DoD awards $531M design-build contract for Redstone Arsenal headquarters, raising value-for-money questions
Contract Overview
Contract Amount: $53,102,159 ($53.1M)
Contractor: BL Harbert International LLC
Awarding Agency: Department of Defense
Start Date: 2008-07-24
End Date: 2012-09-10
Contract Duration: 1,509 days
Daily Burn Rate: $35.2K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 9
Pricing Type: FIRM FIXED PRICE
Sector: Construction
Official Description: DESIGN/BUILD TWO PHASE CONSTRUCTION PF AMC/USASAC HEADQUARTERS, REDSTONE ARSENAL, ALABAMA.
Place of Performance
Location: HUNTSVILLE, MADISON County, ALABAMA, 35808
State: Alabama Government Spending
Plain-Language Summary
Department of Defense obligated $53.1 million to BL HARBERT INTERNATIONAL LLC for work described as: DESIGN/BUILD TWO PHASE CONSTRUCTION PF AMC/USASAC HEADQUARTERS, REDSTONE ARSENAL, ALABAMA. Key points: 1. The contract's large value suggests a significant investment in infrastructure. 2. Full and open competition was utilized, indicating a potentially broad market engagement. 3. The firm-fixed-price structure aims to transfer risk to the contractor. 4. Project duration of over 4 years necessitates robust oversight. 5. The award to a single large business raises questions about small business participation. 6. Construction sector spending is a significant portion of federal outlays.
Value Assessment
Rating: fair
The $531 million award for a design-build headquarters at Redstone Arsenal represents a substantial investment. Benchmarking this against similar large-scale federal construction projects is challenging without more granular cost breakdowns. However, the firm-fixed-price nature of the contract suggests an attempt to control costs, though the ultimate value-for-money will depend on the quality of the final facility and adherence to schedule. The duration of the contract also implies significant resource allocation.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, with nine bids received. This level of competition is generally positive for price discovery and suggests that multiple capable contractors were interested in the project. The presence of nine bidders indicates a healthy market for this type of large-scale construction service within the relevant geographic area.
Taxpayer Impact: A competitive bidding process helps ensure that taxpayer dollars are used efficiently by driving down prices and encouraging contractors to offer their best value.
Public Impact
The primary beneficiaries are the Department of Defense and its personnel at Redstone Arsenal, Alabama, who will gain a new headquarters facility. The project will deliver a modern, purpose-built facility designed to support the operational needs of AMC/USASAC. The geographic impact is concentrated in Huntsville, Alabama, stimulating local economic activity through construction jobs and related services. Workforce implications include the creation of numerous construction jobs, potentially benefiting skilled trades and project management professionals in the region.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns if design changes are extensive or unforeseen site conditions arise.
- Risk of schedule delays impacting the operational readiness of the supported units.
- Ensuring compliance with all environmental and safety regulations during construction.
- Adequacy of oversight to manage a multi-year, high-value construction project.
Positive Signals
- Firm-fixed-price contract structure shifts cost risk to the contractor.
- Full and open competition with nine bidders suggests a robust market response.
- Design-build approach can streamline project delivery by integrating design and construction.
- The project aims to consolidate and modernize critical headquarters functions.
Sector Analysis
This contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the broader construction industry. Federal spending in this area often supports critical infrastructure for government agencies. The market for large-scale federal design-build projects is competitive, with a mix of large prime contractors and specialized subcontractors. Comparable spending benchmarks would typically involve analyzing other large military or government facility construction awards.
Small Business Impact
The contract was awarded to BL Harbert International LLC, a large business, and there is no indication of a small business set-aside. Given the scale of the project, there may be opportunities for small businesses to participate as subcontractors. However, the primary award does not directly benefit small businesses through set-aside provisions, and their overall participation will depend on the prime contractor's subcontracting plan.
Oversight & Accountability
Oversight for this project would typically be managed by the Department of the Army's contracting and engineering divisions. Accountability measures would include adherence to contract terms, performance milestones, and quality standards. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.
Related Government Programs
- Military Construction Projects
- Department of Defense Facilities
- Design-Build Contracts
- Federal Building Construction
Risk Flags
- Potential for cost growth if scope changes significantly.
- Risk of schedule delays impacting operational readiness.
- Adequacy of oversight for a large, multi-year project.
- Ensuring small business participation through subcontracting.
Tags
construction, department-of-defense, department-of-the-army, alabama, definitive-contract, firm-fixed-price, full-and-open-competition, large-business, commercial-and-institutional-building-construction, headquarters-construction, design-build
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $53.1 million to BL HARBERT INTERNATIONAL LLC. DESIGN/BUILD TWO PHASE CONSTRUCTION PF AMC/USASAC HEADQUARTERS, REDSTONE ARSENAL, ALABAMA.
Who is the contractor on this award?
The obligated recipient is BL HARBERT INTERNATIONAL LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $53.1 million.
What is the period of performance?
Start: 2008-07-24. End: 2012-09-10.
What is the track record of BL Harbert International LLC with large federal design-build contracts?
BL Harbert International LLC has a significant track record with large federal design-build projects, particularly within the Department of Defense. They have been awarded numerous contracts for military facilities, including barracks, training centers, and administrative buildings, often in overseas locations as well as CONUS. Their experience includes managing complex projects from initial design through final construction, often under firm-fixed-price agreements. Reviewing their past performance on similar scale projects, including any reported cost variances or schedule adherence issues, would provide further insight into their capability to execute this Redstone Arsenal headquarters contract successfully. Data from contract databases often shows their award history and contract values, which can be compared to this current award.
How does the $531 million cost compare to similar federal headquarters construction projects?
Directly comparing the $531 million cost to similar federal headquarters construction projects requires careful consideration of project scope, size, location, and specific requirements. Large-scale federal facilities, especially those requiring specialized design and robust security features, can vary significantly in cost. For instance, a headquarters building in a high-cost-of-living area or one with extensive technological integration might command a higher price. Benchmarking would involve identifying projects of comparable square footage, complexity (e.g., LEED certification requirements, specific infrastructure needs), and construction type (e.g., design-build vs. traditional design-bid-build) awarded within a similar timeframe. Without these specific comparative data points, it's difficult to definitively state whether $531 million represents a high, low, or average cost for this type of federal facility.
What are the primary risks associated with a multi-year design-build construction project of this magnitude?
The primary risks associated with a multi-year design-build construction project of this magnitude include potential cost overruns due to unforeseen site conditions, material price escalation, or scope creep. Schedule delays are another significant risk, stemming from weather, labor shortages, supply chain disruptions, or contractor performance issues. Design risks can arise if the integrated design-build process doesn't adequately address all functional requirements or if constructability issues are not identified early. Furthermore, managing a project of this scale requires robust oversight to ensure quality control, safety compliance, and adherence to environmental regulations. The firm-fixed-price nature transfers some cost risk to the contractor, but significant overruns could still impact project completion or lead to disputes.
How effective is the firm-fixed-price (FFP) contract type in controlling costs for large federal construction projects?
The firm-fixed-price (FFP) contract type is generally considered effective in controlling costs for large federal construction projects, as it places the primary cost risk on the contractor. Under an FFP agreement, the contractor is obligated to complete the work for a predetermined price, regardless of their actual costs. This incentivizes the contractor to manage their expenses efficiently and accurately estimate project costs upfront. However, the effectiveness of FFP can be diminished if the initial cost estimate is flawed, if significant unforeseen conditions arise that necessitate contract modifications (which can add cost), or if the government's requirements change substantially during the project. For complex projects like headquarters construction, a well-defined scope and thorough pre-construction planning are crucial for FFP to achieve its cost-control objectives.
What historical spending patterns exist for similar construction projects at Redstone Arsenal or within the Army Corps of Engineers?
Historical spending patterns for similar construction projects at Redstone Arsenal and within the Army Corps of Engineers (which often oversees such facilities) reveal a consistent and substantial investment in infrastructure. These patterns typically show a significant allocation of funds towards new construction, renovations, and upgrades of military installations to support evolving operational needs and personnel. Projects often range from tens to hundreds of millions of dollars, depending on scale and complexity. Design-build contracts have become increasingly common for efficiency. Analyzing past awards for similar facilities (e.g., command centers, research facilities, administrative complexes) at Redstone Arsenal or comparable Army posts can provide context for the $531 million award, indicating whether this represents a typical investment level or an outlier based on specific project drivers.
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
Offers Received: 9
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: B.L. Harbert Holdings, L.L.C. (UEI: 147371236)
Address: 820 SHADES CREEK, BIRMINGHAM, AL, 35209
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $137,338,575
Exercised Options: $137,338,575
Current Obligation: $53,102,159
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2008-07-24
Current End Date: 2012-09-10
Potential End Date: 2012-09-10 00:00:00
Last Modified: 2021-02-23
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