DOD Awards $549M Medical Center Construction Contract to Kiewit-Turner JV
Contract Overview
Contract Amount: $548,859,112 ($548.9M)
Contractor: Kiewit-Turner a Joint Venture
Awarding Agency: Department of Defense
Start Date: 2015-10-30
End Date: 2018-06-13
Contract Duration: 957 days
Daily Burn Rate: $573.5K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE
Sector: Construction
Official Description: IGF::OT::IGF VA REPLACEMENT MEDICAL CENTER, AURORA CO ACTION ID: 56691
Place of Performance
Location: AURORA, ADAMS County, COLORADO, 80045
State: Colorado Government Spending
Plain-Language Summary
Department of Defense obligated $548.9 million to KIEWIT-TURNER A JOINT VENTURE for work described as: IGF::OT::IGF VA REPLACEMENT MEDICAL CENTER, AURORA CO ACTION ID: 56691 Key points: 1. The contract value of $549M is substantial for a single construction project. 2. The project was not competed, raising questions about potential price efficiencies. 3. The fixed-price incentive contract type aims to balance cost control with performance. 4. Construction sector spending can be cyclical; this project represents significant federal investment.
Value Assessment
Rating: fair
The contract value is high, but without a competitive bid, it's difficult to assess if the price is optimal. Benchmarking against similar large-scale medical facility construction projects would be necessary for a more precise valuation.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was not competed, indicating a sole-source or limited competition award. This limits price discovery and potentially leads to higher costs compared to a fully competitive process.
Taxpayer Impact: The lack of competition may result in taxpayers paying more than necessary for the construction of this vital medical facility.
Public Impact
Construction of a new medical center will improve healthcare access for military personnel and their families. The project creates numerous jobs in the construction sector and related industries. The long-term operational costs and effectiveness of the new facility will be a future consideration for taxpayers.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- High contract value
- Fixed-price incentive can lead to cost overruns if not managed carefully
Positive Signals
- Addresses critical healthcare infrastructure needs
- Potential for long-term cost savings through modern, efficient design
Sector Analysis
This contract falls within the Commercial and Institutional Building Construction sector. Federal spending in this area can fluctuate based on infrastructure needs and budget allocations. The $549M value is significant for a single project within this sector.
Small Business Impact
The data does not indicate any specific provisions or awards to small businesses within this contract, suggesting a potential gap in small business participation.
Oversight & Accountability
The Department of the Army awarded this contract. Oversight would typically involve contract management teams monitoring progress, costs, and adherence to specifications to ensure accountability.
Related Government Programs
- Commercial and Institutional Building Construction
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Lack of competitive bidding
- Potential for cost overruns due to incentive structure
- Limited transparency on sole-source justification
- No clear indication of small business participation
Tags
commercial-and-institutional-building-co, department-of-defense, co, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $548.9 million to KIEWIT-TURNER A JOINT VENTURE. IGF::OT::IGF VA REPLACEMENT MEDICAL CENTER, AURORA CO ACTION ID: 56691
Who is the contractor on this award?
The obligated recipient is KIEWIT-TURNER A JOINT VENTURE.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $548.9 million.
What is the period of performance?
Start: 2015-10-30. End: 2018-06-13.
What was the justification for awarding this contract on a sole-source basis instead of through full and open competition?
The justification for a sole-source award typically involves unique capabilities, urgent needs, or a lack of qualified sources. Without further details, it's impossible to definitively state the reason. However, the absence of competition raises concerns about whether the government explored all avenues to secure the best possible price and value for taxpayers.
How will the fixed-price incentive structure be managed to mitigate cost overruns and ensure value for money?
Effective management of a fixed-price incentive contract requires robust oversight, clear performance metrics, and diligent tracking of costs against targets. The government must actively monitor the contractor's progress and expenditures, ensuring that any cost savings or overruns are shared according to the contract's incentive clauses. Regular audits and performance reviews are crucial.
What are the projected long-term operational and maintenance costs associated with this new medical facility?
The initial construction cost is only one part of the total lifecycle expense. Understanding the long-term operational and maintenance costs is critical for assessing the true value and taxpayer impact. Factors like energy efficiency, material durability, and system design will influence these future expenditures, requiring careful consideration during the planning and construction phases.
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: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: W9128F15R0043
Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE (L)
Evaluated Preference: NONE
Contractor Details
Address: 13611 E COLFAX AVENUE, 2ND FL, AURORA, CO, 80045
Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $548,859,112
Exercised Options: $548,859,112
Current Obligation: $548,859,112
Subaward Activity
Number of Subawards: 127
Total Subaward Amount: $493,223,367
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2015-10-30
Current End Date: 2018-06-13
Potential End Date: 2018-06-13 00:00:00
Last Modified: 2021-10-12
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