DoD's $19.2M Guam HQ contract awarded to DCK Pacific Guam, LLC, faces scrutiny over value and competition

Contract Overview

Contract Amount: $19,222,870 ($19.2M)

Contractor: DCK Pacific Guam, LLC

Awarding Agency: Department of Defense

Start Date: 2008-09-18

End Date: 2020-05-24

Contract Duration: 4,266 days

Daily Burn Rate: $4.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: BASIS FOR CLIN 0001 BASE BID FOR SPECIAL PROJECT RM 022-08 JOINT REGION MARIANAS HEADQUARTERS

Place of Performance

Location: TAMUNING, GUAM County, GUAM, 96931

Plain-Language Summary

Department of Defense obligated $19.2 million to DCK PACIFIC GUAM, LLC for work described as: BASIS FOR CLIN 0001 BASE BID FOR SPECIAL PROJECT RM 022-08 JOINT REGION MARIANAS HEADQUARTERS Key points: 1. The contract's value appears high relative to its duration and scope, raising questions about cost-effectiveness. 2. Limited competition may have contributed to a higher-than-expected price. 3. The firm fixed-price structure shifts risk to the contractor, but oversight is crucial for managing costs. 4. Performance context is limited, making it difficult to assess the contractor's track record on this specific project. 5. This contract falls within the specialty trade contractors sector, supporting infrastructure development for the Navy. 6. The contract's long duration suggests a significant, multi-faceted project.

Value Assessment

Rating: questionable

The contract's total value of $19.2 million over approximately 11.7 years (4266 days) suggests a substantial per-year cost. Benchmarking against similar large-scale construction or renovation projects for military headquarters in similar geographic regions is necessary to determine if this represents fair value. Without more detailed cost breakdowns or comparisons to market rates for specialized trade work in Guam, it is difficult to definitively assess the pricing's reasonableness. The firm fixed-price nature implies a negotiated price that should reflect market conditions and anticipated costs.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely solicited. However, the data only specifies '3' bidders, which, while not a sole-source situation, represents a relatively low number of competitors for a contract of this magnitude. This limited pool of bidders could potentially impact price discovery and may not have driven the most competitive pricing possible. Further analysis would be needed to understand why only three bids were received.

Taxpayer Impact: While full and open competition was utilized, a low number of bidders can still result in less competitive pricing, potentially leading to higher costs for taxpayers than if more firms had participated.

Public Impact

The primary beneficiaries are the Department of the Navy and personnel stationed at Joint Region Marianas, who will utilize the new headquarters. The services delivered include the construction or renovation of a special project headquarters facility. The geographic impact is concentrated in Guam, supporting U.S. military presence in the Pacific. Workforce implications may include local employment opportunities in Guam for construction and trade labor, as well as potential indirect economic benefits.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the fixed-price contract does not adequately account for unforeseen complexities in Guam's construction environment.
Limited competition may have resulted in a price that is not optimally competitive.
The long duration of the contract increases the risk of scope creep or changes that could impact the final cost.
Dependence on a single contractor for an extended period could pose risks if performance issues arise.

Positive Signals

Awarded under full and open competition, suggesting an effort to achieve fair market value.
Firm fixed-price contract shifts performance risk to the contractor.
The contract supports critical infrastructure for U.S. military operations in a strategic location.
The contractor, DCK Pacific Guam, LLC, is based in Guam, potentially indicating local expertise and commitment.

Sector Analysis

This contract falls under the 'All Other Specialty Trade Contractors' (NAICS 238990) sector, which encompasses firms performing specific construction activities not classified elsewhere, such as specialized foundation work, structural metal erection, or building equipment installation. The market for such services in Guam is influenced by military construction projects, local development, and the unique logistical challenges of operating in an island environment. Comparable spending benchmarks would typically involve analyzing other large-scale government construction projects in similar remote or island territories, considering factors like material transport, labor availability, and regulatory requirements.

Small Business Impact

The contract data indicates that small business participation was not a specific set-aside (ss: false, sb: false). This means the primary contract was not designated for small businesses. There is no explicit information on subcontracting plans or performance. Without this data, it's difficult to assess the impact on the small business ecosystem in Guam. Typically, large prime contracts can offer subcontracting opportunities for smaller, specialized firms, but this depends on the prime contractor's strategy and the nature of the work required.

Oversight & Accountability

Oversight for this definitive contract would primarily fall under the Department of the Navy's contracting and project management offices. Accountability measures are inherent in the firm fixed-price structure, which obligates the contractor to deliver the specified work within the agreed-upon price. Transparency is generally facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if allegations of fraud, waste, or abuse arise during the contract's performance or closeout.

Related Government Programs

Department of Defense Construction Contracts
Navy Infrastructure Projects
Guam Military Construction
Specialty Trade Services Contracts
Large Value Definitive Contracts

Risk Flags

Long Contract Duration
Limited Number of Bidders
Vague 'Special Project' Scope
High Cost Per Year (Estimated)

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.2 million to DCK PACIFIC GUAM, LLC. BASIS FOR CLIN 0001 BASE BID FOR SPECIAL PROJECT RM 022-08 JOINT REGION MARIANAS HEADQUARTERS

Who is the contractor on this award?

The obligated recipient is DCK PACIFIC GUAM, 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 $19.2 million.

What is the period of performance?

Start: 2008-09-18. End: 2020-05-24.

What is the typical cost per square foot for similar headquarters construction projects in Guam or similar Pacific island territories?

Determining a precise cost per square foot for this contract is challenging without knowing the total square footage of the headquarters facility. However, construction costs in Guam are generally higher than in the continental U.S. due to factors like material shipping, limited labor pools, and logistical complexities. For large commercial or government buildings in Guam, costs can range significantly, often from $400 to $800+ per square foot, depending on the complexity, finishes, and specific site conditions. The $19.2 million contract value, spread over an unspecified but likely substantial building footprint, would need to be compared against these regional benchmarks to assess value. Without the square footage, a direct per-square-foot comparison is speculative but the overall contract value suggests a significant facility.

How does the duration of this contract (4266 days) compare to typical construction timelines for similar-sized military facilities?

A contract duration of 4266 days, approximately 11.7 years, is exceptionally long for a single construction project, even for a major headquarters facility. Typical timelines for constructing large military buildings might range from 2 to 5 years, including design, procurement, and construction phases. Such an extended duration could indicate that this contract encompasses multiple phases, extensive renovation work, ongoing support services, or perhaps a phased construction approach over a very long period. It raises questions about whether the project scope has evolved or if the duration reflects a strategic, long-term development plan rather than a single build. This extended timeline warrants scrutiny regarding project management, potential for delays, and the need for sustained oversight.

What specific 'Special Project' is being undertaken for the Joint Region Marianas Headquarters?

The provided data identifies the contract as a 'BASIS FOR CLIN 0001 BASE BID FOR SPECIAL PROJECT RM 022-08 JOINT REGION MARIANAS HEADQUARTERS.' The term 'Special Project' is vague and does not specify the exact nature of the work. It could encompass new construction, significant renovation, expansion, or a combination of these. Without further details from the contract documentation or agency statements, the precise scope of 'Special Project RM 022-08' remains unclear. This lack of specificity in publicly available data makes it difficult to fully assess the project's requirements, risks, and value proposition.

What are the potential risks associated with a firm fixed-price contract of this magnitude and duration?

While a firm fixed-price (FFP) contract shifts cost risk to the contractor, a contract of this magnitude ($19.2 million) and exceptionally long duration (11.7 years) presents unique risks. For the contractor, unforeseen increases in material costs, labor shortages, or significant changes in site conditions over such an extended period could erode profit margins if not adequately anticipated in the initial bid. For the government, the primary risk is that the initial price, negotiated years ago, may not reflect current market value or that the contractor may cut corners on quality to maintain profitability if issues arise. Furthermore, the long duration increases the likelihood of contract modifications, which can add complexity and potentially increase the overall cost if not managed carefully. Ensuring robust oversight to monitor performance and manage any necessary changes is critical.

How does the awarded amount of $19.2 million compare to historical spending on similar Navy infrastructure projects in the Pacific region?

Comparing the $19.2 million award to historical spending requires identifying truly comparable projects. 'Similar' could mean similar in scope (e.g., headquarters construction), similar in location (e.g., Guam or other Pacific islands), or similar in agency (e.g., other Navy projects). Given the 'Special Project' designation and the long duration, finding direct comparables is difficult. However, major military construction projects in the Pacific region are known for their high costs due to logistics and specialized requirements. If this $19.2 million represents a significant new build or major renovation, it might fall within the expected range for large-scale infrastructure in high-cost areas. A detailed analysis would involve querying historical contract databases for projects with similar NAICS codes, agencies, and geographic locations, adjusting for inflation and scale.

Industry Classification

NAICS: Construction › Other Specialty Trade Contractors › All Other Specialty Trade Contractors

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N4019208R1316

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 266D FINEGAYAN STREET, HARMON, GU, 96913

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $19,222,870

Exercised Options: $19,222,870

Current Obligation: $19,222,870

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline