DoD awards $73.6M for B-21 Hangar Construction, raising questions about value and competition

Contract Overview

Contract Amount: $73,556,391 ($73.6M)

Contractor: Conti Federal Services, LLC

Awarding Agency: Department of Defense

Start Date: 2023-04-15

End Date: 2026-06-04

Contract Duration: 1,146 days

Daily Burn Rate: $64.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: CONSTRUCTION OF B-21 RF HANGAR

Place of Performance

Location: ELLSWORTH AFB, MEADE County, SOUTH DAKOTA, 57706

State: South Dakota Government Spending

Plain-Language Summary

Department of Defense obligated $73.6 million to CONTI FEDERAL SERVICES, LLC for work described as: CONSTRUCTION OF B-21 RF HANGAR Key points: 1. Contract awarded to Conti Federal Services, LLC for B-21 hangar construction. 2. Significant investment in critical defense infrastructure for the B-21 bomber program. 3. Contract type is Firm Fixed Price, indicating defined cost expectations. 4. Competition level was 'Full and Open', suggesting broad market engagement. 5. Project duration is substantial at 1146 days, implying complex execution. 6. Geographic focus on South Dakota for this major construction project. 7. No small business set-aside, potentially limiting opportunities for smaller firms.

Value Assessment

Rating: fair

The contract value of $73.6 million for a B-21 hangar is substantial, but a direct value-for-money assessment is difficult without detailed cost breakdowns and comparable project data. The 'Commercial and Institutional Building Construction' NAICS code suggests a standard construction project, but the specialized nature of housing a next-generation bomber likely incurs unique costs. Benchmarking against similar large-scale military construction projects would be necessary to determine if the pricing is competitive. The firm fixed-price nature provides cost certainty but may not reflect the most economical approach if unforeseen complexities arise.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition,' indicating that all responsible sources were permitted to submit offers. The data shows two bids were received. While 'full and open' is generally preferred for maximizing competition, receiving only two bids for a project of this magnitude and specialization might suggest limitations in the market's capacity or interest, or potentially issues with the solicitation itself. This level of competition could impact price discovery, potentially leading to higher prices than if more bidders had participated.

Taxpayer Impact: A limited number of bidders, even in a full and open competition, can mean taxpayers may not be benefiting from the most competitive pricing achievable. This could translate to higher overall costs for the defense budget.

Public Impact

The primary beneficiaries are the Department of Defense and the B-21 bomber program, ensuring operational readiness and basing capabilities. The project will deliver a specialized hangar facility crucial for the maintenance, support, and deployment of the B-21 Raider. The geographic impact is concentrated in South Dakota, potentially bringing economic benefits through construction jobs and related services. Workforce implications include demand for skilled construction labor in the region, supporting local employment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition (2 bidders) for a large-value contract may indicate potential for higher costs.
Lack of small business set-aside could limit opportunities for smaller, specialized construction firms.
Firm Fixed Price contracts can sometimes lead to higher initial bids to account for contractor risk.
Long project duration (1146 days) increases exposure to potential cost overruns or scope creep if not managed tightly.

Positive Signals

Awarded under 'Full and Open Competition' to ensure a broad range of potential contractors could bid.
Firm Fixed Price contract provides cost certainty for the government.
Project supports a critical national defense asset (B-21 bomber), aligning with strategic priorities.
Contract awarded to Conti Federal Services, LLC, a known entity in federal contracting.

Sector Analysis

This contract falls within the Construction sector, specifically Commercial and Institutional Building Construction. The market for large-scale, specialized military construction is a niche within this broader sector, often dominated by a smaller number of experienced federal contractors. The value of this contract, at $73.6 million, places it in the upper tier of construction projects. Comparable spending benchmarks would typically involve other major military facility constructions, such as aircraft hangars, command centers, or training facilities, which often run into tens or hundreds of millions of dollars.

Small Business Impact

This contract does not appear to have a small business set-aside, as indicated by 'sb: false'. While the prime contractor, Conti Federal Services, LLC, may be a large business, the absence of a set-aside means opportunities for small businesses would primarily be through subcontracting. The impact on the small business ecosystem depends on the prime contractor's subcontracting plan and the availability of qualified small businesses capable of performing specialized construction tasks required for a B-21 hangar.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Army, given it was awarded through their contracting channels. Accountability measures are inherent in the Firm Fixed Price contract type, which obligates the contractor to deliver the specified work within the agreed price. Transparency is generally maintained through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected during the contract's performance or closeout.

Related Government Programs

B-21 Raider Program
Military Construction Projects
Air Force Base Infrastructure
Department of Defense Facilities

Risk Flags

Limited competition (2 bidders) for a large contract value.
Potential for cost overruns due to long project duration.
Lack of small business participation noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $73.6 million to CONTI FEDERAL SERVICES, LLC. CONSTRUCTION OF B-21 RF HANGAR

Who is the contractor on this award?

The obligated recipient is CONTI FEDERAL SERVICES, 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 $73.6 million.

What is the period of performance?

Start: 2023-04-15. End: 2026-06-04.

What is the track record of Conti Federal Services, LLC with similar large-scale military construction projects?

Conti Federal Services, LLC has a history of performing federal construction contracts, including significant projects for various military branches. Their portfolio often includes infrastructure development, facility modernization, and specialized construction. To assess their track record specifically for projects comparable to a B-21 hangar, a deeper dive into their past performance evaluations, contract values, and project complexities would be necessary. Reviewing past performance metrics, such as on-time delivery, budget adherence, and quality of work, would provide a clearer picture of their capability to execute this high-priority defense contract successfully. Their experience with firm-fixed-price contracts and large-scale bids is also a key factor.

How does the awarded price of $73.6 million compare to similar B-21 hangar construction projects or comparable military aviation facilities?

Direct comparison of the $73.6 million award for the B-21 hangar is challenging without access to detailed cost breakdowns and specific project requirements. However, large-scale military aviation facilities, such as hangars for advanced aircraft, often involve significant costs due to specialized requirements like reinforced structures, advanced environmental controls, and security measures. Projects of this nature can range from tens of millions to well over $100 million depending on size, complexity, and location. The fact that only two bids were received in a 'full and open' competition might suggest that the market for such specialized construction is limited, potentially influencing the final price. A thorough benchmark analysis against recently awarded contracts for similar military facilities would be needed for a definitive value assessment.

What are the primary risks associated with this contract, and what mitigation strategies are in place?

Key risks for this contract include potential cost overruns despite the firm-fixed-price structure, especially given the long duration (1146 days) and the specialized nature of housing a next-generation aircraft. Schedule delays are another significant risk, which could impact the B-21 program's operational timeline. Technical risks related to unforeseen site conditions or integration challenges with advanced systems could also arise. Mitigation strategies likely involve robust project management by the Department of the Army, stringent oversight of contractor performance, clear communication channels, and potentially contingency planning for unforeseen issues. The firm-fixed-price nature itself acts as a primary risk mitigation for the government regarding cost escalation, placing that burden on the contractor.

How effective is the 'Full and Open Competition' with only two bidders in ensuring competitive pricing for taxpayers?

While 'Full and Open Competition' is designed to maximize market participation, receiving only two bids for a contract valued at $73.6 million raises concerns about its effectiveness in this specific instance. Ideally, a broader range of bidders would foster greater price competition, potentially driving down costs for taxpayers. With only two offers, the government has limited options, and the pricing may reflect less aggressive bidding than if multiple competitors were vying for the contract. This situation could indicate a specialized market with few qualified contractors, or potential barriers to entry that discouraged wider participation. Further analysis of the solicitation process and market research conducted prior to award would be needed to fully understand why competition was limited.

What is the historical spending trend for similar military construction projects within the Department of Defense over the last five years?

Historical spending on similar military construction projects within the Department of Defense has generally been substantial, reflecting the ongoing need to modernize aging infrastructure and build facilities for new weapon systems. Annual military construction budgets often run into the billions of dollars, encompassing a wide array of projects from barracks and training facilities to specialized hangars and research centers. Spending trends can fluctuate based on geopolitical priorities, budget allocations, and specific program needs, such as the fielding of new aircraft like the B-21. Analyzing specific contract award data for large-scale aviation facilities over the past five years would reveal average contract values, common awardees, and prevailing construction costs, providing context for the current $73.6 million award.

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: W9128F22R0054

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 11486 CORPORATE BLVD, ORLANDO, FL, 32817

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: $73,788,565

Exercised Options: $73,556,391

Current Obligation: $73,556,391

Actual Outlays: $4,806,104

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline