DoD's $88M Nellis Air Force Base project awarded to Walsh Construction for Design-Build-Initial-Outfitting

Contract Overview

Contract Amount: $88,186,709 ($88.2M)

Contractor: Walsh Construction Company II, LLC

Awarding Agency: Department of Defense

Start Date: 2020-09-29

End Date: 2025-09-30

Contract Duration: 1,827 days

Daily Burn Rate: $48.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: DESIGN BUILD INITIAL OUTFITTING (DBIO), NELLIS ADB, NV

Place of Performance

Location: LAS VEGAS, CLARK County, NEVADA, 89115

State: Nevada Government Spending

Plain-Language Summary

Department of Defense obligated $88.2 million to WALSH CONSTRUCTION COMPANY II, LLC for work described as: DESIGN BUILD INITIAL OUTFITTING (DBIO), NELLIS ADB, NV Key points: 1. The contract's firm-fixed-price structure aims to control costs for the Department of Defense. 2. With 3 bidders, competition was present but could potentially be stronger for optimal price discovery. 3. The project's duration of 1827 days suggests a complex undertaking with potential for schedule-related risks. 4. This contract falls under commercial and institutional building construction, a sector with established market rates. 5. The absence of small business set-aside indicates a focus on large prime contractors for this specific award. 6. The project is located in Nevada, a state with significant federal construction activity.

Value Assessment

Rating: good

The contract value of $88.2 million for a Design-Build-Initial-Outfitting project at Nellis Air Force Base appears reasonable given the scope. Benchmarking against similar large-scale military construction projects suggests that the pricing is within expected ranges. The firm-fixed-price contract type provides cost certainty for the government, mitigating the risk of cost overruns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with three bids received. While three bidders indicate some level of competition, a higher number of bids could have potentially led to more aggressive pricing and a broader range of innovative solutions. The presence of multiple bidders, however, does suggest that the market was aware of and able to respond to the requirement.

Taxpayer Impact: The full and open competition, despite having three bidders, provides a baseline for taxpayer value by ensuring multiple firms had the opportunity to compete. This helps prevent single-source price inflation.

Public Impact

The primary beneficiaries are the Department of Defense and its personnel at Nellis Air Force Base, who will receive updated facilities. The project delivers design, construction, and initial outfitting services, ensuring a complete and ready facility. The geographic impact is concentrated at Nellis Air Force Base in Nevada. The project will likely involve a significant construction workforce, contributing to local and regional employment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions arise, despite the fixed-price nature.
Schedule delays could impact the operational readiness of the facility.
Ensuring the 'initial outfitting' meets all specified requirements and is integrated seamlessly with the building design.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Full and open competition, even with three bidders, ensures market engagement.
The contractor, Walsh Construction Company II, LLC, has experience in large-scale construction projects.

Sector Analysis

This contract falls within the broader construction sector, specifically commercial and institutional building construction. The federal government is a significant client in this sector, often engaging in large-scale projects for military bases, research facilities, and public infrastructure. The market for such projects is competitive, with established firms capable of handling complex design-build requirements. Comparable spending benchmarks for similar military facility construction projects would typically range in the tens to hundreds of millions of dollars, depending on scale and complexity.

Small Business Impact

This contract did not include a small business set-aside, indicating that the primary focus was on large prime contractors capable of managing the full scope of the design-build-initial-outfitting requirement. While there is no direct set-aside, the prime contractor may engage small businesses as subcontractors for specialized services or materials, contributing to the broader small business ecosystem. However, the absence of a direct set-aside means opportunities for small businesses to act as prime contractors on this specific award were limited.

Oversight & Accountability

Oversight for this contract is likely managed by the Department of the Army contracting and project management offices at Nellis Air Force Base. Accountability measures are embedded in the firm-fixed-price contract terms, requiring delivery of specified services and facilities. Transparency is generally maintained through contract award databases and public reporting, though specific project-level details might be less accessible. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Military Construction Projects
Design-Build Contracts
Base Realignment and Closure (BRAC) Facilities
Department of Defense Facilities Modernization

Risk Flags

Potential for cost overruns due to unforeseen site conditions.
Risk of schedule delays impacting facility readiness.
Complexity of integrating design, build, and outfitting phases.
Market volatility affecting material and labor costs over the project duration.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $88.2 million to WALSH CONSTRUCTION COMPANY II, LLC. DESIGN BUILD INITIAL OUTFITTING (DBIO), NELLIS ADB, NV

Who is the contractor on this award?

The obligated recipient is WALSH CONSTRUCTION COMPANY II, 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 $88.2 million.

What is the period of performance?

Start: 2020-09-29. End: 2025-09-30.

What is the track record of Walsh Construction Company II, LLC on similar federal projects?

Walsh Construction Company II, LLC has a substantial track record with federal agencies, including the Department of Defense. They have been involved in numerous large-scale construction projects, often encompassing design-build elements. Their portfolio includes military barracks, aviation facilities, and infrastructure upgrades. While specific performance metrics for every contract are not publicly detailed, their consistent bidding on and winning of significant federal contracts suggests a satisfactory performance history and capability to meet government requirements. Reviewing past performance evaluations, if available through federal procurement databases, would provide a more granular understanding of their reliability and quality of work on similar projects.

How does the $88.2 million cost compare to similar Design-Build-Initial-Outfitting projects for military bases?

The $88.2 million cost for the Nellis Air Force Base DBIO project appears to be within the typical range for large-scale military facility construction. Projects of this nature, involving design, construction, and furnishing of new or significantly renovated facilities, often run into tens or even hundreds of millions of dollars. Factors influencing cost include the size and complexity of the facility, specific technological requirements, geographic location (which affects labor and material costs), and the duration of the project. Without specific details on the square footage and exact scope of the Nellis project, a precise comparison is difficult, but the awarded amount is not an outlier for a substantial military construction undertaking.

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

The primary risks associated with a project of this scale (1827 days duration, $88.2M value) include potential cost overruns, schedule delays, and scope creep, despite the firm-fixed-price contract. Unforeseen site conditions, such as environmental hazards or unexpected geological issues, can lead to significant cost and time impacts. Labor shortages or material price volatility in the construction market can also pose risks. For a Design-Build-Initial-Outfitting (DBIO) contract, ensuring seamless integration between the design, construction, and outfitting phases is critical; any disconnect can lead to rework and delays. Furthermore, changes in military requirements or operational needs during the long project lifecycle could necessitate modifications, impacting cost and schedule.

How effective is a firm-fixed-price contract in managing costs for complex construction?

A firm-fixed-price (FFP) contract is generally considered effective in managing costs for complex construction projects by shifting the majority of the cost risk to the contractor. The contractor agrees to a set price, and any costs incurred above that price are absorbed by them, while any savings below the price benefit the contractor. This incentivizes the contractor to control costs and manage the project efficiently. However, for highly complex or long-duration projects where unforeseen issues are more likely, contractors may build in larger contingencies into their initial bid price to protect against potential losses. This can sometimes result in a higher initial price compared to cost-reimbursement contracts, but it provides greater budget certainty for the government.

What is the historical spending trend for similar construction projects at Nellis Air Force Base?

Analyzing historical spending trends for similar construction projects at Nellis Air Force Base would require access to detailed historical contract data specific to the base. Generally, military installations undergo periodic upgrades and expansions, leading to consistent, albeit variable, spending on construction projects. Factors like aging infrastructure, evolving mission requirements, and national defense priorities influence the volume and value of construction contracts awarded at any given base. Without specific data for Nellis AFB, it's reasonable to assume that spending fluctuates year-to-year based on the capital investment plans of the Air Force and Department of Defense, with significant projects like the one awarded to Walsh Construction representing major investment cycles.

What are the implications of having only three bidders for a large federal construction contract?

Having three bidders for a large federal construction contract like this one indicates a moderate level of competition. While it's better than a sole-source or limited competition scenario, it may not represent the full potential for price discovery and innovation that a larger pool of bidders could offer. A higher number of bidders (e.g., five or more) often leads to more competitive pricing as firms vie more aggressively for the contract. Conversely, three bidders suggest that the market is aware of the opportunity, and qualified firms exist, but perhaps the barriers to entry (e.g., bonding capacity, specialized expertise, past performance requirements) are high, or the project's complexity limits the number of capable respondents. This level of competition can still yield a fair price, but taxpayers might not be receiving the absolute best value achievable.

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Commercial and Institutional Building Construction

Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR NONBUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: W9127S16R6000

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 929 WEST ADAMS, CHICAGO, IL, 60607

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $88,186,709

Exercised Options: $88,186,709

Current Obligation: $88,186,709

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W9127S17D6002

IDV Type: IDC

Timeline