Department of Defense awards $69.7M contract for Afghanistan construction services to Tutor Perini Corporation

Contract Overview

Contract Amount: $69,688,840 ($69.7M)

Contractor: Tutor Perini Corporation

Awarding Agency: Department of Defense

Start Date: 2004-07-16

End Date: 2010-09-01

Contract Duration: 2,238 days

Daily Burn Rate: $31.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 60

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: 200411!000937!2100!W912ER!TRANSATLANTIC PROGRAM CENTER !W912ER04D0008 !A!N! !N!0002 ! !20040716!20040518!006954432!006954432!006954432!N!PERINI CORPORATION !73 MT WAYTE AVENUE !FRAMINGHAM !MA!01701!00000! !AF!* !* !AFGHANISTA!+000052083473!N!N!000000000000!Y199!OTHER MISCELLANEOUS BUILDINGS !C2 !CONSTRUCTION !000 !* !236220!E! !5!B!S! ! ! !99990909!B! ! !A! !A!U!J!2!060!B! !Z!N!A! ! !N!M!N! ! ! ! ! !A!A!00 !A!B!N! ! ! !Y! ! !0001! !

Plain-Language Summary

Department of Defense obligated $69.7 million to TUTOR PERINI CORPORATION for work described as: 200411!000937!2100!W912ER!TRANSATLANTIC PROGRAM CENTER !W912ER04D0008 !A!N! !N!0002 ! !20040716!20040518!006954432!006954432!006954432!N!PERINI CORPORATION !73 MT WAYTE AVENUE !FRAMINGHAM !MA!01701!00000! !AF!* !* … Key points: 1. Contract awarded for construction of miscellaneous buildings, indicating a need for infrastructure development. 2. The contract was fully and openly competed, suggesting a competitive bidding process. 3. A long performance period of over two years suggests a significant scope of work. 4. The contract was awarded as a delivery order, implying it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract. 5. The firm-fixed-price nature of the contract shifts cost risk to the contractor. 6. The contractor, Tutor Perini Corporation, has a history of large-scale construction projects.

Value Assessment

Rating: good

The total award amount of $69.7 million for construction services in Afghanistan appears reasonable given the scale and duration of the project. Without specific benchmarks for similar projects in that region and time period, a precise value-for-money assessment is challenging. However, the firm-fixed-price contract structure generally promotes cost control by the contractor. The number of bids received (31) also suggests a competitive environment that likely influenced pricing.

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. Thirty-one bids were received, demonstrating a robust level of interest and competition for this requirement. A high number of bidders typically leads to more competitive pricing and a wider selection of qualified contractors.

Taxpayer Impact: The extensive competition for this contract is beneficial for taxpayers as it likely drove down the final price through market forces, ensuring a better value for the allocated funds.

Public Impact

The primary beneficiaries are the U.S. Department of Defense and its operational needs in Afghanistan. Services delivered include the construction of miscellaneous buildings, crucial for supporting military operations and personnel. The geographic impact is concentrated in Afghanistan, contributing to the U.S. military's presence and infrastructure. Workforce implications include employment opportunities for construction labor, both locally in Afghanistan and potentially for the contractor's U.S.-based employees.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Geopolitical instability in Afghanistan could pose risks to project timelines and contractor personnel.
Logistical challenges in a remote and potentially hostile environment can increase costs and complexity.
The long duration of the contract increases the potential for unforeseen issues and cost overruns, despite the fixed-price nature.

Positive Signals

The firm-fixed-price contract structure provides cost certainty for the government.
The high number of bidders suggests strong market interest and contractor capability.
The contractor, Tutor Perini Corporation, is a large, established firm with experience in complex projects.

Sector Analysis

This contract falls within the construction sector, specifically commercial and institutional building construction. The global construction market is vast, with significant government spending dedicated to infrastructure and facilities, particularly in support of defense and foreign policy objectives. This contract represents a portion of the U.S. government's investment in building and maintaining facilities in overseas operational theaters.

Small Business Impact

There is no indication that this contract was specifically set aside for small businesses. Given the large dollar value and the nature of the work, it is likely that larger, established construction firms were the primary bidders. Subcontracting opportunities may exist for smaller businesses, but this would depend on the prime contractor's strategy.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and their representatives within the Department of the Army. The contract's performance in Afghanistan would likely be monitored by on-site personnel and potentially subject to audits by the Defense Contract Audit Agency (DCAA) and oversight from the Department of Defense Inspector General.

Related Government Programs

Afghanistan Infrastructure Projects
Department of Defense Construction Contracts
Overseas Military Construction
Indefinite Delivery/Indefinite Quantity (IDIQ) Contracts

Risk Flags

Geopolitical Risk
Logistical Challenges
Security Concerns
Environmental Factors
Long Project Duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $69.7 million to TUTOR PERINI CORPORATION. 200411!000937!2100!W912ER!TRANSATLANTIC PROGRAM CENTER !W912ER04D0008 !A!N! !N!0002 ! !20040716!20040518!006954432!006954432!006954432!N!PERINI CORPORATION !73 MT WAYTE AVENUE !FRAMINGHAM !MA!01701!00000! !AF!* !* !AFGHANISTA!+000052083473!N!N!000000000000!Y199!OTHER MISCELLANEOUS BUILDINGS !C2 !CONSTRUCTION !000 !* !236220!E! !5!B!S! ! ! !999

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 $69.7 million.

What is the period of performance?

Start: 2004-07-16. End: 2010-09-01.

What is the track record of Tutor Perini Corporation with the Department of Defense?

Tutor Perini Corporation, and its predecessor entities, have a long history of securing contracts with the Department of Defense and other federal agencies. They specialize in large-scale, complex construction projects, often in challenging environments. Their portfolio includes military bases, infrastructure, and specialized facilities. While specific performance details for every contract are not publicly available, their consistent ability to win significant government contracts suggests a generally positive track record and capability to meet federal requirements. However, like many large contractors, they may have faced scrutiny or disputes on specific projects, which is common in the industry.

How does the cost of this contract compare to similar construction projects in Afghanistan during that period?

Benchmarking the cost of this $69.7 million contract against similar projects in Afghanistan from 2004-2010 is difficult without access to detailed project specifications, location specifics, and prevailing market rates at the time. Construction costs in conflict zones are inherently higher due to increased security, logistical complexities, and risk premiums. The number of bidders (31) suggests a competitive market, which should have helped moderate prices. However, the unique challenges of operating in Afghanistan mean direct comparisons to domestic projects or even projects in more stable regions would be misleading. The firm-fixed-price nature aims to contain costs, but the overall value is best assessed by the successful completion of the required facilities.

What are the primary risks associated with a construction contract of this magnitude in Afghanistan?

The primary risks associated with a construction contract of this magnitude in Afghanistan during the specified period include significant security threats to personnel and assets, logistical challenges in delivering materials and equipment to remote sites, political and economic instability, potential for corruption, and the harsh environmental conditions. The long performance period also increases the risk of project delays due to unforeseen circumstances. While the firm-fixed-price contract shifts financial risk to the contractor, the government still faces risks related to project completion, quality, and potential contractor default or withdrawal due to escalating risks.

How effective was the competition level in ensuring a good value for taxpayers?

The high level of competition, with 31 bids received for this contract, is a strong indicator that taxpayers likely received good value. A large number of bidders typically forces contractors to offer their most competitive pricing and terms to win the award. This competitive pressure helps ensure that the government is not overpaying for the services rendered. Furthermore, full and open competition allows the government to select from a wide pool of qualified contractors, increasing the likelihood of choosing one that can deliver the required quality and performance at a reasonable cost.

What is the historical spending trend for similar construction services by the Department of Defense in overseas locations?

Historical spending by the Department of Defense for construction services in overseas locations, particularly in operational theaters like Afghanistan, has been substantial, especially during periods of active military engagement. Spending often fluctuates based on geopolitical conditions, troop presence, and strategic objectives. Contracts for building barracks, operational bases, airfields, and support facilities represent a significant portion of the defense budget allocated to overseas operations. While specific figures vary year to year, the trend generally shows a consistent need for construction services to support military readiness and infrastructure development in regions where U.S. forces are deployed.

What does the contract type (firm-fixed-price) imply about risk allocation?

The firm-fixed-price (FFP) contract type implies that the contractor, Tutor Perini Corporation, bears the primary responsibility for all costs incurred in completing the work. Unlike cost-reimbursement contracts, the government pays a set price regardless of the contractor's actual costs. This allocation of risk is generally favorable to the government, as it provides cost certainty and incentivizes the contractor to manage its expenses efficiently to maximize profit. However, FFP contracts can sometimes lead to contractors cutting corners on quality if not adequately monitored, or may result in higher initial bid prices to account for the contractor's risk exposure.

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

Offers Received: 60

Pricing Type: FIRM FIXED PRICE (J)

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: W912ER04D0008

IDV Type: IDC

Timeline