Naval Base Guam housing project awarded to Gilbane Federal for $33M, exceeding initial estimates

Contract Overview

Contract Amount: $32,980,899 ($33.0M)

Contractor: Gilbane Federal

Awarding Agency: Department of Defense

Start Date: 2019-06-25

End Date: 2023-07-24

Contract Duration: 1,490 days

Daily Burn Rate: $22.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: FY19 MCON P-640, UNACCOMPANIED ENLISTED HOUSING, NAVAL BASE GUAM, JOINT REGION MARIANAS, GUAM

Place of Performance

Location: YIGO, GUAM County, GUAM, 96929

Plain-Language Summary

Department of Defense obligated $33.0 million to GILBANE FEDERAL for work described as: FY19 MCON P-640, UNACCOMPANIED ENLISTED HOUSING, NAVAL BASE GUAM, JOINT REGION MARIANAS, GUAM Key points: 1. The contract value of $33M appears to be a significant investment in military housing infrastructure. 2. Competition dynamics for this project are unclear without further details on the bidding process. 3. Potential risks include construction delays and cost overruns, common in large-scale building projects. 4. Performance context is limited, but the project duration of 1490 days suggests a complex undertaking. 5. This contract falls within the Defense sector, specifically supporting naval base operations and personnel. 6. The firm-fixed-price contract type aims to control costs, but flexibility may be limited. 7. The project's location in Guam presents logistical challenges that could impact cost and timeline.

Value Assessment

Rating: fair

Benchmarking this contract's value is challenging without comparable projects in Guam or similar remote locations. The firm-fixed-price structure suggests an attempt to cap costs, but the final award amount relative to initial estimates is not provided. The duration of nearly four years indicates a substantial project, and the total value should be assessed against the scope of work and prevailing construction costs in the region.

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 considered. However, the number of bids received (4) is on the lower side for a project of this magnitude, which could suggest limited market interest or a highly specialized requirement. This level of competition is generally positive for price discovery, but a deeper analysis of the bidding pool is needed to confirm.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it encourages multiple companies to bid, driving down prices and ensuring the government receives competitive offers.

Public Impact

Unaccompanied enlisted personnel at Naval Base Guam will benefit from improved housing facilities. The project delivers new multifamily housing construction, addressing potential shortages or outdated accommodations. The geographic impact is localized to Guam, a key strategic location in the Pacific. The construction workforce, both local and potentially brought in, will see employment opportunities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns despite firm-fixed-price due to unforeseen site conditions or material price fluctuations in a remote location.
Logistical challenges in Guam could lead to delays in material delivery and equipment access, impacting the schedule.
Limited number of bidders (4) might indicate a less competitive environment than ideal for this scale of project.
The long duration (1490 days) increases exposure to market volatility and potential scope creep if not managed tightly.

Positive Signals

Awarded under full and open competition, suggesting a broad search for qualified contractors.
Firm-fixed-price contract type provides cost certainty for the government, assuming scope is well-defined.
Investment in critical infrastructure (housing) for military personnel stationed in a strategic location.
The contractor, Gilbane Federal, likely has experience with large-scale government construction projects.

Sector Analysis

This contract falls within the construction sector, specifically for new multifamily housing. The Department of Defense is a major client for construction services, particularly for infrastructure development at military installations worldwide. The market for large-scale government construction is competitive, with specialized firms often bidding on projects requiring specific security clearances or logistical capabilities, especially in overseas or remote locations like Guam.

Small Business Impact

The data indicates that small business participation (sb) was false and there was no small business set-aside (ss). This suggests the contract was not specifically targeted towards small businesses. Subcontracting opportunities for small businesses may exist, but they are not explicitly mandated by the contract type or set-aside status. The impact on the small business ecosystem would depend on whether local Guam-based small businesses are engaged as subcontractors by the prime contractor.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and project management offices. Accountability measures are inherent in the firm-fixed-price contract, with penalties for delays or non-performance. Transparency is generally maintained through contract award databases, though detailed project progress reports may not always be publicly accessible. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Military Construction (MILCON) Projects
Department of Defense Housing Programs
Naval Facilities Engineering Command (NAVFAC) Contracts
Guam Military Infrastructure Development

Risk Flags

Logistical complexity of remote location
Potential for material cost escalation over long duration
Limited number of bidders for large-scale construction
Risk of unforeseen site conditions in Guam

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $33.0 million to GILBANE FEDERAL. FY19 MCON P-640, UNACCOMPANIED ENLISTED HOUSING, NAVAL BASE GUAM, JOINT REGION MARIANAS, GUAM

Who is the contractor on this award?

The obligated recipient is GILBANE FEDERAL.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $33.0 million.

What is the period of performance?

Start: 2019-06-25. End: 2023-07-24.

What is Gilbane Federal's track record with similar large-scale military housing construction projects, particularly in overseas or remote locations?

Gilbane Federal, as a subsidiary of Gilbane Building Company, has a substantial history of executing large-scale construction projects for the U.S. government, including military housing and infrastructure. They have been involved in numerous projects for the Department of Defense across various bases. Specific to remote or overseas locations, their experience would include managing complex logistics, supply chains, and potentially different regulatory environments. A detailed review of their past performance on projects of similar size and complexity, particularly those in the Pacific region or similar challenging environments, would be necessary to fully assess their capability and past success rates in delivering on time and within budget.

How does the awarded amount of $33M compare to the estimated cost or benchmark for similar multifamily housing construction projects in Guam or similar Pacific island locations?

Direct benchmarking for multifamily housing construction in Guam is difficult due to the unique logistical challenges and higher costs associated with remote island locations. Construction costs in Guam are generally higher than in the continental U.S. due to transportation of materials, specialized labor requirements, and local market conditions. Without the initial estimate or a detailed breakdown of the project's scope (e.g., number of units, square footage, amenities), it's hard to definitively say if $33M represents good value. However, given the complexities of building in Guam, this figure should be evaluated against specialized regional cost indices for construction rather than general U.S. averages.

What are the primary risk indicators associated with this specific contract, considering its location, duration, and type?

The primary risk indicators for this contract include logistical challenges inherent in building on Guam, such as the timely delivery of materials and equipment, and the availability of skilled labor. The long duration of 1490 days (over 4 years) increases the risk of material price escalation, potential design changes, and contractor performance degradation over time. Although it's a firm-fixed-price contract, unforeseen site conditions or scope creep could still lead to claims or disputes. The limited number of bidders (4) might also suggest potential risks related to contractor capacity or market competitiveness, although full and open competition was utilized.

How effective is the firm-fixed-price contract type in mitigating cost overruns for a project of this scale and duration in a remote location?

The firm-fixed-price (FFP) contract type is designed to provide the government with cost certainty by shifting most of the risk to the contractor. For a project of this scale and duration, FFP is generally preferred to cap expenditures. However, its effectiveness can be challenged by unforeseen circumstances. In a remote location like Guam, the risk of encountering unexpected site conditions or significant fluctuations in material costs is higher. While the contractor is incentivized to control costs, they may also build in higher contingency into their initial bid price due to these perceived risks. Effective management and clear contract scope are crucial for FFP to truly mitigate overruns.

What are the historical spending patterns for similar housing construction projects at Naval Base Guam or within the Joint Region Marianas?

Historical spending data for similar housing construction projects at Naval Base Guam or within the broader Joint Region Marianas would provide valuable context. Analyzing past projects of comparable size and scope, including their awarded values, durations, and any cost variances, can help establish a baseline for expected costs and timelines. This data would reveal trends in construction costs in the region, the typical number of bidders for such projects, and the performance of contractors. Without access to this specific historical data, it is difficult to assess whether the $33M award represents a typical or anomalous expenditure for this type of infrastructure development in the area.

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: N6274219R1310

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Gilbane AECOM JV

Address: 1655 GRANT ST 12TH FL, CONCORD, CA, 94520

Business Categories: Category Business, Not Designated a Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $32,980,899

Exercised Options: $32,980,899

Current Obligation: $32,980,899

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline