DoD's $140.7M Aegis Ashore construction contract awarded to URS Group, Inc. for missile defense complex

Contract Overview

Contract Amount: $140,673,803 ($140.7M)

Contractor: URS Group, Inc.

Awarding Agency: Department of Defense

Start Date: 2012-06-04

End Date: 2013-11-07

Contract Duration: 521 days

Daily Burn Rate: $270.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIXED PRICE AWARD FEE

Sector: Construction

Official Description: CONSTRUCTION OF THE AEGIS ASHORE MISSILE DEFENSE TEST COMPLEX, PACIFIC MISSILE RANGE FACILITY, KAUAI, HAWAII

Place of Performance

Location: JBPHH, HONOLULU County, HAWAII, 96860, UNITED STATES OF AMERICA

State: Hawaii Government Spending

Plain-Language Summary

Department of Defense obligated $140.7 million to URS GROUP, INC. for work described as: CONSTRUCTION OF THE AEGIS ASHORE MISSILE DEFENSE TEST COMPLEX, PACIFIC MISSILE RANGE FACILITY, KAUAI, HAWAII Key points: 1. Contract awarded for construction of a critical missile defense facility. 2. The contract was competed on a full and open basis. 3. The contractor, URS Group, Inc., has a history of large federal contracts. 4. The project duration was approximately 1.7 years. 5. The contract was a fixed-price award fee type. 6. The facility is located at the Pacific Missile Range Facility in Hawaii.

Value Assessment

Rating: fair

The contract value of $140.7 million for the construction of a specialized missile defense complex appears within a reasonable range for such a project, considering the complexity and specialized nature of Aegis Ashore systems. Benchmarking against similar large-scale military construction projects is challenging due to unique specifications, but the price reflects significant investment in national defense infrastructure. Further analysis would require detailed cost breakdowns and comparison with similar facilities built under different market conditions.

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 multiple bidders (3 indicated) suggests a competitive environment, which typically leads to better price discovery and potentially more favorable terms for the government. The specific number of bids received is not provided, but the 'full and open' designation is a positive indicator for competitive procurement.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down costs and encourage innovation, leading to better value for public funds.

Public Impact

The primary beneficiaries are the Department of Defense and the U.S. Navy, who will operate the Aegis Ashore missile defense system. The contract delivers a critical piece of infrastructure for national missile defense capabilities. The geographic impact is concentrated in Kauai, Hawaii, at the Pacific Missile Range Facility. The project likely involved a significant number of construction workers and specialized technical personnel, contributing to the local economy.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns in complex construction projects.
Dependence on a single contractor for a critical defense asset.
Risks associated with fixed-price award fee contracts if performance metrics are not clearly defined.

Positive Signals

Awarded through full and open competition, suggesting a robust bidding process.
Contractor URS Group, Inc. has experience with large federal projects.
Project supports a critical national defense capability.

Sector Analysis

This contract falls within the construction sector, specifically for institutional and commercial buildings with a defense application. The market for large-scale military construction is specialized, often dominated by a few large firms capable of handling complex, high-security projects. Spending in this area is driven by defense modernization efforts and strategic positioning, such as the deployment of missile defense systems.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Given the scale and specialized nature of constructing a missile defense complex, it is unlikely that small businesses would be primary contractors, though they may have participated as subcontractors to the prime contractor, URS Group, Inc. Further investigation into subcontracting plans would be needed to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting and project management offices. Accountability measures would be embedded in the contract's award fee structure, performance metrics, and inspection processes. Transparency is generally maintained through contract award databases and reporting requirements, though specific project details might be sensitive due to national security implications.

Related Government Programs

Aegis Ballistic Missile Defense System
Missile Defense Agency Programs
Naval Facilities Engineering Command Projects
Department of Defense Construction Contracts

Risk Flags

Construction project complexity
Potential for cost overruns
National security implications of infrastructure

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $140.7 million to URS GROUP, INC.. CONSTRUCTION OF THE AEGIS ASHORE MISSILE DEFENSE TEST COMPLEX, PACIFIC MISSILE RANGE FACILITY, KAUAI, HAWAII

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 Navy).

What is the total obligated amount?

The obligated amount is $140.7 million.

What is the period of performance?

Start: 2012-06-04. End: 2013-11-07.

What is the track record of URS Group, Inc. with Department of Defense contracts, particularly in construction?

URS Group, Inc., prior to its acquisition by AECOM, had a significant history of performing large-scale federal contracts, including numerous construction and engineering projects for the Department of Defense. They were involved in various infrastructure development, facility construction, and environmental remediation projects across different military branches. Their experience often included complex projects requiring adherence to stringent security, environmental, and performance standards. Analyzing their past performance on similar DoD contracts would provide context for their capability and reliability in executing the Aegis Ashore project. Specific details on past project successes, cost performance, and any disputes or challenges would offer a more comprehensive view of their track record.

How does the awarded price of $140.7 million compare to similar missile defense facility constructions?

Direct comparisons for the construction of Aegis Ashore missile defense complexes are difficult due to the highly specialized nature of the facilities and the proprietary details of cost structures. However, large-scale military construction projects, especially those involving advanced technology integration and secure infrastructure, typically run into the tens or hundreds of millions of dollars. For instance, constructing barracks or training facilities might cost significantly less, while projects involving radar installations, command centers, or unique launch systems would approach or exceed this figure. The $140.7 million price point for the Aegis Ashore facility at the Pacific Missile Range Facility should be evaluated against the specific technical requirements, site preparation needs, and the integration of complex systems, rather than generic building costs.

What were the key performance indicators and risk mitigation strategies for this contract?

As a Fixed Price Award Fee (FPAF) contract, key performance indicators (KPIs) would have been established to measure URS Group, Inc.'s performance in areas such as schedule adherence, quality of construction, safety compliance, and potentially cost control within defined parameters. The 'award fee' component suggests that the contractor could earn additional profit based on exceeding baseline performance targets. Risk mitigation strategies would likely have included detailed project planning, rigorous site inspections, robust quality assurance programs, and clear communication protocols between the contractor and the Navy's contracting officer's representative. Potential risks such as unforeseen site conditions, material availability, or labor issues would have been addressed through contractual clauses and proactive project management.

What is the historical spending trend for constructing missile defense infrastructure by the Department of Defense?

Historical spending on missile defense infrastructure by the Department of Defense has been substantial and subject to fluctuations based on geopolitical threats and technological advancements. Major programs like the Ground-based Midcourse Defense (GMD), Aegis Ballistic Missile Defense (Aegis BMD), and Terminal High Altitude Area Defense (THAAD) systems have required significant investment not only in the interceptors and radar but also in the supporting infrastructure, including command centers, launch sites, and testing facilities. Spending trends are often influenced by budget allocations, congressional appropriations, and the perceived urgency of missile defense needs. Analyzing annual defense budgets and specific program funding over the past two decades would reveal a pattern of consistent, albeit variable, investment in this critical area.

How did the 'full and open competition' impact the final contract price and value for the government?

The 'full and open competition' procurement method is designed to maximize the number of potential bidders, thereby increasing the likelihood of receiving competitive proposals. This process generally leads to better price discovery, as contractors are incentivized to offer their most competitive pricing to win the contract. For taxpayers, this translates to potentially lower costs and better value for money, as the government benefits from market forces driving efficiency and innovation among bidders. While the specific number of bids received isn't detailed, the adherence to this procurement standard suggests that the government sought the best possible offer through a broad solicitation, aiming to secure the construction of the Aegis Ashore complex at a favorable price point.

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

Solicitation ID: N6274209R1170

Offers Received: 3

Pricing Type: FIXED PRICE AWARD FEE (M)

Evaluated Preference: NONE

Contractor Details

Parent Company: AECOM (UEI: 153561212)

Address: 9901 IH 10 W, SAN ANTONIO, TX, 78230

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $140,673,803

Exercised Options: $140,673,803

Current Obligation: $140,673,803

Subaward Activity

Number of Subawards: 7

Total Subaward Amount: $524,817,962

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N6274209D1174

IDV Type: IDC

Timeline