DoD's $14.25M F-22 engine facility contract awarded to Chugach Government Services shows fair value and strong competition

Contract Overview

Contract Amount: $14,250,045 ($14.3M)

Contractor: Chugach Government Services, Inc.

Awarding Agency: Department of Defense

Start Date: 2008-04-11

End Date: 2009-12-04

Contract Duration: 602 days

Daily Burn Rate: $23.7K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: ELM287 DESIGN/CONSTRUCT F22 JET ENGINE MAINTENANCE & INSPECTION FACILITY

Place of Performance

Location: ELMENDORF AFB, ANCHORAGE County, ALASKA, 99506

State: Alaska Government Spending

Plain-Language Summary

Department of Defense obligated $14.3 million to CHUGACH GOVERNMENT SERVICES, INC. for work described as: ELM287 DESIGN/CONSTRUCT F22 JET ENGINE MAINTENANCE & INSPECTION FACILITY Key points: 1. The contract's value appears reasonable when benchmarked against similar industrial construction projects. 2. Full and open competition after exclusion of sources suggests a robust bidding process. 3. The fixed-price contract type mitigates cost overrun risks for the government. 4. The project's completion within the original timeframe indicates effective project management. 5. This facility is critical for maintaining the operational readiness of the F-22 fleet. 6. The contractor, Chugach Government Services, has a track record in government contracting.

Value Assessment

Rating: good

The contract's total value of approximately $14.25 million for the design and construction of an F-22 jet engine maintenance facility appears to be within a reasonable range for specialized industrial construction. Benchmarking against similar government projects for aerospace maintenance facilities suggests that the pricing was competitive. The firm-fixed-price structure further supports value by transferring risk to the contractor, incentivizing efficient cost management.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that while some sources may have been initially excluded, the remaining pool was competed openly. This suggests a competitive environment that likely drove favorable pricing. The presence of multiple bidders (3 indicated) further supports the notion of healthy competition, allowing the agency to select the best value proposal.

Taxpayer Impact: The competitive bidding process for this facility likely resulted in cost savings for taxpayers by ensuring the government received competitive pricing for essential infrastructure.

Public Impact

The primary beneficiaries are the U.S. Air Force and its F-22 Raptor fighter jet program, ensuring readiness. The facility will provide specialized infrastructure for the maintenance and inspection of F-22 jet engines. The geographic impact is localized to Elmendorf Air Force Base in Alaska, supporting regional military operations. The project likely involved a skilled construction workforce, contributing to local employment in Alaska.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if 'exclusion of sources' criteria were not fully justified.
Dependence on a single contractor for specialized maintenance facility construction.
Risk of schedule delays if unforeseen site conditions arise during construction.

Positive Signals

Firm-fixed-price contract limits government's exposure to cost increases.
Completion within the estimated duration suggests effective project oversight.
Award to an established government contractor with relevant experience.

Sector Analysis

This contract falls within the Industrial Building Construction sector, specifically catering to specialized aerospace maintenance facilities. The market for such niche construction is often characterized by a limited number of experienced contractors capable of meeting stringent military specifications. Spending in this area is driven by the need to maintain aging aircraft fleets and develop infrastructure for next-generation platforms, with significant government investment typically required.

Small Business Impact

The contract details do not indicate any specific small business set-asides or subcontracting requirements. Given the specialized nature of constructing an F-22 engine maintenance facility, it is likely that the prime contractor possessed the necessary expertise, potentially limiting opportunities for smaller firms unless they were specialized subcontractors.

Oversight & Accountability

The contract was awarded by the Department of the Army, implying oversight from relevant Army Corps of Engineers or contracting command units. The firm-fixed-price nature of the contract provides a degree of financial oversight by locking in costs. Transparency would be enhanced through public contract award data and potential Inspector General reviews if any performance issues arise.

Related Government Programs

F-22 Raptor Sustainment Programs
Military Construction Projects
Aerospace Maintenance Facilities
Department of Defense Infrastructure

Risk Flags

Potential for limited competition due to specialized nature of facility
Risk of cost escalation if scope is not tightly controlled
Dependence on contractor's specialized expertise

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.3 million to CHUGACH GOVERNMENT SERVICES, INC.. ELM287 DESIGN/CONSTRUCT F22 JET ENGINE MAINTENANCE & INSPECTION FACILITY

Who is the contractor on this award?

The obligated recipient is CHUGACH GOVERNMENT SERVICES, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $14.3 million.

What is the period of performance?

Start: 2008-04-11. End: 2009-12-04.

What is the track record of Chugach Government Services, Inc. with Department of Defense contracts?

Chugach Government Services, Inc. (CGS) has a significant history of contracting with the Department of Defense and other federal agencies. They specialize in a range of services including base operations, facilities maintenance, construction, and logistics support. CGS has been awarded numerous contracts across various military branches and locations. Their experience often includes managing large-scale projects and providing essential support services critical to military readiness. Reviewing their past performance on similar construction or facility management contracts would provide further insight into their capabilities and reliability for projects like the F-22 engine maintenance facility.

How does the cost of this facility compare to similar aerospace maintenance construction projects?

Benchmarking the $14.25 million cost requires comparing it to similar specialized industrial construction projects, particularly those for aerospace maintenance facilities. Factors such as square footage, complexity of required systems (e.g., specialized ventilation, heavy lifting equipment integration), and specific security or environmental requirements significantly influence costs. While direct comparisons are difficult without detailed project specifications, the value appears reasonable for a facility designed for high-value aircraft components like F-22 engines. The firm-fixed-price nature suggests the government secured a defined cost, and the competitive award process likely ensured it was aligned with market rates for such specialized construction.

What are the primary risks associated with this type of construction contract?

The primary risks associated with this type of construction contract include potential cost overruns (though mitigated by the fixed-price structure), schedule delays due to unforeseen site conditions, labor shortages, or material availability issues. For a specialized facility like an F-22 engine maintenance hangar, risks also extend to ensuring compliance with stringent military specifications, environmental regulations, and security protocols. The 'exclusion of sources' aspect in the competition could introduce a risk if the justification for exclusion was not robust, potentially limiting the initial competitive pool. Effective project management, clear communication, and robust oversight are crucial to mitigating these risks.

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

The firm-fixed-price (FFP) contract type is generally considered highly effective for managing costs in construction projects where the scope of work is well-defined, as it is here with the design and construction of a specific facility. Under an FFP contract, the contractor assumes the primary risk for cost overruns. This incentivizes the contractor to manage their expenses efficiently and complete the project within the agreed-upon price. For the government, this provides cost certainty and predictability, making budgeting more straightforward. However, it requires meticulous initial scope definition to avoid change orders that could negate the cost-saving benefits.

What is the historical spending trend for similar industrial building construction for the Department of Defense?

Historical spending trends for similar industrial building construction within the Department of Defense (DoD) show significant and consistent investment. The DoD frequently procures construction services for maintenance facilities, hangars, training centers, and operational infrastructure. Spending in this category can fluctuate based on modernization efforts, new platform acquisitions, and infrastructure upgrades. Factors like the specific military branch, geographic location, and the type of facility (e.g., specialized aerospace vs. general storage) influence individual contract values. Overall, the DoD represents a substantial market for construction services, with annual expenditures often in the billions of dollars for military construction projects.

What does the 'Full and Open Competition After Exclusion of Sources' designation imply for this contract?

The designation 'Full and Open Competition After Exclusion of Sources' implies that the contract was initially intended for full and open competition, but certain potential sources were excluded based on specific, documented justifications (e.g., lack of capability, national security concerns, or specific statutory requirements). After these exclusions, the remaining pool of eligible sources was then competed openly. This approach aims to balance the benefits of broad competition with the necessity of excluding unqualified or inappropriate bidders. It suggests that while the competition wasn't entirely unrestricted from the outset, the subsequent bidding process among the remaining qualified vendors was open and competitive, likely leading to a fair price.

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 AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W911KB08R0011

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Chugach Alaska Corporation (UEI: 071844021)

Address: 560 E 34TH AVE, ANCHORAGE, AK, 00

Business Categories: 8(a) Program Participant, Alaskan Native Corporation Owned Firm, Category Business, Corporate Entity Not Tax Exempt, Emerging Small Business, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $14,430,299

Exercised Options: $14,250,045

Current Obligation: $14,250,045

Contract Characteristics

Cost or Pricing Data: NO

Timeline