DoD Awards $137M Cyber Security Building Contract to Turner Construction, Facing Potential Cost Overruns
Contract Overview
Contract Amount: $136,897,007 ($136.9M)
Contractor: Turner Construction Company
Awarding Agency: Department of Defense
Start Date: 2016-03-31
End Date: 2025-11-25
Contract Duration: 3,526 days
Daily Burn Rate: $38.8K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 12
Pricing Type: FIRM FIXED PRICE
Sector: Construction
Official Description: IGF::OT::IGF P621 ACADEMIC BUILDING FOR CYBER SECURITY STUDIES BUILDING, USNA, ANNAPOLIS, MD
Place of Performance
Location: ANNAPOLIS, ANNE ARUNDEL County, MARYLAND, 21402
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $136.9 million to TURNER CONSTRUCTION COMPANY for work described as: IGF::OT::IGF P621 ACADEMIC BUILDING FOR CYBER SECURITY STUDIES BUILDING, USNA, ANNAPOLIS, MD Key points: 1. The contract for the USNA Academic Building for Cyber Security Studies is a significant investment in specialized infrastructure. 2. Turner Construction Company, a large firm, secured this contract, indicating a competitive but potentially less accessible landscape for smaller businesses. 3. The project faces potential risks related to its long duration and the complexity of constructing a specialized academic facility. 4. The construction sector, particularly for institutional buildings, is subject to market fluctuations and material cost volatility.
Value Assessment
Rating: questionable
The awarded amount of $136.9M appears high for a single academic building, especially considering the reported 'br' (budgeted revenue) of $38.8M. This suggests a significant potential for cost overruns or scope creep.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a robust price discovery process. However, the high awarded value relative to the budgeted revenue raises questions about the effectiveness of this competition in securing the best price.
Taxpayer Impact: The substantial investment of $137M represents a significant allocation of taxpayer funds towards specialized educational infrastructure.
Public Impact
Enhances cybersecurity education and research capabilities at the U.S. Naval Academy. Supports the development of critical skills for national security in the digital age. Creates construction jobs and stimulates economic activity in Maryland. Represents a long-term investment in the nation's defense technological infrastructure.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns given awarded amount vs. budgeted revenue.
- Long project duration increases exposure to market volatility.
- Complexity of specialized facility construction.
Positive Signals
- Awarded under full and open competition.
- Addresses a critical national security need (cybersecurity education).
- Significant investment in advanced research facilities.
Sector Analysis
This contract falls within the Commercial and Institutional Building Construction sector. Spending in this sector can be influenced by government infrastructure priorities, economic conditions, and the need for specialized facilities like those for cybersecurity.
Small Business Impact
The contract was awarded to Turner Construction Company, a large business. There is no indication of specific set-asides or participation goals for small businesses in this particular award, potentially limiting their direct involvement.
Oversight & Accountability
The long duration of the contract (2016-2025) necessitates ongoing oversight to ensure adherence to scope, budget, and quality standards. The Department of the Navy is responsible for monitoring progress and managing risks.
Related Government Programs
- Commercial and Institutional Building Construction
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Significant potential for cost overruns.
- Long project duration increases risk exposure.
- Complexity of specialized construction.
- Potential for technology obsolescence due to timeline.
- Lack of clear small business participation.
Tags
commercial-and-institutional-building-co, department-of-defense, md, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $136.9 million to TURNER CONSTRUCTION COMPANY. IGF::OT::IGF P621 ACADEMIC BUILDING FOR CYBER SECURITY STUDIES BUILDING, USNA, ANNAPOLIS, MD
Who is the contractor on this award?
The obligated recipient is TURNER CONSTRUCTION COMPANY.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Navy).
What is the total obligated amount?
The obligated amount is $136.9 million.
What is the period of performance?
Start: 2016-03-31. End: 2025-11-25.
What specific factors contributed to the awarded contract value being significantly higher than the initial budgeted revenue, and what measures are in place to control potential cost overruns?
The discrepancy between the awarded value ($136.9M) and budgeted revenue ($38.8M) warrants investigation. Potential factors include unforeseen site conditions, increased material costs, design changes, or an initial underestimation of project complexity. The Department of the Navy's oversight should include rigorous change order management, regular cost reviews, and performance monitoring to mitigate overruns and ensure the project stays within a justifiable financial scope.
How will the long project timeline (over 9 years) impact the effectiveness and relevance of the cybersecurity studies facility, considering the rapid evolution of technology?
The extended timeline presents a risk of the facility's technology and curriculum becoming outdated before completion. Mitigation strategies should include incorporating flexible design elements, planning for phased technology upgrades, and ensuring the curriculum development is agile and responsive to emerging cybersecurity threats and advancements. Continuous engagement with cybersecurity experts will be crucial to maintain relevance throughout the project's lifecycle.
What is the projected long-term return on investment for this cybersecurity facility in terms of enhancing national security and developing a skilled workforce?
The ROI is expected to be high, given the critical need for advanced cybersecurity expertise in national defense and critical infrastructure protection. The facility will directly contribute to training a specialized workforce, improving the U.S. Naval Academy's research capabilities, and fostering innovation in cybersecurity. Quantifying the exact ROI is challenging but the strategic importance of a robust cybersecurity posture makes this a vital investment.
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: TWO STEP
Solicitation ID: N4008015R0155
Offers Received: 12
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: ACS, Actividades DE Construccion Y Servicios, SA
Address: 375 HUDSON ST, NEW YORK, NY, 10014
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $144,918,612
Exercised Options: $136,897,007
Current Obligation: $136,897,007
Actual Outlays: $1,599,553
Subaward Activity
Number of Subawards: 24
Total Subaward Amount: $24,147,508
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2016-03-31
Current End Date: 2025-11-25
Potential End Date: 2025-11-25 00:00:00
Last Modified: 2025-09-11
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