Army awards $141M construction contract to M. A. Mortenson Company for Fort Hood facilities
Contract Overview
Contract Amount: $141,269,394 ($141.3M)
Contractor: M. a. Mortenson Company
Awarding Agency: Department of Defense
Start Date: 2008-12-29
End Date: 2011-03-30
Contract Duration: 821 days
Daily Burn Rate: $172.1K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Construction
Official Description: IBCT
Place of Performance
Location: EL PASO, EL PASO County, TEXAS, 79906
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $141.3 million to M. A. MORTENSON COMPANY for work described as: IBCT Key points: 1. Contract value represents a significant investment in military infrastructure. 2. Competition dynamics suggest a potentially competitive bidding process for this large-scale project. 3. Fixed-price contract type may offer cost certainty but could limit flexibility for unforeseen issues. 4. Project duration of 821 days indicates a substantial construction timeline. 5. Geographic focus on Texas highlights regional economic impact. 6. The award to a single contractor implies a thorough vetting process.
Value Assessment
Rating: good
The contract value of $141.3 million for commercial and institutional building construction appears to be within a reasonable range for a project of this magnitude, especially considering the scope and duration. Benchmarking against similar large-scale military construction projects would provide a more precise value-for-money assessment. The firm fixed-price structure suggests the contractor assumed significant risk, which can sometimes lead to higher initial bids but provides budget predictability for the government.
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. This approach generally fosters a competitive environment, driving down prices and encouraging innovation. The fact that it was competed openly suggests that the Army sought the best value from a wide range of qualified contractors.
Taxpayer Impact: Full and open competition is beneficial for taxpayers as it maximizes the potential for cost savings by encouraging multiple bidders to offer their most competitive pricing.
Public Impact
The primary beneficiaries are the U.S. Army personnel and units stationed at Fort Hood, Texas, who will receive improved facilities. The contract will deliver new or renovated commercial and institutional buildings, enhancing operational capabilities and quality of life. The geographic impact is concentrated in Texas, potentially creating local jobs and stimulating the regional economy. The construction activities will likely involve a significant workforce, including skilled trades and support personnel.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns if unforeseen site conditions or material price fluctuations occur, despite the fixed-price nature.
- Dependence on a single contractor for a large, multi-year project introduces execution risk.
- The long duration could lead to challenges in maintaining project momentum and adapting to evolving military requirements.
Positive Signals
- Awarded under full and open competition, suggesting a robust selection process.
- Firm fixed-price contract provides budget certainty for the government.
- Contractor's experience in large-scale construction projects is likely a positive factor.
- Focus on improving military facilities directly supports readiness and personnel welfare.
Sector Analysis
This contract falls within the construction sector, specifically commercial and institutional building construction. The U.S. government is a major client in this sector, awarding numerous contracts for military bases, federal buildings, and infrastructure projects. The market for large-scale construction is competitive, with significant players capable of undertaking complex, high-value projects. This award represents a substantial portion of spending within this specific niche of federal construction.
Small Business Impact
The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a large-value construction project, it is likely that the prime contractor, M. A. Mortenson Company, will engage subcontractors. There is potential for small businesses to participate in subcontracting opportunities, but the extent of this participation is not detailed in the provided data. Further analysis would be needed to determine if subcontracting goals for small businesses were established.
Oversight & Accountability
Oversight for this contract would typically be managed by the contracting officer and the relevant Army contracting command. The firm fixed-price nature of the contract places the primary responsibility for cost control on the contractor. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General (IG) jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- Military Construction Program
- Base Realignment and Closure (BRAC) projects
- Department of Defense Facilities Modernization
- Federal Buildings Fund
Risk Flags
- Potential for cost escalation impacting fixed-price contract profitability.
- Execution risk associated with a single prime contractor for a long-duration project.
- Dependency on subcontractor performance and availability.
- Site condition surprises impacting schedule and cost.
- Changes in military requirements during project execution.
Tags
construction, department-of-defense, department-of-the-army, fort-hood, texas, firm-fixed-price, full-and-open-competition, large-contract, infrastructure, commercial-building, institutional-building, m-a-mortenson-company
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $141.3 million to M. A. MORTENSON COMPANY. IBCT
Who is the contractor on this award?
The obligated recipient is M. A. MORTENSON 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 $141.3 million.
What is the period of performance?
Start: 2008-12-29. End: 2011-03-30.
What is the track record of M. A. Mortenson Company with the Department of Defense?
M. A. Mortenson Company has a history of securing and successfully executing large-scale construction contracts, including those with the Department of Defense. While specific details of past DoD projects are not provided here, their general profile suggests experience with complex government and military infrastructure. A deeper dive into their contract history with the DoD would reveal the number and value of previous awards, performance ratings, and any significant issues encountered. This would help assess their reliability and capability for projects of this scale and type.
How does the awarded amount compare to similar construction projects at military installations?
The $141.3 million award for commercial and institutional building construction at Fort Hood is a substantial sum, indicative of a significant project. To benchmark its value, one would compare it to similar construction projects (e.g., barracks, training facilities, administrative buildings) awarded by the Army or other branches of the DoD at comparable installations over the past few years. Factors like project scope, square footage, specific building types, and regional construction cost indices would need to be considered. Without direct comparable data, it's difficult to definitively state if this represents exceptional value, but it aligns with the scale of major military infrastructure development.
What are the primary risks associated with a firm fixed-price contract for a project of this duration?
The primary risk with a firm fixed-price (FFP) contract for a long-duration project like this (821 days) is the contractor's exposure to escalating costs for labor, materials, and subcontractors over time. While the FFP structure protects the government from cost overruns, it can incentivize contractors to bid higher initially to account for potential market volatility. Conversely, if the contractor significantly underestimates costs or encounters unforeseen issues (e.g., subsurface conditions, design changes), they bear the financial burden, which could potentially impact project quality or lead to disputes. The government's risk is primarily that the contractor may cut corners to maintain profitability if costs rise unexpectedly.
How effective is full and open competition in ensuring cost-effectiveness for large construction contracts?
Full and open competition is generally considered the most effective method for ensuring cost-effectiveness in large construction contracts. By allowing all responsible sources to bid, it maximizes the number of potential offerors, thereby increasing the likelihood of receiving competitive pricing. This competitive pressure encourages bidders to submit their best offers and to be efficient in their cost proposals. While it doesn't guarantee the lowest price in every instance (as other factors like technical approach and past performance are also evaluated), it creates a strong market dynamic that favors cost savings for the government compared to less competitive procurement methods.
What is the historical spending trend for similar construction services by the Department of the Army?
The Department of the Army consistently allocates significant funding towards construction and facilities maintenance, driven by the need to modernize infrastructure, support troop readiness, and improve living conditions. Historical spending data would likely show multi-billion dollar annual expenditures on construction projects across various categories, including barracks, training facilities, operational buildings, and utilities. Trends may reflect shifts in military priorities, BRAC actions, or specific modernization initiatives. Analyzing this specific contract's value ($141.3M) within the broader context of the Army's historical construction budget would reveal its relative scale and significance.
Are there specific performance metrics or KPIs associated with this contract?
The provided data does not specify the performance metrics or Key Performance Indicators (KPIs) associated with this particular contract. However, for large construction projects, typical performance metrics often include adherence to schedule (milestones and final completion), quality of workmanship (meeting specifications and standards), safety compliance (incident rates), and budget management. The contract would likely outline specific deliverables, inspection requirements, and potential remedies for non-performance. The contracting officer's representative (COR) would be responsible for monitoring these aspects throughout the project lifecycle.
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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: M. a. Mortenson Companies, Inc. (UEI: 130731797)
Address: 700 MEADOW LN N, MINNEAPOLIS, MN, 90
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $141,269,394
Exercised Options: $141,269,394
Current Obligation: $141,269,394
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W912HN08D0021
IDV Type: IDC
Timeline
Start Date: 2008-12-29
Current End Date: 2011-03-30
Potential End Date: 2011-03-30 00:00:00
Last Modified: 2011-04-15
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