Department of the Army awards $32M construction contract to Skanska USA Building Inc. for institutional building

Contract Overview

Contract Amount: $32,071,419 ($32.1M)

Contractor: Skanska USA Building Inc

Awarding Agency: Department of Defense

Start Date: 2009-02-20

End Date: 2011-04-09

Contract Duration: 778 days

Daily Burn Rate: $41.2K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: BASE BID ITEM 0001-CONSTRUCTION CONTRACT

Place of Performance

Location: FORT GEORGE G MEADE, ANNE ARUNDEL County, MARYLAND, 20755

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $32.1 million to SKANSKA USA BUILDING INC for work described as: BASE BID ITEM 0001-CONSTRUCTION CONTRACT Key points: 1. The contract was awarded using full and open competition, suggesting a competitive bidding process. 2. The firm fixed-price contract type indicates that the price was set at the time of award, transferring some risk to the contractor. 3. The contract duration of 778 days suggests a significant construction project. 4. The base bid item is for construction services, falling under commercial and institutional building construction. 5. The award amount of $32,071,419 represents a substantial investment in infrastructure. 6. The contract was awarded in Maryland, indicating a specific geographic focus for the project.

Value Assessment

Rating: fair

Benchmarking the value of this specific construction contract is challenging without more detailed project specifications and comparable project data. However, the firm fixed-price structure suggests an attempt to control costs upfront. The award amount of over $32 million indicates a significant project, and its value will ultimately be determined by the quality of construction and adherence to schedule and budget. Further analysis would require comparing the cost per square foot or per unit of construction against similar institutional building projects in Maryland.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through full and open competition, meaning that all responsible sources were permitted to submit a bid. This approach typically fosters a competitive environment, encouraging bidders to offer their best pricing and terms to secure the contract. The number of bidders is not specified, but the open competition suggests that multiple companies likely vied for this project, which is generally beneficial for price discovery and achieving a fair market price.

Taxpayer Impact: Taxpayers benefit from full and open competition as it generally leads to more competitive pricing and a wider selection of qualified contractors, potentially resulting in cost savings and better value for public funds.

Public Impact

The primary beneficiaries are the Department of the Army and its personnel who will utilize the completed institutional building. The services delivered include the construction of a commercial and institutional building. The geographic impact is localized to Maryland, where the construction will take place. The project will likely have implications for the local construction workforce, creating jobs and economic activity in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific details on project scope and potential change orders could lead to cost overruns.
The firm fixed-price contract may not account for unforeseen site conditions or material price fluctuations.
The duration of the contract (778 days) presents a risk of delays due to weather, labor issues, or supply chain disruptions.

Positive Signals

Awarded through full and open competition, indicating a robust bidding process.
Firm fixed-price contract type can provide cost certainty if well-defined.
The contractor, Skanska USA Building Inc., is a large and established construction firm with experience in large-scale projects.

Sector Analysis

The construction sector is a significant part of the federal spending landscape, encompassing a wide range of projects from infrastructure to facility development. This contract falls under commercial and institutional building construction, a segment that includes the building of government facilities, schools, hospitals, and other public structures. Federal spending in this area is often driven by the need to maintain, upgrade, or expand existing government infrastructure. Comparable spending benchmarks would involve analyzing the total federal outlays for similar construction projects awarded by various agencies over a defined period.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (sb: false) and does not specify any subcontracting requirements for small businesses. This suggests that the primary contractor, Skanska USA Building Inc., will likely manage the project with its own resources or through larger subcontractors. The absence of small business set-asides means that opportunities for small businesses to directly participate in this specific contract may be limited, though they could potentially be involved as suppliers or indirectly through the broader economic impact.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant project management office within the Department of the Army. Accountability measures would be embedded in the contract terms, including performance standards, delivery schedules, and quality control requirements. Transparency is generally facilitated through contract award databases and public reporting mechanisms. Inspector General jurisdiction may apply if any allegations of fraud, waste, or abuse arise during the contract's performance.

Related Government Programs

Military Construction
Federal Building Construction
Institutional Facility Development
Department of Defense Procurement

Risk Flags

Potential for cost overruns due to unforeseen site conditions or material price fluctuations.
Risk of project delays impacting operational readiness or facility availability.
Contract performance may be affected by labor availability or disputes.
Adequacy of the firm fixed-price structure to cover all project contingencies.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $32.1 million to SKANSKA USA BUILDING INC. BASE BID ITEM 0001-CONSTRUCTION CONTRACT

Who is the contractor on this award?

The obligated recipient is SKANSKA USA BUILDING INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $32.1 million.

What is the period of performance?

Start: 2009-02-20. End: 2011-04-09.

What is the track record of Skanska USA Building Inc. with the Department of the Army and similar federal construction projects?

Skanska USA Building Inc. is a large, well-established construction and development company with a significant history of undertaking complex projects for government agencies, including the Department of Defense. While specific details of their past performance with the Army on similar institutional building projects would require a deeper dive into contract databases and performance reviews, their general profile suggests they possess the capacity and experience for large-scale federal contracts. Analyzing their past federal awards, contract values, and any reported performance issues or commendations would provide a clearer picture of their reliability and expertise in executing projects of this magnitude and type.

How does the awarded price of $32,071,419 compare to the estimated cost or budget for this construction project?

The provided data only includes the awarded amount ($32,071,419) and does not specify the initial estimated cost or the allocated budget for this construction contract. To assess value for money, a comparison between the awarded price and the government's independent government cost estimate (IGCE) or the initial budget would be necessary. If the awarded price is significantly lower than the IGCE, it could indicate strong competition and good negotiation. Conversely, if it is close to or exceeds the estimate, further scrutiny might be warranted to understand the reasons for the variance and ensure taxpayer funds are being used efficiently.

What are the key performance indicators (KPIs) and risk mitigation strategies outlined in the contract for Skanska USA Building Inc.?

The provided data does not detail the specific Key Performance Indicators (KPIs) or risk mitigation strategies embedded within the contract. However, for a firm fixed-price construction contract of this scale, typical KPIs would likely include adherence to the project schedule, quality of workmanship, safety compliance, and final project completion within scope. Risk mitigation strategies would generally involve detailed project planning, site investigations, material sourcing plans, and contingency planning for potential issues like adverse weather or unforeseen site conditions. The contract itself would stipulate penalties for non-performance and potentially incentives for early completion or exceptional quality.

What is the historical spending pattern for similar commercial and institutional building construction contracts awarded by the Department of the Army?

Historical spending patterns for similar construction contracts by the Department of the Army can vary significantly based on military branch needs, geographic location, and infrastructure modernization initiatives. Analyzing past awards for commercial and institutional buildings would reveal trends in contract values, types of construction, and the agencies within the Army that procure these services most frequently. For instance, spending might increase during periods of military expansion or base realignment and closure (BRAC) activities. Understanding these patterns helps in benchmarking current contract awards and forecasting future budgetary needs for construction projects.

What is the potential impact of the firm fixed-price contract type on cost overruns and contractor profitability?

A firm fixed-price (FFP) contract type aims to provide cost certainty for the buyer by establishing a price that is not subject to adjustment based on the contractor's cost experience. For the contractor, it means they bear the full risk of cost overruns. If Skanska USA Building Inc. underestimates costs, experiences unexpected material price increases, or faces significant labor challenges, their profit margin will be reduced, or they could incur a loss. Conversely, efficient management and cost control can lead to higher profits. This contract type incentivizes the contractor to manage costs effectively but can also lead to disputes or claims if unforeseen circumstances significantly impact project costs.

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: W912DR08R0112

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Skanska AB (UEI: 353937956)

Address: 1801 RESEARCH BLVD, ROCKVILLE, MD, 20850

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

Financial Breakdown

Contract Ceiling: $32,071,419

Exercised Options: $32,071,419

Current Obligation: $32,071,419

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline