Department of the Navy awards $23.4M Design-Build contract for Camp Schwab facility repair to NIPPO CORPORATION

Contract Overview

Contract Amount: $23,410,431 ($23.4M)

Contractor: Nippo Corporation

Awarding Agency: Department of Defense

Start Date: 2022-05-24

End Date: 2026-12-17

Contract Duration: 1,668 days

Daily Burn Rate: $14.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 7

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: N4008421D0073 / TO#N4008422F4247 DESIGN BUILD (DB) REPAIR BEQ BLDG. 3409, CAMP SCHWAB, OKINAWA, JAPAN (ESR107-13, HQMCBU1778M/1388629)

Plain-Language Summary

Department of Defense obligated $23.4 million to NIPPO CORPORATION for work described as: N4008421D0073 / TO#N4008422F4247 DESIGN BUILD (DB) REPAIR BEQ BLDG. 3409, CAMP SCHWAB, OKINAWA, JAPAN (ESR107-13, HQMCBU1778M/1388629) Key points: 1. Contract awarded via full and open competition, indicating a broad market search. 2. The contract is a firm-fixed-price delivery order, providing cost certainty for the government. 3. Project duration of 1668 days suggests a significant scope of work for facility repair. 4. The North American Industry Classification System (NAICS) code 236220 points to commercial and institutional building construction. 5. No small business set-aside was utilized for this contract. 6. The contract is for repair work, implying existing infrastructure is being addressed.

Value Assessment

Rating: good

The contract value of $23.4 million for a design-build repair project of this scope and duration appears reasonable. Benchmarking against similar large-scale construction and repair projects within the Department of Defense, particularly those involving overseas bases, would provide further context. The firm-fixed-price nature of the contract helps manage cost risks for the government, assuming the initial design and scope were well-defined.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit offers. With 7 bidders, the competition level suggests a healthy interest in the project. This level of competition is generally favorable for price discovery and can lead to more competitive pricing for the government.

Taxpayer Impact: The robust competition for this contract is beneficial for taxpayers, as it likely drove down the final price compared to a sole-source or limited competition scenario.

Public Impact

The primary beneficiaries are the U.S. military personnel stationed at Camp Schwab, Okinawa, Japan, who will utilize the repaired facilities. The contract delivers essential repair and potentially upgrade services to Building 3409, ensuring operational readiness and safety. The geographic impact is localized to Camp Schwab, Okinawa, Japan, a significant U.S. Marine Corps installation. The project will likely involve a workforce of construction professionals, potentially including local Japanese labor, contributing to employment in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions arise during the design-build process.
Risk of schedule delays due to the complexities of overseas construction and potential supply chain issues.
Ensuring quality of construction meets U.S. military standards in a foreign jurisdiction.

Positive Signals

Firm-fixed-price contract structure mitigates budget uncertainty.
Full and open competition with multiple bidders suggests a competitive pricing environment.
Design-build approach can streamline the construction process and potentially reduce overall project time.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, specifically related to government infrastructure development and maintenance. The market for large-scale military construction and repair projects is often dominated by a few large, experienced firms capable of handling complex, international requirements. Spending in this sector for the Department of Defense is substantial, driven by the need to maintain and modernize global facilities.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses in the provided data. The nature of large-scale overseas construction projects often favors larger prime contractors with the capacity and experience to manage such complex undertakings. This means direct opportunities for small businesses as prime contractors are limited in this specific award.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting and engineering divisions. Accountability measures are embedded in the firm-fixed-price contract terms, performance standards, and delivery schedules. Transparency is facilitated through contract award databases, though detailed project-specific oversight reports may not be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Military Construction, Navy
Facilities Sustainment, Restoration, and Modernization (FSRM)
Overseas Military Construction Projects
Design-Build Contracts

Risk Flags

Potential for unforeseen site conditions
Complexity of overseas construction logistics
Ensuring compliance with U.S. military standards abroad

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $23.4 million to NIPPO CORPORATION. N4008421D0073 / TO#N4008422F4247 DESIGN BUILD (DB) REPAIR BEQ BLDG. 3409, CAMP SCHWAB, OKINAWA, JAPAN (ESR107-13, HQMCBU1778M/1388629)

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 $23.4 million.

What is the period of performance?

Start: 2022-05-24. End: 2026-12-17.

What is the track record of NIPPO CORPORATION in performing similar design-build repair projects for the U.S. Department of Defense, particularly in overseas locations?

NIPPO CORPORATION is a Japanese construction company with a significant history of undertaking large-scale civil engineering and building construction projects. While specific details on their past performance exclusively with the U.S. Department of Defense in overseas locations like Okinawa are not detailed in this data snippet, their general profile suggests they possess the capabilities for such projects. A deeper dive would involve reviewing past performance evaluations, any reported issues on previous DoD contracts, and their experience with U.S. military construction standards and regulations. Their ability to win a full and open competition bid indicates they met the pre-qualification criteria set by the Navy.

How does the awarded price of $23.4 million compare to similar design-build repair projects for military barracks or administrative buildings of comparable size and complexity?

Benchmarking this $23.4 million contract requires comparing it to similar projects, considering factors like location (especially overseas costs), specific building type (e.g., barracks vs. specialized facilities), scope of repair (minor vs. major structural), and the design-build delivery method. Projects of this magnitude for military facilities can range widely in cost. Without specific comparable project data, it's difficult to definitively state if this price is high or low. However, the presence of 7 bidders in a full and open competition suggests the price was likely competitive within the market for this type of work.

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

Key risk indicators include the potential for unforeseen site conditions in an existing building, complexities associated with performing construction in a foreign country (logistics, regulations, labor), and the inherent risks of the design-build process where design finalization occurs concurrently with construction planning. Mitigation strategies likely include thorough site investigations prior to final design, robust contract clauses addressing unforeseen conditions, experienced project management from NIPPO CORPORATION, and close government oversight by the Department of the Navy. The firm-fixed-price nature also shifts some cost risk to the contractor.

What is the expected impact of this repair project on the operational effectiveness and living conditions at Camp Schwab?

The repair of Building 3409 is expected to significantly enhance operational effectiveness and living conditions by ensuring the facility meets modern safety, habitability, and functional standards. Outdated or deteriorating facilities can impede mission readiness and negatively impact morale. By addressing these issues, the project contributes to a more secure, comfortable, and efficient environment for the U.S. military personnel stationed at Camp Schwab, thereby supporting the overall mission objectives in the region.

How has federal spending on similar construction and repair projects at U.S. military installations in Japan trended over the past five years?

Federal spending on construction and repair projects at U.S. military installations in Japan has historically been substantial, driven by the strategic importance of the region and the need to maintain and upgrade aging infrastructure. Trends often reflect shifts in defense priorities, infrastructure modernization initiatives, and specific security concerns. While precise year-over-year figures for all such projects require detailed analysis of federal procurement data, it's generally understood that significant investments are consistently made to support U.S. Forces Japan. This particular contract aligns with ongoing efforts to ensure facilities are modern and capable.

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: N4008420R0073

Offers Received: 7

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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: $23,410,431

Exercised Options: $23,410,431

Current Obligation: $23,410,431

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N4008421D0073

IDV Type: IDC

Timeline