DoD's $105M METC Buildings 1 & 2 contract awarded to URS Group, Inc. for construction services

Contract Overview

Contract Amount: $104,847,260 ($104.8M)

Contractor: URS Group, Inc.

Awarding Agency: Department of Defense

Start Date: 2008-03-20

End Date: 2012-01-09

Contract Duration: 1,390 days

Daily Burn Rate: $75.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 30

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: METC BUILDINGS 1 AND 2, FT. SAM HOUSTON TEXAS

Place of Performance

Location: SAN ANTONIO, BEXAR County, TEXAS, 78234

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $104.8 million to URS GROUP, INC. for work described as: METC BUILDINGS 1 AND 2, FT. SAM HOUSTON TEXAS Key points: 1. Contract awarded for construction of two buildings at Fort Sam Houston, Texas. 2. The contract was awarded under full and open competition. 3. The duration of the contract was 1390 days. 4. The contract was a firm-fixed-price type. 5. The base bid was $75.4M, with the final award at $104.8M.

Value Assessment

Rating: fair

The final award amount of $104.8M significantly exceeded the base bid of $75.4M, representing a substantial increase. While specific benchmarks for similar construction projects of this scale are not readily available, the nearly 30% increase from the base bid warrants scrutiny regarding cost management and potential scope creep during the contract's execution. Without detailed breakdowns of the cost increases, it is difficult to definitively assess value for money.

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. The presence of 30 bids suggests a competitive marketplace for this type of construction service. A high number of bidders generally supports price discovery and can lead to more favorable pricing for the government.

Taxpayer Impact: The robust competition for this contract likely resulted in a more competitive price for taxpayers compared to a sole-source or limited competition scenario.

Public Impact

The primary beneficiaries are the Department of Defense and its personnel at Fort Sam Houston, Texas, who will utilize the new facilities. The contract delivered construction services for two new buildings, enhancing military infrastructure. The geographic impact is localized to Fort Sam Houston, Texas. The contract supported the construction workforce in the Texas region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Significant increase between base bid and final award amount suggests potential cost overruns or scope changes.
Lack of detailed cost breakdown makes it difficult to assess the justification for the $29.4M increase.
Long contract duration (1390 days) increases the risk of unforeseen cost escalations due to market fluctuations or project delays.

Positive Signals

Awarded under full and open competition with 30 bids, indicating a healthy competitive environment.
Firm-fixed-price contract type provides cost certainty for the government, assuming no significant change orders.
Construction services delivered at a major military installation, supporting critical defense infrastructure.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector. The construction industry is characterized by significant capital investment, labor requirements, and varying levels of competition depending on project size and complexity. Federal construction spending is a substantial component of the overall market, with agencies like the Department of Defense being major clients. Benchmarking this specific project's cost against similar military construction projects would provide further insight into its value.

Small Business Impact

The data indicates that small business participation was not a specific set-aside for this contract (ss: false, sb: false). While the prime contractor is URS Group, Inc., there is no explicit information on subcontracting plans or performance related to small businesses. Further investigation into subcontracting reports would be needed to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant Department of the Army contracting command. The firm-fixed-price nature of the contract implies a focus on adherence to the agreed-upon scope and price. Transparency would be enhanced by public availability of contract modifications and performance reports. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Military Construction
Fort Sam Houston Projects
Department of Defense Facilities
Large-Scale Construction Contracts

Risk Flags

Cost Growth from Base Bid
Long Contract Duration Risk
Potential for Unforeseen Conditions

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $104.8 million to URS GROUP, INC.. METC BUILDINGS 1 AND 2, FT. SAM HOUSTON TEXAS

Who is the contractor on this award?

The obligated recipient is URS GROUP, 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 $104.8 million.

What is the period of performance?

Start: 2008-03-20. End: 2012-01-09.

What factors contributed to the significant increase from the base bid ($75.4M) to the final award amount ($104.8M)?

The substantial increase of approximately $29.4 million (nearly 30%) from the base bid to the final award amount suggests potential factors such as unforeseen site conditions, changes in project scope requested by the government, escalation of material and labor costs during the contract period, or contractor-identified issues requiring additional resources. Without access to contract modifications, change order logs, or detailed justifications provided by the contracting officer, it is difficult to pinpoint the exact reasons. However, a variance of this magnitude warrants a thorough review of the contract's administration and the change management process to ensure that the increased costs were justified and represented fair value.

How does the per-square-foot cost of this construction project compare to similar military building projects?

To accurately benchmark the per-square-foot cost, specific details regarding the total square footage of METC Buildings 1 and 2, along with their intended functions (e.g., administrative, training, barracks), would be required. Additionally, a comparison group of similar military construction projects, accounting for geographic location, construction type, and year of award, would be necessary. Given the available data, a precise per-square-foot cost comparison is not feasible. However, the total award of $104.8 million for two buildings at a major military installation suggests a significant investment, typical for large-scale government construction projects.

What was the track record of URS Group, Inc. with similar large-scale construction contracts prior to this award?

URS Group, Inc. (now part of AECOM) has a history of undertaking large-scale construction and engineering projects for government and private sector clients. Prior to this specific award in 2008, the company had experience in military construction, infrastructure development, and complex building projects. Assessing their specific performance on contracts of comparable size and complexity to the METC Buildings project would involve reviewing past performance evaluations, any documented disputes or claims, and their overall safety and quality records on similar federal contracts. A comprehensive review would likely reveal a portfolio of relevant experience, but specific performance metrics for this exact project would need to be evaluated independently.

What are the potential risks associated with a firm-fixed-price contract for a project with a long duration like this one?

While firm-fixed-price (FFP) contracts offer cost certainty for the government, a long duration (1390 days) introduces risks, primarily related to economic price adjustments and potential for unforeseen conditions. If the contract does not include robust escalation clauses for labor and materials, the contractor may face significant cost increases due to market fluctuations over the multi-year period, potentially leading to requests for equitable adjustments or claims. Furthermore, extended project timelines increase the likelihood of encountering unforeseen site conditions or regulatory changes that could necessitate scope modifications, which, if not managed carefully through the change order process, could erode the cost certainty of the FFP structure.

How did the number of bidders (30) influence the final negotiated price for this contract?

A high number of bidders, such as the 30 received for this contract, generally indicates a competitive market and provides the government with a strong negotiating position. This level of competition typically drives down prices as contractors strive to offer the most attractive bids to win the contract. While the final award amount was higher than the base bid, the initial competitive bidding process likely established a baseline price that prevented excessive inflation. The subsequent increase suggests factors beyond initial pricing, but the robust competition itself is a positive indicator for achieving a fair market price for the services rendered.

What is the historical spending pattern for construction at Fort Sam Houston, and how does this contract fit within that pattern?

Analyzing historical spending patterns for construction at Fort Sam Houston would require access to historical contract databases and budget allocations for the installation. Without this specific data, it's challenging to place this $104.8 million contract within a broader context. However, major military installations like Fort Sam Houston often undergo periodic upgrades and expansions, involving significant construction investments. This contract likely represents a substantial, but potentially typical, investment in modernizing or expanding facilities to meet the needs of the U.S. Army installation. Understanding the frequency and scale of previous construction projects would clarify whether this award is an outlier or part of a consistent infrastructure development strategy.

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Commercial and Institutional Building Construction

Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 30

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: AECOM Global II, LLC (UEI: 043271568)

Address: 200 ORCHARD RIDGE DRIVE, S, GAITHERSBURG, MD, 90

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $104,847,560

Exercised Options: $104,847,560

Current Obligation: $104,847,260

Contract Characteristics

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA890306D8520

IDV Type: IDC

Timeline