Air Force Awards $21.9M Contract to Fargo Pacific for Terminal Renovation in Guam

Contract Overview

Contract Amount: $21,902,826 ($21.9M)

Contractor: Fargo Pacific Inc.

Awarding Agency: Department of Defense

Start Date: 2024-08-06

End Date: 2026-10-25

Contract Duration: 810 days

Daily Burn Rate: $27.0K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: RENOVATE PASSENGER TERMINAL B-17002 AND PROVIDE TEMPORARY FACILITY FOR PASSENGER TERMINAL

Place of Performance

Location: YIGO, GUAM County, GUAM, 96929

Plain-Language Summary

Department of Defense obligated $21.9 million to FARGO PACIFIC INC. for work described as: RENOVATE PASSENGER TERMINAL B-17002 AND PROVIDE TEMPORARY FACILITY FOR PASSENGER TERMINAL Key points: 1. Significant investment in critical infrastructure for the Guam Air Force base. 2. Competition method suggests potential for price discovery, but exclusion of sources warrants scrutiny. 3. Risk of cost overruns or delays exists given the project's scope and duration. 4. Construction sector spending is substantial, with this contract representing a notable allocation.

Value Assessment

Rating: fair

The contract value of $21.9 million for renovating a passenger terminal appears substantial. Benchmarking against similar large-scale construction projects is necessary to determine if the pricing is competitive, especially considering the firm-fixed-price structure.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating a limited competition. This method may restrict the pool of potential bidders and could impact the government's ability to secure the lowest possible price.

Taxpayer Impact: Taxpayer funds are being utilized for this significant infrastructure project. The limited competition raises questions about whether the most cost-effective solution was secured.

Public Impact

Enhances passenger experience and operational efficiency at the Guam terminal. Supports military readiness and personnel movement in the Indo-Pacific region. Potential for job creation and economic activity in Guam during the construction period.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may lead to higher costs.
Project duration of over two years presents potential for delays.
Firm-fixed-price contracts can shift cost overrun risk to the contractor, but scope creep is a concern.

Positive Signals

Addresses a clear need for infrastructure improvement.
Firm-fixed-price contract provides cost certainty if scope is well-defined.
Awarded to a contractor with experience in the region (implied by name).

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector. Spending in this sector is often project-driven and can fluctuate based on government infrastructure needs and modernization efforts.

Small Business Impact

The data indicates this contract was not awarded to a small business. Further analysis would be needed to determine if small business subcontracting opportunities exist within this larger prime contract.

Oversight & Accountability

Oversight will be crucial to ensure the project stays on schedule and within budget, particularly given the two-year duration and the limited competition. The Air Force should monitor progress closely and manage any potential scope changes effectively.

Related Government Programs

Commercial and Institutional Building Construction
Department of Defense Contracting
Department of the Air Force Programs

Risk Flags

Limited competition may result in suboptimal pricing.
Extended project duration increases risk of delays and cost escalation.
Potential for scope creep in a large construction project.
Lack of small business prime awardee.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.9 million to FARGO PACIFIC INC.. RENOVATE PASSENGER TERMINAL B-17002 AND PROVIDE TEMPORARY FACILITY FOR PASSENGER TERMINAL

Who is the contractor on this award?

The obligated recipient is FARGO PACIFIC INC..

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 $21.9 million.

What is the period of performance?

Start: 2024-08-06. End: 2026-10-25.

What specific criteria led to the exclusion of sources in the competition, and how was the fairness of the limited competition assessed?

The exclusion of sources typically occurs when only a limited number of contractors can meet specific, justifiable requirements, such as unique capabilities, security clearances, or geographic proximity. The contracting officer must document the rationale for exclusion and ensure the remaining competition is fair and provides the best value. Without detailed documentation, it's difficult to assess the fairness and potential impact on price.

What are the key performance indicators and risk mitigation strategies in place to manage the $21.9 million terminal renovation project over its 810-day duration?

Effective project management would involve detailed schedules, regular progress reports, quality assurance checks, and contingency plans for unforeseen issues like material shortages or weather delays. Key performance indicators might include on-time completion milestones, adherence to quality standards, and budget variance. Risk mitigation would focus on proactive identification and management of potential issues throughout the project lifecycle.

How does the awarded price compare to independent government cost estimates or market research for similar terminal renovation projects of this scale?

A thorough comparison against independent government cost estimates (IGCE) and market research data is essential. If the awarded price is significantly higher than benchmarks, it could indicate a lack of effective price negotiation or insufficient competition. Conversely, if it aligns with or is below estimates, it suggests a potentially good value was achieved despite the limited competition.

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 AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: FA524024R0005

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 124 SERENU AVE, TAMUNING, GU, 96913

Business Categories: Asian Pacific American Owned Business, Category Business, Corporate Entity Not Tax Exempt, HUBZone Firm, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $21,902,826

Exercised Options: $21,902,826

Current Obligation: $21,902,826

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline