DoD's $33.7M Fort Greely missile field construction contract awarded to Watterson Construction Co

Contract Overview

Contract Amount: $33,724,100 ($33.7M)

Contractor: Watterson Construction CO

Awarding Agency: Department of Defense

Start Date: 2018-07-20

End Date: 2021-09-30

Contract Duration: 1,168 days

Daily Burn Rate: $28.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: CONSTRUCT MISSILE FIELD 4 MECHANICAL ELECTRICAL BLDG AT FORT GREELY, ALASKA

Place of Performance

Location: FORT GREELY, SOUTHEAST FAIRBANKS County, ALASKA, 99731

State: Alaska Government Spending

Plain-Language Summary

Department of Defense obligated $33.7 million to WATTERSON CONSTRUCTION CO for work described as: CONSTRUCT MISSILE FIELD 4 MECHANICAL ELECTRICAL BLDG AT FORT GREELY, ALASKA Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract's firm-fixed-price structure aims to control costs for the government. 3. Performance period spanned over three years, indicating a substantial construction project. 4. The project involved constructing mechanical and electrical buildings for a missile field. 5. Geographic location in Alaska may present unique logistical and environmental challenges. 6. No small business set-aside was utilized, potentially limiting direct small business participation.

Value Assessment

Rating: fair

The contract value of $33.7 million for constructing mechanical and electrical buildings at Fort Greely appears to be within a reasonable range for specialized military construction in a remote location like Alaska. Benchmarking against similar large-scale construction projects for military infrastructure, especially those involving complex mechanical and electrical systems in challenging environments, would be necessary for a definitive value assessment. The firm-fixed-price nature of the contract suggests that the contractor assumed the risk for cost overruns, which can sometimes lead to higher initial bids but provides budget certainty for the government.

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 four bidders suggests a moderate level of competition for this specialized construction project. While four bidders are better than a sole-source award, a higher number of bids could potentially drive prices down further and offer a wider range of technical solutions. The specific details of the bidding process and the evaluation criteria would provide further insight into the effectiveness of the competition.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to more favorable pricing and innovative solutions. The presence of multiple bidders helps ensure that the government is not overpaying and receives the best value for its investment.

Public Impact

The Department of Defense benefits through the enhanced infrastructure at Fort Greely, supporting its missile defense capabilities. The project delivered essential mechanical and electrical buildings, crucial for the operational readiness of the missile field. The geographic impact is concentrated in Alaska, specifically at Fort Greely, contributing to local economic activity during construction. The construction activities likely involved a significant workforce, including skilled tradespeople and project management personnel, with potential implications for local employment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions in Alaska were not adequately accounted for in the fixed-price bid.
Logistical challenges inherent in construction projects in remote Alaskan locations could impact timelines and costs.
The firm-fixed-price contract might have led to a higher initial bid to account for contractor risk.

Positive Signals

Awarded through full and open competition, indicating a structured procurement process.
Firm-fixed-price contract provides budget certainty for the government.
The project addresses critical infrastructure needs for national defense.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a broad category encompassing the building of non-residential structures. Federal spending in this sector often supports critical infrastructure for government operations, including military bases, research facilities, and public service buildings. The market for large-scale military construction is specialized, often requiring contractors with specific security clearances, experience in remote or challenging environments, and the capacity to handle complex projects. Spending benchmarks for similar military construction projects can vary significantly based on location, scope, and technological requirements.

Small Business Impact

The data indicates that this contract was not awarded as a small business set-aside, nor does it appear to have specific subcontracting goals for small businesses mentioned. This suggests that the primary contract was likely awarded to a large business. While large prime contractors may engage small businesses as subcontractors, the absence of a formal set-aside means direct opportunities for small businesses to compete for the prime contract were limited. The overall impact on the small business ecosystem would depend on whether the prime contractor actively sought out and utilized small business subcontractors.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program management office within the Department of the Army. The firm-fixed-price nature of the contract shifts cost risk to the contractor, but government oversight would still focus on ensuring compliance with contract terms, quality of work, and adherence to schedule. Transparency is generally maintained through contract award databases like FPDS. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arose during the contract's lifecycle.

Related Government Programs

Military Construction, Army
Facilities Sustainment, Restoration, and Modernization
Missile Defense Agency Programs
Base Realignment and Closure (BRAC) Construction

Risk Flags

Potential for cost overruns due to remote location and logistical challenges.
Risk associated with unforeseen environmental or geological conditions in Alaska.
Dependence on specialized labor availability in a remote region.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $33.7 million to WATTERSON CONSTRUCTION CO. CONSTRUCT MISSILE FIELD 4 MECHANICAL ELECTRICAL BLDG AT 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 $33.7 million.

What is the period of performance?

Start: 2018-07-20. End: 2021-09-30.

What is the track record of Watterson Construction Co. on similar federal contracts, particularly those involving military infrastructure or complex building systems?

Watterson Construction Co. has a history of performing construction services for various government agencies, including the Department of Defense. Analyzing their past performance on similar projects, such as constructing specialized facilities or working in challenging environments, is crucial. Data from contract databases can reveal their on-time and on-budget performance, any contract disputes or terminations, and client satisfaction ratings. For this specific contract, understanding their experience with missile field infrastructure or large-scale mechanical/electrical installations would provide context for their ability to execute the Fort Greely project successfully. A review of their award history and past performance evaluations would offer insights into their reliability and capability as a federal contractor.

How does the awarded price of $33.7 million compare to the estimated cost or budget for this type of construction in Alaska?

The awarded price of $33.7 million for constructing mechanical and electrical buildings at Fort Greely needs to be benchmarked against similar projects to assess value. Factors such as the specific square footage, complexity of the mechanical and electrical systems, and the inherent costs associated with construction in Alaska (e.g., labor, materials, logistics, permafrost considerations) are critical. Without access to the government's independent cost estimate or data on comparable projects in similar remote, cold-weather locations, it is difficult to definitively state if the price was optimal. However, the firm-fixed-price structure implies the contractor bore the risk of cost overruns, which can sometimes lead to higher initial bids compared to cost-plus contracts, but provides budget certainty.

What were the primary risks identified during the procurement process for this contract, and how were they mitigated?

Key risks for a project like this in Alaska would likely include logistical challenges (transportation of materials and personnel), potential for unforeseen site conditions (e.g., permafrost issues, environmental sensitivities), labor availability, and the complexity of integrating specialized mechanical and electrical systems for a missile field. Given the firm-fixed-price nature, the primary risk transferred to the contractor was cost overruns. Mitigation strategies during procurement would involve thorough site investigations, detailed technical specifications, robust contractor pre-qualification, and potentially incorporating contingency allowances or specific clauses addressing known environmental or logistical challenges. The government's mitigation would focus on ensuring the solicitation clearly defined requirements and risks, and that the selected contractor demonstrated a credible plan to manage them.

What is the overall effectiveness of this contract in supporting the Army's mission at Fort Greely?

The effectiveness of this contract is directly tied to its contribution to the operational readiness and security of the missile field at Fort Greely. By delivering the necessary mechanical and electrical buildings, the contract ensures that critical support infrastructure is in place for the base's functions. The success hinges on the quality of construction, the reliability of the installed systems, and the timely completion of the project, which appears to have occurred within the specified timeframe. Evaluating effectiveness also involves considering if these new facilities enhance the base's capabilities, improve energy efficiency, or meet evolving technological requirements for missile defense systems. The long-term operational performance of these buildings will be the ultimate measure of effectiveness.

How has federal spending on similar construction projects at military installations in Alaska trended over the past decade?

Federal spending on construction projects at military installations in Alaska has likely remained substantial, driven by strategic importance, modernization efforts, and the unique environmental challenges requiring specialized infrastructure. Trends may show increased investment in areas like Arctic defense capabilities, energy resilience, and upgrades to aging facilities. Factors such as geopolitical shifts, budget allocations, and specific modernization programs (e.g., for missile defense) would influence spending levels year-over-year. Analyzing historical data for construction contracts in Alaska, particularly for the Department of Defense, would reveal patterns in contract types, average values, and the types of facilities being prioritized, offering context for the $33.7 million awarded for Fort Greely.

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: W911KB18R0009

Offers Received: 4

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: $33,746,100

Exercised Options: $33,724,100

Current Obligation: $33,724,100

Subaward Activity

Number of Subawards: 18

Total Subaward Amount: $18,012,945

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline