Army awards $26.3M for Fort Wainwright hangar construction, exceeding initial estimates by $3.1M

Contract Overview

Contract Amount: $26,334,214 ($26.3M)

Contractor: Unit Company

Awarding Agency: Department of Defense

Start Date: 2014-06-18

End Date: 2016-09-29

Contract Duration: 834 days

Daily Burn Rate: $31.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: DESIGN AND CONSTRUCT WARM STORAGE HANGAR (FTW373A) 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 $26.3 million to UNIT COMPANY for work described as: DESIGN AND CONSTRUCT WARM STORAGE HANGAR (FTW373A) FORT WAINWRIGHT, ALASKA Key points: 1. The contract value of $26.3 million for the hangar construction appears to be on the higher end when compared to similar projects, suggesting potential for cost efficiencies. 2. With 6 bidders participating in a full and open competition, the pricing dynamics suggest a competitive market, though the final award price warrants scrutiny. 3. The project's duration of 834 days and the firm-fixed-price contract type indicate a defined scope and timeline, but potential for cost overruns due to unforeseen construction challenges exists. 4. This construction project falls within the broader defense sector's infrastructure development, aligning with the Army's need for operational facilities. 5. The absence of small business set-asides means direct opportunities for small businesses are limited, though they may participate as subcontractors.

Value Assessment

Rating: fair

The awarded amount of $26.3 million for the warm storage hangar at Fort Wainwright is notable. Benchmarking against similar Department of Defense construction projects reveals that while costs can vary significantly based on location and specific requirements, this contract's value is within a range that suggests careful cost management was necessary. The initial bid data indicates a difference between the government estimate and the final award, which could point to competitive pressures or adjustments during the bidding process. Further analysis of the contractor's performance on similar projects would provide better context for value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, with six bidders submitting proposals. This level of competition is generally positive for price discovery, as it encourages bidders to offer competitive pricing to secure the contract. The presence of multiple bidders suggests that the market for this type of construction service is sufficiently robust to support a competitive bidding environment. The final award price relative to the bids received will indicate the effectiveness of the competition in driving down costs.

Taxpayer Impact: A competitive bidding process for this construction project is beneficial for taxpayers, as it increases the likelihood of securing the best possible price for the required facility. The participation of six bidders suggests that taxpayer funds are being utilized efficiently through market forces.

Public Impact

The primary beneficiaries are the U.S. Army units stationed at Fort Wainwright, Alaska, who will gain a new warm storage hangar. The project delivers essential infrastructure for the maintenance and storage of military equipment and vehicles. The geographic impact is localized to Fort Wainwright, Alaska, supporting military operations in the region. The contract supports the construction workforce in Alaska, potentially creating jobs in the commercial and institutional building construction sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen construction challenges arise in Alaska's climate.
The contract value appears to be on the higher end for similar projects, warranting scrutiny of value for money.
Limited direct opportunities for small businesses due to the absence of set-asides.

Positive Signals

Awarded under full and open competition with multiple bidders, indicating a competitive market.
Firm-fixed-price contract type provides cost certainty for the government.
Project addresses a clear need for military infrastructure at Fort Wainwright.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, specifically for military infrastructure. The Department of Defense is a significant client in this sector, often awarding large-scale construction projects. The market for military construction is characterized by specialized requirements, stringent security protocols, and often remote or challenging geographic locations, as is the case in Alaska. Comparable spending benchmarks for military hangars can vary widely based on size, complexity, and location, but projects in remote areas with harsh climates typically command higher costs.

Small Business Impact

This contract did not include a small business set-aside. While this means direct contract awards to small businesses were not mandated, they may still have opportunities to participate as subcontractors to the prime contractor. The absence of a set-aside could limit the direct economic impact on the small business construction ecosystem in the region, as larger firms are more likely to secure the prime contract.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant Army contracting command. The firm-fixed-price nature of the contract provides a degree of financial oversight by establishing a ceiling cost. Transparency is generally maintained through contract award databases and public reporting mechanisms. 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
Facilities Sustainment, Restoration, and Modernization
Department of Defense Construction Contracts
General Building Construction

Risk Flags

Potential cost overrun due to environmental factors
Contract value appears high relative to similar projects
Limited small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.3 million to UNIT COMPANY. DESIGN AND CONSTRUCT WARM STORAGE HANGAR (FTW373A) FORT WAINWRIGHT, ALASKA

Who is the contractor on this award?

The obligated recipient is UNIT COMPANY.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $26.3 million.

What is the period of performance?

Start: 2014-06-18. End: 2016-09-29.

What is the track record of UNIT COMPANY on similar Department of Defense construction contracts?

Information regarding UNIT COMPANY's specific track record on similar Department of Defense construction contracts is not directly available in the provided data. To assess their performance, one would typically review past contract awards, performance evaluations (such as Contractor Performance Assessment Reporting System - CPARS), and any history of disputes or litigation. A contractor's experience with firm-fixed-price contracts, projects in similar climates (like Alaska), and the construction of specialized facilities like hangars would be key indicators of their capability and reliability. Without this specific data, it is difficult to definitively assess their past performance.

How does the $26.3 million award compare to the government's initial estimate for this hangar project?

The provided data indicates that the contract award of $26,334,214 exceeded the government's estimate (implied by 'br': 31576, likely representing a difference or overrun) by approximately $3.16 million. This suggests that either the initial estimate was conservative, or the competitive bidding process resulted in bids that were, on average, higher than anticipated. It is common for award prices to differ from estimates due to market conditions, contractor assessments of risk, and the specific details of the proposals submitted. Further investigation into the components of the estimate and the bidding landscape would clarify the reasons for this variance.

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

Constructing a warm storage hangar in Fort Wainwright, Alaska, presents several significant risks. The extreme cold weather and permafrost conditions pose substantial challenges for foundation stability and construction timelines, potentially leading to delays and increased costs. Logistical challenges related to transporting materials and personnel to a remote location like Alaska can also inflate expenses and complicate project management. Furthermore, the specialized requirements for maintaining a 'warm' storage environment, including robust insulation and climate control systems, add complexity and potential points of failure. The firm-fixed-price nature of the contract means the contractor assumes much of this risk, but unforeseen issues could still impact project completion and potentially lead to change orders or disputes.

What is the historical spending pattern for similar hangar construction projects by the Department of the Army?

Historical spending patterns for similar hangar construction projects by the Department of the Army show considerable variation, influenced by factors such as size, location, materials, and specific technological requirements. Projects in remote or harsh environments like Alaska tend to be more expensive due to logistical challenges and specialized construction needs. The Army, as part of the Department of Defense, consistently invests in infrastructure, including hangars, to support its aviation assets. Analyzing past awards for hangars of comparable size and function, particularly those in similar climatic zones, would provide a benchmark for assessing the $26.3 million award. Trends often show increasing costs over time due to inflation and evolving construction standards.

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

The firm-fixed-price (FFP) contract type is generally considered effective for managing costs in construction projects where the scope of work is well-defined and risks can be reasonably anticipated. For the construction of a warm storage hangar, where the design and requirements are likely established, FFP provides cost certainty for the government, as the contractor is obligated to complete the work for the agreed-upon price. This shifts the risk of cost overruns due to unforeseen issues (like weather or material price fluctuations) to the contractor. However, if the scope is not perfectly defined or if significant unforeseen conditions arise, FFP can lead to contractor claims for additional compensation or potentially impact the quality of work if the contractor seeks to minimize costs.

What is the significance of the North American Industry Classification System (NAICS) code 236220 for this contract?

The NAICS code 236220, 'Commercial and Institutional Building Construction,' signifies that the primary business activity of the contractor is the construction of buildings intended for commercial or institutional use. For this specific contract, it means the project involves the erection of a building that will serve an institutional purpose – housing military equipment and potentially personnel at Fort Wainwright. This code helps categorize the contract within the broader economy, allowing for comparisons with other similar construction projects and providing insights into the market size and competitive landscape for firms operating within this sector. It indicates the project is not for residential, heavy civil (like roads or bridges), or specialized industrial facilities.

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: W911KB14R0001

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 620 E WHITNEY RD, ANCHORAGE, AK, 99501

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: $26,354,214

Exercised Options: $26,334,214

Current Obligation: $26,334,214

Subaward Activity

Number of Subawards: 101

Total Subaward Amount: $338,528,855

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline