DoD Awards $20.6M for Japan Base Repair, Facing Potential Overruns and Limited Small Business Participation

Contract Overview

Contract Amount: $20,650,531 ($20.7M)

Contractor: Global Engineering & Construction, LLC

Awarding Agency: Department of Defense

Start Date: 2014-09-30

End Date: 2019-03-28

Contract Duration: 1,640 days

Daily Burn Rate: $12.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF REPAIR/RENEWAL YOKOSUKA/CAMP ZAMA JAPAN

Plain-Language Summary

Department of Defense obligated $20.7 million to GLOBAL ENGINEERING & CONSTRUCTION, LLC for work described as: IGF::OT::IGF REPAIR/RENEWAL YOKOSUKA/CAMP ZAMA JAPAN Key points: 1. Spending on base repair and renewal in Japan totals $20.6 million. 2. Competition was full and open, but the award was a delivery order, suggesting a broader contract. 3. Risk of cost overruns exists due to the long duration and fixed-price contract. 4. The construction sector is subject to fluctuating material costs and labor availability.

Value Assessment

Rating: fair

The $20.6 million award for base repair appears reasonable given the scope and duration. However, without specific benchmarks for similar projects in Japan, a precise valuation is difficult. The fixed-price contract type offers some cost control.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating a robust price discovery process. As a delivery order, it suggests a pre-existing contract vehicle was utilized, potentially streamlining the acquisition but possibly limiting direct competition on this specific order.

Taxpayer Impact: Taxpayer funds are being utilized for essential infrastructure maintenance and repair in a critical overseas location. The fixed-price nature aims to control costs, but potential overruns could increase the final expenditure.

Public Impact

Ensures operational readiness of US military bases in Japan. Supports infrastructure development and maintenance in a key geopolitical region. Potential for job creation in construction and related trades. Highlights the ongoing US commitment to regional security.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (1640 days) increases risk of cost escalation.
Fixed-price contract with potential for unforeseen site conditions.
Limited small business participation noted.
Geographic location may introduce logistical challenges and costs.

Positive Signals

Awarded under full and open competition.
Addresses critical infrastructure needs.
Delivery order mechanism can be efficient for ongoing requirements.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector. Spending in this sector can be volatile, influenced by economic conditions, material costs, and labor availability. DoD construction spending benchmarks vary significantly by project type and location.

Small Business Impact

The data indicates that small business participation was not a factor in this award (ss: false, sb: false). This suggests that the prime contractor is likely a larger entity, and opportunities for small businesses may have been limited or subcontracted through channels not detailed here.

Oversight & Accountability

Oversight would typically be managed by the Department of the Army's contracting and engineering divisions. Accountability for performance and cost rests with GLOBAL ENGINEERING & CONSTRUCTION, LLC, monitored through contract milestones and inspections.

Related Government Programs

Commercial and Institutional Building Construction
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Potential for cost overruns due to fixed-price contract and long duration.
Limited small business participation.
Geographic location may increase logistical costs and complexity.
Reliance on delivery orders may obscure true cost competition for specific tasks.
Potential for scope creep or unforeseen site conditions.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.7 million to GLOBAL ENGINEERING & CONSTRUCTION, LLC. IGF::OT::IGF REPAIR/RENEWAL YOKOSUKA/CAMP ZAMA JAPAN

Who is the contractor on this award?

The obligated recipient is GLOBAL ENGINEERING & CONSTRUCTION, LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $20.7 million.

What is the period of performance?

Start: 2014-09-30. End: 2019-03-28.

What specific factors contributed to the $20.6 million cost for this repair and renewal project, and how do they align with industry standards for similar work in Japan?

The $20.6 million cost likely encompasses labor, materials, equipment, project management, and potentially logistical challenges specific to operating in Japan. Without detailed breakdowns or comparable project data, assessing alignment with industry standards is difficult. Factors like prevailing wages, material import costs, and specific site remediation needs would influence the final price.

Given the fixed-price contract and long duration, what mechanisms are in place to mitigate the risk of cost overruns due to unforeseen conditions or market fluctuations?

While fixed-price contracts aim to cap costs, unforeseen conditions can still lead to change orders or claims, potentially increasing the final price. Mitigation strategies may include detailed site investigations prior to award, robust contingency planning within the contract, and strict change order management processes overseen by the contracting officer.

How effectively does the delivery order mechanism, under a full and open competition framework, ensure optimal value and timely execution for ongoing base maintenance needs?

Delivery orders under established contract vehicles can offer efficiency and speed for recurring needs. Full and open competition at the IDIQ (Indefinite Delivery/Indefinite Quantity) level ensures a competitive pool. However, the specific value and execution depend on the initial IDIQ's pricing structure and the task order competition process, which might be less granular than a standalone new contract.

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Commercial and Institutional Building Construction

Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR NONBUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: W912DY10R0005

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 4904 LAKE WASHINGTON BLVD NE, RENTON, WA, 98056

Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $20,650,531

Exercised Options: $20,650,531

Current Obligation: $20,650,531

Subaward Activity

Number of Subawards: 4

Total Subaward Amount: $800,740

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W912DY12D0013

IDV Type: IDC

Timeline