Everything is more expensive these days. Check out the latest Marine barracks you bought earlier this week: we’re spending between $67,681,224 and $75,874,765 to build 400 Marine bedrooms. That works out to a per-bedroom price ranging from $169,203.06 to $189,686.91. That crudely translates into spending more than a half-million dollars for a three-bedroom house.
They’re going to be built at Camp Lejeune, N.C., over the next two years, in three buildings up to five stories high. We’ve asked the contracting officer to offer details about the cost, but haven’t heard back (although one of the contracting documents says the price includes “an upgrade of a portion of the Amphibious Assault Vehicle (AAV) trail near the project site”). The Marines traditionally have been seen as the cheapest, most penny-pinching service.
UPDATE: The Marines want to point out a few things:
As with all issues initially taken at face value, it certainly appears that we are paying a lot for our projects, but if you take into account what we are including in the contract along with the regulations governing Federal contracting & design, it should help explain the costs.
1. Project planning pricing is based both on pricing guidance from DoD industry guidance documents (such as MEANS) and pricing from similar projects recently awarded for construction.
2. As is noted on the blog, 33 proposals were received and it was determined that the proposal from Harper was the best value to the government. Based on the contract requirements that were issued, the market determined the final price for the contract.
3. At $68M, that equates to $85K per Marine. However, that is more than just a bedroom. That price includes bathrooms, multipurpose areas, fitness areas, laundry rooms, and equipment cleaning stations.
4. Another critical and expensive cost for our projects is the site work and utility infrastructure that is needed to be brought to the site to support these barracks. Barracks are of no use if they don’t have electricity or water. These costs are nearly 28% of the total project budget.
5. Based on analyses completed to date and supported by industry association input, as well as direct cost comparisons between recent projects both in the federal and private sectors, there is an added cost to construct federal facilities in general due to fundamental differences in management strategies between the public and private sectors:
– DOD is an extremely large enterprise which builds facilities with considerably longer service lives to maximize return on investment. Our barracks are built to last for 60+ years.
– Private sector is often motivated by market drivers which encourage facility recapitalization on a more regular basis. Tax incentives in the private sector encourage increased recapitalization, renovation and facility renewal.
– DOD projects must comply with all mandated anti-terrorism/force protection standards.
– Federally-funded projects must comply with all Federal Contracting requirements and Davis-Bacon wage requirements.
– Bonding Requirements (Miller Act) – Federal projects require 100% performance and payment bonding, which add to the general contractor’s costs. Private sector jobs often have no bonding requirements.