Department of Defense awards $25.1M for Ume Tower building revitalization in Japan

Contract Overview

Contract Amount: $25,116,334 ($25.1M)

Contractor: Nippo Corporation

Awarding Agency: Department of Defense

Start Date: 2018-09-28

End Date: 2021-05-29

Contract Duration: 974 days

Daily Burn Rate: $25.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: N40084-18-C-0092 WHOLE HOUSE REVITALIZATION OF UME TOWER BLDG 5024, SASEBO, JAPAN

Plain-Language Summary

Department of Defense obligated $25.1 million to NIPPO CORPORATION for work described as: N40084-18-C-0092 WHOLE HOUSE REVITALIZATION OF UME TOWER BLDG 5024, SASEBO, JAPAN Key points: 1. Contract awarded to NIPPO CORPORATION for comprehensive building revitalization. 2. Project scope includes revitalization of Tower Building 5024. 3. Contract duration spans over 974 days. 4. This is a definitive contract with a firm fixed price. 5. The contract was awarded under full and open competition. 6. The award value is approximately $25.1 million.

Value Assessment

Rating: fair

The contract value of $25.1 million for the revitalization of a residential tower building appears to be within a reasonable range for a project of this scale and complexity, especially considering the location in Sasebo, Japan, which can incur additional logistical costs. Benchmarking against similar large-scale residential renovations within military installations or comparable international projects would provide a clearer picture of value for money. The firm fixed-price structure suggests that the contractor assumed the primary risk for cost overruns, which can be a positive indicator for the government if the scope was well-defined.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely solicited and considered. The presence of 3 bids suggests a moderate level of competition for this project. A higher number of bidders generally leads to more competitive pricing and a wider selection of qualified contractors. However, the specific details of the bidding process and the qualifications of the bidders are not provided, which limits a deeper assessment of the competition's effectiveness.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it promotes a competitive environment, driving down prices and encouraging efficiency among contractors. This approach helps ensure that the government secures the best possible value for its investment.

Public Impact

Military personnel and their families residing in or utilizing Ume Tower Building 5024 in Sasebo, Japan, will benefit from improved living and working conditions. The services delivered include comprehensive revitalization of a significant building structure. The geographic impact is localized to the Sasebo Naval Base in Japan. The project likely involved a workforce of construction professionals, tradespeople, and support staff, potentially including local hires in Japan.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if initial building assessments were incomplete, leading to cost increases despite fixed-price contract.
Logistical challenges and potential delays associated with performing construction work in an overseas location.
Ensuring quality of work meets long-term durability standards for a major building revitalization.

Positive Signals

Firm fixed-price contract structure shifts cost overrun risk to the contractor.
Awarded under full and open competition, suggesting a competitive bidding process.
The project addresses a clear need for infrastructure improvement at a military installation.

Sector Analysis

The construction and facilities maintenance sector is a significant area of federal spending, particularly for agencies with large physical footprints like the Department of Defense. This contract falls under the category of building renovation and revitalization, a common requirement for maintaining aging infrastructure. Comparable spending benchmarks for similar large-scale building overhauls on military bases, especially overseas, would be necessary for a precise comparison, but the scale suggests a substantial project.

Small Business Impact

There is no indication that this contract included a small business set-aside. The prime contractor, NIPPO CORPORATION, is a large Japanese construction company. Subcontracting opportunities may have been available to small businesses, but this information is not detailed in the provided data. The absence of specific small business participation goals or reporting makes it difficult to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting and engineering departments, ensuring adherence to contract terms, quality standards, and timelines. Accountability measures are inherent in the firm fixed-price contract, where deviations from scope or quality can lead to penalties or non-payment. Transparency is generally maintained through contract award databases, though detailed project progress reports may not be publicly accessible.

Related Government Programs

Department of Defense Facilities Maintenance Contracts
Overseas Military Construction Projects
Residential Building Renovation Contracts
Naval Facilities Engineering Command Contracts

Risk Flags

Overseas contract execution risks
Potential for cost overruns despite fixed-price
Quality assurance in large-scale renovations

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $25.1 million to NIPPO CORPORATION. N40084-18-C-0092 WHOLE HOUSE REVITALIZATION OF UME TOWER BLDG 5024, SASEBO, JAPAN

Who is the contractor on this award?

The obligated recipient is NIPPO 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 $25.1 million.

What is the period of performance?

Start: 2018-09-28. End: 2021-05-29.

What is the track record of NIPPO CORPORATION with the Department of Defense or similar government entities?

NIPPO CORPORATION is a large, established construction company based in Japan with a broad range of experience in civil engineering, building construction, and road construction. While specific details of their past performance on Department of Defense contracts are not readily available in this dataset, their selection for a significant revitalization project suggests they possess the necessary qualifications and experience. Further investigation into their contract history with government agencies, including any past performance reviews or awards, would provide a more comprehensive understanding of their reliability and capability in fulfilling federal contracts.

How does the cost of this revitalization compare to similar projects on other naval bases?

Direct cost comparison is challenging without specific details on the scope of work, materials used, and prevailing market rates at other locations. However, the $25.1 million award for revitalizing a tower building indicates a substantial investment. Projects of this nature, especially those involving structural, electrical, and plumbing upgrades, can vary significantly in cost due to factors like building size, age, complexity of renovations, and geographic location. Overseas projects often incur higher logistical and labor costs. Benchmarking against similar-sized residential building renovations on U.S. naval bases or other international military installations would be necessary to determine if this contract represents a competitive price point.

What are the primary risks associated with a large-scale building revitalization contract in an overseas location?

Key risks include logistical challenges in transporting materials and equipment, potential delays due to customs or import regulations, and managing a workforce that may include local labor with different employment practices and potentially language barriers. Environmental factors specific to the location, such as seismic activity or weather patterns, can also pose risks. Furthermore, ensuring compliance with both U.S. military standards and local Japanese building codes and regulations adds complexity. The firm fixed-price nature of this contract shifts much of the financial risk of these challenges to the contractor, NIPPO CORPORATION, but delays or quality issues could still impact the government's objectives.

What is the expected impact of this revitalization on the quality of life for service members and their families?

The revitalization of Ume Tower Building 5024 is expected to significantly improve the quality of life for its occupants. Modernizing residential facilities typically involves upgrades to living spaces, common areas, and essential utilities, leading to enhanced comfort, safety, and functionality. This can include improvements in heating, ventilation, air conditioning, plumbing, electrical systems, and potentially aesthetic enhancements. Such improvements contribute to better morale and well-being for service members and their families stationed at the Sasebo Naval Base, which is a critical factor in military readiness and retention.

What historical spending patterns exist for building maintenance and renovation at the Sasebo Naval Base?

Analyzing historical spending patterns for building maintenance and renovation at the Sasebo Naval Base would require access to detailed procurement data over several fiscal years. This specific contract represents a significant single investment in infrastructure. Typically, bases of this size require ongoing allocations for routine maintenance, repairs, and periodic major renovations to address aging infrastructure. Understanding the frequency and scale of past projects would help contextualize the $25.1 million award as part of a larger, long-term capital improvement strategy for the base.

Were there any performance issues or disputes related to this contract during its execution?

The provided data does not contain information regarding performance issues, disputes, or contract modifications during the execution of this contract. A comprehensive review would necessitate examining contract performance reports, modification logs, and any official correspondence or dispute resolution records associated with N40084-18-C-0092. Without this information, it is assumed the contract was executed to completion according to its terms, but this cannot be definitively confirmed.

Industry Classification

NAICS: Construction › Residential Building Construction › Residential Remodelers

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: TWO STEP

Solicitation ID: N4008418R0092

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: JX Holdings, Inc.

Address: 1-19-11, KYOBASHI, CHUO-KU

Business Categories: Category Business, Corporate Entity Tax Exempt, Foreign Owned, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $25,116,334

Exercised Options: $25,116,334

Current Obligation: $25,116,334

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline