DoD awards $380M for Montana weapons facility construction, highlighting significant investment in defense infrastructure

Contract Overview

Contract Amount: $380,333,955 ($380.3M)

Contractor: Archer Western Federal JV

Awarding Agency: Department of Defense

Start Date: 2023-06-30

End Date: 2027-07-15

Contract Duration: 1,476 days

Daily Burn Rate: $257.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 7

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: CONSTRUCTION OF WEAPONS STORAGE AND MAINTENANCE FACILITY AT MONTANA.

Place of Performance

Location: MALMSTROM AFB, CASCADE County, MONTANA, 59402

State: Montana Government Spending

Plain-Language Summary

Department of Defense obligated $380.3 million to ARCHER WESTERN FEDERAL JV for work described as: CONSTRUCTION OF WEAPONS STORAGE AND MAINTENANCE FACILITY AT MONTANA. Key points: 1. The contract represents a substantial investment in specialized defense infrastructure, crucial for national security operations. 2. Competition dynamics for this large-scale construction project are vital for ensuring taxpayer value and efficient resource allocation. 3. Performance risks are associated with the extended duration and complexity of constructing a secure weapons facility. 4. The project's success hinges on adherence to stringent security protocols and construction quality standards. 5. This facility's construction positions the Department of Defense to enhance its operational readiness and storage capabilities.

Value Assessment

Rating: good

The contract value of $380.3 million for a weapons storage and maintenance facility appears to be within the expected range for a project of this scale and complexity, especially considering the specialized security and construction requirements. Benchmarking against similar large-scale defense infrastructure projects would provide a more precise value-for-money assessment. The firm-fixed-price nature of the contract shifts significant cost risk to the contractor, which can be beneficial for the government if managed effectively.

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 considered. With 7 bidders, the level of competition suggests a robust market response for this type of specialized construction. This broad competition is generally favorable for price discovery and achieving competitive pricing, as contractors are incentivized to offer their best terms to secure the award.

Taxpayer Impact: The full and open competition for this significant defense contract is a positive indicator for taxpayers, suggesting that the government sought the most cost-effective solution by allowing all qualified sources to participate.

Public Impact

The primary beneficiaries are the Department of Defense and its operational units, which will gain enhanced capabilities for storing and maintaining weapons. The project will deliver a critical piece of infrastructure essential for national security and military readiness. The geographic impact is concentrated in Montana, potentially creating local employment opportunities during the construction phase. Workforce implications include demand for skilled construction labor, engineers, and project managers in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions or material price fluctuations occur, despite the firm-fixed-price structure.
Ensuring timely completion within the 4-year duration is critical to meet operational needs and avoid extended project management costs.
Maintaining stringent security and quality control throughout the extended construction period requires robust oversight.

Positive Signals

The firm-fixed-price contract structure provides cost certainty for the government, transferring most cost overrun risks to the contractor.
Awarding to a joint venture (ARCHER WESTERN FEDERAL JV) suggests a capable team with potentially diverse expertise for complex projects.
The full and open competition indicates a healthy market and likely competitive pricing, benefiting the government.

Sector Analysis

The construction sector, particularly for government and defense facilities, is characterized by large-scale projects requiring specialized expertise and adherence to strict regulatory and security standards. This contract fits within the broader category of institutional building construction, with a specific focus on defense infrastructure. Comparable spending benchmarks would involve analyzing other major military construction projects awarded by the DoD or other federal agencies for similar facilities.

Small Business Impact

While the primary award went to a joint venture, the contract details do not explicitly indicate a small business set-aside. However, large federal construction contracts often include subcontracting requirements. It is probable that the prime contractor will be required to engage small businesses for various specialized services and material supply, contributing to the small business ecosystem.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Army's contracting and engineering commands, with potential involvement from the Defense Contract Management Agency (DCMA). Accountability measures are embedded in the firm-fixed-price contract terms, performance specifications, and delivery schedules. Transparency is facilitated through federal procurement databases, though specific project details and oversight reports may be subject to security restrictions.

Related Government Programs

Military Construction, Army
Weapons Systems Storage Facilities
Defense Infrastructure Projects
Federal Construction Contracts
Department of Defense Facilities

Risk Flags

Potential for cost escalation despite firm-fixed-price due to long duration and unforeseen site conditions.
Risk of schedule delays impacting operational readiness if project milestones are not met.
Ensuring consistent quality and security compliance over the multi-year construction period.
Contractor financial stability and performance over the extended contract term.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $380.3 million to ARCHER WESTERN FEDERAL JV. CONSTRUCTION OF WEAPONS STORAGE AND MAINTENANCE FACILITY AT MONTANA.

Who is the contractor on this award?

The obligated recipient is ARCHER WESTERN FEDERAL JV.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $380.3 million.

What is the period of performance?

Start: 2023-06-30. End: 2027-07-15.

What is the track record of ARCHER WESTERN FEDERAL JV in executing large-scale federal construction projects, particularly those with defense-related security requirements?

ARCHER WESTERN FEDERAL JV is a joint venture formed by Archer Western Contractors, LLC and Federal Constructors, Inc. Archer Western Contractors has a significant history of executing large-scale civil and infrastructure projects, including military facilities. Federal Constructors, Inc. also brings experience in government and commercial construction. While specific project details for the joint venture itself would require deeper investigation, the parent companies' established track records suggest a capacity to handle complex federal projects. A thorough review would involve examining past performance evaluations, any past performance issues, and the successful completion of similar-sized contracts, especially those involving specialized security or construction requirements for defense installations.

How does the awarded price of $380.3 million compare to similar weapons storage and maintenance facility constructions by the Department of Defense?

Benchmarking this $380.3 million contract requires comparing it to similar projects in terms of size, scope, security features, and geographic location. Large-scale defense facilities, especially those requiring specialized environmental controls, high-security measures, and robust construction standards for storing sensitive materials, can vary significantly in cost. Factors such as prevailing labor rates, material costs in the specific region (Montana), and the complexity of the site preparation and foundation work influence the overall price. Without access to a database of comparable, recently awarded projects with detailed cost breakdowns, a precise comparison is difficult. However, for a facility of this nature, a multi-hundred-million-dollar price tag is not unusual for a project spanning over 1.4 million square feet (implied by the NAICS code 236220 for Commercial and Institutional Building Construction, which often includes large facilities) and requiring specialized infrastructure.

What are the primary risk indicators associated with a firm-fixed-price contract for a multi-year construction project of this magnitude?

The primary risk indicator for the government in a firm-fixed-price (FFP) contract, especially one spanning over four years, is the potential for the contractor to cut corners on quality or safety to maintain profitability if costs escalate unexpectedly. While the FFP structure shifts cost risk to the contractor, significant unforeseen issues (e.g., extensive subsurface rock requiring specialized excavation, discovery of environmental hazards, or extreme material price volatility not fully accounted for) could lead to contractor financial distress or disputes, potentially delaying the project. Another risk is ensuring the contractor maintains adequate resources and motivation throughout the long duration. Robust government oversight, clear performance metrics, and proactive risk management by the contractor are crucial to mitigate these indicators.

What is the expected effectiveness of this new facility in enhancing the Department of the Army's operational readiness and weapons storage capabilities?

The effectiveness of this new facility is expected to be high, directly contributing to the Department of the Army's operational readiness by providing secure, modern, and potentially expanded capacity for storing and maintaining a range of weapons systems. Modern facilities are designed to meet current safety, environmental, and security standards, which may improve the longevity and readiness of stored equipment compared to older or less secure storage solutions. Enhanced maintenance capabilities within the facility can also ensure weapons systems are kept in optimal operational condition. The strategic location in Montana could also support specific operational theaters or force structures. Ultimately, its effectiveness will be measured by its ability to safely and efficiently house and service the intended inventory of weapons, thereby supporting the Army's overall mission.

How has federal spending on defense construction projects, particularly specialized facilities, trended in recent years, and does this contract align with those trends?

Federal spending on defense construction projects, especially specialized facilities like weapons storage and maintenance sites, has generally remained robust, driven by the need to modernize aging infrastructure, adapt to evolving threats, and maintain operational readiness. Recent years have seen significant investments in upgrading military bases, enhancing cybersecurity infrastructure, and building specialized facilities for new weapon systems. This $380.3 million contract for a weapons storage and maintenance facility in Montana aligns with these broader trends of sustained investment in defense infrastructure. The Department of Defense consistently allocates substantial portions of its budget to Military Construction (MILCON) accounts to address these needs, indicating that projects of this scale and purpose are a priority and are expected to continue.

What are the potential long-term economic impacts on the local economy in Montana resulting from the construction and operation of this facility?

The construction phase of this $380.3 million facility is expected to generate significant short-to-medium term economic benefits for the local economy in Montana. This includes job creation for construction workers, engineers, project managers, and support staff, as well as demand for local materials, equipment rental, and services. Indirect economic activity will likely arise from increased spending by construction workers in local businesses. In the long term, the operational phase of the facility will create sustained employment for military personnel and civilian staff involved in its maintenance and security. While the primary purpose is defense, the presence of a large federal facility can also stimulate ancillary businesses and services in the surrounding community, contributing to a stable economic base.

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: W912DW22R0013

Offers Received: 7

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 929 W ADAMS ST, CHICAGO, IL, 60607

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

Financial Breakdown

Contract Ceiling: $380,333,955

Exercised Options: $380,333,955

Current Obligation: $380,333,955

Actual Outlays: $46,875,497

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline