DoD awards $79.8M for LOW OBSERVABLE COMPONENT REPAIR FACILITY, Balfour Beatty Construction to lead project

Contract Overview

Contract Amount: $79,787,123 ($79.8M)

Contractor: Balfour Beatty Construction, LLC

Awarding Agency: Department of Defense

Start Date: 2022-08-01

End Date: 2024-10-12

Contract Duration: 803 days

Daily Burn Rate: $99.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: LOW OBSERVABLE COMPONENT REPAIR FACILITY

Place of Performance

Location: LANGLEY AFB, HAMPTON CITY County, VIRGINIA, 23665

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $79.8 million to BALFOUR BEATTY CONSTRUCTION, LLC for work described as: LOW OBSERVABLE COMPONENT REPAIR FACILITY Key points: 1. The contract's value of $79.8 million represents a significant investment in specialized defense infrastructure. 2. Balfour Beatty Construction, a large, established firm, is the sole awardee, indicating a potentially concentrated market for this specific capability. 3. The firm-fixed-price contract type suggests that cost risks are largely borne by the contractor, which can incentivize efficiency. 4. The project duration of 803 days highlights the complexity and scale of the facility being constructed. 5. The absence of small business set-aside flags warrants further investigation into subcontracting opportunities. 6. The contract is categorized under Commercial and Institutional Building Construction, a broad sector that requires specific expertise for defense applications.

Value Assessment

Rating: good

The contract value of $79.8 million for a specialized repair facility appears within a reasonable range for large-scale construction projects of this nature. Benchmarking against similar defense infrastructure projects would provide a more precise value-for-money assessment. The firm-fixed-price structure generally aligns with efforts to control costs, though detailed cost breakdowns are not publicly available for direct comparison. The award to a single, large contractor suggests they possess the necessary scale and expertise, which can be efficient but may also indicate limited competition driving the price.

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 offers. The presence of four bidders suggests a competitive process, though the specific details of the bidding and evaluation are not public. A higher number of bidders typically leads to better price discovery and potentially lower costs for the government. The fact that a single award was made implies that one offeror best met the government's requirements.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it aims to secure the best value through a robust bidding process. While four bidders were involved, the final price is a result of the specific technical and cost proposals submitted.

Public Impact

The primary beneficiaries are the Department of Defense and its personnel, who will gain access to a critical repair facility. The facility will enable specialized repairs for low observable components, enhancing the operational readiness and longevity of advanced aircraft. The geographic impact is concentrated in Virginia, where the facility will be constructed, potentially creating local construction jobs. The project will likely involve a significant workforce of construction professionals, including skilled trades, engineers, and project managers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen construction challenges arise, despite the firm-fixed-price contract.
Dependence on a single large contractor could limit flexibility if performance issues emerge.
Limited visibility into the specific expertise required for 'low observable component repair' and how it was evaluated.
The absence of explicit small business participation targets raises concerns about broader economic impact.

Positive Signals

Awarded through full and open competition, suggesting a fair and transparent process.
Firm-fixed-price contract type helps to mitigate cost uncertainty for the government.
The contractor, Balfour Beatty, is a large, established company with a track record in major construction projects.
The project addresses a critical defense need for specialized repair capabilities.
The duration of the contract allows for thorough planning and execution of a complex facility.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, specifically focusing on specialized defense infrastructure. The market for constructing facilities with unique requirements like 'low observable component repair' is likely niche, dominated by large construction firms with proven experience in government and high-security projects. Comparable spending benchmarks would typically involve large-scale industrial or specialized facility construction for government clients, often exceeding tens of millions of dollars.

Small Business Impact

This contract does not appear to have a small business set-aside. The award to a large prime contractor, Balfour Beatty Construction, LLC, suggests that the primary focus was on securing the necessary scale and expertise for this specialized facility. Further analysis would be needed to determine if subcontracting opportunities exist for small businesses within the construction trades or specialized services required for the facility's unique functions.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Army contracting and project management offices. Accountability measures are embedded in the firm-fixed-price contract terms, which place cost responsibility on the contractor. Transparency is generally limited for specific construction project details and contractor performance metrics, though contract award information is publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Military Construction
Defense Infrastructure
Specialized Facility Construction
Aerospace Maintenance and Repair Facilities

Risk Flags

Potential for cost overruns due to specialized nature of construction.
Contractor performance risk for complex, long-duration project.
Limited visibility into specific technical requirements and evaluation criteria.
Lack of explicit small business participation targets.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $79.8 million to BALFOUR BEATTY CONSTRUCTION, LLC. LOW OBSERVABLE COMPONENT REPAIR FACILITY

Who is the contractor on this award?

The obligated recipient is BALFOUR BEATTY 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 $79.8 million.

What is the period of performance?

Start: 2022-08-01. End: 2024-10-12.

What is Balfour Beatty Construction's track record with similar large-scale defense construction projects?

Balfour Beatty Construction, LLC is a well-established global infrastructure group with a significant presence in the U.S. defense sector. They have a history of undertaking large, complex projects for various branches of the U.S. military, including the construction of barracks, training facilities, and specialized operational buildings. Their experience often includes adhering to stringent security protocols, environmental regulations, and performance standards required by defense clients. While specific details on 'low observable component repair facilities' are not readily available in public contract databases, their portfolio suggests they possess the general capabilities and financial capacity to manage projects of this magnitude and complexity. A deeper dive into their past performance ratings and any past performance issues on similar government contracts would provide a more comprehensive assessment.

How does the $79.8 million contract value compare to similar defense facility construction projects?

The $79.8 million award for the LOW OBSERVABLE COMPONENT REPAIR FACILITY is substantial, placing it in the category of major construction projects. To benchmark its value effectively, comparisons should be made with other large-scale military construction projects, particularly those involving specialized industrial or technical facilities. For instance, the construction of aircraft hangars, maintenance depots, or research and development facilities for the Department of Defense often fall within a similar cost range, sometimes exceeding it depending on the complexity and technological requirements. Factors such as location, specific structural demands, integration of specialized equipment, and security requirements significantly influence project costs. Without more specific details on the facility's technical specifications, a precise comparison is challenging, but the awarded amount is consistent with significant defense infrastructure investments.

What are the primary risks associated with this firm-fixed-price contract for a specialized facility?

The primary risk with a firm-fixed-price (FFP) contract, especially for a specialized facility like this, is the potential for the contractor to cut corners on quality or safety to maintain profitability if unforeseen issues arise during construction. While FFP shifts cost risk to the contractor, significant scope creep or unforeseen site conditions not adequately addressed in the initial contract could lead to disputes or claims. For a 'low observable component repair facility,' the specialized nature means that technical challenges or the need for highly specific materials or construction techniques might not be fully anticipated, potentially impacting the contractor's ability to deliver within the fixed price without compromising quality. The government's risk lies in ensuring robust oversight to maintain quality standards and in the potential for contractor default if the project becomes financially unviable for them.

What is the expected program effectiveness and impact on military readiness?

The program's effectiveness is directly tied to its ability to provide a dedicated, state-of-the-art facility for repairing low observable components. These components are critical for the stealth capabilities of advanced military aircraft. By enabling specialized, in-house repairs, the facility is expected to significantly enhance the operational readiness and reduce turnaround times for these high-value assets. This can lead to increased aircraft availability for missions, reduced reliance on external repair services (which can be costly and time-consuming), and improved sustainment of the fleet. Ultimately, the facility's successful construction and operation should contribute directly to the Department of Defense's ability to maintain its technological edge and respond effectively to national security requirements.

How does historical spending on similar defense construction projects inform the assessment of this contract?

Historical spending data on similar defense construction projects provides a crucial benchmark for assessing the value and reasonableness of this $79.8 million contract. Analyzing past awards for specialized military facilities, such as aircraft maintenance depots, R&D labs, or secure operational buildings, can reveal typical cost ranges, project durations, and the types of contractors that typically win these bids. For example, if historical data shows that similar projects have cost anywhere from $50 million to $150 million, then this $79.8 million award falls within a plausible range. Deviations from historical norms, either significantly higher or lower, would warrant further investigation into the specific project requirements, market conditions, and competition levels. Understanding past spending patterns helps identify potential cost efficiencies or areas where the government might be overpaying.

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: W9123621R2023

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3180 FAIRVIEW PARK DR STE 200, FALLS CHURCH, VA, 22042

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

Financial Breakdown

Contract Ceiling: $79,787,123

Exercised Options: $79,787,123

Current Obligation: $79,787,123

Actual Outlays: $3,853,295

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline