Aleut Building Company LLC Awarded $14.6M for Building Construction, Facing Limited Competition

Contract Overview

Contract Amount: $14,618,012 ($14.6M)

Contractor: Aleut Building Company LLC

Awarding Agency: Department of Defense

Start Date: 2023-09-30

End Date: 2026-02-06

Contract Duration: 860 days

Daily Burn Rate: $17.0K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: BASE BID 2 CONSTRUCTION FOR BLDG 1557

Place of Performance

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

State: Alaska Government Spending

Plain-Language Summary

Department of Defense obligated $14.6 million to ALEUT BUILDING COMPANY LLC for work described as: BASE BID 2 CONSTRUCTION FOR BLDG 1557 Key points: 1. Value appears reasonable given the scope of a large construction project. 2. Limited competition raises concerns about potential overpricing and reduced innovation. 3. Project duration of 860 days suggests a significant undertaking. 4. Fixed-price contract shifts risk to the contractor. 5. Geographic concentration in Alaska may limit broader market comparisons. 6. No indication of small business set-aside, potentially impacting smaller firms.

Value Assessment

Rating: fair

The contract value of $14.6 million for building construction is substantial. Without specific benchmarks for comparable projects in Alaska or for similar building types, a precise value-for-money assessment is challenging. However, the fixed-price nature of the contract suggests that the contractor bears the primary financial risk, which can be a positive indicator. The base bid of $16.998 million indicates potential savings from the initial bid, but further analysis would be needed to understand the reasons for this difference and its impact on overall value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was not available for open competition, indicating a limited procurement approach. The specific reasons for this limitation are not detailed, but it suggests that only a select group of contractors were considered or eligible. This lack of broad competition can lead to less favorable pricing and fewer innovative solutions compared to a full and open solicitation. The single award also means there's no direct comparison of bids to gauge market competitiveness.

Taxpayer Impact: Taxpayers may have paid a premium due to the restricted competition, as the government did not benefit from the price discovery mechanisms inherent in a wider bidding process.

Public Impact

The Department of the Army benefits from the construction of Building 1557. The project will likely create or sustain jobs in the construction sector in Alaska. The new building will support military operations or personnel in its Alaskan location. Local suppliers and subcontractors in Alaska may benefit from the project's activities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may result in higher costs for taxpayers.
Lack of transparency in the procurement process hinders full value assessment.
Potential for contractor lock-in due to limited competitive options.

Positive Signals

Fixed-price contract shifts cost overrun risk to the contractor.
Award to Aleut Building Company LLC, potentially a known entity with relevant experience.
Project completion is scheduled, indicating a defined timeline.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a significant part of the broader construction industry. The market for large-scale government construction projects, especially in remote locations like Alaska, is often characterized by specialized firms and specific procurement regulations. Benchmarking this contract's value would ideally involve comparing it to similar military or institutional building projects in similar geographic and economic conditions, considering factors like labor costs and material availability.

Small Business Impact

The contract data indicates that this was not a small business set-aside, nor is there information suggesting significant subcontracting opportunities for small businesses. This means the primary award went to a larger entity, and the direct impact on the small business ecosystem is likely minimal unless Aleut Building Company LLC actively engages small businesses as subcontractors. Further investigation into subcontracting plans would be necessary to fully assess the impact.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and project management offices. Accountability measures are inherent in the fixed-price contract, requiring the contractor to deliver the specified building. Transparency could be enhanced by making the justification for limited competition publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Military Construction
Department of Defense Facilities
General Building Construction

Risk Flags

Limited Competition
Potential for Cost Overruns (Contractor Risk)
Lack of Small Business Participation Indication

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.6 million to ALEUT BUILDING COMPANY LLC. BASE BID 2 CONSTRUCTION FOR BLDG 1557

Who is the contractor on this award?

The obligated recipient is ALEUT BUILDING COMPANY 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 $14.6 million.

What is the period of performance?

Start: 2023-09-30. End: 2026-02-06.

What is the track record of Aleut Building Company LLC on similar government contracts?

Information regarding Aleut Building Company LLC's specific track record on similar government contracts is not provided in the data. A comprehensive analysis would require reviewing past performance evaluations, contract history, and any reported issues or successes on previous projects of comparable size and scope. Understanding their experience with fixed-price contracts and construction in remote or challenging environments like Alaska would be crucial for assessing their capability and reliability for this project. Without this data, it's difficult to gauge their suitability beyond the fact they were awarded this contract.

How does the $14.6 million cost compare to similar building construction projects in Alaska?

Direct cost comparison for this $14.6 million contract is challenging without specific data on comparable projects. Factors such as building size (square footage), complexity, materials used, and specific site conditions in Alaska significantly influence construction costs. Generally, construction in Alaska is more expensive due to logistical challenges, higher labor costs, and a shorter construction season. To benchmark effectively, one would need to compare this contract against other institutional or commercial buildings of similar scale and complexity built recently in Alaska, adjusting for inflation and specific project requirements. The base bid of $16.998 million suggests potential savings, but the final negotiated price needs context.

What are the primary risks associated with this fixed-price construction contract?

The primary risks associated with this fixed-price contract are largely borne by the contractor, Aleut Building Company LLC. These include potential cost overruns if material prices increase unexpectedly, labor shortages, unforeseen site conditions, or delays due to weather or supply chain issues. If these risks materialize and exceed the contractor's contingency, it could impact their profitability or potentially lead to disputes. For the government, the main risk is that the contractor might cut corners on quality to manage costs if their initial pricing was too aggressive, although quality oversight should mitigate this. The limited competition also presents a risk of suboptimal pricing for the government.

What is the expected effectiveness of Building 1557 once completed?

The effectiveness of Building 1557 will be measured by its ability to fulfill its intended purpose for the Department of the Army in Alaska. This could range from providing necessary operational space, housing for personnel, or specialized facilities for training or support functions. Its effectiveness will depend on the quality of construction, adherence to specifications, and its suitability for the harsh Alaskan climate and operational requirements. Successful completion on time and within budget, as per the contract, will be initial indicators of effectiveness, followed by its long-term utility and minimal maintenance needs.

How does historical spending on building construction by the Department of the Army in Alaska compare to this award?

Analyzing historical spending patterns for building construction by the Department of the Army in Alaska would provide valuable context for this $14.6 million award. Without access to specific historical data, it's difficult to determine if this amount is typical, high, or low for similar projects. Trends in military construction spending in Alaska, influenced by geopolitical factors, infrastructure needs, and budget allocations, would need to be examined. Understanding the average cost per square foot for similar facilities constructed by the Army in the region over the past several years would allow for a more informed comparison and assessment of whether this contract represents a reasonable investment.

What are the implications of the 'NOT AVAILABLE FOR COMPETITION' status on taxpayer value?

The 'NOT AVAILABLE FOR COMPETITION' status, as indicated by 'limited' competition, has significant implications for taxpayer value. When a contract is not competed broadly, the government foregoes the benefits of a competitive marketplace, which typically drives down prices and encourages innovation. This limited approach suggests that either only one source was capable of meeting the requirement, or the government chose not to solicit offers from a wider range of potential contractors. This restriction can lead to higher prices than might be achieved through full and open competition, potentially resulting in less value for taxpayer dollars. It also raises questions about the justification for limiting competition and whether alternative procurement strategies were adequately explored.

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: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W912DY23R0083

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 12355 SUNRISE VALLEY DR STE 300B, RESTON, VA, 20191

Business Categories: 8(a) Program Participant, Alaskan Native Corporation Owned Firm, Category Business, Limited Liability Corporation, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $14,618,012

Exercised Options: $14,618,012

Current Obligation: $14,618,012

Actual Outlays: $4,785,898

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: YES

Timeline