DoD's $27.5M Yokota AB terminal repair contract awarded to Gilbane Federal under full and open competition

Contract Overview

Contract Amount: $27,506,010 ($27.5M)

Contractor: Gilbane Federal

Awarding Agency: Department of Defense

Start Date: 2020-03-20

End Date: 2023-09-13

Contract Duration: 1,272 days

Daily Burn Rate: $21.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: REPAIR PASSENGER TERMINAL-YOKOTA AB, JAPAN

Plain-Language Summary

Department of Defense obligated $27.5 million to GILBANE FEDERAL for work described as: REPAIR PASSENGER TERMINAL-YOKOTA AB, JAPAN Key points: 1. Contract value appears reasonable for a large-scale construction project of this nature. 2. Full and open competition suggests a healthy market and potential for competitive pricing. 3. Project duration of over three years indicates a complex and potentially high-risk undertaking. 4. Fixed-price contract type shifts risk to the contractor, potentially impacting final cost. 5. No small business set-aside was utilized, suggesting larger firms dominated the bidding process. 6. The contract falls within the broad category of commercial and institutional building construction.

Value Assessment

Rating: good

The contract's value of approximately $27.5 million for terminal repair at Yokota Air Base seems aligned with the scope of work for a significant construction project. Benchmarking against similar large-scale military construction or renovation projects would provide a more precise value-for-money assessment. The firm-fixed-price structure suggests that the initial bid was considered competitive and that the contractor assumes cost overruns. Without specific cost breakdowns or comparisons to industry standards for similar repairs in Japan, a definitive value assessment is challenging, but the overall price point does not immediately raise red flags for a project of this magnitude.

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 two bidders suggests a degree of competition, though the exact number of interested parties and the nature of their proposals are not detailed. A higher number of bidders typically leads to more robust price discovery and potentially lower costs for the government. However, even with two bidders, the competitive process should have driven a reasonable price.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to more cost-effective contract awards. This approach ensures that the government explores the widest possible market, increasing the likelihood of securing the best value.

Public Impact

The primary beneficiaries are the U.S. Air Force personnel and their families stationed at Yokota Air Base, Japan, who will utilize the improved terminal facilities. The contract delivers essential repair and modernization services to a critical piece of infrastructure at a major U.S. military installation in the Pacific. The geographic impact is localized to Yokota Air Base, Japan, enhancing operational capabilities and quality of life for those stationed there. The project likely involved a significant number of construction workers, potentially including both U.S. and local Japanese labor, contributing to the regional economy.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The long duration (1272 days) could indicate potential for schedule delays and cost overruns, especially given the complexities of international construction.
Firm-fixed-price contracts can sometimes lead to reduced contractor flexibility for unforeseen site conditions or design changes, potentially causing disputes.
Reliance on a limited number of bidders (2) might suggest less competitive pressure than ideal for such a substantial project.

Positive Signals

Awarding under full and open competition suggests a broad market search and adherence to procurement best practices.
The firm-fixed-price contract type provides cost certainty for the government, assuming the contractor manages risks effectively.
Gilbane Federal's experience as a large construction firm likely brings established project management capabilities to this complex project.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, specifically focusing on infrastructure repair and modernization for a government facility. The market for large-scale construction, particularly for government and military installations, is substantial, involving numerous specialized firms. Projects like this often require significant logistical planning, adherence to strict security protocols, and compliance with international building standards. Comparable spending benchmarks would typically be assessed against other major renovation or new construction projects at U.S. military bases globally or within the Asia-Pacific region.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). The award to Gilbane Federal, a large construction firm, and the presence of only two bidders suggest that the competition likely favored larger, established companies with the capacity to undertake such a significant project. There is no explicit information on subcontracting plans for small businesses, which could be a missed opportunity to engage the small business sector in fulfilling parts of this large contract.

Oversight & Accountability

Oversight for this Department of Defense contract would typically be managed by the Air Force's contracting and engineering divisions, potentially involving base personnel and program managers. Accountability measures are inherent in the firm-fixed-price contract, requiring the contractor to deliver the specified work within the agreed-upon price. Transparency is generally maintained through contract award databases and reporting requirements, though detailed project progress and specific oversight activities may not be publicly disclosed. Inspector General (IG) jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Military Construction Projects
Base Infrastructure Modernization
Air Force Facility Repair and Maintenance
Overseas Construction Contracts

Risk Flags

Potential for cost overruns due to long project duration and fixed-price contract.
Risk of schedule delays associated with international construction and complex projects.
Limited competition may result in less optimal pricing.
Potential quality control issues if contractor seeks to minimize costs under FFP.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $27.5 million to GILBANE FEDERAL. REPAIR PASSENGER TERMINAL-YOKOTA AB, JAPAN

Who is the contractor on this award?

The obligated recipient is GILBANE FEDERAL.

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 $27.5 million.

What is the period of performance?

Start: 2020-03-20. End: 2023-09-13.

What is Gilbane Federal's track record with similar large-scale military construction contracts, particularly overseas?

Gilbane Federal, as a subsidiary of Gilbane Building Company, has a substantial history of executing large-scale construction projects for the U.S. military, both domestically and internationally. They have been involved in numerous projects including barracks, training facilities, hospitals, and administrative buildings on various bases. Their experience often includes navigating complex logistical challenges, security requirements, and working within established government contracting frameworks. While specific details on overseas terminal repair projects are not immediately available in this dataset, their general portfolio suggests they possess the requisite experience for managing projects of this scale and complexity. Reviewing their past performance evaluations and contract history with agencies like the Army Corps of Engineers or Naval Facilities Engineering Command would provide further insight into their reliability and success rates on similar endeavors.

How does the $27.5 million cost compare to similar passenger terminal repair projects at other U.S. military bases?

Benchmarking the $27.5 million cost requires comparing it to similar passenger terminal repair or renovation projects at other U.S. military bases, considering factors like size, scope of work, location, and time of award. Without access to a database of comparable projects, a precise comparison is difficult. However, large-scale infrastructure projects on military bases can range widely in cost. Factors such as the extent of structural repairs, upgrades to HVAC and electrical systems, modernization of passenger amenities, and compliance with current anti-terrorism force protection standards significantly influence the total price. Given that this is a major repair at a significant overseas base (Yokota AB), the cost appears within a plausible range for substantial construction work, though a detailed cost-benefit analysis against specific benchmarks would be necessary for a definitive value assessment.

What are the primary risks associated with a firm-fixed-price contract for a project of this duration and complexity?

The primary risk with a firm-fixed-price (FFP) contract for a project spanning over three years (1272 days) and involving complex construction like terminal repair is the potential for unforeseen issues to significantly impact the contractor's profitability or lead to disputes. While FFP shifts cost overrun risk to the contractor, it can incentivize them to cut corners on quality if not meticulously overseen. For a project of this scale and duration, risks include encountering unexpected subsurface conditions, material price escalations beyond projections, labor shortages, or changes in government requirements. If such issues arise, the contractor may seek change orders, potentially leading to cost increases and schedule delays, or face financial strain if they absorb the costs. Robust government oversight and clear contract terms are crucial to mitigate these risks.

What does the limited number of bidders (2) suggest about the market for this type of construction service?

A limited number of bidders, such as the two identified for this contract, can suggest several market dynamics. It might indicate that the market for specialized, large-scale construction services required for military base infrastructure is concentrated among a few major players. Alternatively, it could imply that the specific requirements of the solicitation, such as geographic location (Japan), security clearances needed, or technical specifications, may have limited the pool of eligible and interested contractors. It's also possible that the timing or overall value of the contract, while substantial, was not attractive enough to draw a wider range of competitors. This limited competition could potentially reduce the downward pressure on pricing compared to a scenario with numerous bidders.

How might the project's location in Japan impact its cost and execution compared to a similar project in the U.S.?

Executing a construction project in Japan introduces several factors that can impact cost and execution compared to a domestic U.S. project. Logistical challenges related to shipping materials and equipment, potential tariffs or import duties, and the need to comply with Japanese building codes and regulations in addition to U.S. military standards can increase complexity and costs. Labor costs may differ significantly, and the availability of specialized local labor or subcontractors needs to be considered. Furthermore, navigating cultural differences, language barriers, and different business practices requires careful management. Security protocols for U.S. military bases in foreign countries can also be more stringent. These factors collectively suggest that overseas projects often incur higher indirect costs and require more extensive planning and coordination.

What is the historical spending trend for passenger terminal construction and repair within the Department of Defense?

Historical spending on passenger terminal construction and repair within the Department of Defense (DoD) is substantial, reflecting the continuous need to maintain and upgrade critical infrastructure at numerous global bases. While specific aggregate figures for terminal repairs alone are not readily available in this dataset, the DoD consistently allocates significant portions of its budget to military construction (MILCON) and facility sustainment, restoration, and Modernization (FSRM). These categories encompass a wide range of projects, including terminals, hangars, barracks, and training facilities. Spending trends are influenced by factors such as geopolitical needs, aging infrastructure requiring replacement or upgrades, and evolving operational requirements. Major global events or shifts in military posture can also drive increased investment in base infrastructure. Analyzing broader DoD construction budgets over time would reveal general trends, with terminal projects representing a specific segment within that larger spending picture.

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Commercial and Institutional Building Construction

Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCTION OF BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Gilbane AECOM JV

Address: 1655 GRANT ST 12TH FL, CONCORD, CA, 94520

Business Categories: Category Business, Not Designated a Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $27,506,010

Exercised Options: $27,506,010

Current Obligation: $27,506,010

Actual Outlays: $11,172,206

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA890317D0041

IDV Type: IDC

Timeline