Department of Defense awards $68.77M for family housing facilities, highlighting construction sector competition

Contract Overview

Contract Amount: $40,904,180 ($40.9M)

Contractor: Pumyang Construction CO., Ltd.

Awarding Agency: Department of Defense

Start Date: 2003-08-24

End Date: 2008-09-30

Contract Duration: 1,864 days

Daily Burn Rate: $21.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 9

Pricing Type: FIXED PRICE

Sector: Construction

Official Description: 200311!000327!2100!CA81 !USA ENGINEER DISTRICT, FAR EAST !DACA8103C0038 !A!N! !N! !20030824!20030821!687745414!687745414!687745414!N!PUMYANG CONSTRUCTION CO , LTD !750-14, BANGBAE-DONG, SEOC!SEOUL !KS!* !* !* !KS!* !* !KOREA, REP!+000027079714!N!N!034048763211!Y161!FAMILY HOUSING FACILITIES !C2 !CONSTRUCTION !1000!NOT DISCERNABLE OR CLASSIFIED !236118!E! !3! ! ! ! ! !99990909!B! ! !N!Z!A!Y!J!2!009!B! !Z!N!C!B !KS!N!L!N! ! ! ! ! !A!A!000!A!B!N! ! ! ! ! ! !0001! !

Plain-Language Summary

Department of Defense obligated $40.9 million to PUMYANG CONSTRUCTION CO., LTD. for work described as: 200311!000327!2100!CA81 !USA ENGINEER DISTRICT, FAR EAST !DACA8103C0038 !A!N! !N! !20030824!20030821!687745414!687745414!687745414!N!PUMYANG CONSTRUCTION CO , LTD !750-14, BANGBAE-DONG, SEOC!SEOUL !KS!* !* !* !KS!* !* !KOREA, REP!+000027079714!N!N!034048763211!Y161!FAMILY HOUSING… Key points: 1. Contract value of $68.77M for family housing facilities suggests significant investment in military infrastructure. 2. Full and open competition indicates a robust bidding process, potentially leading to better pricing for the government. 3. The contract duration of 1864 days points to a long-term project, requiring sustained contractor performance. 4. Award to a South Korean firm, PUMYANG CONSTRUCTION CO., LTD., suggests international participation in defense construction. 5. The contract falls under the 'Construction' sector, specifically 'Electrical Contractors and Other Wiring Installation Contractors', indicating specialized services. 6. A fixed-price contract type generally shifts risk to the contractor, potentially stabilizing costs for the government.

Value Assessment

Rating: good

The contract value of $68.77 million for family housing facilities appears substantial, reflecting the scale of infrastructure development. Benchmarking against similar large-scale construction projects for military housing would provide a clearer picture of value for money. The fixed-price nature of the contract suggests that the contractor bears the risk of cost overruns, which can be advantageous for the government if managed effectively. However, without specific cost breakdowns or comparisons to industry standards for similar housing projects, a definitive value assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 9 bidders suggests a healthy level of competition for this significant construction project. A competitive environment like this typically drives down prices and encourages contractors to offer their best value, benefiting the government through potentially lower costs and higher quality services.

Taxpayer Impact: The extensive competition for this contract is beneficial for taxpayers as it likely resulted in a more cost-effective award than a sole-source or limited competition scenario. It ensures that public funds are used efficiently by leveraging market forces to secure favorable pricing.

Public Impact

Military personnel and their families stationed in the relevant geographic area will benefit from improved housing facilities. The contract delivers essential construction services, specifically focusing on electrical and wiring installations for family housing. The geographic impact is likely concentrated around a specific military installation or base where the housing facilities are located. The project will have workforce implications, creating jobs for construction workers, electricians, and support staff, potentially both locally and internationally depending on the contractor's sourcing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the fixed-price contract does not adequately account for unforeseen construction challenges.
Ensuring quality of electrical and wiring installations to meet stringent military standards requires robust oversight.
Logistical challenges associated with managing an international contractor for a large-scale construction project.
Dependency on the contractor's financial stability and performance over the extended contract duration.

Positive Signals

Full and open competition suggests a strong likelihood of competitive pricing and value.
The fixed-price contract type provides cost certainty for the government.
Awarding to a single contractor for a large project can streamline management and execution.
The long contract duration allows for focused execution and potential for building a strong working relationship.

Sector Analysis

The construction sector, particularly for government infrastructure, is a significant market. This contract falls under the specialized area of electrical contractors and other wiring installation, a critical component of modern building projects. The Department of Defense is a major client in the construction industry, awarding numerous contracts for facilities, infrastructure, and maintenance. Benchmarks for similar large-scale military housing construction projects would typically involve multi-million dollar values, with competition levels varying based on project complexity and location.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'ss': false. The large contract value and specialized nature suggest it may not be easily divisible for small business participation. However, the prime contractor, PUMYANG CONSTRUCTION CO., LTD., may engage small businesses as subcontractors for specific tasks, though this is not explicitly detailed in the provided data. The impact on the small business ecosystem would depend on subcontracting opportunities offered.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army, given its role in awarding the contract. Mechanisms likely include contract performance monitoring, site inspections, and quality assurance reviews to ensure compliance with specifications and standards. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Military Family Housing Construction
Department of Defense Construction Contracts
Electrical Installation Services
Foreign Military Sales Construction Support
Army Corps of Engineers Construction Projects

Risk Flags

Long contract duration increases exposure to market volatility (e.g., material costs).
International contractor may present logistical and communication challenges.
Fixed-price contract shifts cost overrun risk to contractor, potentially impacting quality if not managed.
Specialized nature of electrical installation requires rigorous quality assurance.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $40.9 million to PUMYANG CONSTRUCTION CO., LTD.. 200311!000327!2100!CA81 !USA ENGINEER DISTRICT, FAR EAST !DACA8103C0038 !A!N! !N! !20030824!20030821!687745414!687745414!687745414!N!PUMYANG CONSTRUCTION CO , LTD !750-14, BANGBAE-DONG, SEOC!SEOUL !KS!* !* !* !KS!* !* !KOREA, REP!+000027079714!N!N!034048763211!Y161!FAMILY HOUSING FACILITIES !C2 !CONSTRUCTION !1000!NOT DISCERNABLE OR CLASSIFIED !236118!E! !3! ! ! ! ! !99990909!B! ! !N!Z!A!Y!J!2!009!B! !Z!N!C!B !KS!N!L!N! ! ! ! ! !A!A!000!A!B!N! ! ! ! ! ! !0001! !

Who is the contractor on this award?

The obligated recipient is PUMYANG CONSTRUCTION CO., LTD..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $40.9 million.

What is the period of performance?

Start: 2003-08-24. End: 2008-09-30.

What is the historical spending pattern for family housing facilities by the Department of the Army?

The Department of the Army, and the Department of Defense more broadly, has a consistent history of significant investment in family housing facilities to support military personnel and their families. Annual spending can fluctuate based on infrastructure needs, modernization efforts, and budget allocations. Historically, these investments range from hundreds of millions to billions of dollars annually across various contract types, including new construction, renovation, and maintenance. Analyzing specific fiscal years and contract vehicles, such as this $68.77 million award, reveals trends in project scale, geographic distribution, and the types of construction services procured. Factors like base realignment and closure (BRAC) initiatives and evolving quality-of-life standards also influence spending patterns over time.

How does the per-unit cost of housing constructed under this contract compare to industry benchmarks?

Determining the precise per-unit cost of housing under this contract is challenging without detailed breakdowns of the total cost allocated to housing units versus other project elements (e.g., site preparation, common areas, specific electrical infrastructure). However, the total contract value of $68.77 million for an unspecified number of housing units suggests a substantial investment per unit. Industry benchmarks for military family housing can vary widely based on location, size, amenities, and construction type. Generally, military housing aims for quality comparable to civilian market rates, but often includes specific security and durability requirements. A detailed cost analysis would require knowing the number of units built and their specifications to compare against average construction costs per square foot or per unit in similar geographic regions and market segments.

What is PUMYANG CONSTRUCTION CO., LTD.'s track record with Department of Defense contracts?

PUMYANG CONSTRUCTION CO., LTD. has a track record of securing contracts with the Department of Defense, as evidenced by this award. Further investigation into their contract history would reveal the types and values of previous awards, their performance ratings, and any history of contract disputes or modifications. Companies that successfully win large-scale construction contracts, especially those involving international operations or specialized installations like electrical work, typically demonstrate a capacity to meet stringent government requirements. Assessing their past performance on similar projects, particularly those involving military infrastructure or housing, would provide insight into their reliability and capability to execute this current contract effectively.

What are the primary risks associated with a fixed-price contract of this magnitude and duration?

The primary risks associated with a fixed-price contract of this magnitude ($68.77 million) and duration (1864 days) primarily lie with the contractor, PUMYANG CONSTRUCTION CO., LTD. The contractor assumes the risk of cost overruns due to unforeseen issues such as material price increases, labor shortages, or unexpected site conditions. For the government, the main risks include potential compromises in quality if the contractor seeks to cut costs to maintain profitability, or contractor default if they become financially unstable over the long term. Effective government oversight is crucial to mitigate these risks by ensuring adherence to specifications and monitoring contractor performance and financial health throughout the project lifecycle.

How does the level of competition (9 bidders) impact the government's leverage in contract negotiations and oversight?

A competition level involving 9 bidders provides the government with significant leverage. It indicates a robust market interest in the contract, allowing the government to select from a wide pool of qualified contractors. This competitive environment typically drives down initial bid prices, securing better value for taxpayers. Post-award, the government's leverage is maintained through the implied threat of awarding future contracts to competitors if performance is unsatisfactory. Furthermore, the presence of multiple bidders suggests a healthy industry landscape, reducing the risk of contractor monopolies or undue influence. This leverage is critical for effective contract negotiation, scope management, and ensuring compliance throughout the contract's duration.

Industry Classification

NAICS: Construction › Building Equipment Contractors › Electrical Contractors and Other Wiring Installation Contractors

Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCT NONBUILDING FACILITIES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 9

Pricing Type: FIXED PRICE (J)

Contractor Details

Address: 750-14, BANGBAE-DONG, SEOC, SEOUL

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline