Department of the Army awards $36M contract for Dammam helicopter hangar construction, highlighting significant infrastructure investment

Contract Overview

Contract Amount: $35,959,294 ($36.0M)

Contractor: Aici-Archirodon JV LLC

Awarding Agency: Department of Defense

Start Date: 2024-08-16

End Date: 2027-01-25

Contract Duration: 892 days

Daily Burn Rate: $40.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: CONSTRUCT DAMMAM HELICOPTER HANGAR, WAREHOUSE, AND GSE FACILITY

Plain-Language Summary

Department of Defense obligated $36.0 million to AICI-ARCHIRODON JV LLC for work described as: CONSTRUCT DAMMAM HELICOPTER HANGAR, WAREHOUSE, AND GSE FACILITY Key points: 1. The contract value of $36 million represents a substantial investment in critical infrastructure for military operations. 2. Full and open competition suggests a potentially competitive bidding process, which can lead to better pricing. 3. The firm-fixed-price contract type shifts performance risk to the contractor, providing cost certainty for the government. 4. The project duration of 892 days indicates a complex and lengthy construction undertaking. 5. The contractor, AICI-ARCHIRODON JV LLC, will be responsible for delivering a helicopter hangar, warehouse, and GSE facility. 6. This award falls under the Commercial and Institutional Building Construction NAICS code, indicating a focus on specialized construction services.

Value Assessment

Rating: good

Benchmarking this contract's value requires comparison to similar large-scale military construction projects in similar geographic regions. The firm-fixed-price nature provides cost predictability. Without specific per-unit cost data or detailed scope breakdowns, a precise value-for-money assessment is challenging, but the competitive award process is a positive indicator.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. With 3 bidders identified, this suggests a moderate level of competition for this significant construction project. A higher number of bidders typically correlates with more competitive pricing.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down costs and encourage innovation from contractors.

Public Impact

The primary beneficiaries are the Department of the Army and its personnel, who will gain enhanced operational capabilities through the new facilities. The project will deliver a new helicopter hangar, warehouse, and ground support equipment (GSE) facility. The geographic impact is concentrated in Dammam, Saudi Arabia, supporting U.S. military presence and operations in the region. The construction activities will likely create temporary employment opportunities for skilled labor in the local Dammam area.

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 fixed-price nature.
Ensuring timely completion within the 892-day duration is critical to avoid operational disruptions.
Quality control and adherence to specifications for specialized facilities like helicopter hangars require rigorous oversight.

Positive Signals

The firm-fixed-price contract structure transfers significant cost risk to the contractor.
Awarding through full and open competition suggests a robust vetting of potential contractors and competitive pricing.
The contractor is a joint venture, potentially bringing together specialized expertise for complex construction.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, specifically for large-scale facilities. The global defense construction market is substantial, driven by geopolitical needs and infrastructure modernization. This project aligns with broader U.S. military efforts to enhance operational readiness and logistical support in key strategic locations.

Small Business Impact

The data indicates this contract was not set aside for small businesses, and there is no explicit mention of subcontracting plans for small businesses. The prime contractor is a joint venture, suggesting a focus on larger, experienced entities for this significant project. Further analysis would be needed to determine if small business participation is mandated through subcontracting.

Oversight & Accountability

Oversight will likely be managed by the contracting officer's representative (COR) from the Department of the Army, responsible for monitoring progress, quality, and compliance with contract terms. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General (IG) jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Military Construction, Army
Foreign Military Construction
Aircraft Maintenance Facilities
Logistics and Warehousing Infrastructure

Risk Flags

Potential for cost growth if scope changes are introduced.
Risk of schedule delays due to international logistics or unforeseen site conditions.
Ensuring compliance with foreign regulations and standards.
Quality assurance for specialized aviation facilities.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $36.0 million to AICI-ARCHIRODON JV LLC. CONSTRUCT DAMMAM HELICOPTER HANGAR, WAREHOUSE, AND GSE FACILITY

Who is the contractor on this award?

The obligated recipient is AICI-ARCHIRODON JV 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 $36.0 million.

What is the period of performance?

Start: 2024-08-16. End: 2027-01-25.

What is the track record of AICI-ARCHIRODON JV LLC on similar government contracts?

A comprehensive review of AICI-ARCHIRODON JV LLC's past performance would involve examining their history with federal agencies, particularly the Department of Defense. This includes assessing their success in completing projects on time, within budget, and to specified quality standards. Analyzing past contract awards, modifications, and any performance evaluations or disputes would provide insight into their reliability and capability for executing complex construction projects like the Dammam hangar. Without specific historical data readily available in this summary, further investigation into federal procurement databases and performance reports is recommended.

How does the cost per square foot of this hangar compare to industry benchmarks?

Determining the cost per square foot requires knowing the total square footage of the hangar, warehouse, and GSE facility. This information is not provided in the summary data. Once the total area is known, it can be divided into the contract value of $35,959,294.26. This figure can then be compared to industry benchmarks for similar military or commercial construction projects in the Middle East. Factors such as specialized requirements for helicopter operations (e.g., clear height, ventilation, fire suppression) and the inclusion of warehouse and GSE facilities will influence the cost per square foot, potentially making direct comparisons challenging without detailed scope alignment.

What are the primary risks associated with constructing a helicopter hangar in a foreign location like Dammam?

Key risks include logistical challenges in transporting materials and equipment to the site, potential delays due to customs and import regulations, and adapting to local labor laws and practices. Geopolitical instability or security concerns in the region could also pose risks. Furthermore, ensuring compliance with local building codes and environmental regulations, which may differ significantly from U.S. standards, is crucial. The harsh climate in Dammam, characterized by high temperatures and sandstorms, presents construction challenges that could impact timelines and material durability, requiring specialized construction techniques and materials.

What is the historical spending trend for similar construction projects by the Department of the Army in the Middle East?

Historical spending for similar construction projects by the Department of the Army in the Middle East has generally been substantial, driven by ongoing military operations and strategic presence in the region. This includes investments in barracks, airfields, maintenance facilities, and logistical hubs. Spending patterns can fluctuate based on geopolitical events, troop deployments, and infrastructure modernization initiatives. Analyzing past budgets and contract awards for construction in CENTCOM AOR (Area of Responsibility) would reveal trends in project types, contract values, and the prevalence of firm-fixed-price contracts versus other types. This specific $36 million award appears consistent with the scale of infrastructure development required to support military aviation and logistics.

How effective are firm-fixed-price contracts in managing costs for complex construction projects like this?

Firm-fixed-price (FFP) contracts are generally considered effective for managing costs on projects where the scope of work is well-defined and risks are understood, as is often the case with construction. By establishing a set price, the government gains cost certainty, and the contractor assumes the primary risk of cost overruns. This incentivizes the contractor to manage resources efficiently and control expenses. However, for highly complex projects with potential for unforeseen issues (e.g., subsurface conditions, design changes), FFP contracts can sometimes lead to contractors including significant contingency in their bids, potentially inflating the initial price. Careful scope definition and robust oversight are still necessary to ensure value.

What is the expected impact of this facility on the operational readiness of U.S. forces in the region?

The construction of a new helicopter hangar, warehouse, and GSE facility in Dammam is expected to significantly enhance the operational readiness of U.S. forces in the region. A dedicated hangar provides secure, climate-controlled storage and maintenance space for helicopters, reducing wear and tear and ensuring aircraft are mission-ready. The warehouse will improve logistical support by enabling efficient storage and distribution of essential supplies and equipment. The GSE facility ensures that ground support equipment is readily available and maintained, which is critical for flight line operations. Collectively, these facilities will streamline operations, reduce response times, and improve the overall sustainability of U.S. military presence and mission execution in the Middle East.

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: W912ER24R0004

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 8201 GREENSBORO DR, MCLEAN, VA, 22102

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: $35,959,294

Exercised Options: $35,959,294

Current Obligation: $35,959,294

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline