Department of Defense awards $17.6M for Luke AFB housing construction, completed in 2020

Contract Overview

Contract Amount: $17,583,397 ($17.6M)

Contractor: Straub Construction, Inc.

Awarding Agency: Department of Defense

Start Date: 2007-06-28

End Date: 2020-09-15

Contract Duration: 4,828 days

Daily Burn Rate: $3.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: FY06 PERMANENT PARTY DORM, LUKE AFB, AZ CAR 07-0509

Place of Performance

Location: GLENDALE LUKE AFB, MARICOPA County, ARIZONA, 85309

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $17.6 million to STRAUB CONSTRUCTION, INC. for work described as: FY06 PERMANENT PARTY DORM, LUKE AFB, AZ CAR 07-0509 Key points: 1. Contract awarded for new multifamily housing construction, indicating a need for expanded on-base living quarters. 2. The contract was competed under full and open competition, suggesting a competitive bidding process. 3. The duration of the contract (over 13 years from award to completion) may warrant further investigation into project timelines and potential delays. 4. The firm-fixed-price contract type suggests that the contractor assumed the risk for cost overruns. 5. The project was awarded by the Department of the Army, but for a facility at Luke Air Force Base, indicating inter-service collaboration. 6. The contract was awarded in 2007 and completed in 2020, spanning a significant period.

Value Assessment

Rating: fair

The contract value of approximately $17.6 million for new multifamily housing construction appears reasonable for a project of this scale, though a direct comparison to similar projects is difficult without more specific details on the scope and quality of the housing. The firm-fixed-price nature of the contract suggests that the government secured a predictable cost, but the long duration from award to completion (over 13 years) raises questions about the initial cost estimates and potential for escalation or extended project management overhead. Benchmarking against average construction costs per unit for military housing would provide a clearer picture of value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning that all responsible sources were permitted to submit a bid. The data indicates two bids were received. While two bidders suggest some level of competition, it is on the lower end and may not represent the full market potential. A higher number of bidders typically leads to more competitive pricing and a wider range of innovative solutions.

Taxpayer Impact: A full and open competition, even with a limited number of bidders, generally provides a better opportunity for taxpayers to receive competitive pricing compared to sole-source or limited competition scenarios.

Public Impact

Military personnel and their families stationed at Luke Air Force Base will benefit from new on-base housing. The construction project provides employment opportunities for construction workers and related trades in Arizona. The project directly impacts the quality of life for service members by providing modern living accommodations. The geographic impact is localized to Luke Air Force Base in Arizona.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The extended timeline from award (2007) to completion (2020) suggests potential for project delays, cost overruns beyond the initial fixed price if not managed strictly, or scope changes.
With only two bids received, there's a possibility that the competition was not as robust as it could have been, potentially impacting the final price.
The lack of specific details on the housing units (e.g., number of units, size, amenities) makes it difficult to fully assess the value for money.

Positive Signals

The contract was awarded using a firm-fixed-price structure, which shifts cost overrun risk to the contractor.
The use of full and open competition indicates an effort to maximize market participation and achieve competitive pricing.
The project addresses a clear need for housing at a military installation, contributing to military readiness and personnel well-being.

Sector Analysis

The construction of military housing falls within the broader construction sector, specifically new multifamily housing. This contract represents a specific instance of government procurement within this market. The construction industry is characterized by project-based work, varying levels of specialization, and significant capital investment. Federal spending on military infrastructure, including housing, is a substantial component of the overall construction market, often involving large-scale projects with stringent requirements.

Small Business Impact

The provided data indicates that small business participation was not a specific set-aside for this contract (sb: false). There is no information on subcontracting plans or actual performance. Therefore, the direct impact on the small business ecosystem from this specific contract is not discernible from the data, though the prime contractor, Straub Construction, Inc., may engage small businesses as subcontractors.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and project management offices, given their role as the awarding agency. The firm-fixed-price nature of the contract implies that the contractor is responsible for managing costs within the agreed-upon price. Transparency would be facilitated through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected during the contract's lifecycle.

Related Government Programs

Military Construction, Army
Family Housing Construction
Department of Defense Facilities
Base Realignment and Closure (BRAC) related construction

Risk Flags

Extended contract duration
Limited number of bidders

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.6 million to STRAUB CONSTRUCTION, INC.. FY06 PERMANENT PARTY DORM, LUKE AFB, AZ CAR 07-0509

Who is the contractor on this award?

The obligated recipient is STRAUB CONSTRUCTION, 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 $17.6 million.

What is the period of performance?

Start: 2007-06-28. End: 2020-09-15.

What was the specific scope of work for the FY06 Permanent Party Dorm, Luke AFB, AZ CAR 07-0509 contract?

The contract, identified as FY06 PERMANENT PARTY DORM, LUKE AFB, AZ CAR 07-0509, was for new multifamily housing construction. While the exact number of units, square footage, or specific amenities are not detailed in the provided data, the designation 'Permanent Party Dorm' suggests the construction of barracks-style or apartment-style housing intended for service members who are permanently stationed at Luke Air Force Base. The project aimed to provide updated and potentially expanded living quarters to meet the needs of the base's personnel. The 'CAR 07-0509' likely refers to a specific project or task order number within a larger program or contract vehicle.

How does the $17.6 million contract value compare to similar military housing construction projects?

Comparing the $17.6 million contract value requires context on the number and type of housing units constructed. Without knowing the exact quantity of units, their size, and the level of finish, a direct comparison is challenging. However, for a significant multifamily housing project, this value is within a plausible range for military construction. Federal projects often have higher costs due to stringent building codes, security requirements, and specific military standards. To benchmark effectively, one would need to analyze the cost per unit against other recently awarded military housing contracts of similar scope and location, considering inflation and regional construction cost variations.

What are the potential risks associated with a contract awarded in 2007 and completed in 2020?

A contract spanning over 13 years from award to completion presents several risks. Firstly, there's a significant risk of scope creep or design changes occurring over such a long period, potentially leading to cost increases if not managed under a strict change order process, even with a firm-fixed-price contract. Secondly, material and labor costs can fluctuate substantially over more than a decade, impacting the contractor's profitability and potentially leading to disputes or claims if not adequately accounted for in the initial pricing. Thirdly, prolonged project durations increase the risk of obsolescence in design or technology, and can lead to extended periods of administrative oversight and potential for project management inefficiencies. Finally, there's a higher likelihood of personnel turnover for both the government and contractor teams, which can disrupt continuity and institutional knowledge.

Given the full and open competition with two bidders, what does this imply for price discovery and taxpayer value?

Full and open competition is designed to maximize the number of potential bidders, thereby enhancing price discovery and ensuring competitive pricing. In this case, with only two bids received for the FY06 Permanent Party Dorm contract, the level of competition was limited. While two bidders are better than one, it suggests that the market may not have been as robust as anticipated, or perhaps the specific requirements of the project deterred broader participation. This limited competition could mean that the winning bid was not as low as it might have been if more firms had competed. Consequently, the price discovery process may have been less effective, potentially resulting in a higher cost to taxpayers than if a larger pool of bidders had submitted proposals.

What is the track record of Straub Construction, Inc. in federal contracting, particularly for military housing?

Straub Construction, Inc. has a history of securing federal contracts, including projects for the Department of Defense and other government agencies. Their involvement in the FY06 Permanent Party Dorm project at Luke AFB indicates experience in constructing military facilities. To fully assess their track record, a deeper dive into their portfolio of completed federal projects would be necessary. This would involve examining the size, complexity, and performance history (e.g., on-time and on-budget delivery, quality of work, number of claims or disputes) of other contracts they have undertaken, particularly those involving housing or similar infrastructure for military installations. Their sustained engagement suggests a capacity to meet federal contracting requirements.

How does the firm-fixed-price (FFP) contract type influence risk allocation and potential cost outcomes?

A firm-fixed-price (FFP) contract is a type of contract where the price is set at the outset and is not adjustable unless the scope of work changes. This structure places the primary risk of cost overruns on the contractor. For the government, an FFP contract offers the most certainty regarding the final cost, assuming the scope is well-defined. In the case of the Luke AFB housing project, Straub Construction, Inc. assumed the risk for any increases in labor, material, or other direct costs associated with completing the construction. This benefits taxpayers by locking in the price, but it also means the contractor must build in a contingency, which could lead to a higher initial bid price compared to cost-reimbursement contracts. However, it incentivizes the contractor to control costs efficiently to maximize profit.

Industry Classification

NAICS: Construction › Residential Building Construction › New Multifamily Housing Construction (except For-Sale Builders)

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: W912PL07R0009

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 5256 S MISSION RD STE 310, BONSALL, CA, 48

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $17,583,397

Exercised Options: $17,583,397

Current Obligation: $17,583,397

Contract Characteristics

Cost or Pricing Data: NO

Timeline