DHS awards $1.06B for National Bio and Agro-Defense Facility construction, facing potential cost overruns

Contract Overview

Contract Amount: $1,057,506,675 ($1.1B)

Contractor: Mccarthy Mortenson Nbaf a Joint Venture

Awarding Agency: Department of Homeland Security

Start Date: 2009-09-18

End Date: 2023-06-29

Contract Duration: 5,032 days

Daily Burn Rate: $210.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: CONSTRUCTION OF NATIONAL BIO AND AGRO-DEFENSE FACILITY (NBAF), AT MANHATTAN, KANSAS

Place of Performance

Location: MANHATTAN, RILEY County, KANSAS, 66506

State: Kansas Government Spending

Plain-Language Summary

Department of Homeland Security obligated $1.06 billion to MCCARTHY MORTENSON NBAF A JOINT VENTURE for work described as: CONSTRUCTION OF NATIONAL BIO AND AGRO-DEFENSE FACILITY (NBAF), AT MANHATTAN, KANSAS Key points: 1. The contract's duration has significantly extended beyond initial estimates, indicating potential schedule slippage and increased oversight needs. 2. A single joint venture secured the entire award, raising questions about the breadth of competition and potential for price optimization. 3. The firm-fixed-price structure aims to control costs, but the extended timeline and complexity of the project present inherent risks. 4. This facility is critical for national security, focusing on high-containment research for biological threats to agriculture and animal health. 5. The project's scale and specialized nature position it as a unique, high-stakes undertaking within the federal construction sector.

Value Assessment

Rating: fair

The total award of over $1 billion for the NBAF construction is substantial. Benchmarking this against similar large-scale, specialized government facilities is challenging due to its unique scope. The firm-fixed-price contract type suggests an attempt to cap costs, but the extended duration and complexity of the project may lead to cost growth through change orders or claims. Further analysis of cost performance reports and earned value management data would be necessary to provide a more definitive value-for-money assessment.

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 solicited. However, the award went to a single joint venture, 'MCCARTHY MORTENSON NBAF A JOINT VENTURE'. The number of bids received is not specified, but the consolidation into one entity suggests potential market concentration or a highly specialized requirement that favored a specific consortium. This level of competition, while open, may not have driven the most aggressive pricing if only a few entities could realistically perform the work.

Taxpayer Impact: While the competition was open, the award to a single joint venture warrants scrutiny to ensure that taxpayer funds were used efficiently and that the government received the best possible value. The government should ensure robust oversight to manage the contract effectively.

Public Impact

The primary beneficiaries are federal agencies responsible for national security, biodefense, and agricultural research, enhancing capabilities to protect against agro-terrorism and emerging animal diseases. The facility will deliver state-of-the-art research capabilities, including Biosafety Level 4 (BSL-4) laboratories, crucial for studying the most dangerous pathogens. The geographic impact is concentrated in Manhattan, Kansas, creating a hub for specialized scientific research and potentially boosting the local economy through construction and future operations. The project has significant workforce implications, requiring highly skilled construction labor during its development and specialized scientific and support staff upon completion.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Extended contract duration beyond initial estimates suggests potential for schedule delays and associated cost increases.
The award to a single joint venture, despite full and open competition, may indicate limited market capacity for such specialized projects, potentially impacting future price negotiations.
The complexity of constructing a high-containment facility introduces inherent risks related to safety, environmental compliance, and specialized construction techniques.
The sheer scale of the project ($1.06 billion) presents a significant financial commitment for the government, requiring diligent oversight to ensure fiscal responsibility.

Positive Signals

The firm-fixed-price contract type provides a degree of cost certainty, assuming scope remains stable.
Awarding to a joint venture with potentially combined expertise could enhance the likelihood of successful project execution for a complex undertaking.
The facility's critical mission for national biodefense and agricultural security represents a significant positive outcome for public safety and economic stability.
The use of full and open competition, in principle, allows for a broad range of potential contractors to participate.

Sector Analysis

The construction of the National Bio and Agro-Defense Facility (NBAF) falls within the large-scale, specialized commercial and institutional building construction sector. This sector often involves complex projects requiring significant capital investment, specialized engineering, and adherence to stringent regulatory standards. Comparable spending benchmarks would typically involve other major government infrastructure projects, such as research laboratories, secure facilities, or large public works, though the BSL-4 designation makes this project particularly unique. The market for such specialized construction is often limited to a few large firms or joint ventures capable of handling the technical and logistical demands.

Small Business Impact

The provided data indicates that small business participation (ss: false, sb: false) was not a primary set-aside consideration for this prime contract. This suggests the contract was awarded based on the capabilities of larger firms. There is no explicit information on subcontracting plans for small businesses within this award. For a project of this magnitude and specialization, the prime contractor would typically be expected to engage various subcontractors, potentially including small businesses for specific trades or services, but this is not detailed in the summary data. The impact on the small business ecosystem would likely be indirect, through potential subcontracting opportunities rather than direct prime contract awards.

Oversight & Accountability

Oversight for this contract is managed by the Department of Homeland Security (DHS). As a large, complex construction project with a significant budget, it is expected to be subject to rigorous oversight mechanisms, including regular progress reviews, quality assurance inspections, and financial audits. The firm-fixed-price nature of the contract necessitates close monitoring of scope changes and adherence to the original terms. Inspector General jurisdiction would likely apply to investigate any allegations of fraud, waste, or abuse related to the contract's execution. Transparency would be facilitated through contract award databases and potentially public reporting on project milestones.

Related Government Programs

Department of Homeland Security Research and Development Facilities
National Institutes of Health (NIH) Research Facilities
Department of Agriculture (USDA) Research Facilities
Department of Defense (DoD) Construction Projects
Large-Scale Infrastructure Projects

Risk Flags

Extended Contract Duration
Potential for Cost Overruns
Complexity of High-Containment Facility Construction
Single Prime Contractor for Large Project

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $1.06 billion to MCCARTHY MORTENSON NBAF A JOINT VENTURE. CONSTRUCTION OF NATIONAL BIO AND AGRO-DEFENSE FACILITY (NBAF), AT MANHATTAN, KANSAS

Who is the contractor on this award?

The obligated recipient is MCCARTHY MORTENSON NBAF A JOINT VENTURE.

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (Federal Law Enforcement Training Center).

What is the total obligated amount?

The obligated amount is $1.06 billion.

What is the period of performance?

Start: 2009-09-18. End: 2023-06-29.

What is the historical spending trend for the National Bio and Agro-Defense Facility (NBAF) project?

The provided data reflects a single award of $1.06 billion for the construction of the NBAF. This represents the total obligated amount for this specific contract. To understand the historical spending trend, one would need to examine the project's lifecycle, including any prior planning, design, or phased construction contracts, as well as any subsequent modifications or task orders issued under this definitive contract. The duration of this contract (5032 days, approximately 13.8 years) suggests a long-term expenditure profile. Without access to a detailed contract history or budget execution reports, it's difficult to provide a granular spending trend beyond this single award value. However, the significant sum indicates a major, long-term federal investment in biodefense infrastructure.

How does the cost per square foot of the NBAF compare to similar high-containment research facilities?

The provided data does not include the square footage of the National Bio and Agro-Defense Facility (NBAF), making a direct cost-per-square-foot comparison impossible. To perform such an analysis, detailed architectural plans and final build-out specifications would be required. High-containment facilities, particularly those with Biosafety Level 4 (BSL-4) capabilities like the NBAF, are exceptionally expensive to construct due to the specialized infrastructure, safety systems, redundant utilities, and stringent environmental controls required. These costs are significantly higher than standard commercial or institutional buildings. Benchmarking would necessitate comparing against other BSL-4 facilities, which are rare, and accounting for differences in location, specific design requirements, and the era of construction.

What are the key performance indicators (KPIs) used to measure the success of the NBAF construction contract?

While specific KPIs are not detailed in the provided summary data, typical performance indicators for a large-scale construction contract like the NBAF would likely include: schedule adherence (tracking progress against planned milestones), cost performance (monitoring expenditures against the budget, especially given the firm-fixed-price structure), quality of work (inspections, defect rates, compliance with specifications), safety performance (incident rates, lost time injuries), and compliance with regulatory and environmental standards. For a project of this nature, meeting the stringent requirements for a high-containment facility would be a paramount performance metric. The government would likely employ Earned Value Management (EVM) techniques to track performance against planned value and cost.

What is the track record of 'MCCARTHY MORTENSON NBAF A JOINT VENTURE' in executing similar large-scale federal construction projects?

The provided data identifies 'MCCARTHY MORTENSON NBAF A JOINT VENTURE' as the contractor. To assess their track record, one would need to investigate the individual entities comprising the joint venture (McCarthy Building Companies and Mortenson Construction) and their past performance on federal contracts, particularly those involving complex, large-scale construction, research facilities, or high-security infrastructure. Both McCarthy and Mortenson are established construction firms with significant experience. A thorough review would involve examining contract databases (like FPDS or SAM.gov) for past performance evaluations, project history, and any reported issues or successes on comparable government projects. The formation of a joint venture specifically for this project suggests a strategic pooling of resources and expertise to meet the demanding requirements of the NBAF.

What are the potential risks associated with the extended duration of the NBAF construction contract?

The extended duration of the NBAF construction contract (5032 days) presents several potential risks. Firstly, there is an increased risk of cost escalation due to inflation over the long project timeline, even with a firm-fixed-price contract, as unforeseen issues may lead to change orders or claims that could increase the total cost. Secondly, schedule slippage can occur due to factors like weather, supply chain disruptions, labor availability, or unforeseen site conditions, further extending the timeline and potentially impacting the facility's operational readiness. Thirdly, the prolonged construction period increases the complexity of project management and oversight, requiring sustained resources and attention from the contracting agency. Finally, there's a risk that technological advancements or evolving biodefense needs might occur during the extended construction, potentially requiring costly modifications to the facility design.

How does the $1.06 billion award compare to the total estimated cost of the NBAF project?

The provided data indicates a definitive contract award of $1,057,506,675.30 for the construction of the NBAF. This figure represents the value of the contract awarded to 'MCCARTHY MORTENSON NBAF A JOINT VENTURE'. It is crucial to distinguish this award amount from the total estimated cost of the entire project, which might include design, planning, equipment procurement, and other associated costs beyond the physical construction covered by this contract. Without additional information on the overall project budget or subsequent contract modifications, it's difficult to definitively state how this award compares to the total estimated cost. However, $1.06 billion is a substantial sum, likely representing the majority of the construction budget for such a specialized facility.

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

Solicitation ID: HSFLBP09R00001

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1341 N ROCK HILL RD, SAINT LOUIS, MO, 63124

Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $1,104,602,795

Exercised Options: $1,057,506,675

Current Obligation: $1,057,506,675

Actual Outlays: $1,958,230

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Timeline