Watterson Construction awarded $58.7M for Alaska housing, highlighting significant investment in military family infrastructure

Contract Overview

Contract Amount: $58,669,856 ($58.7M)

Contractor: Watterson Construction CO

Awarding Agency: Department of Defense

Start Date: 2004-09-24

End Date: 2009-07-31

Contract Duration: 1,771 days

Daily Burn Rate: $33.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Place of Performance

Location: FORT WAINWRIGHT, FAIRBANKS NORTH STAR County, ALASKA, 99703

State: Alaska Government Spending

Plain-Language Summary

Department of Defense obligated $58.7 million to WATTERSON CONSTRUCTION CO for work described as: Key points: 1. Contract value represents a substantial investment in military family housing in a remote location. 2. The firm-fixed-price structure aims to control costs for the government. 3. Competition dynamics for this large-scale construction project in Alaska warrant further examination. 4. Project duration of nearly five years suggests a complex and lengthy construction undertaking. 5. Geographic location in Alaska may introduce unique logistical and environmental risks. 6. The absence of small business set-asides indicates a focus on large prime contractors for this project.

Value Assessment

Rating: fair

The contract value of $58.7 million for new multifamily housing construction is significant, particularly given the remote location in Alaska. Benchmarking this against similar military housing projects requires careful consideration of geographic factors, material costs, and labor availability, which are typically higher in Alaska. The firm-fixed-price contract type suggests an attempt to cap costs, but the overall value for money will depend on the final quality and timely completion of the housing units. Without specific cost breakdowns or comparisons to private sector construction of similar scale and complexity in the region, a definitive value assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely solicited. The presence of three bidders, as suggested by the 'no' field, provides a reasonable level of competition for a project of this magnitude. This competitive process should theoretically lead to a more favorable price for the government compared to a sole-source award. However, the specific number of bidders and the nature of their proposals would be needed to fully assess the effectiveness of the competition in driving down costs.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to lower prices and better quality services. For this project, having multiple bidders suggests that taxpayer funds were likely used efficiently to secure the best possible offer for constructing essential military housing.

Public Impact

Military families stationed in Alaska will benefit from improved housing conditions. The project delivers new multifamily housing units, directly addressing accommodation needs. The geographic impact is concentrated in Alaska, supporting the military presence in the state. The construction project will likely create numerous jobs for skilled trades and laborers in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns due to the extended duration and remote location.
Risk of delays associated with construction in harsh Alaskan environmental conditions.
Limited visibility into the specific cost-saving measures employed during the competitive bidding process.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Awarded under full and open competition, suggesting a competitive bidding process.
Addresses a critical need for military family housing, enhancing quality of life for service members.

Sector Analysis

This contract falls within the construction sector, specifically new multifamily housing. The construction industry is characterized by large-scale projects, significant capital investment, and varying degrees of competition depending on the specialization and location. Projects of this nature often involve complex logistics, specialized labor, and adherence to stringent building codes and environmental regulations. Comparable spending benchmarks would typically involve analyzing the cost per square foot or cost per unit for similar government or private sector housing developments in comparable geographic regions.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss=false, sb=false). This suggests that the primary bidders were likely larger construction firms capable of undertaking a project of this scale and complexity. While this may streamline the prime contracting process, it limits opportunities for small businesses to participate directly as prime contractors. Subcontracting opportunities may still exist, but their extent and accessibility for small businesses are not detailed in this data.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and their representatives within the Department of the Army. Accountability measures are inherent in the firm-fixed-price contract, which obligates the contractor to deliver the specified housing within the agreed-upon price. Transparency is generally facilitated through contract award databases and public reporting, although detailed project progress and specific oversight activities may not always be publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Military Construction (MILCON)
Family Housing Construction
Department of Defense Construction Projects
Alaska Military Installations

Risk Flags

Geographic isolation and associated logistical challenges.
Potential for weather-related delays impacting project schedule.
Higher labor and material costs typical of Alaskan construction.
Long project duration increases exposure to market fluctuations.
Absence of explicit small business subcontracting goals.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $58.7 million to WATTERSON CONSTRUCTION CO. See the official description on USAspending.

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 $58.7 million.

What is the period of performance?

Start: 2004-09-24. End: 2009-07-31.

What was the specific timeline and scope of work for the 236116 contract awarded to Watterson Construction?

The contract, identified by NAICS code 236116 (New Multifamily Housing Construction, except For-Sale Builders), was awarded to Watterson Construction Co. on September 24, 2004, with an estimated completion date of July 31, 2009. This indicates a project duration of approximately 1771 days, or nearly five years. The scope of work involved the construction of new multifamily housing units, likely barracks or apartment-style residences, intended to accommodate military personnel and their families stationed in Alaska. The exact number of units, square footage, and specific amenities were determined by the detailed requirements outlined in the contract solicitation and subsequent award.

How does the $58.7 million contract value compare to similar military housing construction projects in remote or high-cost-of-living areas?

The $58.7 million contract value for multifamily housing in Alaska is substantial. Construction costs in Alaska are generally higher than in the contiguous United States due to factors such as transportation of materials, specialized labor requirements, shorter construction seasons, and higher overhead. To benchmark effectively, one would need to compare this contract against other Department of Defense (DoD) housing projects in similar Arctic or sub-Arctic regions, or other high-cost areas like Hawaii or certain parts of California. Without specific data on the number of units, square footage, and quality of finishes, a precise comparison is difficult. However, the value suggests a significant investment, likely reflecting the unique challenges and costs associated with building in such a remote and demanding environment.

What were the key risk indicators identified for this project, considering its location and duration?

Key risk indicators for this project likely included logistical challenges associated with delivering materials and equipment to a remote Alaskan location, potential delays due to severe weather conditions impacting the construction schedule, and the availability and cost of skilled labor in the region. The nearly five-year duration also increases the risk of material price fluctuations and potential scope creep if not managed tightly. Environmental considerations specific to Alaska's sensitive ecosystems could also pose risks related to permitting and construction practices. Furthermore, the reliance on a single prime contractor for such a long and complex project carries inherent performance risks.

What is the significance of the firm-fixed-price (FFP) contract type for this construction project?

The firm-fixed-price (FFP) contract type is significant because it shifts the majority of the risk to the contractor, Watterson Construction Co. Under an FFP agreement, the contractor agrees to a set price for the work, regardless of their actual costs. This provides the government, specifically the Department of the Army, with cost certainty and protects against potential cost overruns. For a large, multi-year construction project like this, the FFP structure incentivizes the contractor to manage their costs efficiently and complete the project within the agreed budget. However, it also means that if the contractor encounters unforeseen difficulties that increase their costs, they bear the financial burden, which could potentially impact the contractor's willingness to bid on similar projects in the future if risks are underestimated.

How does the lack of small business participation (set-aside or subcontracting) impact the overall value and accessibility of this contract?

The absence of a small business set-aside for this contract (indicated by 'ss': false, 'sb': false) means that the primary competition was likely among larger, established construction firms. While this can lead to efficient execution by experienced prime contractors, it limits direct opportunities for small businesses to secure the prime contract. The impact on overall value is indirect; larger firms may have economies of scale, but competition among them is key. The lack of explicit mention of small business subcontracting goals also means that opportunities for small businesses to participate as subcontractors are not guaranteed or mandated by the contract terms presented. This could potentially reduce the broader economic impact on the small business ecosystem in Alaska, although specific subcontracting plans are often detailed in the full contract documentation.

What does the geographic location in Alaska (ST: AK, SN: ALASKA) imply for the execution and cost of this housing project?

The geographic location in Alaska significantly impacts the execution and cost of this housing project. Alaska presents unique challenges including extreme weather conditions (cold temperatures, snow, limited daylight hours during winter), which can shorten the construction season and require specialized building techniques and materials to withstand the climate. Logistics are also a major factor; transporting heavy equipment, construction materials, and personnel to potentially remote sites can be costly and time-consuming. Labor costs are typically higher in Alaska due to the higher cost of living and the demand for skilled workers willing to work in challenging conditions. These factors collectively contribute to a higher overall project cost compared to similar construction projects in the contiguous United States, necessitating careful planning and risk management by the contractor.

Industry Classification

NAICS: Construction › Residential Building Construction › New Multifamily Housing Construction (except For-Sale Builders)

Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCTION OF BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Address: 6500 INTERSTATE CIRCLE, ANCHORAGE, AK, 00

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline