Army awards $186M construction contract to Turner Construction Company for administrative buildings

Contract Overview

Contract Amount: $186,127,689 ($186.1M)

Contractor: Turner Construction Company

Awarding Agency: Department of Defense

Start Date: 2004-09-20

End Date: 2009-04-30

Contract Duration: 1,683 days

Daily Burn Rate: $110.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: 200412!002824!2100!W912DR!* !W912DR04C0049 !A!N! !N! ! !20040920!20070301!006991525!128604506!315922807!N!TURNER CONSTRUCTION COMPANY !11921 FREEDOM DRIVE !RESTON !NY!20190!50000!001!11!WASHINGTON !DISTRICT OF COLUMBIA !D.C. !+000076695120!N!N!000076695120!Y119!OTHER ADMINISTRATIVE & SERVICE BUILDINGS !C2 !CONSTRUCTION !000 !* !236220!E! !3! ! ! ! ! !99990909!B! ! !A! !A!U!J!2!004!B! !D!N!Z! ! !N!C!N! ! ! !C!C!A!A!000!A!C!Y! !N! ! ! ! !0001! !

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20319

State: District of Columbia Government Spending

Plain-Language Summary

Department of Defense obligated $186.1 million to TURNER CONSTRUCTION COMPANY for work described as: 200412!002824!2100!W912DR!* !W912DR04C0049 !A!N! !N! ! !20040920!20070301!006991525!128604506!315922807!N!TURNER CONSTRUCTION COMPANY !11921 FREEDOM DRIVE !RESTON !NY!20190!50000!001!11!WASHINGTON !DIST… Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract duration of over 4 years indicates a significant, long-term project. 3. The fixed-price nature of the contract shifts some cost risk to the contractor. 4. The project falls under commercial and institutional building construction, a broad category. 5. The award to a large, established contractor may limit opportunities for smaller businesses. 6. Geographic location in Washington D.C. suggests a focus on federal facilities in the capital region.

Value Assessment

Rating: fair

The contract value of $186,127,689 for construction services appears substantial. Benchmarking this against similar large-scale administrative building projects for federal agencies is difficult without more specific project details (e.g., square footage, specific construction types). However, given the duration and the nature of the contractor, the price is within a plausible range for major federal construction endeavors. Further analysis would require comparing the cost per square foot or per unit of service to industry standards for similar government projects.

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 bids. The data shows 4 bids were received. A competitive process with multiple bidders generally promotes price discovery and can lead to more favorable pricing for the government. The level of competition (4 bidders) is moderate and suggests that while the market was engaged, it may not have been as broad as possible for such a significant contract.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it encourages a wider range of contractors to bid, potentially driving down costs through competitive pressure and ensuring the government receives the best value.

Public Impact

Federal agencies in Washington D.C. will benefit from new or improved administrative facilities. The contract supports the construction and potentially renovation of administrative and service buildings. The geographic impact is concentrated in Washington D.C., supporting federal operations in the capital. The construction industry workforce, including skilled trades and project management, will be engaged. The project contributes to the infrastructure supporting government functions and personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen issues arise during the multi-year construction period.
Dependence on a single large contractor could lead to less flexibility in scope adjustments.
The fixed-price contract might incentivize cutting corners if not rigorously overseen.
Limited visibility into the specific sub-contracting plans and their impact on small businesses.

Positive Signals

Awarded through full and open competition, indicating a robust bidding process.
The contractor, Turner Construction Company, is a large and experienced entity in the construction sector.
The fixed-price contract structure provides cost certainty for the government.
The contract duration suggests a well-defined project scope and planning.

Sector Analysis

The construction sector is a significant part of the U.S. economy, encompassing a wide range of building activities. This contract falls under 'Commercial and Institutional Building Construction,' which includes a broad category of non-residential structures. Federal construction spending is a key driver in this sector, particularly in major metropolitan areas like Washington D.C. Comparable spending benchmarks would typically involve analyzing the cost per square foot for similar government administrative buildings, factoring in location and specific construction requirements.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses (ss: false, sb: false). While large federal construction projects often involve significant subcontracting opportunities, the extent to which small businesses will participate is not detailed here. The award to a large prime contractor like Turner Construction Company suggests that the primary contract management will be handled by a major player, and the impact on the small business ecosystem will depend heavily on their subcontracting strategy and adherence to any small business subcontracting goals.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army, likely through contracting officers and project managers. Accountability measures are inherent in the contract terms, particularly the fixed-price nature, which holds the contractor responsible for delivering the project within the agreed-upon cost. Transparency is generally facilitated through contract award databases like FPDS, but detailed project progress and spending oversight would occur internally within the agency and potentially through Inspector General reviews if specific concerns arise.

Related Government Programs

Federal Building Construction
Department of Defense Construction Contracts
Administrative Facility Projects
General Services Administration (GSA) Construction

Risk Flags

Potential for cost overruns due to long duration and fixed-price nature.
Scope creep risk without diligent change management.
Quality control concerns if contractor faces profitability pressures.
Limited visibility into small business subcontracting participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $186.1 million to TURNER CONSTRUCTION COMPANY. 200412!002824!2100!W912DR!* !W912DR04C0049 !A!N! !N! ! !20040920!20070301!006991525!128604506!315922807!N!TURNER CONSTRUCTION COMPANY !11921 FREEDOM DRIVE !RESTON !NY!20190!50000!001!11!WASHINGTON !DISTRICT OF COLUMBIA !D.C. !+000076695120!N!N!000076695120!Y119!OTHER ADMINISTRATIVE & SERVICE BUILDINGS !C2 !CONSTRUCTION !000 !* !236220!E! !3! ! ! ! ! !999

Who is the contractor on this award?

The obligated recipient is TURNER 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 $186.1 million.

What is the period of performance?

Start: 2004-09-20. End: 2009-04-30.

What is the historical spending pattern of the Department of the Army on administrative building construction over the last decade?

Analyzing the Department of the Army's historical spending on administrative building construction requires accessing and aggregating data from contract databases over a ten-year period. This would involve filtering for contracts categorized under 'Administrative and Service Buildings' (NAICS 236220) or similar classifications, and specifically for construction services. The trend would likely show fluctuations based on military readiness needs, base realignments, and infrastructure modernization initiatives. Significant events like base closures or major force structure changes could lead to spikes or dips in spending. Understanding this pattern provides context for the current $186M award, indicating whether it represents a typical investment or an outlier.

How does the per-square-foot cost of this contract compare to similar federal administrative building projects in the Washington D.C. area?

To compare the per-square-foot cost, we would need the total square footage of the administrative buildings constructed under this $186M contract. Assuming this information were available, we would then query contract databases for similar federal administrative building projects awarded in the Washington D.C. metropolitan area within the last 5-7 years. The comparison would focus on contracts with similar construction types (e.g., new construction, major renovation) and quality standards. A higher per-square-foot cost for this contract might be justified by unique security requirements, specialized technological infrastructure, or higher-end finishes mandated for federal facilities. Conversely, a significantly lower cost could indicate exceptional value or potentially a less complex build-out.

What is Turner Construction Company's track record with large federal construction contracts, particularly for administrative facilities?

Turner Construction Company has a substantial track record in federal construction. A review of their contract history would reveal numerous awards across various agencies, including the Department of Defense, GSA, and others. For administrative facilities specifically, their portfolio likely includes projects of similar scale and complexity. Key performance indicators to examine would include on-time and on-budget delivery rates, any history of contract disputes or claims, and client satisfaction feedback where available. Their experience with large, complex projects suggests a capacity to manage significant federal contracts, but a detailed analysis would involve scrutinizing specific past performance evaluations and project outcomes.

What are the primary risks associated with a fixed-price definitive contract of this magnitude and duration?

The primary risks associated with a fixed-price definitive contract of this magnitude ($186M) and duration (over 4 years) revolve around cost overruns and scope creep. For the contractor (Turner Construction), the risk lies in underestimating costs, encountering unforeseen site conditions, or facing material price escalations, all of which could erode profit margins. For the government, the risk is that the contractor may cut corners on quality to maintain profitability, or that the fixed price may not adequately account for necessary scope changes, leading to costly change orders. Robust government oversight, clear contract specifications, and proactive risk management by both parties are crucial to mitigate these potential issues.

How has the Army's spending on construction services in the 'Commercial and Institutional Building Construction' category evolved since 2004?

Tracking the Army's spending in NAICS code 236220 ('Commercial and Institutional Building Construction') since 2004 would reveal trends influenced by global military engagements, base infrastructure needs, and modernization efforts. Early years might reflect post-9/11 security enhancements and overseas construction. Later years could show a shift towards domestic infrastructure upgrades, energy efficiency projects, and consolidation of facilities. The $186M award in 2004 falls within this period. Analyzing the total annual spend, the average contract size, and the number of awards would illustrate the Army's investment priorities in this sector over time, highlighting periods of high and low activity.

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: SEALED BID

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Hochtief AG (UEI: 315922807)

Address: 11921 FREEDOM DRIVE, RESTON, NY, 20190

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $10,869,152

Exercised Options: $10,869,152

Current Obligation: $186,127,689

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline