Boiler repair contract awarded to KWAAN-NASCO for $6.99M, highlighting potential value concerns due to sole-source nature

Contract Overview

Contract Amount: $6,991,381 ($7.0M)

Contractor: Kwaan-Nasco Joint Venture

Awarding Agency: Department of Defense

Start Date: 2025-05-08

End Date: 2026-05-12

Contract Duration: 369 days

Daily Burn Rate: $18.9K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: REPAIR BOILER #2 AT THE HEAT PLANT

Place of Performance

Location: USAF ACADEMY, EL PASO County, COLORADO, 80840

State: Colorado Government Spending

Plain-Language Summary

Department of Defense obligated $7.0 million to KWAAN-NASCO JOINT VENTURE for work described as: REPAIR BOILER #2 AT THE HEAT PLANT Key points: 1. The contract's value of nearly $7 million for boiler repair raises questions about cost-effectiveness given the lack of competition. 2. Sole-source procurement limits opportunities for price discovery and potentially higher costs for taxpayers. 3. The duration of 369 days suggests a significant scope of work, but the absence of detailed performance metrics makes assessment difficult. 4. The contract falls under commercial and institutional building construction, a sector with varying cost benchmarks. 5. The firm fixed-price structure offers some cost certainty but does not mitigate the risk of overpayment in a non-competitive scenario. 6. The geographic location in Colorado may influence labor and material costs, but without benchmarks, it's hard to assess. 7. The contractor, KWAAN-NASCO JOINT VENTURE, has a contract type of 'ST' (Standard) which may indicate specific government contracting requirements.

Value Assessment

Rating: questionable

The awarded amount of $6.99 million for boiler repair appears substantial. Without comparable sole-source boiler repair contracts or detailed cost breakdowns, it is difficult to benchmark the value effectively. The lack of competition inherently raises concerns about whether this price represents fair market value. The firm fixed-price nature provides some predictability, but the absence of competitive bidding means taxpayers may not be receiving the best possible price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. This approach is typically used when only one source is capable of meeting the requirement. However, it significantly limits the opportunity for multiple bidders to offer competitive pricing, which can lead to higher costs for the government. The absence of a competitive process means that price discovery is minimal.

Taxpayer Impact: Sole-source awards mean taxpayers do not benefit from the cost savings that typically arise from a competitive bidding process. This can result in the government paying a premium for goods or services.

Public Impact

The primary beneficiary is the Department of the Air Force, which will receive essential repairs to its heat plant infrastructure. The services delivered include the repair of a critical piece of equipment, Boiler #2, ensuring operational continuity. The geographic impact is localized to the facility in Colorado where the heat plant is located. Workforce implications are likely to involve skilled tradespeople for the repair work, potentially including local hires.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition increases the risk of paying above-market rates.
Absence of detailed performance metrics makes it difficult to assess the quality and efficiency of the repair work.
The substantial dollar amount for a single boiler repair warrants scrutiny for potential cost overruns or inefficiencies.
The sole-source nature limits transparency in the pricing structure.
The contract duration of 369 days could indicate unforeseen complexities or potential delays, impacting operational readiness.

Positive Signals

Firm fixed-price contract provides cost certainty for the government, assuming the scope is well-defined.
The repair of essential infrastructure ensures continued operational capability for the facility.
The contractor, KWAAN-NASCO JOINT VENTURE, is identified, allowing for potential tracking of their performance.
The contract is for a specific, identifiable need (repair of Boiler #2).

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, specifically focusing on facility maintenance and repair. This sector encompasses a wide range of activities, from new construction to specialized repairs. Benchmarking costs for boiler repairs can be challenging as it depends heavily on the specific type of boiler, the extent of the damage, and regional labor costs. However, contracts of this magnitude for a single piece of equipment often warrant close examination to ensure value.

Small Business Impact

This contract was not competed and there is no indication of small business set-asides or subcontracting requirements. Therefore, it does not appear to directly benefit the small business ecosystem through this specific award. The absence of subcontracting clauses means opportunities for small businesses to participate in this project are limited.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. As a sole-source award, the justification for this procurement method would be subject to review. Transparency is limited due to the lack of competition. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Department of Defense Facility Maintenance Contracts
Air Force Boiler and HVAC Repair Services
Sole-Source Construction and Repair Awards
Commercial and Institutional Building Construction

Risk Flags

Sole-source award lacks competitive pricing.
High dollar value for a single repair item.
Limited performance metrics provided in summary.
Contract duration is nearly one year.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $7.0 million to KWAAN-NASCO JOINT VENTURE. REPAIR BOILER #2 AT THE HEAT PLANT

Who is the contractor on this award?

The obligated recipient is KWAAN-NASCO JOINT VENTURE.

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 $7.0 million.

What is the period of performance?

Start: 2025-05-08. End: 2026-05-12.

What is the track record of KWAAN-NASCO JOINT VENTURE with the Department of Defense or similar entities?

Information regarding the specific track record of KWAAN-NASCO JOINT VENTURE with the Department of Defense or similar entities is not provided in the abbreviated data. A comprehensive analysis would require accessing contract databases to review past performance, past performance evaluations, and any history of disputes or contract modifications. Understanding their experience with similar boiler repair projects, especially those of comparable scale and complexity, would be crucial in assessing their capability and reliability for this $6.99 million contract.

How does the $6.99 million cost compare to industry benchmarks for similar boiler repairs?

Benchmarking the $6.99 million cost for Boiler #2 repair against industry standards is challenging without more specific details about the boiler's type, age, condition, and the scope of work required. Boiler repairs can range significantly in price. However, for a single boiler repair, this amount is substantial and suggests either a very complex or extensive repair, or potentially an inflated price due to the sole-source nature of the award. A detailed cost breakdown from the contractor, along with comparisons to similar government or commercial repair projects in the Colorado region, would be necessary for a robust value assessment.

What are the specific risks associated with a sole-source award for critical infrastructure repair?

The primary risk associated with a sole-source award for critical infrastructure repair, such as this boiler replacement, is the lack of competitive pressure. This can lead to inflated pricing, as the contractor faces no incentive to offer their best price. Additionally, it limits the government's ability to explore innovative solutions or alternative contractors who might offer better value or faster service. There's also a risk that the chosen contractor may not be the most qualified or experienced, although this is mitigated if a sole-source justification is properly documented. Oversight becomes even more critical to ensure the work is performed efficiently and effectively.

What is the expected impact of this repair on the operational effectiveness of the heat plant?

The repair of Boiler #2 is expected to ensure the continued operational effectiveness and reliability of the heat plant. A functioning boiler is critical for providing heating and potentially other essential services to the facility. The contract duration of 369 days suggests a significant undertaking, implying that the repair is substantial and necessary for maintaining the plant's capacity and efficiency. Successful completion should prevent disruptions in heating services and support the overall mission of the Air Force facility.

What has been the historical spending pattern for boiler maintenance and repair at this Air Force facility?

The provided data does not include historical spending patterns for boiler maintenance and repair at this specific Air Force facility. To assess this, one would need to analyze past contracts awarded for similar services at the location over several fiscal years. This would involve looking at the frequency of repairs, the types of work performed, the contractors involved, and the amounts spent. Comparing the current $6.99 million contract against historical expenditures could reveal trends, identify potential cost increases, or highlight any deviations from normal spending levels.

Are there any specific performance metrics or deliverables outlined in the contract beyond the repair itself?

The abbreviated data does not specify detailed performance metrics or deliverables beyond the core requirement of repairing Boiler #2. A full contract review would be necessary to ascertain if metrics such as repair completion timelines, quality standards, post-repair testing protocols, or warranty periods are included. The absence of clearly defined, measurable performance standards in the summary data makes it difficult to assess how the contractor's performance will be evaluated and ensure the repair meets the Air Force's needs effectively.

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: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 374 KEKU RD, KAKE, AK, 99830

Business Categories: 8(a) Program Participant, Alaskan Native Corporation Owned Firm, Category Business, Corporate Entity Not Tax Exempt, DoT Certified Disadvantaged Business Enterprise, Minority Owned Business, Native American Owned Business, SBA Certified 8 a Joint Venture, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $6,991,381

Exercised Options: $6,991,381

Current Obligation: $6,991,381

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA700022D0004

IDV Type: IDC

Timeline