Navy awards $27.5M for Diego Garcia base repairs, highlighting long-term infrastructure needs

Contract Overview

Contract Amount: $27,508,060 ($27.5M)

Contractor: Black Construction/Mace International Joint Venture

Awarding Agency: Department of Defense

Start Date: 2018-12-07

End Date: 2024-02-25

Contract Duration: 1,906 days

Daily Burn Rate: $14.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: RM15-0421, Q3/BQ DB REPAIR TO UPH 13 AND UPH-17, DIEGO GARCIA, BIOT

Plain-Language Summary

Department of Defense obligated $27.5 million to BLACK CONSTRUCTION/MACE INTERNATIONAL JOINT VENTURE for work described as: RM15-0421, Q3/BQ DB REPAIR TO UPH 13 AND UPH-17, DIEGO GARCIA, BIOT Key points: 1. Contract addresses critical infrastructure maintenance at a key strategic location. 2. Long duration suggests a need for sustained facility upkeep. 3. Fixed-price contract type aims to control costs over the performance period. 4. Competition level indicates a potentially competitive bidding environment. 5. Focus on building construction points to ongoing facility development and repair. 6. Awarded by the Department of the Navy, aligning with strategic defense priorities.

Value Assessment

Rating: good

The contract value of $27.5 million for base repairs at Diego Garcia appears reasonable given the scope and duration. While specific benchmarks for this remote location are difficult to ascertain, the firm-fixed-price nature of the contract suggests an effort to establish a clear cost ceiling. The duration of 1906 days (approximately 5.2 years) indicates a significant, long-term infrastructure need, making the total value a reflection of sustained maintenance rather than a single, large project. Without direct comparable contracts for similar remote island base repairs, a precise value-for-money assessment is challenging, but the fixed-price structure provides a degree of cost certainty.

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 two bidders (no: 2) suggests a moderate level of competition for this specific requirement. While two bidders are better than one, a higher number of bids would typically lead to more robust price discovery and potentially lower prices for the government. The fact that it was competed fully is a positive sign for taxpayer value, ensuring that the award was not limited by restrictive practices.

Taxpayer Impact: Full and open competition, even with a limited number of bidders, generally benefits taxpayers by encouraging competitive pricing and preventing potential cost inflation associated with sole-source or limited solicitations.

Public Impact

Benefits the U.S. Navy by ensuring the operational readiness and habitability of facilities at Diego Garcia. Delivers essential repair and maintenance services for critical base infrastructure. Geographic impact is concentrated on Diego Garcia, a strategically vital U.S. naval support facility in the Indian Ocean. Workforce implications include potential employment opportunities for construction and maintenance personnel, likely a mix of local and contracted labor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 5 years) could lead to scope creep or unforeseen cost increases if not managed tightly.
Remote location of Diego Garcia may introduce logistical challenges and higher costs for materials and labor.
Limited competition (2 bidders) might mean less aggressive pricing than a more crowded field.
Firm-fixed-price contracts can shift risk to the contractor, potentially leading to higher initial bids to cover contingencies.

Positive Signals

Full and open competition process promotes fairness and potentially better pricing.
Firm-fixed-price contract provides cost certainty for the government over the contract term.
Award addresses essential infrastructure maintenance, crucial for operational readiness.
The contract is for a specific, defined need (building repair), reducing ambiguity.

Sector Analysis

This contract falls within the Construction and Engineering Services sector, specifically related to commercial and institutional building construction. The U.S. federal government is a significant spender in this sector, particularly for maintaining and upgrading its vast inventory of facilities worldwide. Spending in this area is often driven by the need to ensure the safety, functionality, and longevity of government buildings and infrastructure, especially in remote or strategically important locations like Diego Garcia. Comparable spending benchmarks would typically involve analyzing other large-scale construction and repair contracts awarded by the Department of Defense for overseas bases.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). As a result, there are no direct subcontracting implications for small businesses mandated by a set-aside. However, the prime contractor, BLACK CONSTRUCTION/MACE INTERNATIONAL JOINT VENTURE, may still engage small businesses as subcontractors, depending on their own procurement strategies and the availability of qualified small business vendors for specific tasks. The absence of a small business set-aside means the primary focus was on securing the best overall offer through full and open competition.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Navy, likely through contracting officers and project managers responsible for ensuring performance and compliance. Given the remote location, specific logistical and performance monitoring challenges may exist. Transparency is facilitated by the contract award data being publicly available. While no specific Inspector General (IG) jurisdiction is mentioned, the DoD IG typically has oversight over defense contracts to investigate fraud, waste, and abuse.

Related Government Programs

Department of Defense Facilities Maintenance
Naval Base Infrastructure Projects
Overseas Construction Contracts
Base Realignment and Closure (BRAC) related construction

Risk Flags

Remote Location Logistics
Long-Term Contract Management
Potential for Unforeseen Conditions
Limited Bidder Competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $27.5 million to BLACK CONSTRUCTION/MACE INTERNATIONAL JOINT VENTURE. RM15-0421, Q3/BQ DB REPAIR TO UPH 13 AND UPH-17, DIEGO GARCIA, BIOT

Who is the contractor on this award?

The obligated recipient is BLACK CONSTRUCTION/MACE INTERNATIONAL JOINT VENTURE.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $27.5 million.

What is the period of performance?

Start: 2018-12-07. End: 2024-02-25.

What is the track record of BLACK CONSTRUCTION/MACE INTERNATIONAL JOINT VENTURE with the federal government?

Information on the specific track record of the BLACK CONSTRUCTION/MACE INTERNATIONAL JOINT VENTURE joint venture with the federal government is not detailed in the provided data. However, the award of this contract by the Department of the Navy suggests they possess the necessary qualifications and experience to undertake significant construction projects. A deeper analysis would require examining their past performance ratings on federal contracts, any history of contract disputes or terminations, and their overall experience with similar types of work, particularly in remote or challenging environments. Federal procurement databases often contain past performance information that can be reviewed to assess a contractor's reliability and capability.

How does the cost per square foot or per unit of repair compare to similar projects?

The provided data does not include specific details on the scope of work beyond 'DB REPAIR TO UPH 13 AND UPH-17', making a precise cost-per-unit or cost-per-square-foot analysis difficult. The total award is $27.5 million over approximately 5.2 years. To benchmark this, one would need to know the total square footage being repaired, the types of repairs (e.g., structural, cosmetic, systems), and the specific facilities (UPH 13 and UPH-17). Without these granular details, comparison to market rates or similar contracts is speculative. Generally, construction costs in remote locations like Diego Garcia are higher due to logistical challenges, transportation of materials, and specialized labor requirements, which would need to be factored into any valid comparison.

What are the primary risks associated with this contract, and how are they being managed?

Primary risks include logistical challenges due to the remote island location, potential for unforeseen site conditions requiring additional work, fluctuations in material costs, and ensuring consistent quality over a long performance period. The remote location increases the risk of delays in material delivery and specialized personnel deployment. Unforeseen conditions are a common risk in construction, especially in older facilities. The firm-fixed-price contract type shifts some cost risk to the contractor, incentivizing them to manage budgets tightly. The long duration (1906 days) requires robust project management and quality assurance oversight from the Navy to ensure standards are met throughout the contract lifecycle and to mitigate risks associated with performance degradation over time.

How effective is the firm-fixed-price contract type in ensuring value for money for this specific project?

The firm-fixed-price (FFP) contract type is generally effective in ensuring value for money when the scope of work is well-defined and risks can be reasonably anticipated. For a project involving repairs to specific units (UPH 13 and UPH-17) at a fixed location, an FFP contract provides cost certainty to the government, as the contractor assumes the risk of cost overruns. This encourages the contractor to be efficient and control costs. However, if unforeseen complexities arise that were not adequately scoped, the contractor might have less incentive to absorb additional costs, potentially leading to change orders or disputes. The success of FFP in delivering value here depends on the thoroughness of the initial scope definition and the contractor's ability to execute efficiently within the agreed price.

What is the historical spending trend for building repair and maintenance at Diego Garcia?

The provided data focuses on a single contract award and does not offer historical spending trends for building repair and maintenance at Diego Garcia. To assess historical spending, one would need to analyze contract data for the Department of the Navy or specific commands operating at Diego Garcia over multiple fiscal years. This would involve identifying all contracts related to facilities maintenance, construction, and repair at that location, summing their values annually, and looking for patterns, increases, or decreases. Such an analysis would reveal whether this $27.5 million award represents a typical level of investment or a significant deviation, potentially indicating a surge in needs or a shift in maintenance strategy.

What is the significance of the 'DB REPAIR TO UPH 13 AND UPH-17' scope for naval operations?

The designation 'DB REPAIR TO UPH 13 AND UPH-17' likely refers to specific buildings or facilities critical for naval operations at Diego Garcia. 'UPH' could stand for 'Utility Plant Housing' or a similar functional designation. Repairs to such units are essential for maintaining the operational readiness and habitability of the base. Diego Garcia is a vital logistics and communications hub in the Indian Ocean; therefore, ensuring the functionality of its utility plants and associated infrastructure is paramount. Disruptions to these systems could impact power generation, water treatment, or other essential services, thereby affecting the base's ability to support naval deployments and operations in the region.

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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N4008416R0001

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: HARMON INDUSTRIAL PARK, HARMON, GU, 96913

Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $27,508,060

Exercised Options: $27,508,060

Current Obligation: $27,508,060

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N4008418D0066

IDV Type: IDC

Timeline