This spring, Tesoro Corp., a Hispanic-owned general contractor in Virginia Beach, Va., is putting the finishing touches on a Naval Deperming Station in the Elizabeth River near Norfolk, Va. Not only are Tesoro’s workers constructing 1,140-foot-long concrete piers, but they’re also contributing to the readiness of the U.S. Navy’s Atlantic Fleet. The end result of their efforts will be a station where ships and submarines are exposed to high-voltage electricity in order to erase their magnetic signatures and protect them from enemy detection.
Though the project is unique, it represents the multi-layered nature of many government jobs: there’s the detailed work performed, and then there’s what the work means in the big picture.
What looks like a typical three-story, 85,000-square-foot office building on paper eventually will serve as a Naval command center with high-tech war-gaming capabilities. And what began as a contract for access roads, pre-cast reinforced concrete buildings and security fencing is now a 12-acre compound where the Navy can research and develop new weapons, materials and tactics.
It’s challenging, gratifying work. But perhaps even more important in today’s economy, it’s available work.
After awarding more than a billion dollars in construction contracts in fiscal year 2008, the Base Realignment and Closure (BRAC) program, which oversees the U.S. Department of Defense’s (DoD) recommended changes to military installations, received an 18 percent funding boost for fiscal year 2009. General contracting giants Hensel Phelps Construction Co., Balfour Beatty Construction, Clark Construction Group, LLC and Caddell Construction Co., among others, are well into large-scale projects at Fort Sam Houston, Texas; Fort Benning, Ga.; Fort Meade, Md.; Walter Reed National Military Medical Center, Bethesda, Md.; and other military installations across the nation.
Opportunities to update mission-critical federal facilities also exist for smaller contractors that don’t qualify for BRAC contracts, or haven’t previously worked with the government. Contractors can enter the market in a variety of ways, and the government is adjusting the way it operates to generate even more work.
Pursuing Service-Based ContractsJohnson-Laux, an Orlando, Fla.-based general contractor, has been involved in the public sector since 2001. Last year, it pursued a job order contract with the Greater Orlando Aviation Authority for work at the Orlando International Airport. Fourteen contractors submitted bids, five of which were seeking to renew previous contracts. Johnson-Laux made the short list of eight and, in the end, impressed the owner enough to be chosen as one of the project’s five continuing vertical construction services contractors.
Not only did the 15-employee firm gain a five-year contract, but it also expanded its strategic focus to winning multi-year, performance-based public work. Last fall, this emphasis translated into a seven-year job order contract with Indyne, a prime contractor to the U.S. Air Force, to perform various mission-critical construction projects at Cape Canaveral, Patrick Air Force Base and Kennedy Space Center.
“Now more than ever, these contracts mean so much because it’s so fiercely competitive out there,” says Kevin Johnson, president of Johnson-Laux. “You could basically have five to seven years worth of work depending on the contract terms. These contracts can carry contractors through these types of economic periods.”
To date, most of Johnson-Laux’s work on the Indyne contract, which consists of a variety of construction and maintenance projects, has occurred at Cape Canaveral.
Challenges on federal military projects include functioning in operating facilities and handling related logistical and security measures.
“It’s challenging, yet very exciting. You’re working in an area not everybody gets to work in,” Johnson says. “Working for the military or at a military installation brings a sense of pride and patriotism. It’s an honor to be afforded the opportunity and trust of Indyne and to be a part of a team with the U.S. Air Force.”
Shifting the RiskDennis Gilbert started Tesoro Corp. in 1997 after spending a decade as a construction manager for the Navy. Due to his understanding of federal regulations, he felt he could succeed as a Hispanic-owned contractor seeking work under the government’s business development program for socially and economically disadvantaged companies.
By all accounts, he seems to be attaining his goals. The company has grown from five employees to 120 and has performed more than $300 million of work—90 percent of which is in the government sector—during 11 years of business.
One trend Gilbert identified is the government’s increasing willingness to transfer risk through design-build project delivery, which in turn can result in more rapid project completion.
“When we’re responsible for the design, we can fast track it,” Gilbert says. “When the foundation design is finished, we can start on the building even though the carpet and light fixtures haven’t been picked out.
“From the owner’s perspective, there’s no more getting in the middle and dealing with change orders. We warranty the design will work.”
Tesoro has completed more than 30 design-build projects and is working on two more for government clients. The $16.3 million Multi Mission Coast Guard Station in Gulfport, Miss., is a 26,000-square-foot replacement for a similar complex destroyed by Hurricane Katrina in 2005. It supports search-and-rescue and homeland defense missions, houses personnel, and provides storage for small boats. Not only is the station designed to withstand a Category 4 hurricane, but it also is pursuing LEED Silver certification.
Sustainable features and construction practices also are evident on Tesoro’s Norfolk jobsite for the $26.5 million Navy Warfare Development Command administrative facility. Per a BRAC directive, the facility—complete with DoD anti-terrorism and force protection standards—is expected to welcome employees relocating from Newport, R.I., in early 2010.
Building on Health Care Experience
In addition to adopting design-build contracts, the government increasingly is electing to lease projects rather than build from scratch. Agencies such as the U.S. Department of Veterans Affairs (VA) often can get more bang for their buck, and therefore build more facilities, by replacing the burden of capital outlay with lease payments.
“It’s a very successful method of acquiring; plus, the developer can recoup costs over time,” says Scott Cairns, vice president of Smith Consulting Architects, San Diego. “I think you’re going to see a lot more of it.”
This could prove particularly true considering the VA has an aggressive schedule of national projects, and former President Bush and President Obama have been adamant about providing quality medical care to veterans.
Several years ago, the VA put out a solicitation for offers on a new outpatient facility in San Diego County, Calif., which has the largest concentration of veterans in the United States. Rockefeller Group Development Corp., Irvine, Calif., had room available in Seagate Corporate Center, a 384,500-square-foot business park under construction in Oceanside, Calif. Rockefeller called on Smith Consulting Architects, Seagate’s designer, to help respond to the solicitation.
The team, along with San Diego-based Reno Contracting, won the contract last June and broke ground on the two-story, 84,000-square-foot clinic in March. Construction should last 14 months; the VA’s lease lasts 20 years.
The new clinic, located near the U.S. Marine Corps’ Camp Pendleton, will provide a variety of medical, compensation and pension evaluation services for approximately 88,000 outpatient visitors per year.
“For the first time, the VA is trying to make all clinics feel like nice doctors’ offices, so we’re using a lot more warm finishes, carpet tiles and colors,” Cairns says.
Additionally, the Seagate clinic features energy-efficient components such as dual-glazed glass around the building perimeter, a variable air volume air-conditioning system, dual chillers and a white foam roof. Back-up generators and a water supply holding tank are available for emergencies.
Security measures required by the VA add an extra layer to the project.
“It’s a medical facility wrapped in an anti-terrorist structure,” says Matt Reno, founder and CEO of Reno Contracting. “You have architecturally pleasing barricades, bulletproof glass, and the walls of the building are blast-proof to a certain degree.”
Both the architect and general contractor transferred their experience designing and building medical office buildings for this foray into VA work, and Reno is looking to collaborate with The Rockefeller Group on another VA project in Arizona.
“If we can do one of these a year for them, that would be terrific,” Reno says.
Making the Case for Modular
Recently, federal clients also have become more accepting of modular construction solutions.
“The key element about modular a lot of people don’t recognize is that over the past five years, technological advancements are such that you can have the same quality building that is built in a manufacturing plant that you would have typically gotten with site-built technologies,” says Jay Grass, director of business development for the Government Services Division of ModSpace, a modular building provider based in Berwyn, Pa. “We’re now providing permanent facilities with technology that wasn’t available 10 years ago.”
One important advancement has been eliminating the threat of progressive collapse in buildings exceeding two stories—something the government zeroed in on after the Twin Towers disaster on Sept. 11, 2001. Innovations also have occurred in mechanical, electrical and plumbing systems, as well as with blast-resistant windows in wood-framed buildings.
Considering these technological breakthroughs and the push to grow the U.S. Armed Forces—not to mention President Obama’s emphasis on executing shovel-ready projects to stimulate the economy—Grass foresees ongoing opportunities amid this tough economy.
ModSpace did its first large-scale modular brigade facility at Fort Stewart, Ga., in 2004, installing 467 separate units joined to form barracks, offices, supply rooms, and laundry and vehicle maintenance facilities in just 142 days. The firm also recently provided 120,000 square feet of barracks at Fort Knox, Ky., for new soldiers beginning basic training; and last summer celebrated the opening of a permanent VA outpatient clinic in St. John the Baptist Parish, Reserve, La., serving more than 200,000 area veterans.
Current ModSpace projects are under way at Fort Bliss, Texas; Quantico Marine Corps Base, Va; and Marine Corps Air Ground Combat Center, Twentynine Palms, Calif.
Modular building was a viable option on these projects because they required a high-quality facility, with four or fewer stories, to be completed in less than 500 days. The potential for flexibility was another attractive feature.
“The Army is now asking as a part of the RFP process: ‘What can you do with buildings 25 years from now to reconfigure or adapt them to a different use?’ Modular technologies are unique in their capacity to take out every interior wall and take a multi-story building with individual bedrooms and turn it into wide open office space,” Grass explains. “The faster they get the doors open, the more quickly troops are in place and able to accomplish their mission.”
In February 2008, the U.S. Army selected Hensel Phelps Construction Co., Chantilly, Va., to build a new 1 million-square-foot headquarters for the Defense Information Systems Agency (DISA) at Fort Meade, Md. The $370 million contract came with a 51 percent small business goal, including 15 percent minority and 10 percent women participation, as well as representation from disadvantaged businesses and disabled veterans.
The requirements aren’t surprising for Maryland, which is the only state with a law obliging state agencies to work toward achieving 25 percent minority participation in contracting. Plus, the state has sub-goals for participation by African American and women-owned enterprises (7 percent and 10 percent, respectively). Due to these participation goals—not to mention a bevy of contracting opportunities stemming from the U.S. military’s Base Realignment and Closure (BRAC) program—the state has seen an influx of new women and minority business enterprise (W/MBE) contractors, some of which have limited construction industry experience.
“Right now these new W/MBE contractors are being told that there are incredible opportunities out there, but nobody is showing them what it takes to be a quality contractor,” says Mike Henderson, president of the Associated Builders and Contractors (ABC) Baltimore Metro Chapter.
To fill that gap, ABC’s Baltimore Metro Chapter is teaming up with Hensel Phelps and the Maryland Minority Contractor’s Association to lead a Contractor’s Boot Camp on the Fort Meade project. Henderson expects about 50 to 60 contractors to participate in the program, which debuted in March and is based on a successful seven-week pilot training program for minority subcontractors that ABC’s Baltimore Metro Chapter offered in fall 2007 with the help of Baltimore City Community College and several large area general contractors.
The boot camp involves three days of classroom instruction—led by Matt Stevens, president of Stevens Construction Institute—covering business fundamentals such as return on investment, financial management, estimating, bidding, scheduling, recruiting and retention, and leadership. On the fourth day of the program, Hensel Phelps mentors participants on how to work successfully with the company in areas such as safety, jobsite supervision, billing and change orders.
Additionally, the boot camp introduces participants to local workforce investment boards that can offer continued training support and assistance finding jobs and obtaining background checks. Grants from ABC National and the Maryland Department of Labor are funding the venture.
“We’re hoping participants will learn the essential building blocks for what it takes to become a successful contractor,” Henderson says. “We want to make sure they’re in business not just to do this one job, but are in business 15 to 20 years down the road.”
Along with contributing to the boot camp, this spring Hensel Phelps will wrap up its first year on the 95-acre DISA jobsite. The new high-tech headquarters will include meeting areas, low-paneled cubicles, fitness and wellness centers, a cafeteria, an outdoor courtyard, access to nature trails and sustainable features to support LEED Silver certification.
Per BRAC, more than 4,000 DISA workers currently based in Northern Virginia are scheduled to move to Fort Meade by September 2011.