Department of Defense awards $11.4M facilities support contract to NIKKEN SOGYO CO., LTD. over 5 years

Contract Overview

Contract Amount: $11,440,352 ($11.4M)

Contractor: Nikken Sogyo CO., Ltd.

Awarding Agency: Department of Defense

Start Date: 2006-12-01

End Date: 2011-11-30

Contract Duration: 1,825 days

Daily Burn Rate: $6.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: FB00

Plain-Language Summary

Department of Defense obligated $11.4 million to NIKKEN SOGYO CO., LTD. for work described as: FB00 Key points: 1. Contract value appears reasonable for the duration and scope of facilities support services. 2. Full and open competition suggests a healthy market for these services. 3. Contract type (Firm Fixed Price) shifts performance risk to the contractor. 4. Contract duration of 5 years provides stability for service delivery. 5. No small business set-aside indicates the primary awardee is not a small business. 6. NAICS code 561210 covers a broad range of facilities support, requiring specific performance metrics for evaluation.

Value Assessment

Rating: good

The contract value of approximately $11.4 million over five years averages to about $2.28 million annually. This figure seems within a reasonable range for comprehensive facilities support services, especially considering potential geographic or facility complexity. Benchmarking against similar contracts would require more detailed scope of work and location data, but the overall value does not immediately suggest overpricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that the agency solicited bids from all responsible sources. The number of bidders is not specified, but this procurement method generally fosters competitive pricing and encourages multiple vendors to offer their best terms. This approach is ideal for ensuring the government receives competitive offers.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically leads to lower prices and better quality services due to market forces driving efficiency and innovation among bidders.

Public Impact

The primary beneficiary is the Department of the Navy, receiving essential facilities support services. Services include maintenance, repair, and operational support for government facilities. Geographic impact is likely localized to the specific facilities managed by the Navy. Workforce implications include potential employment opportunities for facility management and maintenance personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if the definition of 'facilities support' is not tightly managed.
Dependence on a single contractor for critical facility operations could pose a risk if performance falters.

Positive Signals

Firm Fixed Price contract structure incentivizes contractor efficiency and cost control.
Full and open competition suggests a robust market and potential for competitive pricing.
Contract duration provides service continuity and allows the contractor to amortize startup costs.

Sector Analysis

Facilities Support Services, categorized under the broader Commercial and Industrial Machinery and Equipment (NAICS 561210), represents a significant segment of the government services market. This sector involves a wide array of activities from building operations and maintenance to groundskeeping and security. Government spending in this area is substantial, driven by the need to maintain extensive real property assets. Comparable spending benchmarks would depend heavily on the specific types and scale of facilities supported.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the competition was open to all eligible firms, and the awardee is likely a larger entity. There is no explicit information on subcontracting plans, but in a full and open competition, the prime contractor has flexibility in selecting subcontractors, which could include small businesses if deemed cost-effective and necessary for performance.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the contract administration office within the Department of the Navy. Performance monitoring, quality assurance, and invoice review are standard oversight mechanisms. Transparency is generally maintained through contract databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Base Operations Support Services
Facilities Maintenance Contracts
Government Property Management
Logistics and Support Services

Risk Flags

Contract duration may exceed optimal period for price re-evaluation.
Lack of specific performance metrics in summary data prevents detailed value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.4 million to NIKKEN SOGYO CO., LTD.. FB00

Who is the contractor on this award?

The obligated recipient is NIKKEN SOGYO CO., LTD..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $11.4 million.

What is the period of performance?

Start: 2006-12-01. End: 2011-11-30.

What is the specific scope of 'Facilities Support Services' covered under this contract?

The scope of 'Facilities Support Services' under NAICS code 561210 is broad and can encompass a wide range of activities. For this specific Department of the Navy contract, it likely includes the operation and maintenance of buildings, grounds, and associated utilities. This could involve routine maintenance, preventative maintenance, repairs, janitorial services, pest control, landscaping, and potentially security services. The exact deliverables and performance standards would be detailed in the contract's Performance Work Statement (PWS), which outlines the specific tasks, quality requirements, and metrics the contractor must meet. Without the PWS, the precise nature of the services remains generalized.

How does the $11.4 million contract value compare to similar facilities support contracts awarded by the Department of Defense?

Comparing the $11.4 million contract value requires context regarding the duration, scope, and geographic location of the facilities supported. For a 5-year contract, this averages to approximately $2.28 million per year. The Department of Defense awards numerous facilities support contracts annually, ranging from small, localized maintenance agreements to large, comprehensive base operations support contracts. If this contract covers a single facility or a limited set of services, $2.28 million annually might be on the higher end. However, if it encompasses multiple complex facilities, extensive grounds, or specialized support functions across a significant area, this value could be competitive or even low. A detailed comparison would necessitate analyzing contracts with similar PWS requirements and award dates.

What are the potential risks associated with a 5-year Firm Fixed Price contract for facilities support?

A 5-year Firm Fixed Price (FFP) contract for facilities support carries specific risks. For the government, the primary risk is that the fixed price may become uncompetitive if market rates decrease significantly over the contract period, or if the contractor's costs decrease due to efficiencies not passed on. Conversely, the contractor bears the risk of cost overruns if unforeseen issues arise (e.g., unexpected repair needs, increased labor costs, material price hikes) that are not covered by contract modifications. For a long-term FFP contract, robust baseline cost estimates and clear performance standards are crucial to mitigate these risks. The contractor must diligently manage resources and anticipate potential cost fluctuations to maintain profitability.

What does the 'full and open competition' designation imply about the contractor selection process and potential pricing?

The 'full and open competition' designation signifies that the Department of the Navy sought proposals from all responsible sources, without restrictions. This implies a robust solicitation process, likely involving a publicly advertised Request for Proposals (RFP). The agency would have evaluated proposals based on pre-defined criteria, which typically include technical approach, past performance, and price. This competitive environment generally pressures bidders to offer their most competitive pricing and best technical solutions to win the contract. It suggests that the market has multiple capable providers for facilities support services, and the government aimed to leverage this competition to achieve optimal value for taxpayer dollars.

Are there any indications of contractor performance issues or track record from the provided data?

The provided data snippet (FB00) does not contain specific information regarding the contractor's (NIKKEN SOGYO CO., LTD.) past performance, track record, or any history of issues with this or other contracts. It primarily details the contract award itself, including the value, duration, agency, contractor name, and basic contract terms. To assess the contractor's track record, one would need to consult additional sources such as the Federal Awardee Performance and Integrity Information System (FAPIIS), past performance reviews within contract files, or agency-specific performance databases. Without such data, an assessment of their reliability and quality of service cannot be made from this information alone.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Facilities Support Services › Facilities Support Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3-33-19, NISHIIKEBUKURO, TOSHIMA-KU

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $22,818,799

Exercised Options: $13,515,853

Current Obligation: $11,440,352

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N4008407D0407

IDV Type: IDC

Timeline