Air Force awards $21.2M contract for airfield water line repairs, highlighting infrastructure needs

Contract Overview

Contract Amount: $21,195,631 ($21.2M)

Contractor: Kyunan CO., Ltd.

Awarding Agency: Department of Defense

Start Date: 2025-09-11

End Date: 2029-07-08

Contract Duration: 1,396 days

Daily Burn Rate: $15.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: LXEZ201076 REPAIR WATER LINES AROUND AIRFIELD, PHASE II

Plain-Language Summary

Department of Defense obligated $21.2 million to KYUNAN CO., LTD. for work described as: LXEZ201076 REPAIR WATER LINES AROUND AIRFIELD, PHASE II Key points: 1. Contract value represents a significant investment in critical airfield infrastructure maintenance. 2. The firm-fixed-price structure aims to control costs and provide predictability. 3. A full and open competition suggests a healthy market for these specialized construction services. 4. The contract duration of nearly four years indicates a substantial scope of work. 5. This award aligns with broader federal efforts to modernize aging infrastructure. 6. The specific NAICS code points to a specialized construction niche.

Value Assessment

Rating: good

The contract value of approximately $21.2 million for water line repairs appears reasonable given the scope and duration. Without specific benchmarks for airfield water line repair projects of this complexity, a direct per-unit cost comparison is challenging. However, the firm-fixed-price nature of the contract suggests that the contractor has priced the project to account for all anticipated costs and risks, which can be advantageous for the government in terms of cost certainty. The number of bids received (4) in a full and open competition also provides some assurance of competitive pricing.

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. Four bids were received, suggesting a competitive environment for this type of specialized construction service. The presence of multiple bidders generally leads to better price discovery and potentially more favorable terms for the government, as contractors vie for the award.

Taxpayer Impact: A competitive bidding process for this contract helps ensure that taxpayer dollars are used efficiently by driving down costs through market forces.

Public Impact

The primary beneficiaries are the Department of the Air Force and its personnel, ensuring operational continuity and safety through reliable water infrastructure. The contract will deliver essential repairs and upgrades to water and sewer lines around an airfield. The geographic impact is localized to the specific Air Force installation where the work is performed. The project will likely create or sustain jobs in the construction sector, particularly for skilled trades involved in utility construction.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions arise, despite the firm-fixed-price structure.
Dependency on contractor performance for timely completion and quality of repairs.
Risk of supply chain disruptions affecting material availability for construction.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Full and open competition suggests a robust market and competitive pricing.
Long-term contract duration allows for comprehensive infrastructure improvements.
Award to a single contractor streamlines management and oversight.

Sector Analysis

This contract falls within the construction sector, specifically focusing on utility infrastructure. The market for large-scale civil engineering and utility construction is substantial, with significant federal and private investment. Comparable spending benchmarks would typically involve other large infrastructure projects, such as road construction, bridge repair, or utility system upgrades at government facilities. The specialized nature of airfield infrastructure may command a premium due to unique operational requirements and security protocols.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). There is no information provided regarding subcontracting plans. Therefore, the direct impact on the small business ecosystem is likely minimal unless the prime contractor voluntarily engages small businesses for subcontracting opportunities. Further investigation into subcontracting goals would be necessary to assess broader small business implications.

Oversight & Accountability

Oversight for this contract will likely be managed by the contracting officer and the relevant Air Force installation's engineering and facilities management departments. Accountability measures are embedded in the firm-fixed-price contract terms, with penalties or incentives potentially tied to performance and completion milestones. Transparency is generally maintained through contract award databases, though specific project details and progress reports may be internal. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Military Construction
Base Realignment and Closure (BRAC) related infrastructure projects
Department of Defense Facilities Maintenance
Federal Infrastructure Investment Programs

Risk Flags

Potential for unforeseen site conditions impacting cost and schedule.
Dependency on contractor's ability to manage complex logistics in an operational environment.
Risk of material price fluctuations over the contract duration.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.2 million to KYUNAN CO., LTD.. LXEZ201076 REPAIR WATER LINES AROUND AIRFIELD, PHASE II

Who is the contractor on this award?

The obligated recipient is KYUNAN CO., LTD..

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 $21.2 million.

What is the period of performance?

Start: 2025-09-11. End: 2029-07-08.

What is the track record of KYUNAN CO., LTD. in performing similar large-scale utility construction contracts for the Department of Defense?

Assessing the track record of KYUNAN CO., LTD. requires a review of their past performance on federal contracts, particularly those involving utility infrastructure and airfield environments. Information from sources like the Federal Procurement Data System (FPDS) or the Contractor Performance Assessment Reporting System (CPARS) would be crucial. Key indicators to examine include on-time delivery, adherence to budget, quality of work, and any past disputes or contract terminations. A history of successful, similar projects would increase confidence in their ability to execute this current contract effectively. Conversely, a pattern of performance issues would raise concerns about potential risks and delays.

How does the awarded amount compare to the estimated cost or independent government cost estimate for this project?

To benchmark the value, the awarded amount of approximately $21.2 million should be compared against the government's independent cost estimate (ICE) or a detailed engineer's estimate for the project. If the awarded price is significantly below the ICE, it might indicate aggressive bidding or potential underestimation of scope by the contractor. If it's substantially higher, it could suggest an inflated estimate or a lack of sufficient competition. The difference between the bid prices from the four competitors also provides insight; a wide variance might signal differing interpretations of the scope or risk, while close bids often indicate a well-understood market price.

What are the primary risks associated with the long duration (nearly 4 years) and firm-fixed-price nature of this contract?

The primary risks associated with a long-duration, firm-fixed-price contract for airfield water line repair involve potential cost escalation for the contractor and scope creep for the government. For the contractor, unforeseen site conditions (e.g., encountering unexpected subsurface utilities, soil instability, or environmental hazards) or significant increases in material and labor costs over the nearly four-year period could erode profit margins. For the government, the risk lies in the contractor potentially cutting corners on quality to maintain profitability if costs rise unexpectedly, or delays if the contractor struggles financially. Robust oversight and clear contract clauses addressing unforeseen conditions are critical to mitigate these risks.

What is the potential impact of these water line repairs on ongoing airfield operations?

The potential impact of these water line repairs on ongoing airfield operations is a critical consideration. Phase II of repairs suggests a phased approach, likely designed to minimize disruption. However, any work involving underground utilities near active runways, taxiways, or operational facilities carries inherent risks of temporary service interruptions, noise, dust, and traffic control requirements. The contract details should specify mitigation strategies, such as working during off-peak hours, implementing temporary water supply solutions, and coordinating closely with airfield operations to ensure safety and minimize flight delays. The success of the repairs hinges on meticulous planning and execution to maintain operational tempo.

How does this contract's value and scope compare to historical spending on similar infrastructure projects within the Department of the Air Force?

Comparing this $21.2 million contract to historical spending requires analyzing past Air Force contracts for utility infrastructure repair and replacement, particularly those at air installations. Data from FPDS can reveal the average cost, duration, and scope of similar projects. For instance, have there been other multi-million dollar water line repair projects at Air Force bases recently? Understanding the historical context helps determine if this award is within the expected range for such work or if it represents a significant increase or decrease, potentially indicating changes in construction costs, project complexity, or federal investment priorities in infrastructure maintenance.

What specific types of water and sewer line construction are included under NAICS code 237110, and how do they apply to an airfield environment?

NAICS code 237110, 'Water and Sewer Line and Related Structures Construction,' encompasses the construction and repair of pipelines, water mains, sewers, and related facilities like pumping stations and treatment facilities. In an airfield environment, this specifically applies to the underground network supplying potable water and removing wastewater for base facilities, hangars, and potentially runways (for drainage systems). It includes excavation, pipe laying, jointing, backfilling, and potentially the installation of valves, hydrants, and monitoring equipment. The 'Related Structures' aspect could include small pumping stations or access points critical for maintaining water pressure and flow across the expansive base.

Industry Classification

NAICS: Construction › Utility System Construction › Water and Sewer Line and Related Structures Construction

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: TWO STEP

Solicitation ID: FA527025R0025

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 5070, TOHOKU-CHO, MIYAKONOJO

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

Financial Breakdown

Contract Ceiling: $21,195,631

Exercised Options: $21,195,631

Current Obligation: $21,195,631

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline