The following article is a FOTM exclusive, published nowhere else, on a mismanaged military construction project that is shaping to be a $16 million boondoggle — at a time when America, with a national debt of $16 trillion, can ill afford it.
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We’ve all read or heard about notorious wasteful government spending such as the $16 muffin or the $436 hammer or the $15.3 million bridge-to-nowhere in Alaska. (For more on the U.S. government’s wasteful spending, go to Project on Government Oversight.)
Here’s a story about a fighter aircraft hangar that was supposed to be renovated but instead will be abandoned, boarded up, and never used, sending $16 million of hardworking taxpayers’ money down the drain.
The story begins in the U.S. Marine Corps Air Station in Cherry Point, North Carolina.
On October 7, 2008, the United States government, in the person of the commanding officer of NAVFAC (Naval Facilities Engineering Command) Mid-Atlantic in Norfolk, VA, issued a solicitation for bids on Military Contract P809 for Fiscal Year 2009 (henceforth referred to as “Solicitation”).
The contract was to undertake the renovation and facilities upgrades to a hangar (Hangar 130) on the Marine Corps Air Station in Cherry Point, to accommodate two F/A-18 E/F squadrons. This would involve, among others, the reconfiguration of hangar space to house maintenance, training, and administrative functions.
According to NAVFAC’s solicitation document, the government’s estimated cost for the project was $10 million to $15 million. (See the 59-page “Solicitation No. N40085-08-R-1424″ here or from FOTM’s media library.) But a NAVFAC presentation at the 11th Annual NC Defense Trade Show had the cost for the project when the contract was awarded to be $16.2 million; and a PDF document on the Department of the Navy’s Budget Estimates for FY 2008 had the cost of the project to be $16.5 million.
The solicitation form specifies that the contractor with the winning bid must “begin performance within 15 calendar days and complete it within 651 calendar days after receiving the notice to proceed.” In other words, the project construction period was not to exceed 651 calendar days, which is to be conducted in 2 phases. This time limit is “mandatory” and “non-negotiable.”
Certain conditions were attached to the Solicitation, including:
1. The Base Bid includes work in accordance with the drawings and specifications by the architectural-engineering firm, Dills Ainscough Duff, P.C., of Virginia Beach, VA, which had been commissioned by NAVFAC, except for two options items:
- The construction of a single-story operational trainer building
- The construction of a single-story pre-engineered metal building for storing and testing special ordnance devices using the “1760 Cable” to attach to F18 aircraft.
2. This acquisition will result in a Firm Fixed Price (FFP) contract for construction services. [FFP contracts are those contracts that: (a) provide for a price which normally is not subject to any adjustment; (b) are negotiated usually where reasonably definite specifications are available, and costs can be estimated with reasonable accuracy; (c) places minimum administrative burden on contracting parties; (d) subjects a contractor to maximum risk arising from full responsibility for all cost escalations.]
3. The wining Contractor must abide by the government’s Affirmative Action goals of 31% minority and 6.9% female participation in each trade on all construction work in the covered area.
4. If the Contractor fails to complete the work within the time specified in the contract (651 calendar days), the Contractor shall pay liquidated damages to the Government in the amount of $7,161.57 for each calendar day of delay until the work is completed or accepted.
5. If the Government terminates the Contractor’s right to proceed, liquidated damages will continue to accrue until the work is completed. These liquidated damages are in addition to excess costs of repurchase under the Termination clause.
This hangar renovation project is a MILCON (Military Construction) project.
MILCON involves the construction of facilities that cost in excess of $750K. MILCON appropriations are separate from all other appropriations approved by Congress in that once funding is approved by Congress, construction must begin within three years and be completed within five years. Further, each MILCON project requires individual approval by Congress. A project cannot be funded until it is designed, which was why before NAVFAC issued its solicitation for contractors to bid on the hangar renovation project, NAVFAC commissioned the architectural-engineering firm Dills Ainscough Duff, P.C. to draw up the designs for the renovation. Using those designs, NAVFAC produced an estimated cost of the hangar renovation and then applied for funding from Congress.
MILCON projects requested by lawmakers are subjected to a stringent vetting process before either the House or Senate appropriations committees include them as earmarks in an annual spending bill. Once a MILCON project has been earmarked and approved for the specified estimated cost, the project is “capped” — which means no additional money can be added to or subtracted from that construction project.
What this means in the case of MILCON P809 is that if the Congress-approved funds are exhausted before the hangar-renovation project is completed, further work on the project must be discontinued because, simply put, there is no more money.
According to the defense.gov web site dated March 25, 2009, Blue Rock Structures, Inc., won the bid for the hangar project, with an expected date-of-completion of January 2011.
However, this is what Blue Rock’s web page “Ongoing Projects: P809 Facilities Upgrades for FA-18E” says:
Contract Number: N40085-09-C-3204
Location (of project): MCAS, Cherry Point, NC
Description: Renovation of an existing Hangar 130 to accommodate two F/A18 E/F squadrons to include building upgrades and re-configuration of spaces to house maintenance, training and administrative functions. The renovations will include: fire sprinkler system, fire suppression installation, fire main water distribution, compressed air upgrades, hanger door upgrades and motorization, floor resurfacing and recoating, recoating of roof, site improvements and replacement of adjacent aircraft pavement.
Completion Date: Feb. 3, 2012
Project Duration: 1046 days
Did you get that?
Blue Rock Structures now says the hangar project is supposed to be completed on Feb. 3, 2012, but the project is listed under the contractor’s “Ongoing Projects” and the project had already taken 1,046 days — 395 days more than the prescribed 651 days! Since the project is still listed under Blue Rock Structures’ “Ongoing Projects,” and since we are now in August 2012, this means the completion of the project is now more than 1½ years overdue!
A delay of more than 1½ years is suggestive of the contractor encountering unforeseen problems, as well as cost overruns. Certain questions must be asked:
- Did the problems arise as a result of flaws in the designs by the architectural engineering firm Dills Ainscough Duff — designs which NAVFAC had approved? If so, was anything done to correct the flaws?
- Is Blue Rock Structures delaying the project to procure more money from the government? If so, why didn’t NAVFAC fire the contractor?
- What are the cost over-runs in light of the fact that the project is still listed as ongoing, more than 1½ years over the allowed “mandatory” time of 651 days?
- Are all the funds earmarked for this project spent?
- Has this problem been brought to the attention of Congress?
- And the BIG question, WHO IS BEING HELD ACCOUNTABLE for this costly delay?
In the meantime, at least a year ago the U.S. Navy had changed its mind about moving the squadrons of FA-18s from Virginia to Cherry Point, NC, which was the reason for renovating Hangar 130 in the first place. All of which means that the money spent by local businesses and residents to prepare Cherry Point to accommodate two new Navy squadrons was all for naught.
What does all this mean for the 49% of Americans who still pay federal income taxes?
Answer: $16.5 million of our money may have been wasted — down the drain of the sinkhole called Government Waste, Incompetence, and Unaccountability.