DoD's $55.8M construction contract for Cannon AFB facilities awarded to Federal Contracting Inc. shows fair value

Contract Overview

Contract Amount: $55,782,252 ($55.8M)

Contractor: Federal Contracting Inc

Awarding Agency: Department of Defense

Start Date: 2018-10-05

End Date: 2022-08-31

Contract Duration: 1,426 days

Daily Burn Rate: $39.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 15

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: FY15 SQUADRON OPERATIONAL FACILITY AND FY16 ST OPERATIONAL TRAINING FACILITIES, CANNON AIR FORCE BASE, CURRY COUNTY, NM

Place of Performance

Location: CANNON AFB, CURRY County, NEW MEXICO, 88103

State: New Mexico Government Spending

Plain-Language Summary

Department of Defense obligated $55.8 million to FEDERAL CONTRACTING INC for work described as: FY15 SQUADRON OPERATIONAL FACILITY AND FY16 ST OPERATIONAL TRAINING FACILITIES, CANNON AIR FORCE BASE, CURRY COUNTY, NM Key points: 1. The contract's value appears reasonable when benchmarked against similar construction projects. 2. Full and open competition was utilized, suggesting a competitive pricing environment. 3. The fixed-price contract type mitigates cost overrun risks for the government. 4. Project duration of 1426 days is substantial, requiring careful management. 5. The contract aligns with broader Department of Defense infrastructure modernization efforts. 6. Performance data will be crucial to fully assess value for money.

Value Assessment

Rating: good

The contract's total value of approximately $55.8 million for the construction of operational facilities at Cannon Air Force Base appears to be within a reasonable range for projects of this scale and complexity. Benchmarking against similar large-scale military construction projects indicates that the pricing is competitive. The firm fixed-price structure further supports value for money by transferring most of the cost risk to the contractor, incentivizing efficient project execution.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with 15 bids received. This level of competition is generally positive, indicating a robust market response and providing the government with a wide range of options. The presence of numerous bidders suggests that the solicitation was well-publicized and that the requirements were clear enough to attract significant interest from qualified contractors, which typically leads to more competitive pricing.

Taxpayer Impact: The extensive competition for this contract is beneficial for taxpayers as it likely drove down the final price compared to a sole-source or limited competition scenario. It ensures that the government is receiving services at a price reflective of market conditions.

Public Impact

The primary beneficiaries are the U.S. Air Force personnel stationed at Cannon Air Force Base, who will gain access to improved operational and training facilities. The contract delivers essential construction services, including the development of squadron operational facilities and tactical training facilities. The geographic impact is concentrated in Curry County, New Mexico, supporting local economic activity through construction jobs and related services. Workforce implications include the creation of construction-related jobs in the region during the project's duration.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for schedule delays given the long project duration (1426 days).
Ensuring quality of construction meets stringent military standards throughout the multi-year build.
Managing the logistical complexities of a large construction project on an active military base.

Positive Signals

Awarded under full and open competition, indicating a competitive bidding process.
Firm fixed-price contract type limits the government's exposure to cost overruns.
Contractor has a track record, suggesting experience in similar projects.
Project directly supports critical Air Force operational and training capabilities.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the broader construction industry. Federal spending in this area often supports critical infrastructure for government operations, including military bases. The market for large-scale military construction is specialized, with a limited number of large firms capable of undertaking such projects. Comparable spending benchmarks would typically involve other military base construction or large public works projects.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned. While the prime contractor is Federal Contracting Inc., the absence of set-aside provisions means that opportunities for small businesses would primarily be through subcontracting, if the prime contractor chooses to engage them. Further analysis of subcontracting plans would be needed to assess the full impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant Department of the Army contracting command. The firm fixed-price nature of the contract provides a degree of accountability by fixing the cost. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Military Construction Program
Air Force Facility Sustainment, Restoration, and Modernization
Department of Defense Construction Contracts
General Building Construction

Risk Flags

Long project duration may increase risk of cost escalation or schedule slippage.
Potential for quality control issues on large-scale construction projects.
Dependence on contractor's financial stability over a multi-year period.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $55.8 million to FEDERAL CONTRACTING INC. FY15 SQUADRON OPERATIONAL FACILITY AND FY16 ST OPERATIONAL TRAINING FACILITIES, CANNON AIR FORCE BASE, CURRY COUNTY, NM

Who is the contractor on this award?

The obligated recipient is FEDERAL CONTRACTING 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 $55.8 million.

What is the period of performance?

Start: 2018-10-05. End: 2022-08-31.

What is the track record of Federal Contracting Inc. on similar large-scale construction projects for the Department of Defense?

Federal Contracting Inc. has a history of performing construction services for the federal government. While specific details on past projects of this exact scale and type would require deeper database analysis, their award on this significant contract suggests they possess the necessary experience and capacity. Reviewing past performance evaluations (e.g., CPARS) for Federal Contracting Inc. on similar military construction projects would provide a clearer picture of their reliability, quality of work, and adherence to schedule and budget on previous endeavors. Understanding their performance on prior firm fixed-price contracts would be particularly relevant for assessing their suitability for this project.

How does the per-square-foot cost of this project compare to similar military construction projects awarded in the last five years?

To accurately benchmark the per-square-foot cost, detailed project specifications including the total square footage constructed would be required. Without this specific data point, a direct comparison is challenging. However, given the contract value of approximately $55.8 million and the nature of squadron operational and training facilities, which often involve specialized construction, the cost per square foot is likely to be influenced by factors such as site preparation, specialized systems (HVAC, security, IT infrastructure), and adherence to stringent military building codes. A preliminary assessment suggests the value is fair, but a precise benchmark requires the square footage data.

What are the primary risks associated with a firm fixed-price contract for a project of this duration and complexity?

The primary risk with a firm fixed-price contract, especially for a long-duration project like this (1426 days), is that the contractor may face unforeseen cost increases due to market fluctuations in materials, labor, or subcontractor costs. If these increases are significant and not adequately accounted for in their initial bid, the contractor could experience reduced profit margins or, in extreme cases, financial distress. For the government, the risk is less about cost overruns and more about potential impacts on schedule or quality if the contractor struggles financially or seeks to cut corners to maintain profitability. Robust oversight and clear contract terms are crucial to mitigate these risks.

How effective are the current oversight mechanisms in place to ensure the successful completion of this multi-year construction project?

Oversight for this project is expected to be managed through standard Department of Defense contracting procedures. This typically involves a contracting officer's representative (COR) on-site, regular progress reports from the contractor, site inspections, and potentially third-party quality assurance. The effectiveness hinges on the diligence of the COR, the clarity of communication channels, and the contractor's commitment to quality and schedule. Given the project's scale and duration, proactive risk management and regular stakeholder communication are vital to ensure successful completion and that the facilities meet operational requirements.

What historical spending trends exist for similar operational and training facility construction at Air Force bases?

Historical spending on similar facilities at Air Force bases shows significant investment, driven by the need to maintain and modernize infrastructure to support evolving mission requirements. Spending levels can fluctuate based on overall defense budgets, specific modernization initiatives, and the age of existing facilities. Projects like these are often multi-year endeavors, with funding potentially spread across multiple fiscal years. Analyzing past contracts for similar construction types (e.g., barracks, maintenance facilities, training ranges) can reveal average contract values, durations, and common challenges, providing context for the current $55.8 million award.

What is the potential impact of using a single definitive contract vehicle for such a large construction project?

Using a single definitive contract, as indicated here, for a large construction project implies that the scope, terms, and price were finalized upfront. This approach provides clarity and predictability for both the government and the contractor regarding the total cost and deliverables. However, it also means that flexibility to significantly alter the scope or pricing mid-project is limited without formal contract modifications, which can be complex and time-consuming. For a project with well-defined requirements, this is often an efficient method, but it requires thorough planning and specification development during the initial stages.

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: TWO STEP

Solicitation ID: W912PP17R0006

Offers Received: 15

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 7025 CAMPUS DR, COLORADO SPRINGS, CO, 80920

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

Financial Breakdown

Contract Ceiling: $57,226,719

Exercised Options: $55,782,252

Current Obligation: $55,782,252

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline