Navy awards $96.6M contract for runway repairs at NAS Oceana, with Lane Construction winning the bid

Contract Overview

Contract Amount: $96,576,809 ($96.6M)

Contractor: THE Lane Construction Corporation

Awarding Agency: Department of Defense

Start Date: 2015-06-30

End Date: 2018-07-19

Contract Duration: 1,115 days

Daily Burn Rate: $86.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF REPAIR RUNWAY 14 LEFT 32 RIGHT PAVEMENT AND LIGHTING, NAS OCEANA, VIRGINIA BEACH, VA

Place of Performance

Location: VIRGINIA BEACH, VIRGINIA BEACH CITY County, VIRGINIA, 23460

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $96.6 million to THE LANE CONSTRUCTION CORPORATION for work described as: IGF::OT::IGF REPAIR RUNWAY 14 LEFT 32 RIGHT PAVEMENT AND LIGHTING, NAS OCEANA, VIRGINIA BEACH, VA Key points: 1. The contract value of $96.6 million represents a significant investment in critical infrastructure at Naval Air Station Oceana. 2. The use of a 'Definitive Contract' with a 'Firm Fixed Price' suggests a clear scope and budget, aiming to control costs. 3. The award to The Lane Construction Corporation indicates a competitive selection process for this substantial project. 4. The duration of 1115 days (approximately 3 years) points to a complex and lengthy repair and upgrade process. 5. The project focuses on essential pavement and lighting for runways, directly impacting operational readiness and safety. 6. The absence of small business set-aside flags suggests the primary contractor is likely a large business, with potential subcontracting opportunities.

Value Assessment

Rating: good

The contract value of $96.6 million for runway repair and lighting at NAS Oceana appears reasonable given the scope and duration. While direct comparisons are difficult without specific project details, major airfield infrastructure projects of this scale typically run into tens of millions of dollars. The firm fixed-price nature of the contract provides cost certainty for the government, assuming the scope was well-defined. Benchmarking against similar runway repair contracts would require more granular data on square footage, materials, and specific repair types, but the overall investment aligns with the critical nature of naval aviation infrastructure.

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 3 bidders suggests a moderate level of competition for this significant infrastructure project. A competitive process like this generally leads to better price discovery and ensures the government receives proposals from multiple qualified contractors, potentially driving down costs and improving the quality of the final product.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure the best value for the significant investment in critical naval aviation infrastructure.

Public Impact

Naval Air Station Oceana and its operational readiness are the primary beneficiaries, ensuring safe and efficient flight operations. The project delivers essential repairs and upgrades to runway pavement and lighting systems, enhancing safety and functionality. The geographic impact is localized to Virginia Beach, Virginia, where NAS Oceana is located. The contract supports the defense sector's infrastructure needs, indirectly impacting the military personnel and operations based at the facility. While specific workforce numbers are not detailed, the project likely creates employment opportunities in construction and related trades during its multi-year duration.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen subsurface conditions or material price escalations occur, despite the fixed-price nature.
Risk of schedule delays due to weather, contractor performance, or unforeseen complexities in the aging infrastructure.
Dependence on the performance and financial stability of The Lane Construction Corporation for successful project completion.
Ensuring compliance with environmental regulations and historical preservation requirements during extensive construction activities.

Positive Signals

The firm fixed-price contract structure provides strong cost control incentives for the contractor.
Awarding to a known entity like The Lane Construction Corporation, which likely has a track record in similar projects, can reduce execution risk.
The 'Full and Open Competition' process suggests a thorough vetting of potential bidders and a focus on selecting a capable contractor.
The long duration allows for phased repairs, potentially minimizing disruption to ongoing base operations.

Sector Analysis

This contract falls within the Highway, Street, and Bridge Construction sector (NAICS 237310), specifically addressing airfield infrastructure. The market for large-scale civil engineering and construction projects, particularly those supporting government and military facilities, is substantial. Comparable spending benchmarks for airfield pavement and lighting projects vary widely based on size, complexity, and location, but projects in the tens of millions are common for major air installations. This contract represents a significant investment in maintaining and upgrading critical defense infrastructure.

Small Business Impact

The contract was not awarded as a small business set-aside, and the 'sb' (small business) flag is false. This indicates that the primary contract was likely awarded to a large business. While there are no explicit subcontracting goals mentioned in the provided data, large federal construction contracts often include provisions for small business participation. The Lane Construction Corporation may engage small businesses for specialized services or material supply, contributing to the small business ecosystem, but this is not guaranteed by the contract terms alone.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and engineering divisions, ensuring adherence to contract terms, specifications, and quality standards. The firm fixed-price nature provides a degree of accountability by linking payment to deliverables. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected during the contract's performance or closeout.

Related Government Programs

Naval Facilities Engineering Command (NAVFAC) Contracts
Airfield Pavement and Lighting Projects
Department of Defense Infrastructure Modernization
Major Construction Contracts
Firm Fixed Price Contracts
Highway, Street, and Bridge Construction

Risk Flags

Potential for schedule delays
Risk of unforeseen site conditions
Material price escalation over contract duration
Contractor performance risk
Ensuring environmental compliance

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $96.6 million to THE LANE CONSTRUCTION CORPORATION. IGF::OT::IGF REPAIR RUNWAY 14 LEFT 32 RIGHT PAVEMENT AND LIGHTING, NAS OCEANA, VIRGINIA BEACH, VA

Who is the contractor on this award?

The obligated recipient is THE LANE CONSTRUCTION CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $96.6 million.

What is the period of performance?

Start: 2015-06-30. End: 2018-07-19.

What is the track record of The Lane Construction Corporation with the Department of Defense?

The Lane Construction Corporation has a significant history of working with the Department of Defense and other federal agencies on large-scale infrastructure projects. Their portfolio includes numerous contracts for road construction, bridge repair, airfield improvements, and other civil engineering works. While specific performance metrics for past DoD contracts are not detailed here, their continued success in winning competitive bids for substantial projects suggests a generally positive track record. Further analysis would involve reviewing past performance evaluations and any documented issues or commendations on previous government contracts.

How does the $96.6 million cost compare to similar runway repair projects at other naval air stations?

Directly comparing the $96.6 million cost requires detailed project specifications (e.g., square footage of pavement, type of repairs, lighting system complexity, specific site conditions). However, major airfield infrastructure projects at large naval air stations are consistently multi-million dollar endeavors. For instance, similar runway rehabilitation projects at other bases have ranged from $50 million to over $150 million depending on the scope. The Lane Construction Corporation's bid appears to be within the expected range for a comprehensive runway repair and lighting upgrade at a facility like NAS Oceana, especially considering the project's duration of approximately three years.

What are the primary risks associated with a project of this magnitude and duration?

The primary risks associated with this project include potential cost overruns due to unforeseen site conditions (e.g., subsurface issues, environmental remediation needs), material price escalation over the multi-year duration, and schedule delays caused by adverse weather, contractor performance issues, or changes in operational requirements at the base. There's also a risk related to the long-term durability of the repairs and the effectiveness of the new lighting systems. Ensuring robust project management, contingency planning, and clear communication channels between the Navy and The Lane Construction Corporation are crucial for mitigating these risks.

How effective is the firm fixed-price contract type in managing costs for this type of infrastructure project?

The firm fixed-price (FFP) contract type is generally considered effective for managing costs in infrastructure projects where the scope of work can be clearly defined upfront, as is often the case with runway repairs. FFP places the primary cost risk on the contractor, incentivizing them to control expenses and complete the work efficiently to maximize profit. For the government, it provides budget certainty. However, if unforeseen issues arise that necessitate significant scope changes, the FFP structure can lead to costly change orders, potentially negating some of the initial cost-saving benefits. Careful initial scope definition and management are key to maximizing FFP's effectiveness.

What is the historical spending trend for airfield maintenance and repair at the Department of the Navy?

Historical spending by the Department of the Navy (DoN) on airfield maintenance and repair has been substantial and consistent, reflecting the critical need to maintain operational readiness across its numerous air installations. Annual expenditures typically run into the hundreds of millions of dollars, allocated across various projects such as runway resurfacing, lighting upgrades, taxiway repairs, and apron improvements. This spending is influenced by factors like aging infrastructure, operational tempo, and modernization requirements. The $96.6 million award for NAS Oceana fits within this broader pattern of significant, ongoing investment in naval aviation infrastructure.

What are the implications of 'Full and Open Competition' versus other contract award methods for taxpayer value?

Full and Open Competition generally offers the best potential for taxpayer value because it maximizes the pool of potential bidders, fostering robust price competition and encouraging innovation. By allowing all responsible sources to compete, the government is more likely to receive the lowest possible price for the required goods or services, coupled with high quality. In contrast, limited competition or sole-source awards typically result in higher prices and reduced pressure on the contractor to be efficient, potentially leading to less value for taxpayer dollars. The presence of multiple bidders in this case suggests a competitive environment that benefits taxpayers.

Industry Classification

NAICS: Construction › Highway, Street, and Bridge Construction › Highway, Street, and Bridge 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: N4008515R0052

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Webuild S.P.A.

Address: 90 FIELDSTONE CT, CHESHIRE, CT, 06410

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

Financial Breakdown

Contract Ceiling: $96,576,809

Exercised Options: $96,576,809

Current Obligation: $96,576,809

Subaward Activity

Number of Subawards: 28

Total Subaward Amount: $47,381,060

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline