DoD's $19.1M cold weather training facility contract awarded to Afognak Diversified Services, Inc. in Alaska

Contract Overview

Contract Amount: $19,136,006 ($19.1M)

Contractor: Afognak Diversified Services, Inc.

Awarding Agency: Department of Defense

Start Date: 2012-09-27

End Date: 2015-06-02

Contract Duration: 978 days

Daily Burn Rate: $19.6K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 7

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: BASE BID SOF COLD WEATHER TRAINING FACIL

Place of Performance

Location: KODIAK, KODIAK ISLAND County, ALASKA, 99615, UNITED STATES OF AMERICA

State: Alaska Government Spending

Plain-Language Summary

Department of Defense obligated $19.1 million to AFOGNAK DIVERSIFIED SERVICES, INC. for work described as: BASE BID SOF COLD WEATHER TRAINING FACIL Key points: 1. The contract value of $19.1 million for cold weather training facilities appears reasonable given the specialized nature of the work and the remote Alaskan location. 2. Full and open competition was utilized, suggesting a robust bidding process that should have yielded competitive pricing. 3. The contract duration of 978 days (approximately 2.7 years) indicates a significant project scope. 4. The firm-fixed-price contract type shifts performance risk to the contractor, potentially leading to cost overruns if unforeseen issues arise. 5. The project is located in Alaska, a region known for higher construction costs due to logistics and environmental challenges. 6. The contractor, Afognak Diversified Services, Inc., is an Alaska Native Corporation, which may have implications for subcontracting and local economic impact.

Value Assessment

Rating: good

The contract value of $19.1 million for a cold weather training facility in Alaska is within a reasonable range for specialized construction projects in remote, challenging environments. While specific benchmarks for similar facilities are not readily available, the firm-fixed-price structure suggests the government sought to control costs upfront. The number of bids received (7) indicates sufficient market interest, which typically supports competitive pricing. However, without detailed cost breakdowns, a precise value-for-money assessment is limited.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that the initial solicitation was broad, but specific sources were later excluded. The fact that seven bids were received suggests a healthy level of competition for this specialized requirement. A competitive bidding process generally leads to better price discovery and ensures that the government receives offers from multiple qualified contractors, potentially driving down costs.

Taxpayer Impact: The use of full and open competition, with seven bidders, is beneficial for taxpayers as it increases the likelihood of securing the best possible price and quality for the training facility. This approach minimizes the risk of inflated costs that can occur with less competitive procurement methods.

Public Impact

The primary beneficiaries are U.S. military personnel who will utilize the cold weather training facilities to enhance their operational readiness in extreme environments. The contract delivers essential infrastructure for advanced military training, improving the effectiveness of combat operations in arctic and sub-arctic conditions. The geographic impact is concentrated in Alaska, supporting regional economic activity through construction and related services. The project likely involves a significant workforce, including construction labor and specialized trades, contributing to employment in the local Alaskan economy.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns due to the firm-fixed-price contract type if unforeseen construction challenges arise in the remote Alaskan environment.
The exclusion of sources after initial full and open competition warrants further investigation to ensure fairness and optimal price discovery.
Logistical complexities in Alaska can lead to delays and increased costs, impacting project timelines and final expenditures.
The long contract duration increases the risk of scope creep or changes that could escalate costs beyond initial projections.

Positive Signals

The use of full and open competition with seven bidders suggests a competitive environment that should have driven a fair price.
The firm-fixed-price contract type provides cost certainty for the government, assuming the contractor manages risks effectively.
Awarding to an Alaska Native Corporation may align with federal goals for supporting indigenous businesses and local economies.
The specialized nature of the training facility indicates a critical capability being developed for national defense.

Sector Analysis

The construction sector, particularly commercial and institutional building, is a significant part of federal spending. This contract falls within the niche of specialized military infrastructure development. The market for such facilities is often limited to contractors with specific expertise in remote construction and harsh environmental conditions. Comparable spending benchmarks are difficult to establish without more specific project details, but large-scale government construction in Alaska typically commands premium pricing due to logistical and labor challenges.

Small Business Impact

While the prime contractor, Afognak Diversified Services, Inc., is an Alaska Native Corporation, this contract was not specifically set aside for small businesses. However, as an ANC, the company may have obligations or opportunities to subcontract with small businesses, including those owned by Native Alaskans. The impact on the broader small business ecosystem will depend on the extent of subcontracting opportunities created by this large prime contract.

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, requiring the contractor to deliver the facility within the agreed-upon price and schedule. Transparency is facilitated through contract award databases, though detailed cost breakdowns and performance reports may not be publicly accessible. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Military Construction (MILCON)
Department of Defense Facilities
Arctic Warfare Training
Alaska Construction Projects
Specialized Training Infrastructure

Risk Flags

Potential for cost escalation due to remote location and logistical challenges.
Risk associated with firm-fixed-price contract if unforeseen site conditions arise.
Need for detailed review of 'exclusion of sources' rationale in competition.
Contract duration of nearly three years increases exposure to market fluctuations.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.1 million to AFOGNAK DIVERSIFIED SERVICES, INC.. BASE BID SOF COLD WEATHER TRAINING FACIL

Who is the contractor on this award?

The obligated recipient is AFOGNAK DIVERSIFIED SERVICES, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $19.1 million.

What is the period of performance?

Start: 2012-09-27. End: 2015-06-02.

What is the track record of Afognak Diversified Services, Inc. with Department of Defense contracts, particularly for construction projects of similar scale and complexity?

Afognak Diversified Services, Inc. (ADSI) has a history of performing government contracts, including significant work with the Department of Defense. As an Alaska Native Corporation, ADSI often leverages its unique status to secure and execute large-scale projects. While specific details on past cold weather training facility construction are not immediately available in this data snippet, their portfolio likely includes various construction and support services. A deeper dive into their contract history, including past performance evaluations and any reported issues on previous DoD projects, would be necessary to fully assess their suitability and reliability for this specific contract. Their experience in Alaska's challenging environment is a key asset.

How does the awarded price of $19.1 million compare to similar cold weather training facilities constructed for the military or other government agencies?

Benchmarking the $19.1 million cost for this cold weather training facility is challenging without detailed specifications and location-specific cost indices. However, large military construction projects in remote, high-cost-of-living areas like Alaska typically incur significant premiums. Factors such as specialized design requirements for extreme temperatures, logistical challenges in material transport, specialized labor rates, and extended construction seasons contribute to higher overall costs compared to similar facilities built in more accessible locations. The firm-fixed-price nature of the contract also implies that the contractor absorbed initial risk assessments, which could be factored into the price. A comprehensive comparison would require access to detailed cost breakdowns and data on comparable projects.

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

The primary risks associated with this contract include potential cost overruns due to the firm-fixed-price structure, unforeseen environmental or geological challenges in Alaska, logistical delays in material and personnel transport, and potential labor shortages. Mitigation strategies likely involve robust project management by the contractor, detailed site investigations prior to construction, contingency planning for logistical disruptions, and adherence to strict quality control measures. The government's mitigation includes the competitive bidding process to select a capable contractor and the firm-fixed-price contract type, which places the financial risk of cost overruns primarily on the contractor, provided the scope remains unchanged.

What is the expected effectiveness of this cold weather training facility in enhancing military readiness?

The effectiveness of this cold weather training facility is expected to be high in enhancing military readiness for operations in arctic and sub-arctic environments. Such facilities allow service members to train under realistic, harsh conditions, developing critical skills in operating equipment, survival techniques, and tactical maneuvers specific to cold weather. This training is crucial for units deploying to or operating in regions like Alaska, Northern Europe, or other cold climates. By providing a controlled yet challenging training environment, the facility directly contributes to improved soldier performance, reduced risk of injury due to environmental exposure, and overall mission success in extreme theaters.

What has been the historical spending trend for similar cold weather training infrastructure by the Department of Defense?

Historical spending on cold weather training infrastructure by the Department of Defense has likely fluctuated based on geopolitical priorities, military doctrine shifts, and specific regional operational needs. Investments in such specialized facilities are often driven by increased focus on Arctic capabilities or sustained operations in cold regions. While specific aggregate spending data for 'cold weather training facilities' is not readily available, it falls under the broader category of Military Construction (MILCON) and training range development. Spending in these areas can be substantial, particularly when new theaters of operation emerge or existing ones require modernization. Budget allocations for these types of projects are typically subject to long-term strategic planning and congressional appropriations.

What specific clauses or performance metrics were included in the contract to ensure quality and timely delivery?

While the provided data does not detail specific contract clauses or performance metrics, firm-fixed-price contracts typically include requirements for the contractor to complete the project according to specified designs, standards, and by a defined completion date. Quality assurance would be governed by standard construction specifications (e.g., referencing specific building codes, material standards, and performance requirements for the facility's intended use). Performance metrics might include adherence to schedule milestones, successful completion of inspections, and final acceptance of the facility meeting all functional and operational requirements. The government would likely have designated representatives (e.g., Contracting Officer's Representative - COR) to monitor progress and ensure compliance.

Industry Classification

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

Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCTION OF BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: TWO STEP

Solicitation ID: N4425512R3002

Offers Received: 7

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Afognak Native Corp (UEI: 052089695)

Address: 3909 ARCTIC BLVD STE 400, ANCHORAGE, AK, 99503

Business Categories: 8(a) Program Participant, Alaskan Native Corporation Owned Firm, Category Business, Limited Liability Corporation, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $19,136,006

Exercised Options: $19,136,006

Current Obligation: $19,136,006

Subaward Activity

Number of Subawards: 3

Total Subaward Amount: $194,841

Contract Characteristics

Cost or Pricing Data: NO

Timeline