Air Force Medical Clinic Replacement Contract Exceeds $55 Million for Design-Build Services

Contract Overview

Contract Amount: $55,192,329 ($55.2M)

Contractor: J. E. Dunn Construction Company

Awarding Agency: Department of Defense

Start Date: 2014-03-27

End Date: 2019-05-03

Contract Duration: 1,863 days

Daily Burn Rate: $29.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF DESIGN-BUILD CONSTRUCTION AND INITIAL OUTFITTING SERVICES (DBIO) IN SUPPORT OF THE UNITED STATES AIR FORCE MEDICAL SERVICE - TASK ORDER DM01 - DESIGN/BUILD MEDICAL/DENTAL CLINIC REPLACEMENT, CANNON AIR FORCE BASE, NEW MEXICO

Place of Performance

Location: CANNON AFB, CURRY County, NEW MEXICO, 88103

State: New Mexico Government Spending

Plain-Language Summary

Department of Defense obligated $55.2 million to J. E. DUNN CONSTRUCTION COMPANY for work described as: IGF::OT::IGF DESIGN-BUILD CONSTRUCTION AND INITIAL OUTFITTING SERVICES (DBIO) IN SUPPORT OF THE UNITED STATES AIR FORCE MEDICAL SERVICE - TASK ORDER DM01 - DESIGN/BUILD MEDICAL/DENTAL CLINIC REPLACEMENT, CANNON AIR FORCE BASE, NEW MEXICO Key points: 1. The contract was awarded under full and open competition, suggesting a competitive bidding process. 2. The firm-fixed-price contract type aims to control costs for the government. 3. The project involves significant construction and outfitting for a medical/dental clinic, indicating a substantial infrastructure investment. 4. The duration of the contract (over 1800 days) points to a complex, multi-phase project. 5. The award to J. E. Dunn Construction Company represents a significant commitment to a single prime contractor for a large-scale project.

Value Assessment

Rating: fair

Benchmarking the value of this specific design-build contract is challenging without comparable project data for similar medical facilities. The firm-fixed-price structure provides cost certainty, but the total value of over $55 million suggests a substantial investment. Further analysis would require comparing the cost per square foot or per bed to similar military or civilian medical construction projects to assess if the pricing was competitive.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through full and open competition, indicating that multiple bidders were likely considered. The presence of 3 bids suggests a reasonable level of competition for this significant project. A higher number of bidders might have potentially driven down costs further, but three bids generally provide a basis for price discovery and selection.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages multiple companies to bid, potentially leading to lower prices and better value.

Public Impact

Beneficiaries include U.S. Air Force personnel and their families requiring medical and dental services at Cannon Air Force Base. The project delivers a new or replaced medical and dental clinic facility, enhancing healthcare infrastructure. The geographic impact is localized to Cannon Air Force Base, New Mexico. The project likely created numerous jobs in construction, design, and related trades within the local and regional economy.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen construction challenges arise, despite the fixed-price nature.
Risk of schedule delays impacting the availability of critical medical services.
Dependence on a single contractor for a complex, multi-year project.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Full and open competition suggests a robust bidding process.
Design-build approach can streamline project delivery by integrating design and construction.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, specifically focusing on specialized facilities for the healthcare industry. The market for large-scale government construction projects, particularly for military bases, is often characterized by a few large, experienced firms capable of handling complex design-build requirements. Spending in this sector for federal facilities can fluctuate based on infrastructure needs and modernization efforts.

Small Business Impact

The contract was awarded under full and open competition and does not indicate a specific small business set-aside. While the prime contractor, J. E. Dunn Construction Company, is a large entity, there may be opportunities for small businesses to participate as subcontractors. The extent of small business subcontracting would depend on the prime contractor's strategy and federal subcontracting requirements.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and relevant Air Force medical and engineering commands. The firm-fixed-price nature of the contract provides a degree of accountability for the contractor to deliver the project within the agreed-upon cost. Transparency is generally maintained through contract awards databases, though detailed project progress and financial reports may not be publicly accessible.

Related Government Programs

Military Construction Projects
Healthcare Facility Construction
Design-Build Contracts
Department of Defense Facilities

Risk Flags

Potential for cost overruns
Risk of schedule delays
Complex project management

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $55.2 million to J. E. DUNN CONSTRUCTION COMPANY. IGF::OT::IGF DESIGN-BUILD CONSTRUCTION AND INITIAL OUTFITTING SERVICES (DBIO) IN SUPPORT OF THE UNITED STATES AIR FORCE MEDICAL SERVICE - TASK ORDER DM01 - DESIGN/BUILD MEDICAL/DENTAL CLINIC REPLACEMENT, CANNON AIR FORCE BASE, NEW MEXICO

Who is the contractor on this award?

The obligated recipient is J. E. DUNN CONSTRUCTION COMPANY.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $55.2 million.

What is the period of performance?

Start: 2014-03-27. End: 2019-05-03.

What is the track record of J. E. Dunn Construction Company with federal contracts, particularly within the Department of Defense?

J. E. Dunn Construction Company has a significant history of working with the federal government, including numerous contracts with the Department of Defense and other agencies. Their experience often spans large-scale construction projects, including institutional, healthcare, and military facilities. A review of federal contract databases would reveal the volume and types of projects they have completed, their performance ratings on past contracts, and any history of disputes or contract modifications. This specific contract for the Air Force Medical Service indicates their capability in delivering specialized medical facilities, which often have stringent requirements.

How does the awarded amount of $55.19 million compare to similar Air Force medical facility construction projects?

Comparing the $55.19 million award for the Cannon Air Force Base clinic replacement requires context regarding the size, scope, and specific requirements of the facility. Factors such as square footage, number of beds or patient capacity, specialized equipment integration (e.g., imaging, surgical suites), and the complexity of the design-build process significantly influence project costs. Without detailed specifications for this project and comparable data for other Air Force medical facilities of similar scale and complexity, a direct value-for-money assessment is difficult. However, the award suggests a substantial investment in modernizing or replacing critical healthcare infrastructure.

What are the primary risks associated with a large, multi-year design-build contract for a medical facility?

Large, multi-year design-build contracts for medical facilities carry several inherent risks. These include potential cost overruns due to unforeseen site conditions or material price escalations, despite the firm-fixed-price structure. Schedule delays are also a significant risk, which can impact the operational readiness of the base and the delivery of healthcare services. Furthermore, ensuring the final design and construction meet the highly specialized and evolving needs of a medical facility requires rigorous oversight and quality control. The integration of complex medical equipment and systems adds another layer of risk. Finally, contractor performance and financial stability over the extended project duration are critical considerations.

What is the historical spending pattern for design-build construction services by the Air Force Medical Service?

Historical spending patterns for design-build construction by the Air Force Medical Service would likely show a cyclical nature, influenced by military readiness needs, infrastructure modernization initiatives, and budget allocations. Major construction projects, especially for new facilities or significant renovations, are often awarded as design-build contracts to leverage efficiencies. Spending would likely increase during periods of base realignment and closure (BRAC) or when specific healthcare modernization programs are prioritized. Analyzing past budgets and contract awards would reveal trends in the types of facilities prioritized (e.g., primary care clinics, hospitals, specialized treatment centers) and the average contract values over time.

How does the firm-fixed-price contract type mitigate risks for the government in this construction project?

The firm-fixed-price (FFP) contract type is designed to shift significant risk from the government to the contractor. Under an FFP agreement, the contractor is obligated to complete the work for a predetermined price, regardless of the actual costs incurred. This provides the government with cost certainty and protects against unexpected cost increases. While the government benefits from price predictability, the contractor assumes the risk of cost overruns. This contract structure incentivizes the contractor to manage costs efficiently and complete the project within budget to maximize their profit margin. However, it can also lead to higher initial bid prices as contractors factor in potential risks.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: JE Dunn Construction Group Inc

Address: 1001 LOCUST, KANSAS CITY, MO, 64106

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

Financial Breakdown

Contract Ceiling: $55,563,704

Exercised Options: $55,192,329

Current Obligation: $55,192,329

Subaward Activity

Number of Subawards: 110

Total Subaward Amount: $110,650,303

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W9127S13D6001

IDV Type: IDC

Timeline