DoD's $31.2M Greece construction contract awarded to Environmental Chemical Corp. shows fair value

Contract Overview

Contract Amount: $31,249,568 ($31.2M)

Contractor: Environmental Chemical Corporation

Awarding Agency: Department of Defense

Start Date: 2021-11-08

End Date: 2024-06-30

Contract Duration: 965 days

Daily Burn Rate: $32.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: CONTINGENCY LOCATION BUILD, AIRCRAFT MAINTENANCE HANGARS, LARISSA, GREECE

Plain-Language Summary

Department of Defense obligated $31.2 million to ENVIRONMENTAL CHEMICAL CORPORATION for work described as: CONTINGENCY LOCATION BUILD, AIRCRAFT MAINTENANCE HANGARS, LARISSA, GREECE Key points: 1. Contract value appears reasonable given the scope of construction services in a foreign location. 2. Full and open competition suggests a competitive bidding process, potentially leading to better pricing. 3. The contract duration of 965 days indicates a significant, long-term project. 4. Fixed-price contract type shifts risk to the contractor, which is generally favorable for the government. 5. The project is located in Larissa, Greece, implying a need for specialized international construction capabilities. 6. No small business set-aside was utilized, suggesting the primary contractor is not a small business.

Value Assessment

Rating: good

The contract value of $31.2 million for construction services in Greece appears to be within a reasonable range for a project of this scale and complexity. Benchmarking against similar international construction projects is challenging due to unique logistical and regulatory factors. However, the firm fixed-price nature of the contract provides cost certainty for the government, and the presence of two bidders suggests some level of market interest and potential for 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. The fact that there were two bidders suggests a moderate level of competition for this specific project. While more bidders would typically lead to stronger price discovery, two bidders are sufficient to establish a competitive baseline and avoid a sole-source situation.

Taxpayer Impact: The full and open competition, even with two bidders, provides a degree of assurance that taxpayer funds were not unnecessarily inflated due to a lack of market engagement.

Public Impact

The Department of Defense benefits from the construction of essential aircraft maintenance hangars. Personnel and operations at Larissa, Greece, will be supported by improved infrastructure. The project's geographic impact is localized to Larissa, Greece, enhancing military readiness in the region. The construction activities will likely involve a workforce, potentially including local hires, contributing to economic activity in the area.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions arise, though mitigated by fixed-price contract.
Logistical challenges and potential delays associated with construction in a foreign country.
Ensuring compliance with local Greek building codes and regulations.
Quality control and oversight of construction activities performed by the contractor.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Full and open competition suggests a structured procurement process.
Project duration is clearly defined, allowing for planning.
Contract is for essential infrastructure (aircraft maintenance hangars).

Sector Analysis

The contract falls within the Commercial and Institutional Building Construction sector, specifically for military infrastructure. The Department of Defense is a significant consumer of construction services globally, often requiring specialized facilities in various operational theaters. The market for such services is competitive, with numerous large and small firms capable of undertaking complex projects, though international projects often involve fewer bidders due to specific expertise and logistical requirements.

Small Business Impact

The contract was not awarded as a small business set-aside, and the prime contractor, Environmental Chemical Corporation, is likely not a small business given the contract value. There is no explicit information regarding subcontracting plans for small businesses. This suggests that opportunities for small businesses may be limited to direct supply chain roles or potential lower-tier subcontracts, rather than prime contract awards.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting and engineering divisions, with potential involvement from the Defense Contract Management Agency (DCMA) for on-site quality assurance and progress monitoring. Transparency is generally maintained through contract award databases like FPDS. Accountability measures are inherent in the firm fixed-price contract, with penalties for non-performance or deviations from specifications. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Military Construction
Aircraft Maintenance Facilities
Foreign Military Construction Contracts
Department of Defense Infrastructure Projects

Risk Flags

International Construction Logistics
Foreign Regulatory Compliance
Contractor Performance Risk
Geopolitical Stability

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $31.2 million to ENVIRONMENTAL CHEMICAL CORPORATION. CONTINGENCY LOCATION BUILD, AIRCRAFT MAINTENANCE HANGARS, LARISSA, GREECE

Who is the contractor on this award?

The obligated recipient is ENVIRONMENTAL CHEMICAL CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $31.2 million.

What is the period of performance?

Start: 2021-11-08. End: 2024-06-30.

What is the track record of Environmental Chemical Corporation with the Department of Defense?

Environmental Chemical Corporation has a history of contracts with the Department of Defense, primarily in construction and environmental services. While this specific contract is for $31.2 million, their broader portfolio includes various projects, some of which may be smaller or larger in scale. A detailed review of their past performance, including any past performance evaluations or disputes, would be necessary to fully assess their reliability for this project. However, the award of this significant contract suggests they have met the necessary qualifications and demonstrated capability to the Department of the Navy.

How does the value of this contract compare to similar aircraft maintenance hangar construction projects?

Directly comparing the $31.2 million value to similar projects is difficult without more specific data on project scope, size, and location. Aircraft maintenance hangars can vary significantly in complexity, size, and required features (e.g., specialized equipment, climate control, security). Construction costs are also heavily influenced by geographic location, labor rates, material costs, and logistical challenges. Projects in foreign locations like Greece often incur higher costs due to transportation, import duties, and specialized labor requirements. The firm fixed-price nature and the presence of two bidders suggest a competitive effort to establish a fair market price for this specific requirement.

What are the primary risks associated with constructing military facilities in Greece?

Key risks include logistical challenges in transporting materials and equipment to the site, potential delays due to customs or import regulations, and the need to comply with both U.S. military specifications and Greek building codes and labor laws. Geopolitical factors in the region, while not directly indicated as a risk for this contract, are always a background consideration for overseas operations. Furthermore, managing a project of this scale in a foreign country requires robust oversight to ensure quality control and adherence to schedule, especially given the firm fixed-price nature which places the onus on the contractor to manage these risks effectively.

How effective is the full and open competition process for specialized international construction projects?

Full and open competition is the preferred method for ensuring fair pricing and broad market access. However, for specialized international construction, the pool of qualified bidders may be smaller due to specific expertise, security clearances, or experience requirements. In this case, with two bidders, the competition likely provided a reasonable benchmark, preventing a sole-source award. The effectiveness is measured by whether the competition yielded a price that reflects market value and whether the selected contractor possesses the necessary capabilities to execute the project successfully, which appears to be the case here.

What is the historical spending pattern for aircraft maintenance hangar construction by the Department of Defense?

The Department of Defense consistently invests in infrastructure, including aircraft maintenance facilities, across its global installations. Historical spending patterns show significant annual outlays for military construction, with costs varying widely based on project size, location (domestic vs. international), and technological requirements. Contracts for hangars can range from tens of millions to hundreds of millions of dollars. This $31.2 million contract for Larissa, Greece, represents a specific investment in regional operational capability, fitting within the broader pattern of ongoing infrastructure modernization and maintenance.

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

Address: 1240 BAYSHORE HGHWY, BURLINGAME, CA, 94010

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $31,249,568

Exercised Options: $31,249,568

Current Obligation: $31,249,568

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N6247019D8025

IDV Type: IDC

Timeline