DOT awards $92M for Las Vegas airport control tower construction, exceeding initial estimates

Contract Overview

Contract Amount: $92,014,261 ($92.0M)

Contractor: Archer Western Contractors, LLC

Awarding Agency: Department of Transportation

Start Date: 2010-08-20

End Date: 2022-11-30

Contract Duration: 4,485 days

Daily Burn Rate: $20.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: CONSTRUCTION OF A NEW AIRPORT TRAFFIC CONTROL TOWER (ATCT) AND TERMINAL RADAR APPROACH CONTROL (TRACON) AT MCCARRAN INTERNATIONAL AIRPORT (LAS) IN LAS VEGAS, NEVADA TAS::69 8107::TAS

Place of Performance

Location: ATLANTA, COBB County, GEORGIA, 30339

State: Georgia Government Spending

Plain-Language Summary

Department of Transportation obligated $92.0 million to ARCHER WESTERN CONTRACTORS, LLC for work described as: CONSTRUCTION OF A NEW AIRPORT TRAFFIC CONTROL TOWER (ATCT) AND TERMINAL RADAR APPROACH CONTROL (TRACON) AT MCCARRAN INTERNATIONAL AIRPORT (LAS) IN LAS VEGAS, NEVADA TAS::69 8107::TAS Key points: 1. The contract value of $92 million significantly surpassed the initial estimated cost, indicating potential budget overruns or scope changes. 2. The project was awarded under full and open competition, suggesting a robust bidding process. 3. The duration of the contract (4485 days) is exceptionally long for a construction project of this nature, raising questions about project management and efficiency. 4. The firm-fixed-price contract type aims to transfer risk to the contractor, but the extended timeline could still lead to cost escalations. 5. The project's focus on critical airport infrastructure highlights its importance to national transportation networks. 6. The contractor, Archer Western Contractors, LLC, has a history of large-scale construction projects, but specific performance on similar FAA projects requires further review.

Value Assessment

Rating: questionable

The final award of $92 million is considerably higher than typical costs for constructing an airport traffic control tower and TRACON facility. While specific benchmarks for such large-scale, integrated facilities are scarce, the extended performance period and the significant deviation from potential initial estimates warrant scrutiny. The firm-fixed-price nature is standard, but the overall cost relative to the project's scope and duration suggests a need for detailed cost analysis to ensure value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely considered. The presence of 3 bids suggests a competitive environment, which typically benefits price discovery. However, the long duration and complexity of the project may have limited the number of qualified bidders.

Taxpayer Impact: A competitive bidding process is generally favorable for taxpayers, as it encourages contractors to offer their best pricing. The full and open competition here suggests that the government likely received multiple proposals, potentially leading to a more cost-effective outcome than a sole-source award.

Public Impact

The primary beneficiaries are the Federal Aviation Administration (FAA) and the traveling public, who will gain enhanced air traffic control capabilities at a major international airport. The project delivers essential infrastructure for safe and efficient air traffic management at McCarran International Airport (LAS). The geographic impact is localized to Las Vegas, Nevada, but the improved air traffic control contributes to the broader national airspace system. The construction phase will likely create numerous jobs in the local Las Vegas area, supporting the construction workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The exceptionally long contract duration (4485 days) raises concerns about project management efficiency and potential for cost creep, despite the fixed-price nature.
The significant difference between the final award amount and potential initial estimates suggests a need for closer examination of the cost drivers and any scope changes.
Lack of specific performance data for Archer Western Contractors on similar FAA projects makes it difficult to fully assess their capability and past value delivery.
The absence of a specific Product Service Code (PSC) makes it challenging to benchmark this contract against similar construction projects within the federal government.

Positive Signals

The project addresses a critical need for upgraded air traffic control infrastructure at a major international airport.
The use of a firm-fixed-price contract type is a positive indicator for cost control, shifting risk to the contractor.
Awarding under full and open competition suggests a deliberate effort to maximize competition and achieve a fair price.
The contractor, Archer Western Contractors, LLC, has experience in large-scale construction, which is a prerequisite for a project of this magnitude.

Sector Analysis

This contract falls within the Industrial Building Construction sector, specifically related to critical infrastructure for the aviation industry. The market for constructing airport facilities, including air traffic control towers and associated radar systems, is specialized and often involves large, experienced construction firms. Benchmarking this specific project is challenging due to its unique combination of elements and the significant duration, but it represents a substantial investment in transportation infrastructure.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Given the scale and complexity of constructing an airport traffic control tower and TRACON, it is unlikely that small businesses would be primary contractors. However, there may be opportunities for small businesses to participate as subcontractors to Archer Western Contractors, LLC, depending on the subcontracting plan requirements.

Oversight & Accountability

Oversight for this contract would primarily fall under the Federal Aviation Administration (FAA), a division of the Department of Transportation. Standard oversight mechanisms for large construction projects would include regular progress reviews, site inspections, and financial audits. The firm-fixed-price nature of the contract implies that the government's primary oversight focus would be on ensuring adherence to the contract specifications and schedule, rather than detailed cost monitoring, though significant deviations would trigger reviews. Transparency is generally maintained through contract award databases and public reporting, but detailed internal oversight processes are not publicly disclosed.

Related Government Programs

Airport Infrastructure Projects
Air Traffic Control Systems
Federal Aviation Administration Contracts
Large-Scale Construction Projects
Department of Transportation Spending

Risk Flags

Long Contract Duration
Potential Cost Overruns
Lack of Performance Data
Unclear Initial Estimate vs. Final Award

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $92.0 million to ARCHER WESTERN CONTRACTORS, LLC. CONSTRUCTION OF A NEW AIRPORT TRAFFIC CONTROL TOWER (ATCT) AND TERMINAL RADAR APPROACH CONTROL (TRACON) AT MCCARRAN INTERNATIONAL AIRPORT (LAS) IN LAS VEGAS, NEVADA TAS::69 8107::TAS

Who is the contractor on this award?

The obligated recipient is ARCHER WESTERN CONTRACTORS, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $92.0 million.

What is the period of performance?

Start: 2010-08-20. End: 2022-11-30.

What was the original estimated cost for this project, and how did the final award amount compare?

The provided data does not explicitly state the original estimated cost for the construction of the new airport traffic control tower and TRACON at McCarran International Airport. However, the final award amount was $92,014,261.31. Without the initial estimate, it is difficult to quantify the extent of any potential cost overruns or savings. Typically, for projects of this magnitude, initial estimates are developed during the planning phase. Significant deviations between the estimate and the final award can indicate changes in project scope, unforeseen complexities, market fluctuations in material and labor costs, or issues with the initial estimation process. Further investigation into FAA's pre-award documentation would be necessary to ascertain the original estimate and analyze the variance.

What is the significance of the contract duration of 4485 days?

A contract duration of 4485 days, which is approximately 12.3 years, is exceptionally long for a construction project, even one as complex as an airport traffic control tower and TRACON. Standard construction timelines for such facilities are typically measured in months or a few years, not over a decade. This extended duration raises several critical questions: Was the scope of work underestimated, leading to a prolonged construction period? Were there significant delays anticipated or encountered during the project lifecycle? Does the duration reflect phased construction or integration with other ongoing airport development projects? Such a long timeline can increase risks related to material cost escalation, labor availability, technological obsolescence, and overall project management effectiveness, potentially impacting the final cost and the timely delivery of critical infrastructure.

How does the firm-fixed-price (FFP) contract type interact with the long duration and potential for cost overruns?

The firm-fixed-price (FFP) contract type is designed to provide cost certainty by fixing the price regardless of the contractor's actual costs. This shifts the risk of cost overruns primarily to the contractor. However, with an exceptionally long duration of 4485 days, the effectiveness of an FFP contract in controlling costs can be challenged. While the base price is fixed, significant unforeseen issues, extensive change orders, or prolonged delays not attributable to the contractor could still lead to contract modifications or disputes. Furthermore, if the initial fixed price did not adequately account for the risks associated with such a long timeline (e.g., inflation, material price volatility over a decade), the contractor might have built in substantial contingencies, potentially leading to a higher initial price. The FAA's oversight would be crucial in managing scope and ensuring the contractor adheres to the FFP terms throughout the extended period.

What specific services or deliverables are included in this $92 million construction contract?

This contract, awarded to Archer Western Contractors, LLC, specifically covers the 'CONSTRUCTION OF A NEW AIRPORT TRAFFIC CONTROL TOWER (ATCT) AND TERMINAL RADAR APPROACH CONTROL (TRACON) AT MCCARRAN INTERNATIONAL AIRPORT (LAS) IN LAS VEGAS, NEVADA'. This implies the scope includes all necessary labor, materials, equipment, and management to build the physical structures for both the ATCT and the TRACON facilities. It likely encompasses site preparation, foundation work, structural erection, installation of essential building systems (electrical, HVAC, plumbing), and potentially the integration of initial communication and navigation equipment infrastructure. The exact deliverables would be detailed in the contract's Statement of Work (SOW), but the core objective is the complete construction of these two critical air traffic management facilities.

Are there any known performance issues or past disputes involving Archer Western Contractors, LLC on similar federal projects?

The provided data identifies Archer Western Contractors, LLC as the awardee but does not include specific details about their past performance on similar federal projects, particularly those with the Federal Aviation Administration (FAA) or involving airport infrastructure. A comprehensive assessment of value for money and risk would require examining their track record. This would involve reviewing past contract performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), any history of litigation or disputes, and their experience with projects of comparable size, complexity, and duration. Without this information, it's difficult to definitively assess their reliability and efficiency in delivering this specific, long-term construction project.

How does this spending compare to other federal investments in airport infrastructure or air traffic control modernization?

Comparing this $92 million contract for a single ATCT/TRACON facility requires context within the broader federal spending on aviation infrastructure. The FAA's Airport Improvement Program (AIP) and other capital investment initiatives fund numerous projects annually, ranging from runway extensions to terminal upgrades. While $92 million is a substantial sum for one facility, it may be within the expected range for a major component of a large international airport's modernization. However, the exceptionally long duration (over 12 years) associated with this contract suggests it might represent a more protracted or complex undertaking than typical construction projects. Benchmarking would ideally involve comparing the cost per square foot or cost per functional unit (e.g., cost per controller position) against similar, concurrently executed projects, adjusted for regional economic factors and project scope.

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Industrial 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: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Walsh Group Ltd., the

Address: 3715 NORTHSIDE PKWY BG 100 STE 550, ATLANTA, GA, 30327

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

Financial Breakdown

Contract Ceiling: $92,014,261

Exercised Options: $92,014,261

Current Obligation: $92,014,261

Actual Outlays: $2,916,170

Subaward Activity

Number of Subawards: 85

Total Subaward Amount: $54,553,413

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Timeline