Navy awards $41.8M for Guam housing construction, a significant investment in military family infrastructure

Contract Overview

Contract Amount: $41,845,882 ($41.8M)

Contractor: Core Tech International Corporation

Awarding Agency: Department of Defense

Start Date: 2008-08-20

End Date: 2011-01-09

Contract Duration: 872 days

Daily Burn Rate: $48.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: BASE ITEM

Place of Performance

Location: SANTA RITA, GUAM County, GUAM, 96915

Plain-Language Summary

Department of Defense obligated $41.8 million to CORE TECH INTERNATIONAL CORPORATION for work described as: BASE ITEM Key points: 1. The contract's value suggests a substantial commitment to improving living conditions for service members and their families. 2. Competition dynamics for this large-scale construction project will be crucial for ensuring cost-effectiveness. 3. The fixed-price contract type aims to mitigate cost overruns, but requires careful scope management. 4. Performance will be key to delivering quality housing within the specified timeline. 5. This project positions the Navy as a significant investor in Guam's construction sector. 6. The duration of the contract indicates a long-term need for housing solutions in the region.

Value Assessment

Rating: good

The $41.8 million award for multifamily housing construction is a significant investment. Benchmarking this against similar military housing projects requires detailed analysis of scope, location, and specific construction types. However, the firm fixed-price nature suggests an attempt to control costs upfront. The number of bids received (4) provides a baseline for assessing competitive pricing, though without knowing the bid amounts, a definitive value-for-money assessment is challenging.

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. With four bids received, there was a degree of competition, which generally helps in achieving fair market prices. The level of competition suggests that the Navy sought a broad range of potential contractors, aiming to leverage market capabilities for this substantial project.

Taxpayer Impact: Full and open competition with multiple bidders is generally favorable for taxpayers, as it increases the likelihood of receiving competitive pricing and encourages contractors to offer their best value to win the award.

Public Impact

Service members and their families stationed in Guam will benefit from improved housing quality and availability. The contract will deliver new multifamily housing units, addressing potential shortages or outdated facilities. The geographic impact is concentrated in Guam, supporting the military's strategic presence in the Pacific. The project will likely create numerous jobs in the construction sector in Guam, benefiting the local workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep in large construction projects can lead to cost increases if not managed tightly.
Ensuring timely completion is critical to meet the housing needs of military personnel and their families.
Quality control during construction is essential to ensure durable and safe housing.

Positive Signals

The firm fixed-price contract type provides cost certainty for the government.
Awarding under full and open competition suggests a robust bidding process.
The contract duration of 872 days indicates a well-planned, long-term project.

Sector Analysis

This contract falls within the construction sector, specifically new multifamily housing. The market for military housing construction is often characterized by large, complex projects awarded by government entities. Comparable spending benchmarks would involve analyzing other large-scale housing developments, particularly those undertaken by the Department of Defense in similar geographic locations or for similar purposes. The size of this award indicates a significant project within the regional construction market.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses (ss: false, sb: false). While there is no direct indication of small business subcontracting requirements in the provided snippet, large federal construction contracts often include provisions for small business participation. The impact on the small business ecosystem would depend on whether the prime contractor actively seeks to subcontract portions of the work to qualified small businesses in Guam.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant Navy construction oversight personnel. Accountability measures are built into the firm fixed-price contract, with payments tied to performance and completion milestones. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Military Family Housing Construction
Department of Defense Construction Projects
Naval Facilities Engineering Command Contracts
Guam Infrastructure Development

Risk Flags

Potential for cost overruns if scope is not tightly managed.
Risk of schedule delays due to logistical or environmental factors in Guam.
Ensuring adequate quality control throughout the construction process.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $41.8 million to CORE TECH INTERNATIONAL CORPORATION. BASE ITEM

Who is the contractor on this award?

The obligated recipient is CORE TECH INTERNATIONAL 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 $41.8 million.

What is the period of performance?

Start: 2008-08-20. End: 2011-01-09.

What is the historical spending pattern for multifamily housing construction by the Department of the Navy in Guam?

Analyzing historical spending for multifamily housing construction by the Department of the Navy in Guam would involve reviewing past contract awards for similar projects over several fiscal years. This would help establish a baseline for typical project values, durations, and the frequency of such awards. For instance, comparing this $41.8 million contract to previous projects could reveal trends in investment, whether spending has increased or decreased, and if there's a consistent need for new housing. Understanding this pattern is crucial for assessing the current award's significance and for future budget planning. Without access to a comprehensive historical database of Navy contracts specifically for Guam housing, a precise historical spending pattern cannot be detailed here, but such an analysis would typically involve searching contract databases like FPDS or SAM.gov for relevant keywords and agencies.

How does the number of bidders (4) compare to similar large-scale military housing construction contracts?

The number of bidders on a federal contract provides insight into the level of competition and market interest. For a contract valued at $41.8 million for new multifamily housing construction, four bidders suggest a moderate level of competition. In the realm of large-scale construction, especially for specialized government projects, the number of qualified bidders can vary significantly. Factors such as geographic location, specific technical requirements, and the overall health of the construction industry can influence bid participation. If similar projects in comparable locations typically receive six or more bids, then four might indicate slightly lower competition. Conversely, if similar projects often see only two or three bids, then four would represent strong competition. A thorough comparison would require analyzing bid counts on other Navy or DoD housing projects of similar magnitude and complexity.

What are the key performance indicators (KPIs) likely to be used to evaluate the success of this housing construction contract?

Key performance indicators (KPIs) for this multifamily housing construction contract would focus on ensuring the project is completed on time, within budget, and to the required quality standards. Primary KPIs would likely include adherence to the project schedule, with milestones for foundation, framing, roofing, interior finishing, and final completion. Budget adherence, particularly given the firm fixed-price nature, would be monitored closely, though the primary focus is on delivering the agreed scope. Quality control KPIs would involve inspections for structural integrity, compliance with building codes, material quality, and finish work. Additionally, safety performance, measured by incident rates and adherence to safety protocols, would be a critical KPI. Finally, successful closeout, including punch list completion and final acceptance, would signify project success.

What are the potential risks associated with a firm fixed-price contract for a long-duration construction project in Guam?

Firm fixed-price (FFP) contracts offer cost certainty but can introduce risks, especially for long-duration projects in potentially volatile environments like Guam. Key risks include contractor performance issues, where the contractor might cut corners on quality to maintain profitability if costs escalate unexpectedly due to unforeseen site conditions, material price fluctuations, or labor shortages. Schedule delays are another significant risk; if the contractor falls behind, they bear the cost of acceleration or face penalties, potentially leading to disputes or contractor default. Furthermore, if the scope of work is not perfectly defined, change orders can become a source of conflict and cost increases, even under an FFP. For Guam, specific risks might include logistical challenges for materials and labor, potential environmental or geological issues, and the impact of weather patterns on construction timelines. Effective government oversight and proactive risk management are crucial to mitigate these potential issues.

How does the NAICS code 236116 (New Multifamily Housing Construction) inform the analysis of this contract?

The North American Industry Classification System (NAICS) code 236116, 'New Multifamily Housing Construction (except For-Sale Builders),' precisely categorizes the core activity of this contract. This code signifies that the contract is for the construction of residential buildings containing three or more housing units, such as apartment buildings, condominiums, and townhouses, where the builder is not selling the individual units. This classification is vital for several reasons: it allows for benchmarking against industry standards and average costs for this specific type of construction; it helps identify potential competitors within this specialized sector; and it aids in understanding the market dynamics, labor requirements, and typical project complexities associated with building new multifamily housing. Government agencies use NAICS codes to classify business establishments and for statistical purposes, including procurement planning and market research.

Industry Classification

NAICS: Construction › Residential Building Construction › New Multifamily Housing Construction (except For-Sale Builders)

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N6274208R1310

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 195 TUN JOSE SALAS STREET, TAMUNING, GU, 96913

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

Financial Breakdown

Contract Ceiling: $49,479,282

Exercised Options: $41,845,882

Current Obligation: $41,845,882

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline