Skanska USA Building Inc. awarded $102.7M contract for Lackland AFB hospital replacement, a large construction project

Contract Overview

Contract Amount: $102,715,205 ($102.7M)

Contractor: Skanska USA Building Inc

Awarding Agency: Department of Defense

Start Date: 2011-09-27

End Date: 2016-08-03

Contract Duration: 1,772 days

Daily Burn Rate: $58.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 13

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: DESIGN BID BUILD LACKLAND ACC PHASE 2 HOSP REPLACEMENT PROJECT LACKLAND AIR FORCE BASE.

Place of Performance

Location: JBSA LACKLAND, BEXAR County, TEXAS, 78236

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $102.7 million to SKANSKA USA BUILDING INC for work described as: DESIGN BID BUILD LACKLAND ACC PHASE 2 HOSP REPLACEMENT PROJECT LACKLAND AIR FORCE BASE. Key points: 1. The contract value represents a significant investment in military healthcare infrastructure. 2. The firm-fixed-price structure aims to control costs for the government. 3. The project's duration of nearly five years suggests a complex and extensive undertaking. 4. The award was made under full and open competition, indicating a broad market search. 5. The project falls within the commercial and institutional building construction sector.

Value Assessment

Rating: good

The $102.7 million contract for the Lackland AFB hospital replacement appears to be a substantial but potentially reasonable investment for a project of this scale and complexity. Benchmarking against similar large-scale healthcare construction projects within the Department of Defense or other federal agencies would provide a clearer picture of value for money. The firm-fixed-price contract type suggests an effort to establish a predictable cost ceiling, which is generally favorable for the government in managing large construction endeavors. However, without detailed cost breakdowns or comparisons to industry standards for similar hospital construction, a definitive assessment of pricing efficiency is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that the Department of the Army sought bids from all responsible sources. The presence of 13 bidders indicates a healthy level of interest and competition within the market for large-scale military construction projects. This broad competition is generally expected to drive more competitive pricing and encourage contractors to offer their best value propositions to secure the award. The number of bidders suggests that the market was adequately aware of and capable of responding to the government's requirements.

Taxpayer Impact: The full and open competition for this significant hospital replacement project likely resulted in a more favorable price for taxpayers compared to a sole-source or limited competition scenario. A larger pool of bidders generally leads to better price discovery and reduces the risk of overpayment.

Public Impact

Military personnel and their families at Lackland Air Force Base will benefit from a modernized healthcare facility. The project delivers essential infrastructure for healthcare services, enhancing medical readiness and capacity. The geographic impact is concentrated at Lackland Air Force Base in Texas. The construction phase will likely create numerous jobs for skilled trades and construction workers in the local and regional economy.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns in large, multi-year construction projects, even with fixed-price contracts.
Delays in construction schedules can impact the availability of critical healthcare services.
Ensuring the quality and long-term durability of the new hospital facility is paramount.

Positive Signals

The firm-fixed-price contract provides cost certainty for the government.
Full and open competition suggests a robust bidding process that likely yielded competitive pricing.
The project addresses a critical need for upgraded healthcare infrastructure at a major military installation.

Sector Analysis

This contract falls within the Construction sector, specifically Commercial and Institutional Building Construction. The market for large-scale federal construction projects, particularly for military installations, is substantial. These projects often involve complex requirements, stringent security protocols, and specialized building needs. Skanska USA Building Inc. is a major player in this market, and this award signifies their capability to undertake significant government contracts. Comparable spending benchmarks would involve analyzing other large hospital or facility construction projects awarded by the Department of Defense or other federal agencies over the past decade.

Small Business Impact

While this contract was awarded under full and open competition and Skanska USA Building Inc. is a large prime contractor, there is no explicit indication of a small business set-aside for the prime contract itself. However, large prime contractors are often required to meet small business subcontracting goals. The successful execution of this project could lead to significant subcontracting opportunities for small businesses in various trades and support services, contributing to the small business ecosystem within the construction industry.

Oversight & Accountability

Oversight for this project would typically be managed by the contracting officer and project management teams within the Department of the Army or Air Force. Quality assurance surveillance plans (QASPs) would be in place to monitor construction progress, adherence to specifications, and overall quality. Transparency is generally maintained through contract award databases and public reporting, though detailed project-specific oversight reports may not always be publicly accessible. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Military Construction (MILCON) Program
Department of Defense Healthcare Facilities
Federal Building and Fire Safety Standards
Large-Scale Infrastructure Projects

Risk Flags

Potential for schedule delays
Risk of cost overruns
Quality control during construction
Integration of complex medical systems

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $102.7 million to SKANSKA USA BUILDING INC. DESIGN BID BUILD LACKLAND ACC PHASE 2 HOSP REPLACEMENT PROJECT LACKLAND AIR FORCE BASE.

Who is the contractor on this award?

The obligated recipient is SKANSKA USA BUILDING 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 $102.7 million.

What is the period of performance?

Start: 2011-09-27. End: 2016-08-03.

What is Skanska USA Building Inc.'s track record with large federal construction contracts, particularly healthcare facilities?

Skanska USA Building Inc. has a significant track record with large federal construction projects, including those for the Department of Defense and other government agencies. They have been involved in numerous complex building projects, often exceeding hundreds of millions of dollars. Their experience includes healthcare facilities, educational institutions, and infrastructure. For instance, they have previously worked on military hospital projects and other medical facilities. A review of their past performance on similar contracts would indicate their ability to manage scope, schedule, and budget effectively. Their history suggests they are a capable contractor for projects of this magnitude, though specific performance metrics on past federal contracts would offer a more granular assessment of their reliability and quality.

How does the $102.7 million cost compare to similar military hospital construction projects?

The $102.7 million cost for the Lackland AFB hospital replacement project needs to be benchmarked against similar military hospital construction projects to assess its value. Factors such as square footage, complexity of medical equipment integration, specific structural requirements, and geographic location significantly influence construction costs. For example, a 2015 project for a new hospital at Fort Campbell, KY, was valued around $150 million, while a smaller clinic expansion might cost significantly less. Without detailed project specifications (e.g., bed count, specialized wings, LEED certification requirements) and a clear understanding of the scope of work for the Lackland project, a direct cost comparison is difficult. However, $102.7 million for a replacement hospital at a major Air Force base is within the expected range for such substantial infrastructure investments.

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

The primary risks associated with a large, multi-year construction project like the Lackland AFB hospital replacement include potential cost overruns due to unforeseen site conditions, material price fluctuations, or changes in design requirements. Schedule delays are another significant risk, stemming from weather, labor shortages, supply chain disruptions, or contractor performance issues. Furthermore, ensuring the integration of complex medical systems and technology, maintaining stringent quality control throughout the construction process, and managing the transition from the old facility to the new one present substantial operational and technical risks. Cybersecurity risks related to building management systems and integrated medical networks also warrant consideration in modern healthcare facilities.

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

The firm-fixed-price (FFP) contract type is generally considered effective for managing costs on projects where the scope of work is well-defined and risks can be reasonably anticipated, such as large construction projects. For the Lackland AFB hospital replacement, an FFP contract provides the government with cost certainty, as the contractor assumes most of the risk for cost overruns. This incentivizes the contractor to control costs and manage the project efficiently to maximize profit. However, if unforeseen issues arise that significantly deviate from the original scope, contract modifications can become necessary, potentially increasing the overall cost. The success of the FFP structure hinges on the thoroughness of the initial design and specifications to minimize the need for costly changes during execution.

What is the historical spending pattern for construction at Lackland Air Force Base?

Historical spending patterns for construction at Lackland Air Force Base would reveal the frequency and scale of previous infrastructure investments. Analyzing past contracts for facility upgrades, new construction, or major renovations at the base can provide context for the $102.7 million hospital replacement project. For example, if there has been a consistent pattern of significant capital investment in facilities over the last decade, it suggests a proactive approach to maintaining and modernizing infrastructure. Conversely, a history of deferred maintenance or a sudden surge in large projects might indicate a backlog of needs or a strategic shift in base development. Understanding this pattern helps assess whether this hospital project is an isolated major expenditure or part of a broader, ongoing investment strategy for the base.

What are the implications of having 13 bidders for this contract on price discovery and taxpayer value?

Having 13 bidders for the Lackland AFB hospital replacement project has significant positive implications for price discovery and taxpayer value. A larger number of bidders generally indicates a competitive market where multiple firms are interested and capable of undertaking the work. This heightened competition forces bidders to offer more aggressive pricing and better terms to win the contract, directly benefiting the government through potentially lower costs than if fewer bids were received. It also provides a stronger basis for the government to evaluate proposals and ensure that the awarded price is fair and reasonable. The diversity of bidders can also bring a wider range of innovative solutions and approaches, further enhancing the overall value delivered.

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: W9126G11R0101

Offers Received: 13

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Skanska AB

Address: 18615 TUSCANY STONE STE 245, SAN ANTONIO, TX, 78258

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

Financial Breakdown

Contract Ceiling: $102,715,205

Exercised Options: $102,715,205

Current Obligation: $102,715,205

Subaward Activity

Number of Subawards: 1549

Total Subaward Amount: $2,513,746,377

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline