DoD's $19M Navy construction contract awarded to NAN INC for facility upgrades in Hawaii

Contract Overview

Contract Amount: $19,036,642 ($19.0M)

Contractor: NAN Inc

Awarding Agency: Department of Defense

Start Date: 2021-12-16

End Date: 2025-04-18

Contract Duration: 1,219 days

Daily Burn Rate: $15.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: UMIG-FY21 RM09-2894 REPLACE LOW PRESSU

Place of Performance

Location: PEARL HARBOR, HONOLULU County, HAWAII, 96860

State: Hawaii Government Spending

Plain-Language Summary

Department of Defense obligated $19.0 million to NAN INC for work described as: UMIG-FY21 RM09-2894 REPLACE LOW PRESSU Key points: 1. Contract value appears reasonable for a large-scale construction project of this nature. 2. Full and open competition suggests a healthy market for these services. 3. Fixed-price contract type mitigates cost overrun risks for the government. 4. Project duration of over three years indicates a significant scope of work. 5. Awarded to a single contractor, NAN INC, for a specific set of deliverables. 6. Geographic focus on Hawaii may present logistical challenges and cost considerations.

Value Assessment

Rating: good

The contract value of approximately $19 million for facility upgrades in Hawaii seems within a reasonable range for a project of this scope and duration. Benchmarking against similar large-scale construction contracts awarded by the Department of Defense or other federal agencies for base improvements or building construction would provide a more precise value-for-money assessment. The firm fixed-price structure is generally favorable for the government, as it shifts most of the cost risk to the contractor, promoting budget predictability.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that the solicitation was made available to all responsible sources. The presence of four bidders suggests a competitive environment, which typically leads to better pricing and quality for the government. The specific number of bids received (4) is a positive sign of market interest and the availability of qualified contractors for this type of work.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive bidding process that can drive down costs and encourage innovation, leading to better value for public funds.

Public Impact

The primary beneficiaries are the Department of the Navy and its personnel stationed in Hawaii, who will receive improved facilities. The contract will deliver construction and renovation services for existing or new buildings. The geographic impact is concentrated in Hawaii, potentially involving local labor and material sourcing. Workforce implications may include the employment of construction workers, project managers, and support staff, potentially including local hires.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost increases if unforeseen site conditions arise, despite fixed-price structure.
Logistical challenges and higher material costs associated with construction in Hawaii.
Dependence on a single contractor for the full scope of work over an extended period.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Full and open competition indicates a robust bidding process and potential for competitive pricing.
Awarded by the Department of the Navy, suggesting alignment with strategic infrastructure needs.
Project duration allows for thorough planning and execution of complex construction tasks.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the broader construction industry. Federal spending in this area supports military readiness, infrastructure development, and government operations. Comparable spending benchmarks would involve analyzing other large-scale construction projects awarded by the Department of Defense or other federal agencies for base improvements, barracks, or administrative facilities, particularly in geographically isolated or high-cost areas like Hawaii.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As such, the primary contractor, NAN INC, is likely a large business. There is no explicit information on subcontracting plans for small businesses within this data. The absence of a small business set-aside means that opportunities for small businesses would primarily arise if NAN INC voluntarily engages them for subcontracting, which is not guaranteed.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant Department of the Navy contracting command. The firm fixed-price nature of the contract provides a degree of accountability by fixing the total cost. Transparency is generally maintained through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Department of Defense Military Construction
Naval Facilities Engineering Command Contracts
Federal Building and Infrastructure Projects
Construction Services for Government Facilities

Risk Flags

Potential for cost escalation due to Hawaii's high cost of living and logistics.
Risk of delays due to weather or unforeseen site conditions in a remote location.
Contractor performance risk on a large, multi-year project.
Ensuring quality standards are met under a fixed-price contract.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.0 million to NAN INC. UMIG-FY21 RM09-2894 REPLACE LOW PRESSU

Who is the contractor on this award?

The obligated recipient is NAN 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 $19.0 million.

What is the period of performance?

Start: 2021-12-16. End: 2025-04-18.

What is the track record of NAN INC in performing similar large-scale federal construction contracts?

Assessing the track record of NAN INC requires a review of their past performance on federal contracts, particularly those of similar size, scope, and complexity. This would involve examining contract databases for previous awards, performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), and any history of disputes or contract terminations. A history of successful project completion on time and within budget would indicate a lower performance risk. Conversely, a pattern of delays, cost overruns, or quality issues would raise concerns about their capability to execute this specific $19 million project effectively for the Department of the Navy.

How does the awarded price compare to industry benchmarks for similar construction projects in Hawaii?

To benchmark the awarded price of approximately $19 million, one would need to compare it against recent, similar construction projects in Hawaii. This comparison should consider project type (e.g., new construction, renovation, specific building types), size (square footage), complexity, and the prevailing market conditions in Hawaii, which often has higher labor and material costs. Data from construction cost estimating services, industry reports, or publicly available information on comparable government or private sector projects in the region would be essential. A significant deviation from established benchmarks, either higher or lower, would warrant further investigation into the pricing structure and scope.

What are the primary risks associated with a firm fixed-price contract for a multi-year construction project?

While firm fixed-price (FFP) contracts are generally favored for cost control, they carry specific risks for both parties, especially on long-duration projects like this one. For the contractor (NAN INC), the primary risk is underestimating costs, leading to reduced profit margins or even losses if unforeseen issues arise (e.g., material price escalation, labor shortages, unexpected site conditions). For the government, the risk is that the contractor may cut corners on quality or scope to protect their profit margin if costs escalate beyond their initial estimates. Effective oversight and clear contract specifications are crucial to mitigate these risks and ensure the project meets quality standards.

What is the expected impact of this contract on the local Hawaiian construction labor market?

A contract of this magnitude ($19 million) is likely to have a positive impact on the local Hawaiian construction labor market. It will create demand for skilled tradespeople, project managers, engineers, and support staff. Depending on NAN INC's hiring practices and subcontracting strategies, it could lead to direct job creation and employment opportunities for local residents. Furthermore, increased activity in the construction sector can stimulate demand for local suppliers of materials and equipment, indirectly benefiting other businesses in the region. The duration of the project suggests sustained employment opportunities over several years.

How does the competition level (4 bidders) influence the value for money achieved in this award?

Having four bidders in a full and open competition generally indicates a healthy level of competition, which is conducive to achieving good value for money. A larger pool of bidders typically drives down prices as companies compete to win the contract. It also increases the likelihood that the government will receive proposals that meet or exceed technical requirements at a competitive price. While four bidders is a solid number, the specific nature of the competition (e.g., were all bids technically compliant and competitive on price?) would provide a more nuanced understanding of the value achieved. Fewer bidders might suggest less competition and potentially higher prices.

What are the potential challenges of managing a construction project in Hawaii from a logistical and cost perspective?

Managing construction projects in Hawaii presents unique logistical and cost challenges compared to projects on the mainland United States. Transportation costs for materials, equipment, and potentially specialized labor are significantly higher due to the island location. Limited local availability of certain specialized materials or skilled labor may necessitate importing them, further increasing costs and lead times. Additionally, environmental regulations, land use restrictions, and the need to coordinate with local authorities can add complexity. These factors often result in higher overall project costs and longer timelines, which must be carefully managed by the contractor and overseen by the government.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N6247817R4032

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 636 LAUMAKA ST, HONOLULU, HI, 96819

Business Categories: Asian Pacific American Owned Business, Category Business, Corporate Entity Not Tax Exempt, Minority Owned Business, Not Designated a Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $19,036,642

Exercised Options: $19,036,642

Current Obligation: $19,036,642

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N6247820D4014

IDV Type: IDC

Timeline