DoD's $48.9M Fort Greely construction contract awarded to Watterson Construction for mechanical-electrical building

Contract Overview

Contract Amount: $48,863,085 ($48.9M)

Contractor: Watterson Construction CO

Awarding Agency: Department of Defense

Start Date: 2014-05-16

End Date: 2016-12-01

Contract Duration: 930 days

Daily Burn Rate: $52.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 7

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: DESIGN AND CONSTRUCT MECHANICAL-ELECTRICAL BUILDING FOR MISSILE FIELD #1, FORT GREELY, ALASKA

Place of Performance

Location: DELTA JUNCTION, SOUTHEAST FAIRBANKS County, ALASKA, 99737

State: Alaska Government Spending

Plain-Language Summary

Department of Defense obligated $48.9 million to WATTERSON CONSTRUCTION CO for work described as: DESIGN AND CONSTRUCT MECHANICAL-ELECTRICAL BUILDING FOR MISSILE FIELD #1, FORT GREELY, ALASKA Key points: 1. Contract awarded at a competitive price, indicating potential value for money. 2. Full and open competition suggests a robust market for industrial building construction. 3. The firm-fixed-price structure transfers risk to the contractor, potentially stabilizing costs. 4. Project duration of 930 days indicates a significant, long-term construction undertaking. 5. Contract awarded to a single entity, highlighting the need for specialized construction capabilities. 6. Alaska's remote location may present unique logistical and cost challenges for construction projects.

Value Assessment

Rating: good

The contract's value of $48.9 million for a mechanical-electrical building at Fort Greely appears reasonable given the scope and location. While direct comparisons are difficult without more specific project details, construction costs in Alaska are generally higher due to logistical challenges and specialized labor requirements. The firm-fixed-price contract type suggests that the initial bid was considered a fair reflection of the expected costs, and the contractor bears the risk of cost overruns. Benchmarking against similar large-scale industrial construction projects in remote or challenging environments would provide further insight into the value proposition.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple qualified contractors had the opportunity to bid. Seven bids were received, suggesting a healthy level of interest and competition for this type of specialized construction work. This broad competition is generally favorable for price discovery and ensures that the government can select the most advantageous offer based on price and technical qualifications. The presence of multiple bidders implies that the market is capable of supporting such projects and that the government was not limited to a narrow selection of potential contractors.

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 scenario. It also ensures that the government is receiving services from a qualified contractor selected through a transparent process.

Public Impact

The primary beneficiaries are the Department of Defense and the personnel stationed at Fort Greely, Alaska, who will gain a new, essential facility. The contract delivers critical infrastructure for missile field operations, enhancing national security capabilities. The geographic impact is concentrated in Alaska, specifically at Fort Greely, supporting military readiness in a strategic location. The project likely created numerous jobs in the construction sector, including skilled trades, project management, and support staff, both directly and indirectly.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions or logistical challenges arise in Alaska.
Risk of schedule delays due to Alaska's harsh weather conditions impacting construction timelines.
Dependence on a single contractor for a critical infrastructure project could pose risks if performance issues emerge.

Positive Signals

Firm-fixed-price contract transfers cost overrun risk to the contractor.
Full and open competition suggests a competitive pricing environment.
Awarding to a single, presumably experienced, contractor for a specialized task.
Project contributes to critical national defense infrastructure.

Sector Analysis

This contract falls within the Industrial Building Construction sector, a segment of the broader construction industry focused on facilities for manufacturing, processing, and defense-related operations. The market for such specialized construction is often characterized by a smaller pool of highly qualified firms capable of handling large-scale, complex projects, particularly in remote or challenging environments like Alaska. The Department of Defense is a significant client in this sector, frequently awarding contracts for infrastructure development and upgrades to support military readiness. Comparable spending benchmarks would typically involve analyzing the cost per square foot or cost per unit of specialized equipment installed for similar defense facilities.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of specific subcontracting requirements for small businesses in the provided data. The award went to Watterson Construction Co., a large business. The absence of small business set-asides or explicit subcontracting goals means that the direct impact on the small business ecosystem for this specific contract is likely minimal, though larger prime contractors may engage small businesses for certain support services.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and engineering divisions, with potential involvement from the Department of Defense's Inspector General for audits and investigations. The firm-fixed-price contract type provides a degree of accountability by fixing the total price, though oversight would still focus on ensuring adherence to specifications, quality standards, and timely completion. Transparency is generally maintained through contract award databases, but detailed project progress and specific oversight activities may not be publicly disclosed.

Related Government Programs

Military Construction
Industrial Facilities
Defense Infrastructure
Alaska Construction Projects
Missile Defense Facilities

Risk Flags

Potential for cost overruns due to Alaska's high cost of living and logistics.
Risk of schedule delays due to severe weather conditions.
Dependence on specialized construction expertise for military facilities.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $48.9 million to WATTERSON CONSTRUCTION CO. DESIGN AND CONSTRUCT MECHANICAL-ELECTRICAL BUILDING FOR MISSILE FIELD #1, FORT GREELY, 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 $48.9 million.

What is the period of performance?

Start: 2014-05-16. End: 2016-12-01.

What is Watterson Construction Co.'s track record with large federal construction projects, particularly for the Department of Defense?

Watterson Construction Co. has a history of performing large-scale construction projects, including significant work for the Department of Defense and other federal agencies. Their portfolio often includes military barracks, training facilities, and other critical infrastructure. While specific details on past performance metrics for this exact contract are not provided, their experience suggests a capacity to handle complex projects. A deeper dive into their contract history, including any past performance reviews or disputes, would offer a more comprehensive understanding of their reliability and quality of work on similar federal endeavors. Their involvement in projects like this Fort Greely contract indicates a level of trust and proven capability within the defense construction sector.

How does the awarded price of $48.9 million compare to similar industrial building construction projects in remote or challenging environments?

Benchmarking the $48.9 million contract value requires comparing it to similar industrial building construction projects, ideally those undertaken in remote or challenging environments like Alaska. Construction costs in Alaska are typically 20-50% higher than in the continental U.S. due to factors such as transportation of materials and equipment, specialized labor availability, and the need to mitigate extreme weather conditions. Without specific details on the building's size (square footage), complexity, and the exact nature of the mechanical and electrical systems, a precise comparison is difficult. However, for a significant facility within a military installation in Alaska, this price point is likely within a reasonable range, reflecting the inherent cost premiums associated with such projects. Further analysis would involve comparing cost per square foot or cost per specific system component against publicly available data for comparable projects.

What are the primary risks associated with constructing a mechanical-electrical building for a missile field in Alaska?

The primary risks associated with this project include logistical challenges inherent to Alaska's remote location, such as the high cost and complexity of transporting materials, equipment, and personnel. Extreme weather conditions, including prolonged periods of cold, snow, and limited daylight, pose significant risks of construction delays and potential damage to materials or work-in-progress. Site-specific geological conditions, such as permafrost, could present unforeseen challenges requiring specialized engineering and construction techniques, potentially leading to cost overruns and schedule impacts. Furthermore, ensuring the availability of a skilled local workforce or the cost-effective mobilization of external labor adds another layer of risk. Finally, the specialized nature of mechanical and electrical systems for a missile field requires meticulous planning and execution to ensure operational integrity and reliability.

What is the expected impact of this contract on the operational capabilities of Fort Greely's missile field?

This contract is expected to significantly enhance the operational capabilities of Fort Greely's missile field by providing a new, modern mechanical-electrical building. This facility is crucial for housing and supporting the essential power, climate control, and operational systems required for the missile defense infrastructure. A reliable and efficient building ensures the optimal functioning and longevity of sensitive equipment, reducing the risk of downtime or performance degradation due to environmental factors or system failures. The construction of this facility directly supports the base's mission readiness and its role in national security by ensuring the underlying infrastructure is robust and capable of meeting the demands of advanced defense systems. It represents a critical investment in maintaining and upgrading the physical plant necessary for effective missile defense operations.

How has federal spending on industrial building construction in Alaska trended over the past five years?

Federal spending on industrial building construction in Alaska has likely seen fluctuations influenced by defense priorities, infrastructure needs, and overall federal budget allocations. While specific aggregate data for 'industrial building construction' in Alaska isn't readily available without detailed database queries, it's reasonable to infer that spending in this category is substantial due to the state's strategic importance and unique logistical environment. Major projects, particularly those related to military installations like Fort Greely, often represent significant investments. Trends would be influenced by modernization efforts, new facility requirements, and the lifecycle replacement of existing structures. Periods of heightened geopolitical tension or specific defense program expansions could lead to increased spending. Conversely, budget constraints or shifts in military posture might result in reduced investment. Analyzing broader categories like 'Military Construction' or 'Facilities Sustainment, Restoration, and Modernization' for Alaska could provide proxy insights into spending trends.

What does the 'definitive contract' award type signify in the context of this project?

The award of a 'definitive contract' signifies that this is a standard, fully negotiated contract with fixed terms and conditions, unlike an 'indefinite-delivery' contract which might have variable quantities or task orders. In this case, the contract for the design and construction of the mechanical-electrical building at Fort Greely was finalized with a specific scope, price, and schedule. The 'firm fixed price' (FFP) designation further clarifies that the total price is set, and the contractor bears the primary responsibility for managing costs to remain profitable. This award type is common for projects with well-defined requirements, where the government seeks cost certainty and the contractor possesses the expertise to accurately estimate and execute the work within the agreed-upon budget and timeframe. It implies a mature stage of project planning and a clear understanding of the deliverables.

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Industrial 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: W911KB14R0008

Offers Received: 7

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 6500 INTERSTATE CIR, ANCHORAGE, AK, 99518

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

Financial Breakdown

Contract Ceiling: $48,890,731

Exercised Options: $48,863,085

Current Obligation: $48,863,085

Subaward Activity

Number of Subawards: 27

Total Subaward Amount: $26,451,614

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline