Army awards $133M hangar construction contract to Federal Contracting Inc. for Global Hawk maintenance

Contract Overview

Contract Amount: $13,325,240 ($13.3M)

Contractor: Federal Contracting Inc

Awarding Agency: Department of Defense

Start Date: 2006-08-23

End Date: 2008-03-28

Contract Duration: 583 days

Daily Burn Rate: $22.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: GLOBAL HAWK TWO BAY MAINTENANCE HANGAR

Place of Performance

Location: BEALE AFB, YUBA County, CALIFORNIA, 95903

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $13.3 million to FEDERAL CONTRACTING INC for work described as: GLOBAL HAWK TWO BAY MAINTENANCE HANGAR Key points: 1. Contract value appears reasonable for specialized aviation facility construction. 2. Full and open competition suggests a competitive bidding process. 3. Fixed-price contract shifts risk to the contractor. 4. Project duration of 583 days is standard for construction of this scale. 5. Location in California may influence labor and material costs. 6. No small business set-aside indicates a focus on larger prime contractors.

Value Assessment

Rating: good

The contract value of $133.25 million for a Global Hawk maintenance hangar appears within a reasonable range for specialized military construction projects. Benchmarking against similar large-scale aviation facility constructions would provide a more precise value-for-money assessment. The firm fixed-price structure suggests that the initial pricing was deemed acceptable, with the contractor assuming cost overruns.

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 4 bidders suggests a healthy level of competition for this significant construction project. This competitive environment is generally favorable for price discovery and achieving a fair market price.

Taxpayer Impact: Taxpayers benefit from the competitive bidding process, which aims to secure the best value by encouraging multiple contractors to offer their most competitive pricing.

Public Impact

The primary beneficiaries are the U.S. Army and its aviation units, ensuring operational readiness for Global Hawk aircraft. The project delivers a critical infrastructure asset: a dedicated maintenance hangar. The geographic impact is localized to the specific Army installation in California where the hangar will be built. Workforce implications include job creation for construction workers, engineers, and project managers in the local California area.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions arise, despite fixed-price contract.
Delays in construction could impact operational readiness of Global Hawk units.
Dependency on specific subcontractors could introduce supply chain risks.

Positive Signals

Firm fixed-price contract mitigates budget uncertainty for the government.
Full and open competition suggests a robust selection process.
Experienced contractor likely selected based on qualifications and past performance.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, specifically catering to specialized defense infrastructure needs. The market for constructing large-scale aviation facilities is competitive, with significant players capable of undertaking complex projects. This contract represents a substantial investment in maintaining and enhancing the operational capabilities of advanced unmanned aerial systems.

Small Business Impact

The absence of small business set-asides suggests that the prime contract was awarded to a larger firm capable of managing a project of this magnitude. While there's no direct set-aside, Federal Contracting Inc. may engage small businesses as subcontractors for specialized services or materials, contributing to the broader small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant Army contracting command. Accountability measures are embedded in the firm fixed-price contract terms, requiring the contractor to deliver the specified facility within budget. Transparency is generally maintained through contract award databases, though detailed project progress reports may be internal.

Related Government Programs

Military Construction Projects
Aviation Facility Construction
Department of Defense Infrastructure
Global Hawk Program Support

Risk Flags

Potential for cost overruns impacting contractor profitability.
Risk of construction delays affecting operational readiness.
Dependency on subcontractor performance.
Ensuring quality standards are met under fixed-price terms.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $13.3 million to FEDERAL CONTRACTING INC. GLOBAL HAWK TWO BAY MAINTENANCE HANGAR

Who is the contractor on this award?

The obligated recipient is FEDERAL CONTRACTING 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 $13.3 million.

What is the period of performance?

Start: 2006-08-23. End: 2008-03-28.

What is the track record of Federal Contracting Inc. on similar government construction projects?

A review of Federal Contracting Inc.'s past performance on government contracts would be crucial. Specifically, examining their history with large-scale construction, aviation facilities, and projects of similar value ($133M+) would provide insight into their reliability, quality of work, and ability to meet deadlines and budgets. Data on any past disputes, contract modifications, or performance issues would also be relevant for assessing their suitability for this project.

How does the awarded price compare to industry benchmarks for similar hangar construction?

To assess value for money, the awarded price of $133.25 million should be benchmarked against industry data for constructing specialized aviation maintenance hangars. Factors such as square footage, specialized equipment requirements (e.g., ventilation, cranes), and location-specific construction costs (labor, materials) would need to be considered. Without specific comparable projects, it's difficult to definitively state if this price represents excellent or fair value, but the competitive bidding process suggests it is market-driven.

What are the primary risks associated with this firm fixed-price contract?

The primary risk with a firm fixed-price contract lies with the contractor, Federal Contracting Inc. They bear the financial responsibility for any cost overruns that may occur during construction. However, risks to the government could include potential compromises in quality if the contractor seeks to cut costs aggressively, or delays if the contractor faces financial difficulties. Unforeseen site conditions or scope creep not adequately managed could also pose risks.

How effective is the 'full and open competition' strategy in ensuring optimal pricing for defense construction?

Full and open competition is generally considered the most effective strategy for ensuring optimal pricing in defense construction. By allowing all responsible sources to bid, it maximizes the pool of potential contractors, fostering a competitive environment that drives down prices and encourages innovation. The presence of 4 bidders in this case indicates that the strategy was successful in attracting multiple interested parties, likely leading to a more competitive bid than a sole-source or limited competition scenario.

What is the historical spending pattern for Global Hawk maintenance facilities by the Department of the Army?

Analyzing historical spending patterns for Global Hawk maintenance facilities by the Department of the Army would provide context for the $133.25 million award. This would involve examining previous contracts for similar facilities, their costs, durations, and the contractors involved. Understanding whether this award represents an increase, decrease, or stable level of investment in such infrastructure can inform future budget planning and identify trends in maintenance facility needs.

Are there any specific performance metrics or KPIs tied to this construction contract?

While the schema doesn't detail specific performance metrics, construction contracts of this nature typically include performance standards related to schedule adherence, quality of workmanship, safety compliance, and adherence to specifications. The contracting officer and project managers would monitor these aspects. Failure to meet key performance indicators could lead to penalties or withholding of payments, as stipulated in the contract's terms and conditions.

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: W9123806R0007

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 7025 CAMPUS DRIVE, COLORADO SPRINGS, CO, 05

Business Categories: Category Business, Emerging Small Business, Not Designated a Small Business, Service Disabled Veteran Owned Business, Small Business, Special Designations, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $13,325,240

Exercised Options: $13,325,240

Current Obligation: $13,325,240

Contract Characteristics

Cost or Pricing Data: NO

Timeline