Fort Knox HR Center of Excellence contract awarded to Universal Construction Company Inc. for $199.4M

Contract Overview

Contract Amount: $199,410,711 ($199.4M)

Contractor: Universal Construction Company Inc.

Awarding Agency: Department of Defense

Start Date: 2007-06-12

End Date: 2012-03-12

Contract Duration: 1,735 days

Daily Burn Rate: $114.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: DESIGN/BUILD OF THE HUMAN RESOURCE CENTER OF EXCELLENCE, FORT KNOX, KY

Place of Performance

Location: FORT KNOX, HARDIN County, KENTUCKY, 40121

State: Kentucky Government Spending

Plain-Language Summary

Department of Defense obligated $199.4 million to UNIVERSAL CONSTRUCTION COMPANY INC. for work described as: DESIGN/BUILD OF THE HUMAN RESOURCE CENTER OF EXCELLENCE, FORT KNOX, KY Key points: 1. The contract was awarded using full and open competition, suggesting a competitive bidding process. 2. The firm-fixed-price contract type indicates that the contractor bears the risk of cost overruns. 3. The project duration of 1735 days (approximately 4.75 years) suggests a significant construction undertaking. 4. The contract was awarded to a single vendor, Universal Construction Company Inc. 5. The project is located in Kentucky, potentially impacting the local construction workforce and economy.

Value Assessment

Rating: fair

Benchmarking the value of this $199.4 million contract is challenging without specific cost breakdowns or comparable project data. However, the duration of nearly five years for a Human Resource Center of Excellence construction project at Fort Knox suggests a substantial investment. The firm-fixed-price nature of the contract shifts cost risk to the contractor, which can sometimes lead to higher initial bids to account for potential contingencies. Further analysis would require detailed cost-per-square-foot data and comparison to similar government or commercial construction projects of comparable complexity and scale.

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 a bid. The solicitation process likely involved advertising the requirement and evaluating proposals based on predefined criteria. The fact that it was competed openly suggests an effort to achieve the best value through market forces. The number of bids received (3) is moderate, which could indicate a reasonable level of competition, but without knowing the specific evaluation criteria and the number of interested parties, it's difficult to definitively assess the intensity of the competition.

Taxpayer Impact: A full and open competition generally benefits taxpayers by encouraging multiple companies to bid, which can drive down prices and improve the quality of services or goods offered. This process aims to ensure that the government receives the most advantageous offer.

Public Impact

The primary beneficiaries of this contract are the Department of the Army and its personnel at Fort Knox, Kentucky, who will gain a new Human Resource Center of Excellence. The project delivers a significant construction service, creating a dedicated facility for HR operations. The geographic impact is concentrated in Fort Knox, Kentucky, potentially stimulating local economic activity through construction jobs and material sourcing. The construction phase will likely involve a substantial number of skilled and unskilled laborers, impacting the local and regional construction workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the firm-fixed-price contract did not adequately account for all construction complexities.
Risk of delays in construction completion impacting the operational readiness of the HR Center.
Dependence on a single contractor for the entire project duration.
Limited insight into the specific cost components without detailed breakdowns.
The moderate number of bidders (3) might suggest that the contract scope or requirements were highly specialized, potentially limiting broader competition.

Positive Signals

The use of 'full and open competition' suggests an effort to secure competitive pricing and quality.
The firm-fixed-price contract type places cost control responsibility on the contractor.
The project is awarded to a single, presumably qualified, entity for the duration.
The contract is for a specific, tangible asset (a building), providing clear deliverables.
The project is located in Kentucky, potentially benefiting the local economy through job creation and business opportunities.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector (NAICS code 236220). This sector encompasses establishments primarily engaged in the construction or remodeling of nonresidential buildings. The market for large-scale government construction projects, especially within military installations like Fort Knox, is significant. Such projects often involve complex requirements, stringent security protocols, and adherence to specific government standards. Comparable spending benchmarks would typically involve analyzing the cost per square foot for similar government facilities or large commercial buildings, factoring in location, complexity, and specific functional requirements.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific benefits for small businesses mandated by this contract's award. The primary contractor, Universal Construction Company Inc., would have had the discretion to subcontract portions of the work, and their choices in that regard would determine any indirect impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily reside with the awarding agency, the Department of the Army, through its contracting officers and project managers. They are responsible for monitoring progress, ensuring compliance with contract terms, and approving payments. Transparency is generally facilitated through contract award databases like FPDS. Accountability measures are inherent in the firm-fixed-price structure, where the contractor is liable for performance. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arise during the contract's lifecycle.

Related Government Programs

Military Construction Projects
Department of Defense Facilities
Government Building Construction
Human Resources Infrastructure
Fort Knox Operations

Risk Flags

Potential for cost overruns due to fixed-price nature on a long-term project.
Risk of project delays impacting operational readiness.
Contractor performance and financial stability are critical.
Limited competition (3 bidders) may warrant further investigation into market dynamics.
Dependence on a single contractor for a large-scale project.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $199.4 million to UNIVERSAL CONSTRUCTION COMPANY INC.. DESIGN/BUILD OF THE HUMAN RESOURCE CENTER OF EXCELLENCE, FORT KNOX, KY

Who is the contractor on this award?

The obligated recipient is UNIVERSAL CONSTRUCTION COMPANY 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 $199.4 million.

What is the period of performance?

Start: 2007-06-12. End: 2012-03-12.

What is the track record of Universal Construction Company Inc. with federal contracts, particularly in large-scale construction projects?

A comprehensive review of Universal Construction Company Inc.'s federal contract history would be necessary to assess their track record. This would involve examining past performance on similar projects, including their size, complexity, and duration. Key indicators would include on-time and on-budget completion rates, any history of contract disputes or terminations, and client satisfaction feedback. For a contract of this magnitude ($199.4 million over nearly five years), a strong history of successfully managing large, complex construction projects for the government or comparable entities would be a significant positive signal. Without access to detailed performance reviews and past contract data, it is difficult to definitively assess their specific capabilities and reliability for this particular project.

How does the awarded price of $199.4 million compare to industry benchmarks for similar construction projects?

To benchmark the $199.4 million award, detailed project specifications are required, including the total square footage, specific construction materials, complexity of systems (e.g., HVAC, IT infrastructure), and site preparation needs. Industry benchmarks for commercial and institutional building construction vary significantly by region and project type. For instance, cost per square foot can range widely. Comparing this contract's value would involve calculating a cost per square foot (if building size is known) and comparing it to average costs for similar government facilities or large commercial buildings in Kentucky or comparable regions. Factors like adherence to military construction standards, security requirements, and the firm-fixed-price nature of the contract (which may include contingency premiums) would also influence the comparison. Without these specific details, a precise value-for-money assessment relative to benchmarks is not feasible.

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

The primary risks associated with a firm-fixed-price (FFP) construction contract of this scale ($199.4 million) and duration (1735 days) primarily lie with the contractor, Universal Construction Company Inc. The contractor assumes the risk of cost overruns due to unforeseen site conditions, material price fluctuations, labor shortages, or design changes not covered by contract modifications. While FFP contracts are generally favored by the government for cost certainty, they can lead to higher initial bid prices as contractors build in contingencies. For the government, risks include potential contractor default if they mismanage costs or face financial distress, leading to project delays or termination. Ensuring robust contract oversight and clear change order processes are crucial to mitigate these risks.

What is the expected effectiveness of the new Human Resource Center of Excellence once completed?

The effectiveness of the new Human Resource Center of Excellence is expected to be high, assuming the facility is designed and constructed to meet the intended operational needs of the Department of the Army. A dedicated, modern facility should improve the efficiency and effectiveness of HR services provided to military personnel and their families at Fort Knox. This includes potentially consolidating functions, improving workflow, enhancing technology integration, and providing a better working environment for HR staff. The success will also depend on the implementation of effective HR processes and systems within the new building, and its ability to support evolving military personnel needs. The construction itself is a means to an end; the true effectiveness will be measured by the HR services delivered from the facility.

How has federal spending on similar construction projects at military installations evolved over time?

Federal spending on construction projects at military installations has historically been substantial, driven by the need to maintain, modernize, and expand infrastructure to support military readiness and personnel. Spending levels can fluctuate based on geopolitical events, defense budgets, and specific modernization initiatives. For example, post-9/11 security enhancements led to increased spending on certain types of infrastructure, while budget sequestration periods could lead to reductions. Analyzing historical spending patterns for similar projects (e.g., barracks, training facilities, administrative buildings) at Army installations would reveal trends in contract values, types of construction (design-build vs. traditional), and competition levels. This specific $199.4 million contract for an HR center represents a significant investment in administrative and support infrastructure, reflecting the ongoing need to provide modern facilities for essential functions.

What are the implications of awarding a large construction contract to a single entity for the duration of the project?

Awarding a large construction contract like this ($199.4 million) to a single entity, Universal Construction Company Inc., for its entire duration (nearly five years) implies a design-build or a comprehensive construction management approach. This can streamline communication and project execution by having one point of responsibility. However, it also concentrates risk with that single contractor. It means the government relies heavily on the contractor's performance, financial stability, and management capabilities throughout the project lifecycle. If the contractor underperforms, faces financial difficulties, or encounters significant issues, the project could face substantial delays and potential cost impacts, even with a fixed-price contract, due to change orders or termination complexities. Robust government oversight is critical to manage this dependency.

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: W912QR07R0014

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Vinci (UEI: 462009101)

Address: 336 JAMES RECORD RD SW, HUNTSVILLE, AL, 05

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

Financial Breakdown

Contract Ceiling: $296,382,543

Exercised Options: $296,382,543

Current Obligation: $199,410,711

Contract Characteristics

Cost or Pricing Data: NO

Timeline