGN AND CONSTRUCT ASSAULT, ATTACK, CAVALRY (AAC) HANGAR FOR THE AVIATION TASK FORCE ON FORT WAINWRIGHT, ALASKA

Place of Performance

Location: FORT WAINWRIGHT, FAIRBANKS NORTH STAR County, ALASKA, 99703

State: Alaska Government Spending

Plain-Language Summary

Department of Defense obligated $68.0 million to WATTERSON CONSTRUCTION CO for work described as: DESIGN AND CONSTRUCT ASSAULT, ATTACK, CAVALRY (AAC) HANGAR FOR THE AVIATION TASK FORCE ON FORT WAINWRIGHT, ALASKA Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The firm-fixed-price contract type aims to control costs for the government. 3. Project duration of 1239 days indicates a significant construction undertaking. 4. The contract is for a specialized aviation facility, highlighting specific defense infrastructure needs. 5. Awarded to Watterson Construction Co., a single entity, with 11 bids received. 6. The project is located in Alaska, potentially impacting logistics and labor costs.

Value Assessment

Rating: fair

The contract value of $67,997,737 for the design and construction of an aviation hangar appears to be within a reasonable range for a project of this scale and complexity, especially considering the specialized nature of an Assault, Attack, and Cavalry (AAC) hangar. Benchmarking against similar large-scale military construction projects would provide a more precise assessment of value for money. The firm-fixed-price contract type suggests an effort to establish a definitive cost upfront, which can be beneficial for budget predictability. However, without detailed cost breakdowns or comparisons to industry standards for similar facilities in similar geographic locations, a definitive value assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, indicating that all responsible sources were permitted to submit bids. The solicitation received 11 bids, which suggests a healthy level of competition for this significant construction project. A higher number of bidders generally leads to more competitive pricing and a greater likelihood of the government securing the best value. The fact that 11 bids were submitted implies that the requirements were well-defined and the market was receptive to the opportunity.

Taxpayer Impact: The full and open competition with 11 bidders is beneficial for taxpayers as it likely drove down the final contract price through competitive pressure, ensuring that public funds were used efficiently.

Public Impact

The primary beneficiaries are the U.S. Army's Aviation Task Force stationed at Fort Wainwright, Alaska, who will receive a critical infrastructure upgrade. The contract delivers the design and construction of a specialized Assault, Attack, and Cavalry (AAC) hangar, essential for housing and maintaining aircraft. The geographic impact is concentrated at Fort Wainwright, Alaska, supporting military operations in the Arctic region. The project will likely create numerous jobs in the construction sector in Alaska, including skilled trades and support personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions or logistical challenges arise in Alaska.
Dependence on a single prime contractor (Watterson Construction Co.) for successful project completion.
The specialized nature of the hangar may lead to limited future use if military aviation needs change.

Positive Signals

Firm-fixed-price contract helps mitigate cost escalation risks for the government.
Full and open competition with 11 bids suggests a robust market evaluation and potential for competitive pricing.
The project addresses a specific and critical infrastructure need for the Army's aviation units.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, specifically focusing on specialized military infrastructure. The market for large-scale government construction projects, particularly those for defense, is substantial. Projects like this often involve complex design-build requirements and are subject to stringent federal regulations and oversight. Comparable spending benchmarks would typically involve analyzing the cost per square foot or cost per unit of specialized hangar space for similar military installations, factoring in regional economic conditions and material costs.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications specifically mandated for small businesses through a set-aside program. However, the prime contractor, Watterson Construction Co., may still engage small businesses as subcontractors to fulfill various aspects of the construction project, contributing to the broader small business ecosystem. The absence of a set-aside means the primary competition was open to all eligible firms, regardless of size.

Oversight & Accountability

Oversight for this Department of the Army contract would typically be managed by the Army Corps of Engineers or a designated contracting officer's representative (COR). Accountability measures are embedded in the firm-fixed-price contract terms, requiring the contractor to deliver the specified facility within the agreed-upon cost and schedule. Transparency is generally maintained 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

Military Construction, Army
Aviation Facilities Construction
Department of Defense Construction Contracts
Fort Wainwright Infrastructure Projects
Design-Build Contracts

Risk Flags

Geographic Risk (Alaska)
Logistical Complexity
Weather-Related Delays
Specialized Construction Requirements

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $68.0 million to WATTERSON CONSTRUCTION CO. DESIGN AND CONSTRUCT ASSAULT, ATTACK, CAVALRY (AAC) HANGAR FOR THE AVIATION TASK FORCE ON FORT WAINWRIGHT, ALASKA

Who is the contractor on this award?

The obligated recipient is WATTERSON CONSTRUCTION CO.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $68.0 million.

What is the period of performance?

Start: 2011-05-10. End: 2014-09-30.

What is the track record of Watterson Construction Co. on similar government contracts?

A review of Watterson Construction Co.'s contract history would be necessary to assess their track record on similar government projects. This would involve examining past performance evaluations, any history of contract disputes or terminations, and their experience with large-scale, specialized construction, particularly in challenging environments like Alaska. Information from sources like the Federal Procurement Data System (FPDS) or the Contractor Performance Assessment Reporting System (CPARS) would be crucial. Without this specific data, it's difficult to definitively assess their past performance reliability for this type of critical infrastructure project.

How does the awarded price compare to industry benchmarks for similar aviation hangars?

To benchmark the $67.99 million award price, one would need to compare it against the cost per square foot or cost per aircraft bay for similar Assault, Attack, and Cavalry (AAC) hangars constructed for military purposes. Key factors influencing this comparison include the hangar's size, specific design features (e.g., specialized environmental controls, maintenance equipment integration), the geographic location (Alaska's higher construction costs), and the year of construction. Analyzing data from similar projects awarded by the Department of Defense or other federal agencies over the past few years would provide a more accurate comparison. The firm-fixed-price nature of the contract suggests an attempt to lock in costs, but the initial bid competitiveness is key to ensuring value.

What are the primary risks associated with constructing a large aviation hangar in Fort Wainwright, Alaska?

Constructing a large aviation hangar in Fort Wainwright, Alaska, presents several significant risks. These include logistical challenges related to transporting materials and equipment to a remote location, potential for extreme weather conditions impacting construction schedules and worker safety, and the higher cost of labor and materials in Alaska. Permafrost conditions could also pose engineering challenges for the foundation. Furthermore, specialized requirements for aviation facilities, such as specific environmental controls, power, and maintenance infrastructure, add complexity. The government's risk is mitigated by the firm-fixed-price contract, but the contractor faces substantial execution risks.

How effective is the firm-fixed-price contract type in managing costs for this specific project?

The firm-fixed-price (FFP) contract type is generally considered effective in managing costs for projects where the scope of work is well-defined, as is expected for a design-build hangar. It shifts the risk of cost overruns to the contractor, providing the government with budget certainty. However, the effectiveness hinges on the accuracy of the initial cost estimates and the contractor's ability to manage their own expenses. For a project in a remote location like Alaska with potential for unforeseen conditions, there's a risk the contractor may have built in significant contingency, or that change orders could still arise if the scope isn't perfectly captured upfront. The competitive bidding process is crucial for ensuring the initial FFP is reasonable.

What is the historical spending trend for aviation facilities at Fort Wainwright or similar Army installations?

Analyzing historical spending trends for aviation facilities at Fort Wainwright or comparable Army installations would provide context for the $68 million award. This involves examining past contracts for hangar construction, maintenance, and upgrades, noting their size, scope, and cost. Trends might reveal increasing costs due to inflation, specific technological upgrades, or shifts in military aviation needs. Understanding these patterns helps assess whether the current award is consistent with historical investment levels or represents a significant deviation, potentially indicating a change in requirements or market conditions. Data from FPDS would be the primary source for this analysis.

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: W911KB10R0009

Offers Received: 11

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 6500 INTERSTATE CIR, ANCHORAGE, AK, 00

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

Financial Breakdown

Contract Ceiling: $68,052,737

Exercised Options: $67,997,737

Current Obligation: $67,997,737

Subaward Activity

Number of Subawards: 55

Total Subaward Amount: $40,311,436

Contract Characteristics

Cost or Pricing Data: NO

Timeline