DoD's $24M Tower 2091 conversion to unaccompanied housing awarded to NIPPO CORPORATION

Contract Overview

Contract Amount: $23,989,839 ($24.0M)

Contractor: Nippo Corporation

Awarding Agency: Department of Defense

Start Date: 2022-12-28

End Date: 2028-01-06

Contract Duration: 1,835 days

Daily Burn Rate: $13.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: CONVERSION OF TOWER 2091 TO UNACCOMPANIED HOUSING

Plain-Language Summary

Department of Defense obligated $24.0 million to NIPPO CORPORATION for work described as: CONVERSION OF TOWER 2091 TO UNACCOMPANIED HOUSING Key points: 1. The contract value represents a significant investment in military housing infrastructure. 2. Full and open competition suggests a potentially competitive bidding process. 3. The fixed-price contract type shifts cost risk to the contractor. 4. The project duration of over 5 years indicates a substantial construction undertaking. 5. The absence of small business set-aside flags potential for larger prime contractors. 6. The project aims to address critical housing needs for service members.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific details on the scope of work and the condition of Tower 2091. However, the total contract value of approximately $24 million for a conversion project of this scale, spanning over five years, suggests a moderate per-year expenditure. Comparisons to similar military housing conversion projects would be necessary to definitively assess value for money. The firm fixed-price nature of the contract provides cost certainty for the government, but the ultimate value will depend on the quality of the delivered housing and adherence to budget.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 6 bids suggests a reasonable level of competition for this project. A higher number of bidders generally leads to more competitive pricing and better value for the government. The specific details of the bidding process and the evaluation criteria would provide further insight into the effectiveness of the competition.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically drives down costs through market forces, ensuring the government receives competitive pricing for its investments.

Public Impact

Service members designated as unaccompanied will benefit from improved housing conditions. The project will deliver renovated and modernized living quarters. The geographic impact is localized to the base where Tower 2091 is located. The construction and renovation activities will likely involve a local or regional workforce. The successful completion of this project contributes to military readiness and personnel morale.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen issues arise during conversion, despite fixed-price.
Quality of construction may vary, requiring diligent oversight to ensure standards are met.
Schedule delays could impact the availability of housing for service members.

Positive Signals

Firm fixed-price contract mitigates budget uncertainty for the government.
Full and open competition suggests a potentially competitive pricing environment.
Long-term contract duration allows for phased completion and potential for contractor learning curve benefits.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, specifically focusing on the renovation and conversion of existing structures for specialized use. The defense sector frequently engages in such construction projects to maintain and upgrade its vast real estate portfolio. Comparable spending benchmarks would involve analyzing other military barracks or dormitory conversion projects, which can vary significantly based on location, size, and scope of renovation.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, and there is no information provided regarding subcontracting plans. This suggests that the prime contract was likely awarded to a larger firm capable of undertaking a project of this magnitude. The absence of specific small business participation goals means that the direct impact on the small business ecosystem for this particular contract is likely minimal, unless the prime contractor voluntarily engages small businesses for subcontracting.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Air Force's contracting and engineering divisions. Accountability measures would include adherence to the contract terms, performance standards, and delivery schedules. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Military Housing Privatization Initiative
Base Realignment and Closure (BRAC) projects
Department of Defense Facilities Sustainment, Restoration, and Modernization (FSRM)
Unaccompanied Personnel Housing

Risk Flags

Potential for cost escalation if unforeseen site conditions arise.
Risk of schedule delays impacting housing availability.
Need for robust quality assurance to ensure construction standards.
Contractor performance history requires verification for large-scale project execution.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.0 million to NIPPO CORPORATION. CONVERSION OF TOWER 2091 TO UNACCOMPANIED HOUSING

Who is the contractor on this award?

The obligated recipient is NIPPO CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $24.0 million.

What is the period of performance?

Start: 2022-12-28. End: 2028-01-06.

What is the specific scope of work for the conversion of Tower 2091, and what are the key renovation requirements?

The provided data indicates the contract is for the 'CONVERSION OF TOWER 2091 TO UNACCOMPANIED HOUSING.' While specific details are not in the abbreviated data, typical scopes for such conversions include gutting existing spaces, reconfiguring layouts to create individual or shared living quarters, upgrading electrical and plumbing systems, installing new HVAC, modernizing bathrooms and kitchens (if applicable), and ensuring compliance with current building codes and safety standards. The project aims to transform the existing structure into modern, functional housing units suitable for service members without dependents, likely focusing on enhancing privacy, comfort, and amenities compared to older barracks.

How does the awarded price of $23,989,838.69 compare to similar military housing conversion projects?

Direct comparison of the $23.99 million price tag to similar projects is difficult without detailed project specifications, location, and the specific year of award for comparable contracts. However, for a large-scale conversion of a significant building like a tower over a five-year period, this figure appears within a plausible range for military construction. Factors influencing cost include the building's current condition, the extent of modernization required, labor costs in the specific geographic region, and the complexity of the design. A thorough benchmark analysis would require access to a database of similar DoD construction contracts with detailed cost breakdowns.

What are the primary risks associated with this firm fixed-price contract for the government?

While firm fixed-price contracts are generally favored for cost certainty, the primary risks for the government lie in potential contractor underestimation of costs or unforeseen site conditions. If NIPPO CORPORATION encounters significant issues during the conversion (e.g., structural problems, hazardous materials, unexpected system complexities) that were not adequately accounted for in their bid, they might seek change orders, potentially increasing the overall cost. There's also a risk that the contractor might cut corners on quality to maintain profitability, necessitating stringent government oversight to ensure adherence to specifications and standards. Schedule delays, while not directly a cost risk in FFP, can impact operational readiness and service member housing availability.

What is the track record of NIPPO CORPORATION in executing large-scale government construction contracts?

Information regarding NIPPO CORPORATION's specific track record with large-scale government construction contracts is not detailed in the provided data. A comprehensive assessment would require reviewing their past performance history, including on-time delivery, budget adherence, quality of work, and any past disputes or contract terminations on similar projects. Government contract databases and past performance evaluations (if publicly accessible) would be the primary sources for this information. Understanding their experience with military construction, specifically housing conversions, would be crucial.

What are the potential implications of the 6 bids received on the final contract price and value?

Receiving 6 bids under a full and open competition generally indicates a healthy level of market interest and competition for the contract. This suggests that the government likely received a range of pricing proposals, and the competitive pressure among bidders would have encouraged them to submit their most cost-effective offers to win the award. Consequently, the final contract price is more likely to reflect fair market value, and the government benefits from potentially better value for money compared to a situation with fewer bidders. The specific bid amounts and the winning bid relative to others would provide further insight into the competitiveness.

How does this contract align with the Department of the Air Force's broader strategy for military housing?

This contract aligns with the Department of the Air Force's ongoing efforts to modernize and improve military housing, particularly for unaccompanied personnel. Investing in the conversion of existing structures like Tower 2091 addresses the need for adequate and contemporary living spaces, which is critical for recruitment, retention, and overall morale of service members. Such projects are often part of larger strategic initiatives to upgrade aging infrastructure across bases, ensuring that military families and personnel have safe, comfortable, and modern accommodations, thereby supporting mission readiness and quality of life.

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

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1-19-11, KYOBASHI, CHUO-KU

Business Categories: Category Business, Corporate Entity Tax Exempt, Foreign Owned, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $23,989,839

Exercised Options: $23,989,839

Current Obligation: $23,989,839

Actual Outlays: $1,824,588

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA520920D0009

IDV Type: IDC

Timeline