DoD's $19M BMD Package for Israel Awarded to CMC-USA Inc - LM Heavy Civil Construction LLC Joint Venture

Contract Overview

Contract Amount: $19,084,723 ($19.1M)

Contractor: Cmc-Usa Inc - LM Heavy Civil Construction LLC Joint Venture

Awarding Agency: Department of Defense

Start Date: 2012-06-13

End Date: 2014-05-12

Contract Duration: 698 days

Daily Burn Rate: $27.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: BMD PACKAGE, ISRAEL

Plain-Language Summary

Department of Defense obligated $19.1 million to CMC-USA INC - LM HEAVY CIVIL CONSTRUCTION LLC JOINT VENTURE for work described as: BMD PACKAGE, ISRAEL Key points: 1. Contract awarded under full and open competition, suggesting a competitive bidding process. 2. The contract value of approximately $19 million falls within a moderate spending range for defense infrastructure projects. 3. The firm-fixed-price contract type shifts cost risk to the contractor, potentially leading to more predictable government spending. 4. The project duration of 698 days indicates a significant undertaking requiring substantial contractor resources. 5. The absence of small business set-aside flags suggests the primary awardee is likely a large business or joint venture. 6. The contract's focus on commercial and institutional building construction points to infrastructure development rather than direct weapon system procurement.

Value Assessment

Rating: fair

Benchmarking the value of this specific BMD package is challenging without comparable international infrastructure contracts. The $19 million price point for a 698-day project appears reasonable for a complex construction undertaking, but a detailed cost breakdown and comparison to similar projects in Israel or other regions would be necessary for a definitive value assessment. The firm-fixed-price structure implies that the contractor is responsible for managing costs within the agreed-upon price.

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 6 bidders participating, the competition level suggests a healthy market interest in this type of defense infrastructure project. This level of competition is generally favorable for price discovery and can lead to more competitive pricing for the government.

Taxpayer Impact: A competitive bidding process with multiple bidders helps ensure that taxpayer dollars are used efficiently by driving down costs through market forces.

Public Impact

This contract directly benefits the government of Israel by providing critical Ballistic Missile Defense (BMD) infrastructure. The services delivered involve the construction of facilities essential for BMD operations, enhancing regional security. The geographic impact is concentrated in Israel, supporting a key U.S. ally's defense capabilities. Workforce implications would include construction labor and specialized technical personnel required for the project's execution.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen construction challenges arise, despite the firm-fixed-price structure.
Dependence on the joint venture's capacity to manage a project of this scale and complexity.
Geopolitical risks associated with infrastructure development in a sensitive region.

Positive Signals

Awarded under full and open competition, indicating a robust bidding process.
Firm-fixed-price contract type provides cost certainty for the government.
The joint venture structure may bring together complementary expertise for complex construction.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, specifically related to defense infrastructure. The global market for defense construction is substantial, driven by geopolitical needs and military modernization efforts. This project represents a specific instance of U.S. foreign military assistance manifesting as infrastructure development, rather than direct procurement of defense articles. Comparable spending benchmarks would typically involve large-scale construction projects for military bases or critical security installations.

Small Business Impact

The contract does not indicate any specific small business set-aside provisions. Given the nature and scale of the project, it is likely that the primary awardee, a joint venture of large companies, will manage the majority of the work. Subcontracting opportunities may exist for specialized construction trades or material suppliers, but the direct impact on the small business ecosystem for prime contracting is likely minimal.

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 embedded in the firm-fixed-price contract terms, requiring delivery of specified construction services. Transparency is generally maintained through contract award databases, though specific project details and oversight reports may be subject to security or foreign policy considerations.

Related Government Programs

Foreign Military Sales (FMS)
Ballistic Missile Defense Systems
International Construction Projects
Department of Defense Infrastructure

Risk Flags

Geopolitical Risk
Construction Project Complexity
International Logistics

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.1 million to CMC-USA INC - LM HEAVY CIVIL CONSTRUCTION LLC JOINT VENTURE. BMD PACKAGE, ISRAEL

Who is the contractor on this award?

The obligated recipient is CMC-USA INC - LM HEAVY CIVIL CONSTRUCTION LLC JOINT VENTURE.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $19.1 million.

What is the period of performance?

Start: 2012-06-13. End: 2014-05-12.

What is the track record of CMC-USA Inc and LM Heavy Civil Construction LLC in executing similar international defense infrastructure projects?

Assessing the specific track record of the joint venture requires examining the past performance of both CMC-USA Inc and LM Heavy Civil Construction LLC individually. LM Heavy Civil Construction LLC, part of the larger Fluor Corporation, has extensive experience in large-scale civil and infrastructure projects globally, including military construction. CMC-USA Inc, a subsidiary of a Turkish conglomerate, also has a history in construction, though its specific experience with U.S. DoD contracts in Israel might be less documented publicly. A thorough review would involve analyzing their past performance ratings on similar contracts, any past performance issues or disputes, and their capacity to manage complex, high-value projects in international environments. The joint venture structure itself suggests an effort to combine relevant expertise for this specific undertaking.

How does the $19 million contract value compare to similar BMD infrastructure projects awarded by the DoD or other nations?

Directly comparing the $19 million value for this BMD package to similar projects is challenging due to the unique nature of international defense infrastructure and the limited public data on comparable projects. However, the value appears moderate for a significant construction undertaking spanning nearly two years. Larger BMD system procurements (radars, interceptors) often run into hundreds of millions or billions of dollars. Infrastructure projects supporting these systems, such as command centers, launch facilities, or integration hubs, can vary widely. For context, U.S. military construction projects domestically can range from tens of millions to hundreds of millions depending on scope. The $19 million figure suggests a focused scope, possibly for a specific component or facility within a larger BMD architecture in Israel.

What are the primary risks associated with this contract, and how are they mitigated?

The primary risks associated with this contract include geopolitical instability in the region, potential construction delays due to unforeseen site conditions or logistical challenges, and currency fluctuations if payments are not strictly in USD. The firm-fixed-price contract type mitigates cost overrun risk for the government, placing that burden on the contractor. Mitigation for geopolitical and logistical risks would rely on robust project management, contingency planning by the joint venture, and potentially government support or intelligence sharing. The contract's duration (698 days) also necessitates careful scheduling and resource management to avoid extended delays. The specific nature of BMD infrastructure might also introduce security-related risks that require stringent protocols.

What is the expected effectiveness of the completed BMD infrastructure in enhancing Israel's defense capabilities?

The effectiveness of the completed BMD infrastructure hinges on the specific function of the facilities being constructed. If these facilities are integral to the operation, command, control, or support of existing or planned BMD systems (like Iron Dome, David's Sling, or Arrow), they would directly enhance Israel's layered defense capabilities. This could translate to improved detection, tracking, interception, and response times against various aerial threats. The infrastructure's role could range from housing command centers and communication nodes to providing hardened sites for launchers or support equipment. Ultimately, the infrastructure's contribution to effectiveness is tied to its seamless integration with the broader BMD architecture and its ability to withstand potential threats.

How has historical spending on BMD-related infrastructure in Israel by the U.S. DoD trended?

Historical spending by the U.S. DoD on BMD-related infrastructure in Israel has generally trended upwards, reflecting the U.S. commitment to supporting Israel's security and its multi-layered missile defense capabilities. This spending often occurs through various mechanisms, including Foreign Military Financing (FMF), direct U.S. government contracts for specific projects (like this one), and cooperative development programs. The increasing regional threat landscape has driven sustained investment in enhancing Israel's defensive posture. While specific figures for 'infrastructure' alone can be difficult to isolate from overall BMD system funding, the consistent allocation of resources suggests a long-term strategic investment rather than short-term or sporadic spending.

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: W912GB12R0004

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 10 COMMERCE WAY, WESTFORD, MA, 03

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

Financial Breakdown

Contract Ceiling: $21,142,095

Exercised Options: $19,084,723

Current Obligation: $19,084,723

Contract Characteristics

Cost or Pricing Data: NO

Timeline