Department of Defense awards $13.3M contract for tank inspection and repair in Guam

Contract Overview

Contract Amount: $13,260,548 ($13.3M)

Contractor: Gsi-Pond JV LLC

Awarding Agency: Department of Defense

Start Date: 2023-04-10

End Date: 2027-04-21

Contract Duration: 1,472 days

Daily Burn Rate: $9.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: CLEAN INSPECT AND REPAIR TANKS S5, U2 AND U18 DFSP GUAM.

Place of Performance

Location: TALOFOFO, GUAM County, GUAM, 96915

Plain-Language Summary

Department of Defense obligated $13.3 million to GSI-POND JV LLC for work described as: CLEAN INSPECT AND REPAIR TANKS S5, U2 AND U18 DFSP GUAM. Key points: 1. The contract value represents a significant investment in maintaining critical fuel storage infrastructure. 2. Competition dynamics for this contract are assessed to understand pricing efficiency. 3. Risk indicators are evaluated based on contract type and performance period. 4. Performance context is provided by comparing this award to similar infrastructure maintenance contracts. 5. The contract falls within the broader Defense sector's infrastructure support spending. 6. The awarded amount is benchmarked against historical spending for similar services.

Value Assessment

Rating: good

The contract value of $13.3 million for tank inspection and repair appears reasonable given the scope and location. While direct comparisons are difficult without specific details on the tanks' condition and the extent of repairs, the firm-fixed-price structure suggests a defined cost expectation. Benchmarking against similar infrastructure maintenance contracts within the Department of Defense, particularly those involving specialized industrial services in remote locations like Guam, would provide further context on value for money. The number of bids received (3) also suggests a degree 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. Three bids were received, suggesting a moderate level of competition for this specialized service. While three bidders is not exceptionally high, it does provide a basis for price discovery and suggests that the market has at least a few capable providers. The full and open nature of the competition is generally favorable for achieving competitive pricing.

Taxpayer Impact: The full and open competition process is beneficial for taxpayers as it encourages multiple companies to bid, driving down prices and ensuring the government receives the best value. This approach helps prevent inflated costs that might arise from sole-source or limited competition scenarios.

Public Impact

The primary beneficiaries are the Department of Defense and its operations in Guam, ensuring the integrity of fuel storage facilities. Services delivered include inspection and repair of specific fuel tanks (S5, U2, and U18) at the Defense Fuel Support Point (DFSP) in Guam. The geographic impact is localized to Guam, supporting military readiness and logistical capabilities in the Indo-Pacific region. Workforce implications may include employment opportunities for skilled labor in construction, inspection, and maintenance within Guam or brought in for the project.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen structural issues are discovered during inspection.
Logistical challenges and increased costs associated with performing work in Guam.
Ensuring contractor compliance with stringent environmental and safety regulations for fuel storage facilities.

Positive Signals

Firm-fixed-price contract structure helps control costs and provides budget certainty.
Award to GSI-POND JV LLC, a joint venture, may indicate specialized capabilities.
The contract duration of over four years suggests a comprehensive approach to maintenance and repair.

Sector Analysis

This contract falls within the construction and maintenance sector, specifically related to industrial infrastructure for energy storage. The market for specialized tank inspection and repair services is competitive, with a focus on safety, regulatory compliance, and technical expertise. Spending in this area is crucial for maintaining the operational readiness of military installations. Comparable spending benchmarks would typically involve analyzing other contracts for similar services at military bases or critical infrastructure sites, considering factors like location, size of the facility, and complexity of the work.

Small Business Impact

The contract was awarded under full and open competition and does not appear to have a specific small business set-aside. However, the prime contractor, GSI-POND JV LLC, is a joint venture, which can sometimes involve small business participation. Further analysis would be needed to determine if subcontracting opportunities exist for small businesses within the scope of this project, which could contribute to the small business ecosystem.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy's contracting and engineering divisions. Accountability measures are embedded in the firm-fixed-price contract terms, requiring the contractor to complete the specified work within the agreed-upon budget and timeline. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Defense Fuel Support Points
Military Base Infrastructure Maintenance
Industrial Construction Services
Tank Inspection and Repair Contracts
Department of Defense Facilities Management

Risk Flags

Potential for cost growth due to unforeseen conditions.
Logistical challenges in remote island location.
Contractor performance risk.
Environmental and safety compliance risk.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $13.3 million to GSI-POND JV LLC. CLEAN INSPECT AND REPAIR TANKS S5, U2 AND U18 DFSP GUAM.

Who is the contractor on this award?

The obligated recipient is GSI-POND JV LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $13.3 million.

What is the period of performance?

Start: 2023-04-10. End: 2027-04-21.

What is the track record of GSI-POND JV LLC in performing similar tank inspection and repair contracts for the Department of Defense?

Information regarding the specific track record of GSI-POND JV LLC for tank inspection and repair contracts with the Department of Defense is not readily available in the provided data. As a joint venture, its performance history might be a composite of its member companies or a newer entity. A thorough review would involve examining past performance evaluations (e.g., CPARS reports), any prior awards for similar services, and the experience of key personnel within the joint venture. Understanding their history with large-scale infrastructure projects, particularly those involving fuel storage and operating in challenging environments like Guam, would be crucial for assessing their capability and reliability on this specific contract.

How does the awarded amount of $13.3 million compare to the estimated cost or market rates for similar tank inspection and repair projects?

The awarded amount of $13.3 million for the inspection and repair of three tanks (S5, U2, U18) at DFSP Guam needs to be benchmarked against similar projects to assess value. Without detailed project specifications (e.g., tank size, material, condition, scope of repairs), a precise comparison is challenging. However, the firm-fixed-price nature of the contract suggests that the government and contractor agreed on a defined cost. To evaluate value, one would compare this figure to historical contract awards for similar services, considering factors like geographic location (Guam being a high-cost area), the complexity of the work, and the number of bids received. If the number of bids was low, it might suggest higher perceived risk or specialized requirements that could drive up costs.

What are the primary risk indicators associated with this contract, and how are they being mitigated?

Key risk indicators for this contract include the potential for unforeseen structural issues discovered during inspection, which could lead to cost overruns despite the firm-fixed-price structure if change orders are necessary. Logistical challenges and increased costs associated with performing work in Guam, a remote island location, also present a risk. Furthermore, ensuring the contractor's strict adherence to stringent environmental and safety regulations for fuel storage facilities is critical. Mitigation strategies likely involve thorough pre-award assessments of the contractor's capabilities, detailed inspection protocols, robust project management oversight by the Navy, and clear contractual clauses addressing safety, environmental compliance, and procedures for handling unexpected findings.

What is the expected effectiveness of the services delivered under this contract in ensuring the long-term integrity of the fuel storage tanks?

The effectiveness of the services hinges on the thoroughness of the inspection and the quality of the repairs performed by GSI-POND JV LLC. The contract's duration of over four years (from award to estimated completion) suggests a comprehensive approach that may include phased inspections and repairs, allowing for ongoing monitoring and maintenance. The firm-fixed-price structure incentivizes the contractor to complete the work efficiently. However, long-term integrity also depends on the initial condition of the tanks, the appropriateness of the repair methods chosen, and the establishment of a robust preventative maintenance schedule post-contract. The Navy's oversight and quality assurance processes will be critical in ensuring the delivered services meet the required standards for long-term operational readiness.

How does the historical spending pattern for tank inspection and repair services at DFSP Guam compare to this $13.3 million award?

Analyzing historical spending patterns for tank inspection and repair at DFSP Guam is essential for contextualizing the $13.3 million award. Without access to specific historical data for this facility, it's difficult to provide a direct comparison. However, one would typically look at the frequency and cost of previous contracts for similar services at this location. Factors such as inflation, changes in regulatory requirements, and the aging of the infrastructure would influence spending over time. If this $13.3 million award is significantly higher or lower than previous awards for comparable work, it warrants further investigation into the underlying reasons, such as increased scope, market conditions, or improved procurement strategies.

What are the implications of awarding this contract to a joint venture (GSI-POND JV LLC) versus a single entity?

Awarding the contract to GSI-POND JV LLC, a joint venture, can have several implications. Joint ventures are often formed to combine specialized expertise, resources, or bonding capacity that a single entity might lack, potentially leading to a more capable bidder for complex projects. This structure can also be a strategy for companies to enter new markets or secure larger contracts. For the government, it might offer access to a broader range of skills. However, it can also introduce complexities in management, communication, and accountability compared to contracting with a single, established firm. The government's oversight needs to ensure clear lines of responsibility and performance management within the joint venture structure.

Industry Classification

NAICS: Construction › Utility System Construction › Oil and Gas Pipeline 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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N3943019R2101

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 17 CHURCH ST, FLEMINGTON, NJ, 08822

Business Categories: Category Business, Partnership or Limited Liability Partnership, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $13,260,548

Exercised Options: $13,260,548

Current Obligation: $13,260,548

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N3943020D2223

IDV Type: IDC

Timeline