Watterson Construction awarded $70.4M for barracks construction, highlighting significant investment in military infrastructure

Contract Overview

Contract Amount: $70,433,108 ($70.4M)

Contractor: Watterson Construction CO

Awarding Agency: Department of Defense

Start Date: 2023-01-13

End Date: 2025-06-09

Contract Duration: 878 days

Daily Burn Rate: $80.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: CONSTRUCT 1 + 1 BARRACKS, FTW360

Place of Performance

Location: ELMENDORF AFB, ANCHORAGE County, ALASKA, 99506

State: Alaska Government Spending

Plain-Language Summary

Department of Defense obligated $70.4 million to WATTERSON CONSTRUCTION CO for work described as: CONSTRUCT 1 + 1 BARRACKS, FTW360 Key points: 1. The contract value represents a substantial commitment to improving military living conditions. 2. Full and open competition suggests a robust bidding process, potentially leading to competitive pricing. 3. The firm fixed-price structure shifts cost risk to the contractor, a common practice for construction projects. 4. The project's duration of 878 days indicates a complex undertaking requiring extensive planning and execution. 5. Awarded by the Department of the Army, this contract aligns with broader defense spending priorities. 6. The location in Alaska presents unique logistical and environmental challenges that may impact project costs and timelines.

Value Assessment

Rating: good

The contract value of $70.4 million for constructing barracks is significant. While specific benchmarks for this exact type of construction in Alaska are not readily available, the firm fixed-price nature of the contract suggests that the contractor bears the primary risk for cost overruns. The number of bidders (4) indicates a reasonable level of competition for this type of specialized construction. Further analysis would require comparing the per-square-foot cost against similar military barracks projects in comparable geographic regions.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit a bid. Four bids were received, indicating a healthy level of interest and competition for this project. The open competition process is designed to ensure that the government receives the best value by allowing multiple contractors to vie for the work, which typically drives down prices and encourages innovation.

Taxpayer Impact: Taxpayers benefit from full and open competition as it increases the likelihood of securing the most cost-effective solution for constructing essential military facilities, ensuring funds are used efficiently.

Public Impact

Service members stationed at Fort Wainwright, Alaska, will benefit from improved and modern living quarters. The construction project will deliver new barracks, enhancing the quality of life and readiness of military personnel. The geographic impact is concentrated in Alaska, supporting military operations in a strategic location. The project will likely create numerous jobs in the construction sector in Alaska, benefiting local and regional economies. This investment supports the Department of Defense's mission to provide adequate facilities for its personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns due to the complexities of construction in remote Alaskan environments.
Logistical challenges in transporting materials and personnel to the site could impact the schedule.
Ensuring compliance with environmental regulations specific to Alaska may add complexity.
The firm fixed-price contract places the burden of managing unforeseen costs on the contractor.

Positive Signals

The use of full and open competition suggests a thorough vetting of potential contractors.
The firm fixed-price contract provides cost certainty for the government.
The project addresses a critical need for improved military housing, enhancing troop morale and readiness.
The contractor, Watterson Construction Co., has experience in large-scale construction projects.

Sector Analysis

The construction sector is a significant component of federal spending, particularly for infrastructure projects like military barracks. This contract falls under the Commercial and Institutional Building Construction NAICS code. Federal spending in this area is often driven by modernization efforts, readiness requirements, and troop housing improvements. Comparable spending benchmarks would involve analyzing the cost per square foot or per bed for similar barracks construction projects across different military branches and geographic locations, considering regional cost variations.

Small Business Impact

This contract was awarded under full and open competition and does not indicate a specific small business set-aside. While the prime contractor is Watterson Construction Co., there is no explicit information provided regarding subcontracting plans or goals for small businesses. Federal regulations often encourage prime contractors to utilize small businesses for subcontracting opportunities, but the extent to which this will occur on this project remains to be seen. Further investigation into the contractor's subcontracting history and specific project plans would be needed to assess the impact on the small business ecosystem.

Oversight & Accountability

The Department of the Army, as the awarding agency, is responsible for overseeing this contract. Oversight mechanisms would typically include regular progress reports from the contractor, site inspections, and quality assurance checks. Accountability measures are embedded in the firm fixed-price contract, which incentivizes the contractor to complete the project within budget. Transparency is generally maintained through contract award databases, though specific details of ongoing oversight might be internal. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Military Housing Construction
Department of Defense Infrastructure Projects
Fort Wainwright Construction Contracts
Alaska Construction Spending
Firm Fixed Price Construction Contracts

Risk Flags

Geographic Risk (Alaska)
Logistical Complexity
Potential for Cost Overruns
Environmental Compliance
Contractor Performance Risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $70.4 million to WATTERSON CONSTRUCTION CO. CONSTRUCT 1 + 1 BARRACKS, FTW360

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 $70.4 million.

What is the period of performance?

Start: 2023-01-13. End: 2025-06-09.

What is Watterson Construction Co.'s track record with large federal construction projects, particularly military facilities?

Watterson Construction Co. has a history of undertaking significant construction projects, including those for government and military clients. While specific details on all past projects are not provided here, their involvement in a $70.4 million barracks construction contract suggests they possess the capacity and experience for large-scale federal endeavors. A deeper dive into their contract history, including past performance evaluations and any past issues or successes on similar military construction projects, would provide a more comprehensive understanding of their capabilities and reliability. Examining their portfolio for projects of comparable size, complexity, and location would be crucial for assessing their suitability and potential risks associated with this contract.

How does the awarded amount compare to the estimated cost or budget for this barracks construction project?

The awarded amount of $70.4 million represents the final negotiated price for the construction of barracks. Without access to the initial cost estimates or the government's budget allocation for this project, it is difficult to definitively state whether the award was significantly above, below, or in line with expectations. However, the fact that it was awarded under full and open competition with four bidders suggests that the price achieved is likely competitive. To assess value for money, this figure would ideally be benchmarked against the cost per square foot or per bed for similar barracks projects in Alaska or other high-cost regions, considering the specific scope of work and materials required.

What are the primary risk indicators associated with this specific contract, considering its location and scope?

The primary risk indicators for this contract stem from its location in Alaska and the nature of large-scale construction. Alaska presents unique logistical challenges, including potentially harsh weather conditions, remote site access, and higher costs for materials and labor, which can lead to schedule delays and cost overruns. The scope of constructing barracks involves complex coordination of various trades and adherence to stringent military construction standards. Furthermore, as a firm fixed-price contract, the contractor assumes the risk of cost escalation, which could incentivize shortcuts if not properly managed and overseen. Environmental considerations specific to Alaska also pose a potential risk if not adequately addressed in the project planning and execution.

How effective is the firm fixed-price contract type in ensuring project success and cost control for military construction?

The firm fixed-price (FFP) contract type is generally favored for construction projects when the scope of work is well-defined and risks can be reasonably anticipated. For military construction, FFP shifts the primary financial risk to the contractor, incentivizing them to manage costs efficiently and complete the project within the agreed-upon price. This provides cost certainty for the government. However, if unforeseen issues arise (e.g., unexpected site conditions, material price spikes beyond reasonable prediction), the contractor may face significant losses, potentially impacting project quality or leading to disputes. Effective oversight is crucial under FFP to ensure the contractor maintains quality standards while managing costs, and to identify any potential issues early.

What are the historical spending patterns for barracks construction by the Department of the Army, and how does this contract fit?

The Department of the Army consistently allocates significant funds towards barracks construction and renovation as part of its commitment to troop welfare and readiness. Historical spending patterns reveal a continuous need to modernize aging facilities and build new ones to accommodate evolving force structures and standards. This $70.4 million contract for new barracks in Alaska aligns with these ongoing efforts. It represents a substantial, but not necessarily outlier, investment typical for major infrastructure projects aimed at improving living conditions for soldiers in strategic locations. Analyzing past awards for similar projects would reveal trends in contract values, durations, and competition levels, helping to contextualize this specific award within the broader historical spending landscape.

What are the implications of awarding a large construction contract in Alaska for the local economy and small business participation?

Awarding a large construction contract like this in Alaska has significant implications for the local economy, primarily through job creation in the construction sector and related industries (e.g., material supply, logistics). It injects substantial capital into the regional economy. For small businesses, the impact can be twofold: potential opportunities as subcontractors if the prime contractor actively seeks them out, or increased competition for smaller, local projects as resources and labor are drawn to the larger contract. The extent of small business participation often depends on the prime contractor's subcontracting plan and the availability of qualified local small businesses capable of performing specialized tasks required for such a project.

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: TWO STEP

Solicitation ID: W911KB22R0019

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: $70,433,108

Exercised Options: $70,433,108

Current Obligation: $70,433,108

Subaward Activity

Number of Subawards: 32

Total Subaward Amount: $34,580,089

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline