DoD awards $27.1M contract for relocatable building design, raising questions on competition and value

Contract Overview

Contract Amount: $27,119,514 ($27.1M)

Contractor: Ahtna Infrastructure & Technologies LLC

Awarding Agency: Department of Defense

Start Date: 2024-09-30

End Date: 2026-07-22

Contract Duration: 660 days

Daily Burn Rate: $41.1K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: DESIGN FOR LARGE SECURED RELOCATABLE

Place of Performance

Location: HAVELOCK, CRAVEN County, NORTH CAROLINA, 28532

State: North Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $27.1 million to AHTNA INFRASTRUCTURE & TECHNOLOGIES LLC for work described as: DESIGN FOR LARGE SECURED RELOCATABLE Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. Fixed-price contract type suggests cost certainty for the government, but value depends on initial pricing. 3. Limited competition raises concerns about whether the government secured the best possible price. 4. The contract duration of 660 days (approx. 22 months) indicates a significant project scope. 5. Awarded by the Department of the Army, suggesting a need for secure, deployable facilities. 6. The North Carolina location for performance may indicate specific regional military needs or infrastructure.

Value Assessment

Rating: fair

Benchmarking the value of this design contract is challenging without comparable sole-source awards for similar relocatable building designs. The firm fixed-price structure provides cost certainty, but the absence of competition means the government may not have achieved the most competitive pricing. Further analysis would require understanding the specific design requirements and comparing the awarded amount to industry standards for architectural and engineering services for secure facilities.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning it was not openly competed. This approach is typically used when only one responsible source can provide the required services. The lack of competition limits the government's ability to solicit multiple bids and negotiate the best possible price, potentially leading to higher costs for taxpayers.

Taxpayer Impact: Sole-source awards mean taxpayers do not benefit from the competitive bidding process, which usually drives down prices and encourages innovation among contractors.

Public Impact

The Department of the Army is the primary beneficiary, likely acquiring critical design services for secure, relocatable facilities. Services delivered include architectural and engineering design for specialized buildings. Performance is expected in North Carolina, potentially impacting local design firms or related support services. The contract supports military readiness and operational flexibility by enabling the deployment of necessary infrastructure.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially impacting cost-effectiveness.
Lack of transparency in the selection process for a sole-source award.
Contract duration and value may indicate a complex project with potential for cost overruns if not managed closely.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Award to AHTNA Infrastructure & Technologies LLC, a known entity in government contracting.
Contract supports critical Department of Defense infrastructure needs.

Sector Analysis

The Commercial and Institutional Building Construction sector encompasses a wide range of projects, from office buildings to specialized facilities. This contract falls within the niche of designing secure, relocatable structures, often required by government agencies for operational flexibility and rapid deployment. The market for such specialized construction services is driven by defense needs, emergency response, and temporary infrastructure requirements. Comparable spending benchmarks are difficult to establish due to the unique nature of 'relocatable secured' designs.

Small Business Impact

The contract data indicates that small business participation (ss: false, sb: false) was not a primary set-aside consideration for this award. As a sole-source award, there may be limited opportunities for small business subcontracting unless specifically mandated or pursued by the prime contractor. The impact on the small business ecosystem is likely minimal unless AHTNA Infrastructure & Technologies LLC actively engages small businesses for specialized design or support services.

Oversight & Accountability

Oversight for this contract will primarily fall under the Department of the Army's contracting and program management offices. Accountability measures are inherent in the firm fixed-price structure, which caps the government's financial liability. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Department of Defense Facilities Construction
Army Corps of Engineers Design Contracts
Secure Building Design Services
Relocatable Structures Procurement
Commercial and Institutional Building Construction

Risk Flags

Sole-source award lacks competitive transparency.
Potential for inflated pricing due to lack of competition.
Need for detailed justification for sole-source procurement.
Contract duration requires diligent oversight to ensure timely completion.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $27.1 million to AHTNA INFRASTRUCTURE & TECHNOLOGIES LLC. DESIGN FOR LARGE SECURED RELOCATABLE

Who is the contractor on this award?

The obligated recipient is AHTNA INFRASTRUCTURE & TECHNOLOGIES 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 $27.1 million.

What is the period of performance?

Start: 2024-09-30. End: 2026-07-22.

What is the specific justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was awarded under 'NOT AVAILABLE FOR COMPETITION,' which is a common designation for sole-source procurements. The specific justification would typically be detailed in a Justification and Approval (J&A) document filed with the Federal Business Opportunities (now SAM.gov) database. Common reasons for sole-source awards include unique capabilities of a single contractor, urgent and compelling needs where only one source can meet the requirement, or specific national security concerns. Without access to the J&A, the precise rationale remains unknown, but it implies that the Department of the Army determined that only AHTNA Infrastructure & Technologies LLC could fulfill the requirement for the design of these large, secured, relocatable buildings.

How does the firm fixed-price contract type mitigate risk for the government in this sole-source scenario?

A firm fixed-price (FFP) contract type is generally advantageous for the government as it shifts the risk of cost overruns to the contractor. In a sole-source situation, where competitive pricing pressures are absent, the FFP structure provides a degree of cost certainty. The government agrees to pay a set price for the defined scope of work (design services). If the contractor's costs exceed this price, the contractor absorbs the loss. Conversely, if costs are lower, the contractor retains the profit. This structure incentivizes the contractor to manage their costs efficiently to maximize profit, but it does not guarantee the government received the lowest possible price due to the lack of competition.

What are the potential implications of the contract duration (660 days) on the project's scope and complexity?

A contract duration of 660 days, approximately 22 months, suggests a substantial and potentially complex undertaking for the design of large, secured, relocatable buildings. This timeframe allows for detailed design development, potential revisions, coordination with various stakeholders, and possibly the integration of specialized security features. The extended period implies that the project is not a simple, off-the-shelf solution but requires significant architectural and engineering effort. It also means that the government has committed resources and planning around this project for a considerable duration, highlighting its importance to their operational needs.

Can the awarded amount of $27.1 million be considered a reasonable benchmark for designing secured relocatable buildings?

Determining the reasonableness of the $27.1 million award without further context is difficult. The value is highly dependent on the specific requirements, size, complexity, security features, and intended use of the relocatable buildings. As a sole-source award, there is no direct competitive benchmark. To assess value, one would need to compare the scope of services to industry standards for architectural and engineering design fees for similar government or commercial projects, considering the unique security and mobility aspects. Benchmarking against other sole-source awards for comparable design services, if available, would also be informative, but such data is often proprietary or not publicly accessible.

What does the 'NC' (North Carolina) designation for performance signify in the context of this DoD contract?

The 'NC' designation indicates that the performance of this contract, specifically the design work, is expected to occur in North Carolina. This could imply several things: the primary design team or facilities of AHTNA Infrastructure & Technologies LLC are located there, or the project requires close coordination with a specific military installation or operational area within North Carolina. It might also suggest that the Department of the Army has a significant presence or requirement for such facilities in that state. The location could influence logistical considerations, local labor costs, and potentially the involvement of regional architectural and engineering firms if subcontracting occurs.

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: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W912DY24R0078

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 110 W 38TH AVE, ANCHORAGE, AK, 99503

Business Categories: 8(a) Program Participant, Alaskan Native Corporation Owned Firm, Category Business, Limited Liability Corporation, Minority Owned Business, Native American Owned Business, Partnership or Limited Liability Partnership, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $45,274,966

Exercised Options: $27,119,514

Current Obligation: $27,119,514

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline