DOT awards $86.4M for Teterboro Airport ATC tower construction, with Walsh Construction as prime

Contract Overview

Contract Amount: $86,447,833 ($86.4M)

Contractor: Walsh Construction Company II, LLC

Awarding Agency: Department of Transportation

Start Date: 2019-09-27

End Date: 2024-12-02

Contract Duration: 1,893 days

Daily Burn Rate: $45.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: PROCUREMENT ACTIVITIES ASSOCIATED WITH THE NEW AIRPORT TRAFFIC CONTROL TOWER (ATCT) AND ADMINISTRATIVE BASE BUILDING PROPOSED FOR TETERBORO AIRPORT LOCATED IN TETERBORO, NEW JERSEY.

Place of Performance

Location: TETERBORO, BERGEN County, NEW JERSEY, 07608

State: New Jersey Government Spending

Plain-Language Summary

Department of Transportation obligated $86.4 million to WALSH CONSTRUCTION COMPANY II, LLC for work described as: PROCUREMENT ACTIVITIES ASSOCIATED WITH THE NEW AIRPORT TRAFFIC CONTROL TOWER (ATCT) AND ADMINISTRATIVE BASE BUILDING PROPOSED FOR TETERBORO AIRPORT LOCATED IN TETERBORO, NEW JERSEY. Key points: 1. Contract value represents a significant investment in critical airport infrastructure. 2. The project is a sole-source award, raising questions about competitive pricing. 3. The duration of the contract (over 5 years) suggests a complex and lengthy construction process. 4. The firm-fixed-price structure aims to control costs, but potential for change orders exists. 5. This project is a key component of the FAA's modernization efforts for air traffic control facilities.

Value Assessment

Rating: fair

The contract value of $86.4 million for the Teterboro Airport ATC tower and administrative building appears substantial. Benchmarking against similar large-scale construction projects for airport infrastructure is difficult without more specific cost breakdowns. However, the 'Commercial and Institutional Building Construction' NAICS code suggests a broad category. The firm-fixed-price contract type provides some cost certainty, but the extended duration and complexity of airport projects can lead to cost overruns if not meticulously managed. The reported 'br' (breakdown value) of $45,667 seems exceptionally low relative to the total contract value, potentially indicating an incomplete or preliminary data point.

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 a bid. The data shows 2 bidders participated in this competition. A higher number of bidders generally leads to more competitive pricing and better value for the government. With only two bidders, the level of competition might be considered moderate, potentially limiting the downward pressure on prices compared to a scenario with numerous competing firms.

Taxpayer Impact: While full and open competition is the preferred method, a limited number of bidders (two) may mean taxpayers did not benefit from the most aggressive pricing possible. However, it still represents a competitive process, which is better than a sole-source award.

Public Impact

The primary beneficiaries are the Federal Aviation Administration (FAA) and the traveling public, who will gain a modern and potentially more efficient air traffic control facility. The project will deliver a new Air Traffic Control Tower (ATCT) and an administrative base building at Teterboro Airport. The geographic impact is localized to Teterboro, New Jersey, but the improved air traffic control capabilities can have broader regional implications for air safety and efficiency. The construction will likely create numerous jobs in the construction sector within New Jersey, supporting local employment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The limited number of bidders (2) in a full and open competition could indicate potential barriers to entry for other firms or a lack of broad market interest.
The long contract duration (1893 days) increases the risk of scope creep, unforeseen site conditions, or material price fluctuations impacting the final cost.
The firm-fixed-price contract, while aiming for cost control, can sometimes lead to contractors cutting corners on quality if not rigorously overseen.
The reported 'br' (breakdown value) of $45,667 is significantly disproportionate to the total contract value, suggesting potential data incompleteness or a misunderstanding of the metric.

Positive Signals

The award was made under 'Full and Open Competition,' which is the government's preferred method for ensuring fair access and potential for competitive pricing.
The use of a 'Firm Fixed Price' contract type provides a degree of cost certainty for the government, shifting some financial risk to the contractor.
The contract is awarded to Walsh Construction Company II, LLC, a known entity in the construction industry, suggesting a level of established capability.
The project addresses a critical infrastructure need for the FAA, aiming to modernize essential air traffic control facilities.

Sector Analysis

The construction of airport infrastructure, particularly air traffic control towers, falls within the broader 'Commercial and Institutional Building Construction' sector. This sector is characterized by large, complex projects requiring specialized expertise and significant capital investment. The market size for such specialized airport construction can be substantial, driven by federal and local government investments in modernizing air travel. This contract fits within the FAA's ongoing capital improvement programs aimed at upgrading aging airport facilities nationwide. Comparable spending benchmarks would typically involve analyzing other major airport construction projects, including terminal expansions, runway upgrades, and other ATC facility builds.

Small Business Impact

The provided data indicates that small business participation (ss: false, sb: false) was not a specific set-aside criterion for this contract. Therefore, there are no direct small business set-aside obligations. However, the prime contractor, Walsh Construction Company II, LLC, may engage small businesses as subcontractors to fulfill parts of the project. The extent of subcontracting to small businesses will depend on the prime contractor's strategy and the availability of qualified small business firms for specific construction trades or services required for the ATC tower and administrative building.

Oversight & Accountability

Oversight for this contract will primarily be managed by the Federal Aviation Administration (FAA), a division of the Department of Transportation. Accountability measures are embedded within the contract terms, including performance standards, delivery schedules, and quality requirements, enforced through the firm-fixed-price structure. Transparency is facilitated through federal procurement databases where contract awards are recorded. While specific Inspector General (IG) jurisdiction isn't detailed here, the DOT's Office of Inspector General typically oversees major transportation projects to ensure efficiency, prevent fraud, and promote accountability.

Related Government Programs

FAA Capital Improvement Plan Projects
Airport Infrastructure Modernization Programs
Air Traffic Control System Upgrades
Federal Building Construction Contracts
Commercial Building Construction

Risk Flags

Potential for cost overruns due to long contract duration.
Limited competition (2 bidders) may impact price discovery.
Unclear significance of the 'br' breakdown value.
Risk of scope creep in complex, multi-year construction projects.

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $86.4 million to WALSH CONSTRUCTION COMPANY II, LLC. PROCUREMENT ACTIVITIES ASSOCIATED WITH THE NEW AIRPORT TRAFFIC CONTROL TOWER (ATCT) AND ADMINISTRATIVE BASE BUILDING PROPOSED FOR TETERBORO AIRPORT LOCATED IN TETERBORO, NEW JERSEY.

Who is the contractor on this award?

The obligated recipient is WALSH CONSTRUCTION COMPANY II, LLC.

Which agency awarded this contract?

Awarding agency: Department of Transportation (Federal Aviation Administration).

What is the total obligated amount?

The obligated amount is $86.4 million.

What is the period of performance?

Start: 2019-09-27. End: 2024-12-02.

What is the track record of Walsh Construction Company II, LLC on similar federal construction projects?

Walsh Construction Company II, LLC has a history of undertaking large-scale construction projects, including infrastructure and institutional buildings. While specific details on their past FAA or airport-related projects require deeper database searches, their involvement in significant commercial and institutional building construction suggests they possess the necessary experience and capacity. Federal contract databases would provide a more granular view of their past performance, including on-time delivery, budget adherence, and any past performance issues or awards on similar government contracts. Assessing their track record involves reviewing past project scopes, values, and client feedback, particularly from federal agencies, to gauge their reliability and expertise in executing complex, high-value construction contracts.

How does the $86.4 million contract value compare to similar ATC tower construction projects?

Directly comparing the $86.4 million contract value for the Teterboro Airport ATC tower and administrative building to similar projects is challenging without a standardized benchmark for ATC tower construction costs. Factors such as airport size, complexity of airspace, specific technological requirements for the tower, and prevailing regional construction costs significantly influence project expenses. However, this value suggests a substantial investment, likely reflecting the scale and complexity of modern ATC facilities. To provide a robust comparison, one would need to analyze data from other FAA-funded ATC tower projects awarded over the past several years, adjusting for inflation and geographic cost variations. The 'br' (breakdown value) of $45,667 provided in the data seems incongruous with the total contract value and would need clarification to be used in any meaningful cost analysis.

What are the primary risks associated with the long contract duration (1893 days)?

The 1893-day (approximately 5.2 years) duration for this construction contract presents several key risks. Firstly, there is an increased likelihood of encountering unforeseen site conditions or subsurface issues that could necessitate costly design changes or delays. Secondly, extended project timelines elevate the risk of material price escalation, particularly for key construction components, potentially impacting the contractor's profit margins or leading to change order requests if not adequately hedged. Thirdly, regulatory environments or building codes could change during the project's lifecycle, requiring modifications to meet new standards. Finally, maintaining consistent project oversight and stakeholder engagement over such a long period can be challenging, potentially leading to lapses in quality control or communication breakdowns if not actively managed.

How effective is the firm-fixed-price (FFP) contract type in controlling costs for this type of project?

The Firm Fixed Price (FFP) contract type is generally considered effective for controlling costs in construction projects where the scope of work is well-defined and risks are manageable. For the Teterboro ATC tower project, FFP shifts the primary cost-risk burden to the contractor, Walsh Construction Company II, LLC. This incentivizes the contractor to manage their costs efficiently and complete the project within the agreed-upon price. However, the long duration and inherent complexities of airport construction mean that unforeseen issues could still arise. In such cases, change orders might be necessary, potentially increasing the total cost. Effective oversight by the FAA is crucial to scrutinize any change order requests and ensure they are justified, thereby maximizing the cost-control benefits of the FFP structure.

What is the historical spending pattern for ATC tower construction by the FAA?

Historical spending patterns for Air Traffic Control Tower (ATC) construction by the FAA reveal a consistent need for infrastructure investment driven by technological advancements, safety regulations, and the aging of existing facilities. The FAA allocates significant portions of its capital budget towards modernizing its air traffic control systems, which includes the construction and upgrade of towers. Spending fluctuates based on the number of major projects initiated each fiscal year, the complexity of the required facilities, and overall budget appropriations. Analyzing past FAA budgets and contract awards for similar construction projects would show periods of concentrated investment in specific regions or types of facilities. This Teterboro project represents a component of that ongoing, albeit variable, capital expenditure strategy.

What does the 'br' value of $45,667 signify in relation to the $86.4M contract?

The 'br' value of $45,667 provided in the data appears to be a breakdown value, but its relation to the total contract award of $86,447,832.90 is unclear and seems disproportionately small. In federal procurement data, breakdown values often refer to specific line items, task orders, or perhaps an initial deposit or mobilization payment. However, a value this small relative to the total contract is highly unusual for a major construction project. It is possible this 'br' represents a specific, minor component of the overall contract, or it could be an error in data entry, or perhaps it refers to a preliminary estimate or a specific funding allocation that is not representative of the full project cost. Without further context or clarification from the data source, its precise meaning and relevance to the total contract value remain ambiguous.

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: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 929 W ADAMS ST, CHICAGO, IL, 60607

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $86,447,833

Exercised Options: $86,447,833

Current Obligation: $86,447,833

Actual Outlays: $86,447,833

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline