Dive Brief:

• The U.S. Army Corps of Engineers Kansas City District announced it awarded a $712 million design-build contract for its new $945 million Next NGA (National Geospatial-Intelligence Agency) West (NW2) headquarters project to a joint venture of McCarthy Building Co. and HITT Contracting. The JV also includes Black & Veatch and architecture firm Gensler.
• The 712,000-square-foot office building project will also include parking garages and a visitor center, as well as a remote inspection facility and control access points and myriad sustainability-focused building and campus features.
• The NW2 campus represents the largest federal investment project ever in the St. Louis area and will be jointly managed by the Army Corps, NGA and the U.S. Air Force, which owns the property. Construction is expected to be complete in April 2023. 

Dive Insight:

Since the NW2 project is federally funded, the contract sets diversity requirements. Almost 7% of the construction workforce must be women, and each trade, such as carpenters and electricians, must have 14.7% minority participation. The St. Louis Building Construction Trades Council is also expected to help military veterans find employment there through its Helmets to Hardhats program. 

While minority participation requirements on a project-by-project basis could be higher, the federal government’s goal is to award at least 5% of all federal contracting dollars each year to disadvantaged small businesses, and those companies can demonstrate their eligibility by becoming certified through the Small Business Administration’s 8(a) Business Development program. 

In addition to being eligible for federal set-asides, contractors can also consult with administration specialists on how to bid on federal jobs, gain access to potential joint venture partners through the SBA mentor-protege program, secure loan guarantees and take advantage of other educational, business and technical resources. 

Being qualified under the 8(a) program can lead to lucrative construction contracts for minority and small businesses, so there are always some individuals that try to cheat the process, even at the risk of heavy financial penalties and jail time. 

In February, for instance, two contractors agreed to pay $3.6 million to settle allegations that they committed 8(a) fraud. The government alleged that one company, which was 8(a) certified, handed over operations and decision-making to another firm that was not. In some cases, in order to recoup the proceeds of illegally obtained contracts, the federal government sometimes also will seize company property and the personal property of the individuals behind 8(a) fraud.