Department of Defense awards $379M construction contract to Tutor Perini Corporation for facilities in Iraq

Contract Overview

Contract Amount: $379,434,792 ($379.4M)

Contractor: Tutor Perini Corporation

Awarding Agency: Department of Defense

Start Date: 2003-09-19

End Date: 2013-03-01

Contract Duration: 3,451 days

Daily Burn Rate: $109.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Construction

Official Description: 200312!001242!2100!CA78 !TRANSATLANTIC PROGRAM CENTER !DACA7803D0006 !A!N! !N!0002 !20030919!20040331!006954432!006954432!006954432!N!PERINI CORPORATION !73 MT WAYTE AVENUE !FRAMINGHAM !MA!01701!* !* !IZ!* !* !IRAQ !+000000460000!N!N!000000000000!Y199!OTHER MISCELLANEOUS BUILDINGS !C2 !CONSTRUCTION !1000!NOT DISCERNABLE OR CLASSIFIED !236220!E! !5!B!M! !A!D!20040331!B! ! !N!A!D!N!U!1!001!N!2A!Z!N!Z! ! !N!M!N! ! ! ! ! !A!A!000!A!B!N! ! !Y!Y! ! !0001! !

Plain-Language Summary

Department of Defense obligated $379.4 million to TUTOR PERINI CORPORATION for work described as: 200312!001242!2100!CA78 !TRANSATLANTIC PROGRAM CENTER !DACA7803D0006 !A!N! !N!0002 !20030919!20040331!006954432!006954432!006954432!N!PERINI CORPORATION !73 MT WAYTE AVENUE !FRAMINGHAM !MA!01701!* !* !IZ!* !* … Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract's duration of over 9 years indicates a long-term commitment to construction services. 3. The cost-plus-fixed-fee pricing structure may lead to cost overruns if not managed carefully. 4. The primary contractor, Tutor Perini Corporation, has a significant presence in large-scale construction projects. 5. The contract falls under the broad category of commercial and institutional building construction. 6. The geographic focus on Iraq highlights the complexities and risks associated with overseas construction.

Value Assessment

Rating: fair

The total award amount of $379,434,792 for construction services over a period of approximately 9.5 years appears substantial. Benchmarking this against similar large-scale overseas construction projects is challenging due to unique geopolitical factors and specific project requirements. The cost-plus-fixed-fee (CPFF) contract type, while allowing for flexibility, can sometimes lead to higher final costs compared to fixed-price contracts if not rigorously managed. Without detailed cost breakdowns and performance metrics, a precise value-for-money assessment is difficult, but the scale suggests significant investment.

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. The data does not specify the number of bidders, but this method generally promotes a competitive environment, which can lead to better pricing and terms for the government. The fact that it was competed broadly suggests that the agency sought the best value from the market.

Taxpayer Impact: A full and open competition process is generally favorable for taxpayers as it aims to secure the most competitive pricing and terms by allowing a wide range of contractors to participate.

Public Impact

The primary beneficiaries are the Department of Defense and its personnel requiring facilities in Iraq. The contract supports the construction and potentially the maintenance of various buildings and infrastructure. The geographic impact is concentrated in Iraq, supporting military operations and presence. Workforce implications include employment opportunities for construction workers, engineers, and support staff, both locally and potentially internationally.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Geopolitical instability in Iraq could impact project timelines, costs, and safety.
The CPFF contract type carries inherent risks of cost escalation if not closely monitored.
Logistical challenges of operating in a foreign, potentially high-risk environment.
Potential for scope creep or changes in requirements given the long duration and evolving operational needs.

Positive Signals

Awarded through full and open competition, suggesting a robust selection process.
The contractor, Tutor Perini Corporation, has extensive experience in large-scale construction.
The long contract duration allows for sustained support and development of necessary infrastructure.
The contract specifies a fixed fee component, providing some cost certainty for the contractor's profit.

Sector Analysis

This contract falls within the Construction sector, specifically Commercial and Institutional Building Construction (NAICS code 236220). This sector involves the construction of non-residential buildings. The global construction market, particularly for defense and infrastructure projects in challenging regions, is substantial. This contract represents a significant investment by the Department of Defense in supporting its operations abroad through facility development.

Small Business Impact

The data indicates this contract was not set aside for small businesses (SB is false). Given the large dollar value and the nature of the work, it is unlikely that significant subcontracting opportunities for small businesses would be mandated, although the prime contractor may engage them. The focus is on large-scale construction capabilities, which typically favors larger, established firms.

Oversight & Accountability

Oversight would primarily be conducted by the Department of the Army contracting and project management offices. Inspector General (IG) jurisdiction would apply for investigations into fraud, waste, or abuse. Transparency is facilitated through contract award databases like FPDS, but detailed project-specific oversight mechanisms are internal to the agency and contractor.

Related Government Programs

Military Construction
Base Operations Support
Foreign Military Sales Construction
Contingency Construction Contracts

Risk Flags

High-risk operational environment (Iraq)
Cost-plus contract type (potential for cost overruns)
Long contract duration (risk of inflation and scope creep)
Geopolitical instability impacting logistics and security

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $379.4 million to TUTOR PERINI CORPORATION. 200312!001242!2100!CA78 !TRANSATLANTIC PROGRAM CENTER !DACA7803D0006 !A!N! !N!0002 !20030919!20040331!006954432!006954432!006954432!N!PERINI CORPORATION !73 MT WAYTE AVENUE !FRAMINGHAM !MA!01701!* !* !IZ!* !* !IRAQ !+000000460000!N!N!000000000000!Y199!OTHER MISCELLANEOUS BUILDINGS !C2 !CONSTRUCTION !1000!NOT DISCERNABLE OR CLASSIFIED !236220!E! !5!B!M! !A!D!20040331!B

Who is the contractor on this award?

The obligated recipient is TUTOR PERINI CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $379.4 million.

What is the period of performance?

Start: 2003-09-19. End: 2013-03-01.

What is the track record of Tutor Perini Corporation on similar government contracts, particularly in overseas or high-risk environments?

Tutor Perini Corporation, and its predecessor entities, have a long history of performing large-scale construction projects for the U.S. government, including significant work in overseas locations and complex environments. They have been involved in numerous military construction projects, infrastructure development, and facility support contracts. While specific performance details for every contract are not publicly available, their consistent bidding and winning of large federal contracts suggest a generally accepted capability. However, like many large contractors, they may have faced performance issues or disputes on specific projects, which would be detailed in internal agency performance records or potentially in litigation filings. A thorough review would require examining past performance evaluations and any documented issues.

How does the per-unit cost or cost-per-square-foot for this contract compare to similar construction projects in Iraq or other comparable regions?

Determining a precise per-unit cost or cost-per-square-foot benchmark for this contract is challenging without specific details on the types and scope of facilities being constructed. Factors such as the complexity of design, materials used, security requirements, logistical costs, and local labor rates in Iraq significantly influence per-unit costs. Given the inherent risks and logistical complexities of operating in Iraq, construction costs are likely to be higher than in stable, domestic environments. A meaningful comparison would require access to detailed project specifications and cost breakdowns, as well as data from other construction projects undertaken by the DoD in similar theaters of operation, which is not readily available in the provided data.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for construction in Iraq, and how are they mitigated?

The primary risk with a CPFF contract is that the government bears the cost of all allowable expenses, plus a fixed fee for the contractor's profit. This can lead to cost overruns if the contractor is not incentivized to control expenses, or if unforeseen issues arise. In an environment like Iraq, risks are amplified by potential security threats, supply chain disruptions, and fluctuating labor costs. Mitigation strategies typically include robust government oversight, detailed auditing of costs, clear definition of allowable expenses, strict change order management, and performance incentives or penalties where applicable. The fixed fee itself provides a ceiling on the contractor's profit, but not on the total project cost.

What is the historical spending pattern for construction services in Iraq by the Department of Defense over the last decade?

Historical spending by the Department of Defense (DoD) on construction services in Iraq has been substantial, particularly during periods of active military engagement and subsequent reconstruction efforts. While the exact figures fluctuate annually, billions of dollars have been allocated over the past decade for building and maintaining military bases, operational facilities, and related infrastructure. Spending patterns are heavily influenced by geopolitical conditions, troop levels, and strategic objectives. Periods of heightened activity often see increased contract awards for construction, followed by periods focused on sustainment or drawdown. Analyzing specific annual outlays would require accessing historical DoD budget and contract spending databases.

How does the duration of this contract (over 9 years) impact the overall cost-effectiveness and project management?

A contract duration exceeding nine years for construction services, especially for facilities in a dynamic environment like Iraq, presents both potential benefits and risks regarding cost-effectiveness and project management. On the positive side, a longer duration can allow for phased construction, better integration of facilities, and potentially economies of scale if the scope remains consistent. It can also provide stability for the contractor and workforce. However, it significantly increases the risk of cost escalation due to inflation, changing material prices, and evolving requirements. Project management becomes more complex, requiring sustained oversight to ensure adherence to original scope, budget, and quality standards over an extended period. Flexibility in contract modifications is crucial but must be managed to prevent uncontrolled cost growth.

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

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 73 MT WAYTE AVENUE, FRAMINGHAM, MA, 01701

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: DACA7803D0006

IDV Type: IDC

Timeline