Department of the Navy awards $25.7M contract for aircraft maintenance hangar repair to NIHON MECCS CO., LTD

Contract Overview

Contract Amount: $25,750,806 ($25.8M)

Contractor: Nihon Meccs CO.,Ltd.

Awarding Agency: Department of Defense

Start Date: 2019-09-03

End Date: 2026-02-26

Contract Duration: 2,368 days

Daily Burn Rate: $10.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: REPAIR AIRCRAFT MAINTENANCE HANGAR

Plain-Language Summary

Department of Defense obligated $25.8 million to NIHON MECCS CO.,LTD. for work described as: REPAIR AIRCRAFT MAINTENANCE HANGAR Key points: 1. The contract value of $25.7 million for aircraft maintenance hangar repair appears to be within a reasonable range for such specialized construction projects. 2. The use of a 'Full and Open Competition' suggests a robust bidding process, likely leading to competitive pricing. 3. The contract duration of 2368 days (approximately 6.5 years) indicates a long-term need for maintenance and repair services. 4. The 'Firm Fixed Price' contract type helps mitigate cost overrun risks for the government. 5. The project falls under the 'Commercial and Institutional Building Construction' sector, a common area for federal infrastructure spending. 6. The absence of small business set-aside flags suggests the primary contractor is not a small business, and subcontracting opportunities are not explicitly detailed.

Value Assessment

Rating: good

Benchmarking the exact value of this contract without more specific project details (scope of work, location, specific repairs) is challenging. However, for a large-scale, long-term repair and maintenance project on a military facility, $25.7 million is within the expected range for construction of this nature. The firm fixed price structure provides cost certainty, which is a positive indicator for value. Further analysis would require comparing the cost per square foot or cost per specific repair item against similar projects in the same geographic region.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition,' indicating that all responsible sources were permitted to submit a bid. This method is generally preferred for maximizing competition and achieving the best value for the government. The number of bidders is not specified, but the open competition suggests a potentially wide range of interested parties, which typically drives down prices and encourages innovation.

Taxpayer Impact: A full and open competition process is beneficial for taxpayers as it increases the likelihood of securing services at a competitive market rate, preventing potential overpayment and ensuring efficient use of public funds.

Public Impact

The primary beneficiaries are the Department of the Navy and its personnel, who will have a functional and safe aircraft maintenance hangar. The services delivered include essential repairs and maintenance to a critical military infrastructure asset. The geographic impact is localized to the specific naval base where the hangar is located. Workforce implications include employment opportunities for construction workers, engineers, and project managers involved in the repair and maintenance activities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific details on the scope of work makes it difficult to fully assess the value proposition.
The long contract duration could present risks if unforeseen issues arise or if technology/requirements change significantly.
No explicit mention of small business subcontracting goals could limit opportunities for smaller firms.

Positive Signals

Full and open competition suggests a competitive bidding process, likely resulting in a fair price.
Firm fixed price contract type provides cost certainty and reduces risk of budget overruns.
The contract addresses a clear need for essential infrastructure maintenance at a military facility.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, which encompasses the building, alteration, and repair of nonresidential structures. Federal spending in this sector is substantial, driven by the need to maintain and upgrade government facilities, including military bases, administrative buildings, and research centers. Comparable spending benchmarks would involve analyzing other large-scale construction and repair contracts awarded by the Department of Defense or other federal agencies for similar types of facilities.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the primary award went to a larger entity or that the competition was open to all, regardless of size. Without specific subcontracting plans detailed in the award, it's difficult to assess the direct impact on the small business ecosystem. However, the prime contractor may still engage small businesses for specialized services or materials, which would be a positive outcome for those firms.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and facilities management divisions. Accountability measures are inherent in the firm fixed price contract type, requiring the contractor to complete the work within the agreed-upon budget. Transparency is generally facilitated through federal contract databases like FPDS, where award details are published. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Military Base Infrastructure Maintenance
Aircraft Hangar Construction and Repair
Federal Building and Facility Construction
Department of Defense Construction Contracts

Risk Flags

Long contract duration may increase risk of cost escalation or scope creep.
Lack of detailed scope of work hinders precise value assessment.
No explicit small business subcontracting goals noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $25.8 million to NIHON MECCS CO.,LTD.. REPAIR AIRCRAFT MAINTENANCE HANGAR

Who is the contractor on this award?

The obligated recipient is NIHON MECCS 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 $25.8 million.

What is the period of performance?

Start: 2019-09-03. End: 2026-02-26.

What is the specific scope of work for the aircraft maintenance hangar repair?

The provided data indicates the contract is for 'REPAIR AIRCRAFT MAINTENANCE HANGAR' but does not detail the specific scope of work. This could include structural repairs, roofing, HVAC systems, electrical upgrades, fire suppression systems, or specialized equipment installation. A comprehensive understanding of the scope is crucial for accurately benchmarking costs and assessing the contractor's performance against expectations. Without this detail, it's challenging to determine if the $25.7 million award represents excellent value or if specific components are over or under-priced relative to industry standards.

How does the cost per square foot of this hangar repair compare to similar projects?

To compare the cost per square foot, we would need the total square footage of the hangar and the detailed breakdown of costs associated with the repair. Assuming the $25.7 million covers all aspects of the repair, and if the hangar is, for example, 100,000 square feet, the cost per square foot would be approximately $257. This figure needs to be benchmarked against recent federal and commercial construction projects for similar facilities in the same geographic region. Factors like the age of the facility, the extent of the damage, and specific repair requirements (e.g., specialized coatings, heavy-duty flooring) significantly influence this metric.

What is the track record of NIHON MECCS CO., LTD. with similar federal contracts?

Information on NIHON MECCS CO., LTD.'s track record with similar federal contracts is not detailed in the provided data. A thorough analysis would involve reviewing their past performance on government contracts, particularly those involving large-scale construction and repair of specialized facilities like aircraft hangars. Key aspects to examine include on-time delivery, adherence to budget, quality of work, and any history of disputes or contract modifications. A positive track record suggests a lower risk for this current project, while a history of issues might warrant closer scrutiny of oversight and performance management.

What are the potential risks associated with the long duration of this contract?

The contract's duration of 2368 days (over 6.5 years) presents several potential risks. Firstly, material costs and labor rates can fluctuate significantly over such a long period, potentially impacting the contractor's profitability or leading to requests for equitable adjustments if not adequately managed within the fixed-price structure. Secondly, unforeseen structural issues or environmental concerns might be discovered as work progresses, requiring scope changes and potentially additional funding. Lastly, evolving military operational requirements or technological advancements could necessitate modifications to the hangar's design or functionality, leading to contract changes and delays.

How does the firm fixed price (FFP) structure benefit the government in this context?

The Firm Fixed Price (FFP) contract structure is highly beneficial for the government in this scenario as it shifts the majority of the cost risk to the contractor. NIHON MECCS CO., LTD. is obligated to complete the specified repairs for the agreed-upon $25.7 million, regardless of unforeseen cost increases related to labor, materials, or productivity. This provides budget certainty for the Department of the Navy and protects against potential cost overruns, making financial planning more predictable. While FFP contracts can sometimes lead to higher initial bid prices to account for contractor risk, they generally offer the best value when the scope of work is well-defined and risks are manageable.

What is the historical spending pattern for aircraft maintenance hangar repairs by the Department of the Navy?

Analyzing historical spending patterns for aircraft maintenance hangar repairs by the Department of the Navy would involve examining contract databases for similar projects over the past several years. This would reveal average contract values, typical durations, common contract types (FFP, cost-plus, etc.), and the prevalence of full and open competition versus sole-source awards. Understanding these patterns helps contextualize the current $25.7 million award, indicating whether it is an outlier, typical, or significantly different from past investments in similar infrastructure.

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Commercial and Institutional Building Construction

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SEALED BID

Solicitation ID: N4008419B8304

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3-6-3, IRIFUNE, CHUO-KU

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

Financial Breakdown

Contract Ceiling: $25,750,806

Exercised Options: $25,750,806

Current Obligation: $25,750,806

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline