Fort Leonard Wood Hospital Replacement Project Awarded to J.E. Dunn Construction for $319M

Contract Overview

Contract Amount: $319,382,955 ($319.4M)

Contractor: J. E. Dunn Construction Company

Awarding Agency: Department of Defense

Start Date: 2019-08-08

End Date: 2026-04-16

Contract Duration: 2,443 days

Daily Burn Rate: $130.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: DESIGN BUILD CONSTRUCTION OF FACILITIES FORT LEONARD WOOD HOSPITAL REPLACEMENT

Place of Performance

Location: FORT LEONARD WOOD, PULASKI County, MISSOURI, 65473

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $319.4 million to J. E. DUNN CONSTRUCTION COMPANY for work described as: DESIGN BUILD CONSTRUCTION OF FACILITIES FORT LEONARD WOOD HOSPITAL REPLACEMENT Key points: 1. The contract value of $319 million represents a significant investment in military healthcare infrastructure. 2. The project's firm-fixed-price structure aims to control costs and provide budget certainty. 3. A single award for a large-scale construction project may limit immediate competitive pressure on pricing. 4. The extended performance period suggests a complex undertaking with potential for schedule-related risks. 5. The project's location in Missouri positions it within a region with ongoing construction activity. 6. The absence of small business set-asides indicates a focus on large prime contractors for this project.

Value Assessment

Rating: good

The contract value of $319 million for a hospital replacement project is substantial. Benchmarking against similar large-scale healthcare construction projects would be necessary for a precise value-for-money assessment. However, the firm-fixed-price contract type generally indicates a commitment to a set price, which can be advantageous for the government if managed effectively. The duration of the contract (over 6 years) suggests a complex project, and the final cost will be a key indicator of its overall value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. With four bidders, there was a moderate level of competition for this significant project. While four bidders suggest some price discovery, the complexity and scale of a hospital replacement may naturally limit the number of highly qualified firms able to compete effectively.

Taxpayer Impact: Full and open competition, even with a limited number of bidders, generally benefits taxpayers by encouraging competitive pricing and ensuring the government receives proposals from qualified contractors.

Public Impact

The primary beneficiaries are military personnel and their families stationed at or near Fort Leonard Wood, Missouri, who will receive modern healthcare facilities. The project will deliver a new hospital replacement, enhancing the quality and capacity of medical services available. The geographic impact is localized to Fort Leonard Wood, Missouri, but the improved healthcare services can affect troop readiness and morale. The construction phase will likely create numerous jobs for skilled trades and construction management professionals in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 6 years) increases the risk of cost overruns due to inflation or unforeseen construction challenges.
The firm-fixed-price nature, while beneficial for cost control, could incentivize the contractor to cut corners if not rigorously overseen.
Dependence on a single prime contractor for such a large project concentrates risk.
The absence of small business participation may limit opportunities for specialized subcontractors and innovation.

Positive Signals

Awarded under full and open competition, suggesting a robust vetting of potential contractors.
Firm-fixed-price contract type provides cost certainty for the government.
The project addresses a critical need for modern healthcare infrastructure at a major military installation.
The contractor, J. E. Dunn Construction Company, is a large, established firm with significant experience in complex projects.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, specifically focusing on healthcare facilities. The market for large-scale military construction is specialized, often dominated by a few large firms capable of handling the scale, security, and regulatory requirements. Benchmarking against similar military hospital construction projects would provide further context on cost efficiency.

Small Business Impact

This contract was not awarded as a small business set-aside, nor does it appear to have specific subcontracting goals mandated for small businesses based on the provided data. This suggests that the prime contractor, J. E. Dunn, will likely manage the project with its own resources or through larger subcontractors. The impact on the small business ecosystem is likely minimal unless J. E. Dunn actively seeks out small business partners for specialized work.

Oversight & Accountability

Oversight for this project would typically be managed by the U.S. Army Corps of Engineers or a designated contracting officer's representative (COR) from the Department of the Army. Accountability measures are inherent in the firm-fixed-price contract, with payments tied to milestones and performance. Transparency is generally maintained through contract award databases and reporting requirements, though detailed project progress reports may not always be publicly available.

Related Government Programs

Military Construction (MILCON) Program
Healthcare Facility Construction
Design-Build Contracts
Department of Defense Facilities Management

Risk Flags

Long project duration increases risk exposure.
Potential for cost escalation not fully captured in fixed price.
Quality control critical under fixed price to prevent corner-cutting.
Dependence on a single large contractor.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $319.4 million to J. E. DUNN CONSTRUCTION COMPANY. DESIGN BUILD CONSTRUCTION OF FACILITIES FORT LEONARD WOOD HOSPITAL REPLACEMENT

Who is the contractor on this award?

The obligated recipient is J. E. DUNN CONSTRUCTION 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 $319.4 million.

What is the period of performance?

Start: 2019-08-08. End: 2026-04-16.

What is J. E. Dunn Construction Company's track record with large federal construction projects, particularly healthcare facilities?

J. E. Dunn Construction Company is a large, well-established construction firm with extensive experience in various sectors, including healthcare and federal projects. They have a history of undertaking complex design-build projects for both public and private clients. While specific details on their past federal healthcare facility projects would require deeper research into contract databases like SAM.gov or FPDS, their general profile suggests they possess the capacity and expertise for a project of this magnitude. Reviewing past performance evaluations and any reported disputes or claims on similar federal contracts would provide a more comprehensive understanding of their track record.

How does the $319 million cost compare to similar military hospital replacement projects?

Directly comparing the $319 million cost requires identifying similar-sized military hospital replacement projects completed or in progress around the same timeframe (contract award in 2019). Factors such as square footage, specific medical capabilities (e.g., trauma centers, specialized clinics), location (affecting labor and material costs), and the specific year of award significantly influence project costs. Without access to a detailed cost breakdown or comparable project data, it's challenging to definitively benchmark this contract's value. However, large-scale healthcare construction is inherently expensive, and military projects often include additional security and logistical requirements that can increase costs.

What are the primary risks associated with a firm-fixed-price contract for a project of this scale and duration?

The primary risks with a firm-fixed-price (FFP) contract for a large, long-duration project like the Fort Leonard Wood hospital replacement revolve around cost overruns and potential quality compromises. While FFP aims to cap the government's cost, the contractor assumes the risk of cost increases. If unforeseen issues arise (e.g., unexpected site conditions, material price escalations beyond projections, labor shortages), the contractor might face financial strain. To mitigate this, contractors may build in higher contingency into their initial bid, potentially leading to a higher baseline price. Conversely, to protect their profit margin under FFP, there's a risk the contractor might seek to reduce costs by using lower-cost materials or reducing labor hours, potentially impacting quality if not strictly monitored through quality assurance processes.

How effective are the oversight mechanisms for ensuring the successful completion of this hospital replacement project?

Oversight for this project is likely managed through a combination of contract administration by the awarding agency (Department of the Army), potentially supported by the U.S. Army Corps of Engineers, and on-site quality assurance representatives. The firm-fixed-price nature necessitates rigorous oversight of progress, quality control, and adherence to specifications to ensure the contractor meets contractual obligations. Key oversight functions would include regular progress meetings, site inspections, review of submittals, and verification of milestone completion before payment. The effectiveness hinges on the resources allocated to oversight, the expertise of the oversight personnel, and the contractor's commitment to quality. Inspector General involvement might occur if specific allegations of fraud, waste, or abuse arise.

What is the historical spending trend for military hospital construction, and how does this contract fit within it?

Historical spending on military hospital construction, often categorized under the Military Construction (MILCON) program, fluctuates based on defense budgets, strategic priorities, and the aging of existing facilities. There have been periods of significant investment in upgrading military medical infrastructure, particularly following major conflicts or when new healthcare standards emerge. This $319 million contract represents a substantial single investment, likely part of a broader, multi-year effort to modernize healthcare facilities across the Department of Defense. Its size suggests it addresses a critical need for a major installation, fitting within trends of replacing older, less efficient facilities with modern, technologically advanced ones.

What are the implications of a 'definitive contract' award type for this project?

A 'definitive contract' is the standard type of contract used for a fixed price and scope, unlike a basic ordering agreement or letter contract. For this hospital replacement project, it signifies that the scope of work, price, and terms were clearly defined and agreed upon by both the government and J. E. Dunn Construction Company at the time of award. This provides a solid contractual foundation, clearly outlining the responsibilities and expectations for both parties throughout the project lifecycle. It implies that the government had a well-defined requirement and that the contractor was prepared to commit to delivering the specified outcome at the agreed-upon price.

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: W912DQ18R4018

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1001 LOCUST, KANSAS CITY, MO, 64106

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $319,382,955

Exercised Options: $319,382,955

Current Obligation: $319,382,955

Actual Outlays: $5,388,566

Subaward Activity

Number of Subawards: 90

Total Subaward Amount: $311,335,694

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline