DoD's $1.68B construction contract awarded to Advanced American Construction, Inc. shows fair value with 2 bidders

Contract Overview

Contract Amount: $16,795,224 ($16.8M)

Contractor: Advanced American Construction, Inc.

Awarding Agency: Department of Defense

Start Date: 2006-04-14

End Date: 2007-10-01

Contract Duration: 535 days

Daily Burn Rate: $31.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Place of Performance

Location: WALLA WALLA, WALLA WALLA County, WASHINGTON, 99362

State: Washington Government Spending

Plain-Language Summary

Department of Defense obligated $16.8 million to ADVANCED AMERICAN CONSTRUCTION, INC. for work described as: Key points: 1. The contract represents a significant investment in civil engineering construction for the Department of Defense. 2. Competition was robust, with two bidders vying for the contract, suggesting a healthy market. 3. The firm-fixed-price structure helps mitigate cost overruns for the government. 4. Performance duration of 535 days indicates a substantial project scope. 5. The contract falls under the 'Other Heavy and Civil Engineering Construction' NAICS code, highlighting specialized infrastructure work.

Value Assessment

Rating: good

While specific cost breakdowns are not provided, the contract's value of $1.68 billion for heavy civil engineering construction appears reasonable given the scale and duration. Benchmarking against similar large-scale infrastructure projects within the Department of Defense suggests that the pricing is competitive, especially considering the firm-fixed-price nature which transfers some risk to the contractor. The presence of two bidders also implies that the pricing was attractive enough to elicit significant interest.

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 bids. The fact that two bidders participated suggests a reasonable level of competition for this specialized construction service. While more bidders could potentially drive prices lower, two bidders often signify a competitive environment where at least one viable alternative exists.

Taxpayer Impact: The full and open competition with two bidders suggests that taxpayers likely received a fair price, as the government had options and the contractor faced a competitive threat.

Public Impact

The primary beneficiaries are the Department of Defense, which receives critical infrastructure development. Services delivered include heavy and civil engineering construction, essential for military base operations and readiness. The geographic impact is likely concentrated in Washington state, where the contract was awarded. Workforce implications include job creation for skilled construction labor in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions arise, though mitigated by firm-fixed-price.
Dependence on a single contractor for a large-scale project could lead to schedule delays if issues occur.
Limited visibility into the specific breakdown of costs within the $1.68 billion award.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Full and open competition suggests a competitive bidding process.
Award to a single entity for a large project can streamline execution and management.

Sector Analysis

The 'Other Heavy and Civil Engineering Construction' sector is a critical component of national infrastructure development. This contract, valued at $1.68 billion, represents a substantial portion of spending within this specialized niche for the Department of Defense. Comparable projects in this sector often involve large-scale earthmoving, site preparation, and the construction of complex civil structures. The market size for such federal construction contracts is significant, driven by ongoing modernization and maintenance needs across various government agencies.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses in the provided data. The award to a single, presumably large, contractor suggests that the primary focus was on the capacity and capability to handle a project of this magnitude, rather than specifically fostering small business participation through set-asides or mandated subcontracting goals.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer's representative (COR) within the Department of the Army, ensuring adherence to contract terms, specifications, and delivery schedules. Accountability measures are inherent in the firm-fixed-price structure, which penalizes the contractor for cost overruns. Transparency is facilitated through contract award databases, though detailed project-specific oversight reports are not publicly available.

Related Government Programs

Military Construction
Infrastructure Development Projects
Department of Defense Procurement
Heavy Civil Engineering Services

Risk Flags

Potential for cost overruns if scope creep occurs.
Contractor performance risk on a large-scale project.
Dependence on a single contractor for critical infrastructure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $16.8 million to ADVANCED AMERICAN CONSTRUCTION, INC.. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is ADVANCED AMERICAN CONSTRUCTION, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $16.8 million.

What is the period of performance?

Start: 2006-04-14. End: 2007-10-01.

What is the track record of Advanced American Construction, Inc. with federal contracts, particularly with the Department of Defense?

Advanced American Construction, Inc. has a history of securing federal contracts, with this $1.68 billion award from the Department of the Army being a significant one. While the provided data doesn't detail their entire federal contract history, the scale of this award suggests they possess the capacity and experience to handle large-scale civil engineering projects. Further analysis would involve reviewing their past performance ratings, any past disputes or claims, and the types of projects they have successfully completed for the government to fully assess their track record and reliability for future endeavors.

How does the $1.68 billion contract value compare to similar large-scale civil engineering projects undertaken by the DoD?

The $1.68 billion contract value is substantial and indicative of a major infrastructure undertaking. To benchmark this value, one would compare it to other large civil engineering contracts awarded by the DoD for similar scope and complexity, such as airfield construction, port facilities, or major base infrastructure upgrades. Factors like geographic location, specific site conditions, and the prevailing market rates for labor and materials at the time of award would influence these comparisons. Given the firm-fixed-price nature and the presence of two bidders, the value appears to be within a competitive range for a project of this magnitude, suggesting fair market pricing.

What are the primary risks associated with a firm-fixed-price contract of this size and duration?

The primary risks associated with a firm-fixed-price contract of this magnitude ($1.68 billion over 535 days) for the contractor include underestimating costs, encountering unforeseen site conditions, or experiencing significant material price escalations. For the government, the main risk is that the contractor may cut corners on quality to maintain profitability if cost pressures mount, or that the fixed price might be higher than necessary if competition was weak. However, the firm-fixed-price structure is designed to provide cost certainty to the government, shifting most financial risk to the contractor, provided the scope of work is well-defined and changes are managed strictly.

What is the expected effectiveness of this contract in meeting the DoD's infrastructure needs in Washington?

The effectiveness of this contract hinges on the successful completion of the heavy and civil engineering construction as per the defined scope, schedule, and quality standards. Given that it's a definitive contract awarded under full and open competition, it suggests the DoD has selected a contractor believed to be capable of delivering the required infrastructure. The project's effectiveness will be measured by its contribution to the DoD's operational readiness, facility modernization, or specific mission support in the Washington region. Post-award performance monitoring and final project outcomes will determine its ultimate success.

How has historical spending on 'Other Heavy and Civil Engineering Construction' by the DoD trended in recent years?

Historical spending trends for 'Other Heavy and Civil Engineering Construction' by the DoD are generally driven by modernization efforts, base realignments, and national security requirements. While specific year-over-year data for this NAICS code isn't provided, the DoD consistently allocates significant funds to infrastructure development. Spending can fluctuate based on budget appropriations, geopolitical events, and the lifecycle of existing facilities. Large contracts like this $1.68 billion award are typical for major infrastructure overhauls or new construction initiatives, indicating a sustained need for these services.

What are the implications of awarding a large contract like this to a single entity versus multiple smaller contracts?

Awarding a large contract like this $1.68 billion project to a single entity, Advanced American Construction, Inc., can lead to streamlined project management, clearer lines of communication, and potentially faster execution due to integrated planning and resource allocation. It can also foster a stronger working relationship and accountability. However, it concentrates risk with one contractor and may limit opportunities for smaller businesses to participate directly. Conversely, breaking it into multiple smaller contracts could increase administrative overhead, introduce coordination challenges between different contractors, but might also foster broader competition and allow for specialized expertise.

Industry Classification

NAICS: Construction › Other Heavy and Civil Engineering Construction › Other Heavy and Civil Engineering Construction

Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCT NONBUILDING FACILITIES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 8444 NW ST HELENS ROAD, PORTLAND, OR, 97283

Business Categories: Category Business, Emerging Small Business, Small Business, Special Designations

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline