Department of the Army awards $11.6M contract for fuel cell maintenance hangar construction

Contract Overview

Contract Amount: $11,639,305 ($11.6M)

Contractor: Straub Construction, Inc.

Awarding Agency: Department of Defense

Start Date: 2007-07-23

End Date: 2020-12-30

Contract Duration: 4,909 days

Daily Burn Rate: $2.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: BRAC AIRCRAFT MAINTENANCE COMPLEX - CONSTRUCTION OF A 18,202 SF FUELL CELL MAINTENANCE HANGAR - NEW CONTRACT AWARD

Place of Performance

Location: NELLIS AFB, CLARK County, NEVADA, 89191

State: Nevada Government Spending

Plain-Language Summary

Department of Defense obligated $11.6 million to STRAUB CONSTRUCTION, INC. for work described as: BRAC AIRCRAFT MAINTENANCE COMPLEX - CONSTRUCTION OF A 18,202 SF FUELL CELL MAINTENANCE HANGAR - NEW CONTRACT AWARD Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract duration of over 4900 days (approx. 13.4 years) is exceptionally long for a construction project. 3. The fixed-price contract type aims to control costs, but the extended duration may introduce unforeseen risks. 4. The project involves the construction of a specialized hangar, indicating a specific operational need. 5. The award to Straub Construction, Inc. represents a significant investment in military infrastructure. 6. The lack of small business involvement noted in the data warrants further investigation into subcontracting opportunities.

Value Assessment

Rating: fair

Benchmarking the value of this construction contract is challenging without detailed cost breakdowns and comparable project data. The firm-fixed-price structure is standard for construction, but the exceptionally long duration (over 13 years) raises concerns about potential cost escalations due to inflation, material price fluctuations, or unforeseen site conditions. While the total award amount is $11.6 million, the extended timeline means the effective annual cost is relatively low. Further analysis would require comparing the cost per square foot to similar specialized hangar constructions in similar geographic regions.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The data shows two bids were received. While two bidders suggest some level of competition, it is a relatively low number for a project of this magnitude and duration. A higher number of bidders typically leads to more competitive pricing and a greater likelihood of achieving best value for the government.

Taxpayer Impact: The full and open competition, despite receiving only two bids, aimed to secure the best possible price for taxpayers. However, the limited number of bidders could mean that taxpayers did not benefit from the most competitive pricing achievable in a broader market.

Public Impact

The primary beneficiaries are the Department of the Army and its personnel who will utilize the new fuel cell maintenance hangar. The contract delivers a critical piece of infrastructure: an 18,202 square foot hangar designed for specialized maintenance. The geographic impact is localized to the base or facility where the hangar is constructed in Nevada. The project will likely involve a workforce of construction professionals, tradespeople, and project managers during the construction phase. The long-term impact includes enhanced operational readiness and maintenance capabilities for the Army's aircraft or equipment requiring fuel cell maintenance.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The exceptionally long contract duration (over 13 years) for a construction project introduces significant risk for cost overruns due to inflation and material price volatility.
The low number of bids (2) received under full and open competition may indicate insufficient market outreach or a lack of contractor interest, potentially leading to suboptimal pricing.
The absence of specific details regarding the 'fuel cell maintenance' aspect raises questions about the complexity and potential specialized requirements of the hangar, which could impact execution.
The contract's start date in 2007 and end date in 2020 spans a significant period, suggesting potential delays or phased construction not fully captured in the summary data.
The lack of small business set-aside or reported subcontracting data (ss: false, sb: false) suggests limited direct opportunities for small businesses in this prime contract.

Positive Signals

The use of a Firm Fixed Price (FFP) contract type is a positive indicator for cost control, as it shifts most of the risk to the contractor.
Awarding under Full and Open Competition generally promotes a wider range of potential bidders and encourages competitive pricing.
The construction of specialized infrastructure like a maintenance hangar addresses a clear operational need for the Department of the Army.
The project is located in Nevada (SN: NEVADA), potentially contributing to the local economy through construction jobs and related services.

Sector Analysis

The construction sector is a significant component of federal spending, particularly for infrastructure development and facility upgrades. This contract falls under Commercial and Institutional Building Construction (NAICS 236220). Federal construction projects often involve complex requirements, stringent regulations, and long procurement cycles. The market for large-scale military construction is typically dominated by established, large prime contractors, though subcontracting can provide opportunities for smaller firms. The total federal spending on construction varies annually but represents billions of dollars, supporting military readiness, agency operations, and public works.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the prime contract was awarded to a large business. While there is no explicit mention of subcontracting goals or achievements, the nature of large construction projects often involves significant subcontracting opportunities. Further investigation would be needed to determine if Straub Construction, Inc. has a history of utilizing small business subcontractors or if specific subcontracting plans were required for this project. The lack of set-aside means direct prime contracting opportunities for small businesses were not prioritized.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and project management offices. The firm-fixed-price nature of the contract provides a degree of cost control, shifting risk to the contractor. Transparency is facilitated by the contract award data being publicly available. Accountability measures would be tied to the contractor's adherence to the contract's specifications, schedule, and quality standards. Inspector General (IG) jurisdiction could be invoked if issues of fraud, waste, or abuse arise during the contract's lifecycle.

Related Government Programs

Military Construction Projects
Department of Defense Facilities
Aircraft Maintenance Facilities
Naval Facilities Engineering Command (NAVFAC) Contracts
Army Corps of Engineers Construction Contracts

Risk Flags

Extended Contract Duration Risk
Limited Competition Concern
Potential for Cost Overruns
Lack of Small Business Participation Data
Specialized Facility Requirements Uncertainty

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.6 million to STRAUB CONSTRUCTION, INC.. BRAC AIRCRAFT MAINTENANCE COMPLEX - CONSTRUCTION OF A 18,202 SF FUELL CELL MAINTENANCE HANGAR - NEW CONTRACT AWARD

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 $11.6 million.

What is the period of performance?

Start: 2007-07-23. End: 2020-12-30.

What is the specific nature of 'fuel cell maintenance' and why does it require a specialized hangar?

Fuel cells are electrochemical devices that convert chemical energy into electrical energy. In the context of military aviation or equipment, this could refer to the maintenance of fuel cell systems used for power generation, auxiliary power units, or potentially even propulsion systems in advanced aircraft or vehicles. Specialized hangars for such maintenance would likely require specific environmental controls (e.g., ventilation for hydrogen or other fuel byproducts), safety features (e.g., explosion-proof lighting, fire suppression systems), specialized tooling and equipment access, and potentially cleanroom environments depending on the sensitivity of the components. The exact requirements would depend on the specific type of fuel cells and the equipment they serve, necessitating a purpose-built facility rather than a standard hangar.

How does the $11.6 million cost compare to similar specialized hangar construction projects?

Comparing the $11.6 million cost requires context regarding the hangar's size (18,202 sq ft) and specialized features. The cost per square foot is approximately $638 ($11,639,305 / 18,202 sq ft). Specialized facilities, especially those with stringent safety, environmental, or cleanroom requirements like those potentially needed for fuel cell maintenance, typically command higher per-square-foot costs than standard industrial or commercial buildings. Without specific details on the required environmental controls, safety systems, and equipment integration for this particular hangar, a direct comparison is difficult. However, general industrial building costs can range from $150-$400 per square foot, suggesting this project's cost is significantly higher, likely due to its specialized nature and the extended duration over which costs may have been incurred or planned.

What are the risks associated with a construction contract duration of over 13 years?

A construction contract duration spanning over 13 years (4909 days) is exceptionally long and introduces substantial risks. Firstly, inflation can significantly erode the purchasing power of the original budget, potentially leading to cost overruns if not adequately accounted for in the contract's pricing structure. Secondly, material prices are subject to market volatility; a prolonged project timeline increases exposure to price spikes for key construction materials like steel, concrete, and specialized components. Thirdly, labor costs can increase over such an extended period due to wage inflation and changes in labor availability. Fourthly, regulatory requirements and building codes can change, necessitating costly design modifications or rework. Finally, unforeseen site conditions or environmental factors discovered over time can lead to delays and increased costs. The firm-fixed-price nature attempts to mitigate some of this, but the contractor bears significant risk, which may have been factored into the initial bid price.

Given only two bids were received, what does this imply about the competition and potential value for taxpayers?

Receiving only two bids under a 'full and open competition' scenario suggests that the market may not have been as robustly engaged as desired for a project of this scale. While competition occurred, a limited number of bidders can reduce the downward pressure on pricing. This could mean that the government did not benefit from the full spectrum of competitive offers that might have emerged if more contractors were interested or capable of bidding. Consequently, the price achieved might be higher than what could have been secured with more active competition. For taxpayers, this implies a potential missed opportunity for greater cost savings. It also raises questions about why more bidders did not participate, which could be due to the project's complexity, specialized requirements, location, or the contracting approach.

What is the track record of Straub Construction, Inc. with federal contracts, particularly large-scale construction?

Straub Construction, Inc. has a history of performing federal contracts, including significant construction projects. While the provided data focuses on this specific award, a comprehensive analysis of their track record would involve examining their past performance ratings, contract completion history (on-time, within budget), any past disputes or claims, and their experience with similar types of specialized construction. Their ability to win a contract valued at over $11 million from the Department of the Army suggests they possess the necessary bonding capacity, technical expertise, and experience to handle large federal projects. Further due diligence would involve reviewing their performance on other government contracts to assess their reliability and overall value proposition to taxpayers.

How does the $11.6M award fit into the broader context of Department of the Army construction spending?

The $11.6 million award for the BRAC Aircraft Maintenance Complex hangar represents a specific investment within the Department of the Army's vast construction and facilities budget. The Army's annual military construction (MILCON) budget typically runs into the billions of dollars, funding a wide array of projects from barracks and training facilities to operational infrastructure like hangars and depots. This particular contract, while substantial for a single project, is a relatively small component of the overall Army construction portfolio. Its significance lies in addressing a specific, specialized need for aircraft or equipment maintenance, contributing to operational readiness and infrastructure modernization within a particular base or region. Its value is best assessed in relation to the strategic importance and operational necessity of the facility it enables.

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: W912PL07R0011

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: $11,639,305

Exercised Options: $11,639,305

Current Obligation: $11,639,305

Contract Characteristics

Cost or Pricing Data: NO

Timeline