Navy awards $27.8M for Diego Garcia water plant modernization, highlighting infrastructure needs

Contract Overview

Contract Amount: $27,850,925 ($27.9M)

Contractor: Centerra-Sjc, LLC

Awarding Agency: Department of Defense

Start Date: 2012-12-21

End Date: 2016-12-07

Contract Duration: 1,447 days

Daily Burn Rate: $19.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: POTABLE WATER PLANT MODERNIZATION FOR U.S. NAVY SUPPORT FACILITY, DIEGO GARCIA (P-184)

Plain-Language Summary

Department of Defense obligated $27.9 million to CENTERRA-SJC, LLC for work described as: POTABLE WATER PLANT MODERNIZATION FOR U.S. NAVY SUPPORT FACILITY, DIEGO GARCIA (P-184) Key points: 1. Contract addresses critical infrastructure upgrades for a key naval support facility. 2. The award was made under full and open competition, suggesting a competitive bidding process. 3. The contract duration of approximately 4 years indicates a significant scope of work. 4. The firm-fixed-price structure aims to control costs for the government. 5. This project aligns with broader military investments in maintaining operational readiness at overseas bases.

Value Assessment

Rating: good

The contract value of $27.8 million for a potable water plant modernization appears reasonable given the scope and location. While direct comparisons are difficult without specific project details, similar large-scale infrastructure projects for military bases can range from tens to hundreds of millions of dollars. The firm-fixed-price contract type suggests that the government sought to establish a clear cost ceiling, which is a positive indicator for value. Benchmarking against other water treatment facility upgrades for government facilities would provide a more precise assessment of pricing efficiency.

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 3 bidders suggests a moderate level of competition for this specialized project. A higher number of bidders might have been expected for a project of this scale, but the specific technical requirements and the remote location of Diego Garcia could have limited the pool of qualified contractors. The competition level achieved likely contributed to price discovery, though further analysis of bid margins would be needed for a definitive conclusion.

Taxpayer Impact: Full and open competition is generally beneficial for taxpayers as it encourages multiple companies to bid, potentially driving down prices and ensuring the government receives the best value. The fact that three companies competed suggests that the market was sufficiently engaged to provide a competitive environment.

Public Impact

The primary beneficiaries are the U.S. Navy personnel and their families stationed at the Diego Garcia support facility, ensuring access to safe and reliable drinking water. The project delivers essential upgrades to the potable water treatment and distribution systems, enhancing operational resilience. The geographic impact is localized to the U.S. Navy Support Facility, Diego Garcia, a critical strategic location in the Indian Ocean. Workforce implications may include the employment of specialized construction and engineering personnel, potentially including local hires or contractors mobilized to the remote island.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions arise in the remote location.
Logistical challenges in transporting materials and personnel to Diego Garcia could impact schedule and cost.
Dependency on a single contractor for a critical infrastructure upgrade raises concerns about continuity of service if issues arise.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Awarded under full and open competition, indicating a competitive process.
The project addresses a critical need for infrastructure modernization, enhancing operational readiness.

Sector Analysis

The defense sector heavily relies on robust infrastructure to support its global operations. Modernizing facilities like the potable water plant at Diego Garcia is crucial for maintaining the health, safety, and operational effectiveness of military personnel. Spending on base infrastructure, including utilities and life support systems, is a consistent component of the Department of Defense budget. Comparable spending benchmarks for similar water treatment facility upgrades at other overseas bases would provide further context, but such projects are typically substantial investments.

Small Business Impact

This contract was not set aside for small businesses and the prime contractor, CENTERRA-SJC, LLC, is not typically categorized as a small business. There is no explicit information regarding small business subcontracting plans. The scale and specialized nature of this project may limit opportunities for small business participation as prime contractors, though they could potentially be involved as subcontractors if opportunities arise.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and engineering departments. The firm-fixed-price nature of the contract provides a degree of cost control. Transparency is facilitated by the contract award data being publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse. Regular progress reports and site inspections would be expected oversight mechanisms.

Related Government Programs

Department of Defense Base Realignment and Closure (BRAC) initiatives
Naval Facilities Engineering Command (NAVFAC) infrastructure projects
Overseas military construction projects
Military family housing infrastructure upgrades

Risk Flags

Logistical challenges in remote location
Potential for schedule delays due to weather or supply chain
Dependency on contractor for critical infrastructure

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $27.9 million to CENTERRA-SJC, LLC. POTABLE WATER PLANT MODERNIZATION FOR U.S. NAVY SUPPORT FACILITY, DIEGO GARCIA (P-184)

Who is the contractor on this award?

The obligated recipient is CENTERRA-SJC, 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 $27.9 million.

What is the period of performance?

Start: 2012-12-21. End: 2016-12-07.

What is the track record of CENTERRA-SJC, LLC in performing similar large-scale water infrastructure projects for the Department of Defense?

CENTERRA-SJC, LLC has a history of performing various services for the Department of Defense, often related to base operations and facilities management. While specific details on their experience with large-scale potable water plant modernization projects are not immediately available from this data alone, their selection suggests they met the technical qualifications required by the Navy. A deeper dive into their contract history, past performance reviews, and any reported issues on similar projects would be necessary to fully assess their track record. Examining their portfolio of completed projects, particularly those involving critical infrastructure in remote or challenging environments, would provide further insight into their capabilities and reliability for this specific contract.

How does the awarded amount of $27.8 million compare to the estimated cost or budget for this potable water plant modernization?

The provided data indicates the awarded amount is $27,850,925.43. However, it does not include the government's initial estimate or budget for this project. Without this information, it is difficult to definitively assess whether the contract was awarded at, above, or below the estimated cost. In a competitive bidding process, the awarded amount is typically the result of proposals submitted by contractors. If the bids received were significantly higher than the government's estimate, it could indicate issues with the initial budgeting or a lack of competitive interest. Conversely, if the award was substantially lower, it might suggest a highly competitive market or a conservative government estimate.

What are the key performance indicators (KPIs) used to measure the success of this water plant modernization contract?

Specific Key Performance Indicators (KPIs) for this contract are not detailed in the provided data. However, for a potable water plant modernization project, typical KPIs would likely include: water quality meeting established standards (e.g., EPA or military-specific standards), system reliability and uptime (minimizing service interruptions), operational efficiency (e.g., energy consumption, chemical usage), adherence to project schedule and budget, and compliance with environmental regulations. The firm-fixed-price contract structure implies that meeting performance specifications within the agreed-upon cost and timeline is paramount. The Navy would likely have defined acceptance criteria and performance milestones that CENTERRA-SJC, LLC must meet.

What is the historical spending pattern for potable water infrastructure at Diego Garcia or similar overseas Navy facilities?

Historical spending on potable water infrastructure at Diego Garcia or similar overseas Navy facilities is not detailed in the provided data. However, such projects are typically infrequent but substantial investments, often driven by the need to replace aging systems or meet evolving environmental and operational standards. The Department of the Navy, through entities like the Naval Facilities Engineering Command (NAVFAC), manages significant budgets for infrastructure sustainment and modernization across its global installations. Analyzing past NAVFAC contracts for water systems at comparable bases would reveal spending trends, project scopes, and typical contract values. These investments are crucial for maintaining force readiness and ensuring the well-being of personnel stationed abroad.

What are the potential risks associated with performing infrastructure work in a remote location like Diego Garcia?

Performing infrastructure work in a remote location like Diego Garcia presents several significant risks. Logistical challenges are paramount, including the high cost and complexity of transporting materials, equipment, and personnel to the island. Supply chain disruptions can occur, leading to delays and increased costs. Environmental factors, such as tropical weather conditions, can impact construction schedules. Furthermore, the availability of skilled labor locally may be limited, requiring the contractor to bring in personnel, which adds to logistical burdens and costs. Ensuring adequate power, water, and waste management for the construction effort itself can also be challenging. Finally, the remote nature may complicate oversight and emergency response.

Industry Classification

NAICS: Utilities › Water, Sewage and Other Systems › Water Supply and Irrigation Systems

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: TWO STEP

Solicitation ID: N4008413R0001

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 4800 OVERTON PLAZA, SUITE 380, FORT WORTH, TX, 76109

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

Financial Breakdown

Contract Ceiling: $27,850,925

Exercised Options: $27,850,925

Current Obligation: $27,850,925

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline