Design, cost and contract issues plague $1.3B StratCom HQ

Dive Brief:

The U.S. Department of Defense's inspector general has found that “inaccurate cost estimates, design deficiencies, contract modifications, fire, floods, mold and challenges related to the execution of contract modifications” has caused more than two years of delays and at least $53 million of cost overruns on the new $1.3 billion StratCom headquarters project at Offutt Air Force Base near Omaha, Nebraska.
During the first, $564 million phase of the project, the long string of project challenges that the Kiewit Corp.-Hensel Phelps joint venture has had to overcome included a destructive fire inside an HVAC duct, a copper pipe weld failure that allowed 9,000 gallons of water to pour onto a generator, leaks in a retaining wall, mold in HVAC ducts, labor shortages and design disputes between the JV and the government. The $53 million represents a JV change order for the mold and has upped the price tag of the construction phase to $614 million. The second, $679 million phase will see the government install furnishings and special equipment, a task estimated at 18 months.
The project team is scheduled to turn over the new headquarters to the Air Force in October, and all employees should be moved in by early 2020. Army Corps of Engineers, StratCom and other government departments involved with overseeing the project agreed with the inspector general's determinations but did not hold any individuals accountable.

Dive Insight:

Another project with Army Corps involvement took some heat from same inspector general's office recently, and that was the $1.2 billion hospital replacement at Fort Bliss in El Paso, Texas. The inspector general found that there had been almost $166 million of errors, omissions and change delays as of March 2018. These included the re-fabrication of structural steel and a lighting-related design error. The report indicated that the Army Corps itself was responsible for 126 days of delays related to interior framing, seismic testing and other project issues.

As March 15, 2018, the project had 973 contract changes, 132 of which were canceled.

The Army Corps is involved in many government construction projects, so it often is drawn into disputes. For example, in April, claims of nonpayment for $3 million in contractor cost overruns on a flood control and economic development in Fort Worth, Texas, came to light. The contractor said the Corps still owed money for extra work that exposed its employees to toxic soil.