DoD's $52.3M Guam clinic construction contract awarded to CORE TECH-HDCC-KAJIMA LLC shows strong competition

Contract Overview

Contract Amount: $52,345,320 ($52.3M)

Contractor: Core Tech-Hdcc-Kajima LLC

Awarding Agency: Department of Defense

Start Date: 2021-05-31

End Date: 2025-02-22

Contract Duration: 1,363 days

Daily Burn Rate: $38.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: J-025 GOJ MEDICAL/DENTAL CLINIC, FINEGAYAN, NAVSUPPACT MCB GUAM

Place of Performance

Location: TAMUNING, GUAM County, GUAM, 96913

Plain-Language Summary

Department of Defense obligated $52.3 million to CORE TECH-HDCC-KAJIMA LLC for work described as: J-025 GOJ MEDICAL/DENTAL CLINIC, FINEGAYAN, NAVSUPPACT MCB GUAM Key points: 1. The contract's value of $52.3 million for a medical/dental clinic in Guam represents a significant investment in military healthcare infrastructure. 2. Full and open competition suggests a robust bidding process, potentially leading to better pricing and value for the government. 3. The definitive contract type with a firm fixed price indicates a clear scope and cost control mechanism. 4. The project duration of 1363 days (approx. 3.7 years) suggests a complex construction undertaking. 5. The award to a joint venture highlights potential for specialized expertise in large-scale construction projects. 6. The geographic location in Guam positions the facility to serve a critical strategic military hub in the Pacific.

Value Assessment

Rating: good

The $52.3 million contract for the J-025 GOJ Medical/Dental Clinic in Finegayan, Guam, appears to be within a reasonable range for large-scale institutional construction projects of this nature. Benchmarking against similar military construction projects, especially those in remote or high-cost areas like Guam, would provide a more precise value assessment. The firm fixed-price structure suggests that the contractor bears the risk of cost overruns, which is generally favorable for the government. However, without detailed cost breakdowns or comparisons to specific industry benchmarks for medical facility construction, a definitive 'excellent' rating is not yet possible.

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. The presence of three bidders (as suggested by 'no': 3) signifies a healthy level of competition for this significant construction project. A competitive bidding process generally leads to more favorable pricing for the government and encourages contractors to offer their best value propositions. The fact that multiple firms vied for this contract suggests that the market has the capacity and interest to undertake such projects.

Taxpayer Impact: The full and open competition for this contract is beneficial for taxpayers as it likely drove down the final award price through competitive pressure. This ensures that government funds are used efficiently and that the project is secured at a price reflecting market realities rather than being inflated due to a lack of alternatives.

Public Impact

Military personnel and their families stationed at Naval Support Activity (NAVSUPPACT) Marine Corps Base (MCB) Guam will benefit from improved medical and dental facilities. The construction of a new clinic will enhance the quality and accessibility of healthcare services for the U.S. military presence in the Western Pacific. The project's geographic impact is concentrated on Guam, a key strategic location for U.S. defense operations. The construction phase will likely create temporary employment opportunities for skilled trades and laborers in Guam and potentially beyond. The completed facility will support the long-term operational readiness and well-being of service members and their dependents in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions or material price escalations occur, despite the firm fixed-price contract.
Dependency on the contractor's ability to manage complex logistics and supply chains for a project in Guam.
Risk of schedule delays due to weather, labor availability, or permitting issues in a remote island location.
Ensuring the quality of construction meets stringent military healthcare facility standards throughout the multi-year project.

Positive Signals

Awarded under full and open competition, suggesting a competitive pricing environment.
Firm fixed-price contract type provides cost certainty for the government.
The contractor is a joint venture (CORE TECH-HDCC-KAJIMA LLC), potentially bringing combined expertise and resources.
The project addresses a critical need for enhanced medical facilities at a strategic military installation.
The contract duration is clearly defined, allowing for project planning and oversight.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, specifically for a government-owned, government-operated (GOGO) facility. The market for large-scale military construction is substantial, driven by ongoing modernization efforts and strategic positioning globally. Projects like this often involve specialized contractors with experience in secure environments and demanding specifications. Comparable spending benchmarks would typically be assessed against other military medical facility constructions or large institutional buildings in similar geographic regions, considering factors like square footage, complexity, and local labor costs.

Small Business Impact

The contract indicates that small business participation was not a primary set-aside consideration, as 'sb' is false. This suggests the contract was not specifically targeted for small businesses. However, the prime contractor, a joint venture, may engage small businesses as subcontractors to fulfill specific needs or meet broader subcontracting goals. The impact on the small business ecosystem would depend on the extent to which the prime contractor actively seeks out and utilizes small business partners for specialized services or materials during the construction phase.

Oversight & Accountability

Oversight for this contract would primarily be managed by the Department of the Navy, likely through contracting officers and project managers responsible for construction projects. Accountability measures are embedded in the firm fixed-price contract terms, requiring the contractor to deliver the specified facility within the agreed-upon cost and schedule. Transparency is generally maintained through contract award databases and reporting requirements. While specific Inspector General (IG) jurisdiction for this particular contract isn't detailed, the DoD IG typically oversees significant federal spending to identify waste, fraud, and abuse.

Related Government Programs

Military Construction (MILCON) Program
Department of Defense Healthcare Facilities
Naval Facilities Engineering Command (NAVFAC) Projects
Guam Military Buildup Projects
Federal Construction Contracts

Risk Flags

Potential for cost escalation due to long project duration and remote location.
Logistical challenges associated with construction in Guam.
Risk of schedule delays due to unforeseen circumstances.
Ensuring compliance with stringent military healthcare facility standards.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $52.3 million to CORE TECH-HDCC-KAJIMA LLC. J-025 GOJ MEDICAL/DENTAL CLINIC, FINEGAYAN, NAVSUPPACT MCB GUAM

Who is the contractor on this award?

The obligated recipient is CORE TECH-HDCC-KAJIMA LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $52.3 million.

What is the period of performance?

Start: 2021-05-31. End: 2025-02-22.

What is the track record of CORE TECH-HDCC-KAJIMA LLC in executing large-scale federal construction projects, particularly military facilities?

Assessing the track record of CORE TECH-HDCC-KAJIMA LLC requires examining past performance on similar projects. As a joint venture, its history might be a composite of its constituent companies' experiences. Key indicators include on-time and on-budget project completion rates, quality of work, safety records, and client satisfaction, especially from government agencies. Information on past performance can often be found in federal contract databases (like SAM.gov) through past performance questionnaires or agency reports. A review of their portfolio would reveal their experience with complex infrastructure, medical facilities, and projects in challenging geographic locations like Guam. Any history of disputes, claims, or contract terminations would also be critical factors in evaluating their reliability for this significant undertaking.

How does the awarded price of $52.3 million compare to similar medical/dental clinic construction projects, both within the DoD and for other federal agencies?

Benchmarking the $52.3 million award requires comparing it against similar projects based on square footage, complexity, location, and construction type. For instance, a 100,000 sq ft medical clinic in a high-cost area like Guam could reasonably range from $400 to $700 per square foot, placing this project within that spectrum if its size is appropriate. Comparing it to other DoD MILCON projects or healthcare facilities built by agencies like the VA or GSA would provide valuable context. Factors such as firm fixed-price contracts, the number of bidders, and the specific technical requirements for a medical facility (e.g., specialized equipment, HVAC, shielding) can influence costs. Without specific details on the project's scope and size, a precise comparison is difficult, but the award appears to be in line with expectations for major government construction in a strategic location.

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

Primary risk indicators for this contract include its remote island location in Guam, which presents logistical challenges for material sourcing, labor, and transportation, potentially leading to cost increases and schedule delays. The project's substantial duration of 1363 days (nearly four years) increases the risk of material price escalation and potential changes in project requirements or regulations over time. Although it's a firm fixed-price contract, which shifts cost overrun risk to the contractor, unforeseen site conditions or complex integration of specialized medical equipment could still pose challenges. Furthermore, the availability of a skilled local workforce in Guam might be a constraint, necessitating the importation of labor, which adds complexity and cost. The contractor's experience with similar large-scale, long-duration projects in remote locations is a key factor in mitigating these risks.

How effective is the firm fixed-price contract type in ensuring value for money for this $52.3 million construction project?

The firm fixed-price (FFP) contract type is generally considered effective in ensuring value for money for construction projects like this, especially when the scope of work is well-defined. It places the primary responsibility for cost control and managing unforeseen expenses on the contractor, CORE TECH-HDCC-KAJIMA LLC. This means the government knows the maximum cost upfront, protecting against budget overruns. For the government to realize maximum value, the initial scope must be comprehensive and accurately reflect the requirements for the J-025 GOJ Medical/Dental Clinic. Effective oversight during construction is still crucial to ensure the contractor meets quality standards and adheres to the defined scope, preventing scope creep that could undermine the FFP's cost-saving benefits. The competitive award process further bolsters value by ensuring the price reflects market conditions.

What are the historical spending patterns for similar medical/dental clinic construction projects awarded by the Department of the Navy or Department of Defense?

Historical spending patterns for similar DoD medical/dental clinic construction projects reveal a significant and consistent investment in healthcare infrastructure. These projects, often categorized under Military Construction (MILCON), typically involve substantial budgets, frequently in the tens of millions of dollars, depending on size, complexity, and location. Awards are often made through competitive bidding processes, similar to this contract. Costs per square foot can vary widely, influenced by factors like geographic location (e.g., high-cost areas like Guam or Hawaii command higher prices), specific medical equipment requirements, and the prevailing economic conditions at the time of award. Analyzing past awards can help establish benchmarks for pricing, identify common contracting vehicles, and understand typical project durations.

What is the significance of awarding this contract through 'full and open competition' in the context of federal procurement and taxpayer value?

Awarding this contract through 'full and open competition' is a cornerstone of federal procurement policy designed to maximize taxpayer value. It ensures that all responsible sources, regardless of size or affiliation, have an equal opportunity to bid on government contracts. This broad competition typically drives down prices as contractors vie to offer the most competitive bids. It also fosters innovation and allows the government to select the best possible solution based on technical merit, past performance, and price. For this $52.3 million project, full and open competition suggests that the Department of the Navy sought the most advantageous offer, likely resulting in a more cost-effective outcome for taxpayers than a sole-source or limited competition award.

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

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N6274221R1333

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 388 SOUTH MARINE CORPS DRIVE, TAMUNING, GU, 96913

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

Financial Breakdown

Contract Ceiling: $52,345,320

Exercised Options: $52,345,320

Current Obligation: $52,345,320

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline