Naval Support Facility wharf refueling upgrade contract awarded for over $28.6 million

Contract Overview

Contract Amount: $28,625,800 ($28.6M)

Contractor: Black Construction/Mace International Joint Venture

Awarding Agency: Department of Defense

Start Date: 2017-05-30

End Date: 2020-02-22

Contract Duration: 998 days

Daily Burn Rate: $28.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF FY17 MILCON P-1705, IMPROVE WHARF REFUELING CAPABILITY AT NAVAL SUPPORT FACILITY, DIEGO GARCIA

Plain-Language Summary

Department of Defense obligated $28.6 million to BLACK CONSTRUCTION/MACE INTERNATIONAL JOINT VENTURE for work described as: IGF::OT::IGF FY17 MILCON P-1705, IMPROVE WHARF REFUELING CAPABILITY AT NAVAL SUPPORT FACILITY, DIEGO GARCIA Key points: 1. Contract value appears reasonable for a large-scale construction project of this nature. 2. Full and open competition suggests a competitive bidding process. 3. Project duration of nearly three years indicates a complex undertaking. 4. Fixed-price contract type shifts risk to the contractor. 5. This project supports critical refueling infrastructure for naval operations. 6. The contract falls within the construction sector, specifically related to oil and gas infrastructure.

Value Assessment

Rating: good

The contract value of approximately $28.6 million for improving wharf refueling capabilities at Naval Support Facility, Diego Garcia, appears to be within a reasonable range for a project of this scale and complexity. Benchmarking against similar military construction projects for port infrastructure would provide a more precise value-for-money assessment. The firm fixed-price contract type suggests that the government has secured a defined cost, with the contractor bearing the risk of cost overruns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. With two bids received, the level of competition was limited but still present. This suggests that while multiple companies were aware of and able to bid on the project, the final number of proposals may have been influenced by the specialized nature of the work or the geographic location.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to lower prices and better value. Even with two bidders, the process allows for price discovery and encourages contractors to offer their best terms.

Public Impact

Naval operations at Diego Garcia will benefit from enhanced refueling capabilities, improving efficiency and readiness. The project delivers critical infrastructure upgrades to a key strategic naval support facility. The geographic impact is localized to Diego Garcia, a vital U.S. military installation in the Indian Ocean. The project likely involved a skilled construction workforce, contributing to employment in specialized trades.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions arise, despite fixed-price contract.
Geopolitical risks associated with operating in a remote island location.
Dependency on the contractor's ability to manage complex logistics for materials and personnel.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Full and open competition, even with two bidders, suggests a structured procurement process.
Project addresses a clear operational need for improved refueling infrastructure.

Sector Analysis

This contract falls within the construction sector, specifically focusing on heavy civil engineering and infrastructure related to oil and gas pipelines and structures. The market for such specialized military construction is often dominated by a few large, experienced firms capable of undertaking projects in remote or challenging locations. Spending on naval port and infrastructure upgrades is a consistent part of defense budgets, aimed at maintaining operational readiness and modernizing facilities.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses in the provided data. This suggests that the project's scale and specialized nature likely favored larger prime contractors. Further analysis would be needed to determine if small businesses had opportunities to participate as subcontractors.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting and engineering departments. The firm fixed-price nature of the contract implies that financial oversight will focus on ensuring the contractor meets the defined scope and schedule. Transparency is generally maintained through contract award databases and reporting requirements, though specific oversight mechanisms for this particular project are not detailed here.

Related Government Programs

Naval Facilities Engineering Command (NAVFAC) projects
Military Construction (MILCON) Program
Defense Infrastructure projects
Port and Harbor Construction

Risk Flags

Potential for cost increases due to unforeseen site conditions.
Logistical challenges associated with remote island location.
Limited competition may impact final price negotiation.
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 $28.6 million to BLACK CONSTRUCTION/MACE INTERNATIONAL JOINT VENTURE. IGF::OT::IGF FY17 MILCON P-1705, IMPROVE WHARF REFUELING CAPABILITY AT NAVAL SUPPORT FACILITY, DIEGO GARCIA

Who is the contractor on this award?

The obligated recipient is BLACK CONSTRUCTION/MACE INTERNATIONAL JOINT VENTURE.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $28.6 million.

What is the period of performance?

Start: 2017-05-30. End: 2020-02-22.

What is the track record of BLACK CONSTRUCTION/MACE INTERNATIONAL JOINT VENTURE on similar federal contracts?

A comprehensive review of the contractor's past performance would involve examining their history with federal agencies, particularly the Department of Defense and the Department of the Navy. This includes assessing their successful completion of similar-sized construction projects, adherence to schedules and budgets, and any history of disputes or contract terminations. Databases like the Federal Procurement Data System (FPDS) and contractor performance assessment reporting (CPARS) would be primary sources for this information. Without access to these specific records for this joint venture, it's difficult to definitively assess their track record beyond the information provided for this single contract.

How does the awarded amount compare to similar wharf refueling infrastructure projects globally or within the US military?

Benchmarking this $28.6 million contract against similar wharf refueling infrastructure projects requires access to a broader dataset of comparable contracts. Factors such as location (remote island vs. mainland), specific technical requirements (e.g., capacity, environmental controls), and the prevailing economic conditions at the time of award significantly influence project costs. Generally, military construction in overseas locations like Diego Garcia can incur higher costs due to logistical challenges and potentially higher labor rates. A detailed comparison would involve identifying projects with similar scope, scale, and complexity, adjusting for inflation and location-specific factors.

What are the primary risks associated with this specific contract and its execution?

The primary risks associated with this contract include potential delays due to the remote island location of Diego Garcia, which can complicate logistics for materials, equipment, and personnel. Unforeseen subsurface conditions during excavation or construction could lead to scope changes or delays, although the firm fixed-price contract aims to mitigate cost impacts for the government. Furthermore, the contractor's ability to manage a complex joint venture and ensure quality control throughout the nearly three-year duration are critical risk factors. Geopolitical stability and environmental considerations specific to the region also represent potential risks.

How effective is the firm fixed-price contract type in ensuring value for money for this project?

The firm fixed-price (FFP) contract type is generally considered effective for ensuring value for money when the scope of work is well-defined and the risks are understood. For this wharf refueling upgrade, the FFP structure shifts the responsibility for cost overruns to the contractor, BLACK CONSTRUCTION/MACE INTERNATIONAL JOINT VENTURE. This incentivizes the contractor to manage costs efficiently and adhere to the schedule to maximize profit. However, the government must ensure the initial scope is comprehensive to avoid costly change orders. The effectiveness hinges on the accuracy of the initial cost estimates and the contractor's ability to execute the defined scope within the agreed price.

What is the historical spending trend for wharf and refueling infrastructure at Naval Support Facility, Diego Garcia?

Analyzing historical spending trends for wharf and refueling infrastructure specifically at Naval Support Facility, Diego Garcia, would require access to detailed historical contract data for that installation. This would involve searching procurement databases for contracts awarded to upgrade or maintain similar facilities over previous fiscal years. Without this specific historical data, it's challenging to establish a trend. However, it is reasonable to assume that such critical infrastructure requires ongoing maintenance and periodic upgrades, suggesting a pattern of investment, the scale of which would depend on the facility's age, usage, and strategic importance.

What are the implications of having only two bidders for this full and open competition contract?

Having only two bidders in a full and open competition, as seen with this contract, suggests a potentially limited market for this specific type of specialized construction work, or perhaps barriers to entry such as bonding requirements, technical expertise, or geographic challenges. While competition is present, it is less robust than if there were numerous bidders. This could mean that the government did not achieve the full benefit of price competition that might have been realized with a larger pool of bidders. However, it does not automatically imply a lack of value, as the two competing firms may have submitted aggressive bids to secure the contract.

Industry Classification

NAICS: Construction › Utility System Construction › Oil and Gas Pipeline and Related Structures Construction

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: N6274217R1313

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: HARMON INDUSTRIAL PARK, HARMON, GU, 96913

Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $28,625,800

Exercised Options: $28,625,800

Current Obligation: $28,625,800

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline