M. A. Mortenson Company awarded $76.5M for Custer Hill Beddown construction, a large project with full and open competition
Contract Overview
Contract Amount: $76,465,727 ($76.5M)
Contractor: M. a. Mortenson Company
Awarding Agency: Department of Defense
Start Date: 2007-01-16
End Date: 2009-05-07
Contract Duration: 842 days
Daily Burn Rate: $90.8K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 6
Pricing Type: FIRM FIXED PRICE
Sector: Construction
Official Description: CONSTRUCTION OF THE CUSTER HILL BEDDOWN
Place of Performance
Location: FORT RILEY, GEARY County, KANSAS, 66442
State: Kansas Government Spending
Plain-Language Summary
Department of Defense obligated $76.5 million to M. A. MORTENSON COMPANY for work described as: CONSTRUCTION OF THE CUSTER HILL BEDDOWN Key points: 1. The contract value of $76.5 million represents a significant investment in military infrastructure. 2. Full and open competition suggests a potentially competitive bidding process, which can lead to better pricing. 3. The project duration of 842 days indicates a substantial construction timeline. 4. The firm-fixed-price contract type shifts most of the cost risk to the contractor. 5. The award was made by the Department of the Army, indicating a focus on defense infrastructure. 6. The project is located in Kansas, suggesting a regional economic impact.
Value Assessment
Rating: good
The contract value of $76.5 million for the Custer Hill Beddown construction appears to be within a reasonable range for a project of this scale, especially considering it's a firm-fixed-price contract. Benchmarking against similar military construction projects would provide a more precise value-for-money assessment. The number of bidders (6) suggests a degree of competition that could have influenced pricing favorably.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit a bid. Six bidders participated in the competition, indicating a healthy level of interest and a potentially robust price discovery process. The presence of multiple bidders generally exerts downward pressure on prices, benefiting the government.
Taxpayer Impact: The full and open competition for this substantial construction project likely resulted in a more competitive bid environment, potentially saving taxpayer dollars compared to a less competitive procurement.
Public Impact
The primary beneficiaries are the U.S. Army personnel and units who will utilize the new facilities at Custer Hill. The project delivers essential construction services for military barracks and support facilities. The geographic impact is concentrated in Kansas, potentially stimulating local employment and the regional economy. The construction activities would have implications for the local workforce, requiring skilled labor in various trades.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns if unforeseen site conditions arise, despite the firm-fixed-price structure.
- Delays in construction could impact military readiness and operational timelines.
- Quality control during a large-scale construction project requires diligent oversight to ensure durability and safety.
Positive Signals
- Firm-fixed-price contract mitigates budget uncertainty for the government.
- Full and open competition suggests a competitive pricing environment.
- The contractor, M. A. Mortenson Company, has a track record in large-scale construction, implying experience.
- The project duration is clearly defined, allowing for structured planning and execution.
Sector Analysis
This contract falls within the construction sector, specifically commercial and institutional building construction. The Department of Defense is a major client for construction services, particularly for building and maintaining military bases and infrastructure. The market for large-scale military construction is often characterized by significant contract values and specialized requirements. Comparable spending benchmarks would involve analyzing other large military barracks or base development projects.
Small Business Impact
The contract was not set aside for small businesses, and there is no explicit indication of subcontracting requirements for small businesses in the provided data. This suggests that the primary award went to a large contractor, and the direct impact on the small business ecosystem may be limited unless M. A. Mortenson Company actively engages small businesses as subcontractors.
Oversight & Accountability
Oversight for this contract would typically be managed by the Department of the Army's contracting and engineering divisions. Accountability measures are inherent in the firm-fixed-price contract, which holds the contractor responsible for delivering the project within the agreed-upon cost. Transparency would be facilitated through contract award databases and potentially through public reporting on project milestones, though specific oversight mechanisms are not detailed in the provided data.
Related Government Programs
- Military Base Construction
- Department of Defense Infrastructure Projects
- Barracks Construction Contracts
- Large-Scale Commercial Construction
Risk Flags
- Potential for cost overruns due to unforeseen site conditions.
- Risk of construction delays impacting military operational timelines.
- Ensuring consistent quality throughout a large-scale, multi-year project.
Tags
construction, department-of-defense, department-of-the-army, firm-fixed-price, full-and-open-competition, kansas, large-contract, military-infrastructure, commercial-and-institutional-building-construction, project-duration-over-1-year
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $76.5 million to M. A. MORTENSON COMPANY. CONSTRUCTION OF THE CUSTER HILL BEDDOWN
Who is the contractor on this award?
The obligated recipient is M. A. MORTENSON COMPANY.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $76.5 million.
What is the period of performance?
Start: 2007-01-16. End: 2009-05-07.
What is M. A. Mortenson Company's track record with large federal construction contracts, particularly within the Department of Defense?
M. A. Mortenson Company has a significant history of undertaking large-scale construction projects for various federal agencies, including the Department of Defense. Their portfolio often includes complex projects such as military barracks, research facilities, and infrastructure development. While specific details on past performance metrics like on-time delivery or budget adherence for all projects are not universally public, their repeated selection for substantial federal contracts suggests a demonstrated capability and a generally positive track record in managing complex construction endeavors. Further analysis would involve reviewing specific past performance evaluations and any reported disputes or contract modifications on similar projects.
How does the $76.5 million contract value compare to similar military beddown construction projects awarded by the Army in the same period?
The $76.5 million contract value for the Custer Hill Beddown construction is substantial, reflecting the scale of building new or significantly upgrading military living and support facilities. To benchmark this value, one would compare it against other firm-fixed-price contracts awarded by the Department of the Army for similar beddown projects (e.g., barracks, dining facilities, training support centers) between 2007 and 2009. Factors like geographic location (construction costs vary regionally), specific facility requirements (e.g., LEED certification, specialized security features), and the number of personnel to be housed would influence comparability. Without access to a comprehensive database of similar projects and their specific costs per square foot or per bed, a precise comparison is difficult, but $76.5 million indicates a major infrastructure undertaking.
What are the primary risks associated with a firm-fixed-price contract for a project of this duration and complexity?
The primary risk with a firm-fixed-price (FFP) contract, especially for a long-duration project like the 842-day Custer Hill Beddown, is that the contractor bears the brunt of cost overruns. If M. A. Mortenson Company encounters unforeseen site conditions, material price escalations beyond initial estimates, or labor shortages, their profit margin will shrink, or they could incur a loss. While FFP shifts risk to the contractor, the government's risk lies in potentially lower quality if the contractor seeks to cut costs to maintain profitability, or in contractor default if the project becomes financially unviable. Robust government oversight and clear contract specifications are crucial to mitigate these risks and ensure quality delivery.
How effective was the 'full and open competition' in ensuring competitive pricing for this $76.5 million construction contract?
The 'full and open competition' approach, with six bidders submitting proposals, is generally considered an effective method for promoting competitive pricing in federal contracting. This process allows any responsible source to compete, maximizing the pool of potential bidders and encouraging them to offer their best prices to win the contract. The presence of six bidders suggests sufficient market interest and a competitive environment. While the exact price savings achieved through competition cannot be determined without knowing the government's independent cost estimate or the bids of non-selected contractors, the structure of the procurement itself is designed to yield competitive outcomes and potentially lower prices for the government compared to sole-source or limited competition scenarios.
What is the historical spending pattern for construction projects of this nature by the Department of the Army?
The Department of the Army consistently allocates significant funds towards construction and infrastructure projects to maintain and modernize its global installations. Historical spending patterns reveal a continuous need for barracks, training facilities, operational support buildings, and upgrades to existing infrastructure. The scale of projects like the Custer Hill Beddown can range from tens of millions to hundreds of millions of dollars, depending on the scope and location. Spending in this category is often influenced by military readiness requirements, troop deployment cycles, and federal infrastructure investment initiatives. Analyzing past budgets and contract awards for similar construction categories provides context for the $76.5 million awarded here, indicating it aligns with the Army's ongoing commitment to facility development.
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
Solicitation ID: W912DQ06R0044
Offers Received: 6
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: M. a. Mortenson Companies, Inc. (UEI: 130731797)
Address: 700 MEADOW LN N, MINNEAPOLIS, MN, 90
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $81,217,727
Exercised Options: $76,465,727
Current Obligation: $76,465,727
Contract Characteristics
Consolidated Contract: Yes
Cost or Pricing Data: NO
Timeline
Start Date: 2007-01-16
Current End Date: 2009-05-07
Potential End Date: 2009-05-07 00:00:00
Last Modified: 2011-08-20
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