Army awards $141.9M contract for LRDR Power Plant construction in Alaska

Contract Overview

Contract Amount: $141,880,564 ($141.9M)

Contractor: Unit-Asrc Construction, LLC

Awarding Agency: Department of Defense

Start Date: 2019-03-08

End Date: 2025-05-02

Contract Duration: 2,247 days

Daily Burn Rate: $63.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: LRDR POWER PLANT (LPP) CONSTRUCTION

Place of Performance

Location: CLEAR, DENALI County, ALASKA, 99704

State: Alaska Government Spending

Plain-Language Summary

Department of Defense obligated $141.9 million to UNIT-ASRC CONSTRUCTION, LLC for work described as: LRDR POWER PLANT (LPP) CONSTRUCTION Key points: 1. Contract value represents a significant investment in critical infrastructure. 2. Competition dynamics suggest a potentially competitive bidding process for this large-scale project. 3. Project duration of over 2000 days indicates a long-term commitment and complex execution. 4. Fixed-price contract type aims to control costs, but requires careful scope management. 5. Geographic location in Alaska may present unique logistical and environmental challenges. 6. The project falls under the 'Power and Communication Line and Related Structures Construction' NAICS code.

Value Assessment

Rating: good

The contract value of approximately $141.9 million for the LRDR Power Plant construction appears to be within a reasonable range for a project of this magnitude and complexity, especially considering the remote location in Alaska. Benchmarking against similar large-scale power infrastructure projects, particularly those in challenging environments, would provide further context. The firm fixed-price nature of the contract suggests an effort to establish cost certainty, but the final value will depend on the contractor's ability to manage scope and unforeseen issues.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. With three bidders participating, the competition level suggests a healthy market interest in this type of project. This level of competition is generally favorable for price discovery and can lead to more competitive pricing for the government.

Taxpayer Impact: A competitive bidding process for this substantial contract is beneficial for taxpayers, as it increases the likelihood of securing the best possible price and value for the construction services.

Public Impact

The primary beneficiaries are the Department of Defense and its operational capabilities in Alaska, which will be supported by the new power plant. The project will deliver essential power infrastructure, likely supporting military readiness and base operations. The geographic impact is concentrated in Alaska, specifically at the LRDR site. Workforce implications include job creation for construction workers, engineers, and support staff in the region.

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 the remote location and potential weather impacts.
Ensuring adequate oversight for a long-duration, high-value construction project is crucial.

Positive Signals

Firm fixed-price contract provides cost certainty if scope is well-defined.
Full and open competition with multiple bidders suggests a competitive market.
The project addresses a critical infrastructure need for the Department of Defense.

Sector Analysis

This contract falls within the construction sector, specifically focusing on power and communication infrastructure. The market for large-scale power plant construction is characterized by specialized engineering firms and significant capital investment. Comparable spending benchmarks would involve looking at other military base infrastructure projects or large utility construction projects, particularly those undertaken in remote or challenging geographical locations like Alaska.

Small Business Impact

The data indicates that small business participation was not a specific set-aside for this contract (ss: false, sb: false). While the prime contractor is UNIT-ASRC CONSTRUCTION, LLC, further analysis would be needed to determine if they intend to utilize small business subcontractors. The scale of this project might limit direct subcontracting opportunities for very small businesses, but could provide opportunities for specialized trades or material suppliers.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Army contracting and project management offices. Accountability measures are inherent in the firm fixed-price contract, which incentivizes the contractor to complete the work within budget. Transparency can be assessed through publicly available contract data and reporting. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Military Base Construction
Alaska Infrastructure Projects
Department of Defense Energy Projects
Power Generation Facilities
Large-Scale Construction Contracts

Risk Flags

Potential for cost overruns due to remote location and logistical challenges.
Risk of schedule delays due to weather and environmental factors in Alaska.
Need for robust government oversight on a long-duration, high-value project.
Ensuring adequate small business subcontracting opportunities.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $141.9 million to UNIT-ASRC CONSTRUCTION, LLC. LRDR POWER PLANT (LPP) CONSTRUCTION

Who is the contractor on this award?

The obligated recipient is UNIT-ASRC CONSTRUCTION, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $141.9 million.

What is the period of performance?

Start: 2019-03-08. End: 2025-05-02.

What is the track record of UNIT-ASRC CONSTRUCTION, LLC in executing large-scale federal construction projects?

A thorough review of UNIT-ASRC CONSTRUCTION, LLC's past performance is essential. This would involve examining their history with federal contracts, specifically focusing on projects of similar size, scope, and complexity. Key areas to investigate include their on-time and on-budget completion rates, any history of contract disputes or modifications, and client satisfaction ratings. Information from sources like the Federal Procurement Data System (FPDS) and past performance evaluations would be critical in assessing their capability to successfully deliver the LRDR Power Plant construction project.

How does the awarded price compare to industry benchmarks for similar power plant construction in remote locations?

Benchmarking the $141.9 million award against similar projects is crucial for assessing value for money. This comparison should consider the specific type of power plant, its capacity, the construction methods employed, and, importantly, the geographical challenges. Projects in Alaska often incur higher costs due to logistics, specialized labor requirements, and environmental considerations. Analyzing cost-per-kilowatt or cost-per-square-foot metrics from comparable projects, adjusted for location and complexity, would provide a clearer picture of whether this contract represents a fair and reasonable price.

What are the primary risks associated with constructing a power plant in Alaska, and how are they mitigated in this contract?

Constructing a power plant in Alaska presents significant risks, including extreme weather conditions impacting schedules and operations, logistical challenges in transporting materials and personnel to remote sites, potential permafrost issues affecting foundations, and higher labor costs. The firm fixed-price contract structure aims to mitigate financial risks for the government by capping costs, provided the scope is well-defined. However, the contractor bears the primary risk of cost overruns. Mitigation strategies within the contract might include detailed site surveys, phased construction schedules accounting for seasonal limitations, and robust supply chain management plans. The government's oversight will be critical in monitoring these risks.

What is the expected impact of this power plant on the Department of Defense's operational capabilities in the region?

The LRDR Power Plant construction is expected to significantly enhance the Department of Defense's operational capabilities in Alaska by providing a reliable and potentially more robust power source. This could support increased energy demands for advanced radar systems (implied by LRDR), communication networks, and general base operations. Improved power infrastructure can lead to greater mission assurance, reduced reliance on less stable or more expensive temporary power solutions, and potentially enable the deployment of new technologies requiring substantial energy. The project directly addresses a critical infrastructure requirement for maintaining and enhancing military readiness in the Arctic region.

How has spending on power and communication line construction by the Department of the Army trended over the past five years?

Analyzing historical spending trends for the Department of the Army within the 'Power and Communication Line and Related Structures Construction' (NAICS 237130) category over the past five years would provide valuable context. This trend analysis would reveal whether spending in this area has been increasing, decreasing, or remaining stable. Significant fluctuations could indicate shifts in infrastructure priorities, budget allocations, or the pace of modernization efforts. Understanding this trend helps in assessing whether the current $141.9 million award is an outlier, part of a sustained investment, or a response to specific programmatic needs.

What are the implications of the 'Definitive Contract' award type for project flexibility and cost control?

A 'Definitive Contract' is a standard, legally binding agreement that outlines the terms and conditions for the entire project. For this LRDR Power Plant construction, it means the scope, price, and delivery schedule are intended to be fixed. This award type generally offers good cost control for the government, especially when paired with a firm fixed-price payment structure, as it shifts most of the performance risk to the contractor. However, it can offer less flexibility for changes compared to cost-reimbursement contracts. Any necessary modifications to the scope would typically require formal change orders, which could potentially lead to price adjustments and schedule impacts if not managed carefully.

Industry Classification

NAICS: Construction › Utility System Construction › Power and Communication Line and Related Structures 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: W911KB19R0002

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3900 C ST STE 301, ANCHORAGE, AK, 99503

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

Financial Breakdown

Contract Ceiling: $141,898,564

Exercised Options: $141,898,564

Current Obligation: $141,880,564

Subaward Activity

Number of Subawards: 12

Total Subaward Amount: $5,918,971

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline