Department of the Navy awards $17.2M contract for ordnance operations administration in Guam

Contract Overview

Contract Amount: $17,202,812 ($17.2M)

Contractor: Core Tech-Hdcc-Kajima LLC

Awarding Agency: Department of Defense

Start Date: 2021-03-17

End Date: 2024-12-03

Contract Duration: 1,357 days

Daily Burn Rate: $12.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: FY21 MCON P-296, ORDNANCE OPERATIONS ADMIN, USNAVSUPACT ANDERSEN

Place of Performance

Location: YIGO, GUAM County, GUAM, 96929

Plain-Language Summary

Department of Defense obligated $17.2 million to CORE TECH-HDCC-KAJIMA LLC for work described as: FY21 MCON P-296, ORDNANCE OPERATIONS ADMIN, USNAVSUPACT ANDERSEN Key points: 1. Contract awarded to CORE TECH-HDCC-KAJIMA LLC for ordnance operations administration. 2. The contract has a duration of 1357 days, indicating a long-term need. 3. Awarded under full and open competition, suggesting a competitive bidding process. 4. The contract type is Firm Fixed Price, which shifts cost risk to the contractor. 5. The North American Industry Classification System (NAICS) code is 236220, related to commercial and institutional building construction. 6. The contract is a delivery order, implying it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract or a similar vehicle. 7. The contract is geographically located in Guam (GU), serving the US Naval Support Activity Andersen.

Value Assessment

Rating: good

The contract value of $17.2 million over approximately 3.75 years suggests a moderate annual spend. Without specific benchmarks for ordnance operations administration in the region or comparable construction projects, a precise value-for-money assessment is challenging. However, the firm-fixed-price structure implies that the contractor bears the risk of cost overruns, which can be a positive indicator for the government if the contractor's bid was competitive. Further analysis would require comparing this contract's unit costs or overall price to similar services procured by the Department of Defense or other federal agencies in similar geographic locations.

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 5 bidders identified, this suggests a healthy level of competition for this requirement. A competitive process generally leads to better price discovery and potentially lower costs for the government as contractors vie for the award. The presence of multiple bidders implies that the market has sufficient capacity and interest to support this type of contract.

Taxpayer Impact: The full and open competition ensures that taxpayer dollars are likely being used efficiently, as multiple companies competed to offer the best value. This competitive environment helps prevent inflated pricing and encourages cost-effective solutions.

Public Impact

The primary beneficiaries are the U.S. Navy personnel and operations at Naval Support Activity Andersen in Guam, who will receive administrative support for ordnance operations. The contract delivers essential administrative services crucial for the safe and efficient management of ordnance. The geographic impact is localized to Guam, supporting military readiness and operations in the Indo-Pacific region. The contract supports the construction and related services sector, potentially impacting local employment and businesses in Guam through subcontracting opportunities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the scope of 'ordnance operations administration' is broader than initially anticipated and not fully captured by the fixed-price structure.
Dependence on a single contractor (CORE TECH-HDCC-KAJIMA LLC) for a critical function could pose risks if performance issues arise.
Geographic isolation of Guam may present logistical challenges for the contractor, potentially impacting service delivery or costs.
The long contract duration (over 3 years) could lead to price increases if market conditions change significantly and contract modifications are required.

Positive Signals

The firm-fixed-price contract type transfers cost risk to the contractor, incentivizing efficient performance.
Full and open competition suggests a robust bidding process, likely resulting in a competitive price.
The contract supports essential military operations, contributing to national security objectives.
The award to a single entity streamlines management and accountability for the government.

Sector Analysis

The contract falls within the Commercial and Institutional Building Construction sector, specifically NAICS code 236220. This sector encompasses establishments primarily engaged in the construction or remodeling of nonresidential buildings. While the contract is for 'ordnance operations administration,' the NAICS code suggests a potential link to construction or facility management aspects related to ordnance storage or handling. The total federal spending in this sector is substantial, with construction contracts often representing significant investments in infrastructure and facilities. This specific contract appears to be a component of broader military infrastructure and operational support within the Department of Defense.

Small Business Impact

The contract was awarded under full and open competition and does not indicate a small business set-aside (ss: false, sb: false). Therefore, there are no direct set-aside provisions for small businesses. However, the prime contractor, CORE TECH-HDCC-KAJIMA LLC, may engage small businesses as subcontractors to fulfill portions of the contract requirements. The extent of small business subcontracting would depend on the prime contractor's strategy and any flow-down requirements from the government, which are not detailed in the provided data.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Navy, likely through a contracting officer's representative (COR) responsible for monitoring performance, ensuring compliance with contract terms, and approving payments. The firm-fixed-price nature of the contract shifts some risk to the contractor, but the government retains oversight to ensure the services meet the specified requirements. Transparency is generally maintained through contract award databases like SAM.gov. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arise.

Related Government Programs

Department of Defense Construction Contracts
Naval Facilities Engineering Command Contracts
Ordnance Management Systems
Military Base Operations Support Contracts
Indefinite Delivery/Indefinite Quantity (IDIQ) Vehicles

Risk Flags

Potential for scope creep given the administrative nature of the service.
Geographic isolation of Guam may impact contractor logistics and costs.
Long contract duration increases risk of market fluctuations affecting price.
Dependence on a single contractor for critical ordnance support functions.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.2 million to CORE TECH-HDCC-KAJIMA LLC. FY21 MCON P-296, ORDNANCE OPERATIONS ADMIN, USNAVSUPACT ANDERSEN

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 $17.2 million.

What is the period of performance?

Start: 2021-03-17. End: 2024-12-03.

What is the track record of CORE TECH-HDCC-KAJIMA LLC with the Department of Defense?

Information regarding the specific track record of CORE TECH-HDCC-KAJIMA LLC with the Department of Defense is not provided in the data snippet. A comprehensive assessment would require reviewing past performance evaluations, contract history, and any reported issues or successes on previous government contracts. This would involve searching federal procurement databases and performance reporting systems. Understanding their history with similar types of contracts, particularly those involving construction or facility support services for military installations, would be crucial for evaluating their capability and reliability for this ordnance operations administration contract.

How does the $17.2 million contract value compare to similar ordnance operations administration contracts?

Direct comparison of the $17.2 million contract value for ordnance operations administration is difficult without specific data on similar contracts. The value is influenced by factors such as geographic location (Guam), contract duration (1357 days), and the specific scope of services. To benchmark, one would need to identify comparable contracts awarded by the Department of Defense or other agencies for similar administrative support of ordnance operations, ideally in comparable regions or for similar-sized installations. Analyzing the price per day or per service unit across these contracts would provide a clearer picture of whether this award represents good value for money.

What are the primary risks associated with this contract, given its nature and location?

Key risks include potential performance deficiencies by the contractor, especially given the critical nature of ordnance operations. The firm-fixed-price structure, while beneficial for cost control, could incentivize cutting corners if not adequately monitored. Logistical challenges due to Guam's remote location might impact the contractor's ability to procure materials, access personnel, or maintain equipment, potentially leading to delays or increased costs that could necessitate contract modifications. Furthermore, the long duration increases exposure to changing operational requirements or unforeseen environmental factors. Effective oversight and clear performance metrics are essential to mitigate these risks.

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

The firm-fixed-price (FFP) contract type is generally effective in ensuring value for services where the scope of work is well-defined and unlikely to change significantly. For ordnance operations administration, FFP shifts the risk of cost overruns to the contractor, incentivizing them to manage resources efficiently and complete the work within the agreed-upon price. This can lead to cost savings for the government. However, its effectiveness hinges on the accuracy of the initial scope definition. If the scope proves to be more complex or extensive than anticipated, the contractor might struggle to deliver without requesting modifications, potentially negating some of the cost benefits. Robust technical specifications and performance standards are crucial for FFP success.

What are the historical spending patterns for ordnance operations administration within the Department of the Navy?

Historical spending patterns for ordnance operations administration within the Department of the Navy are not detailed in the provided data. To analyze this, one would need to examine historical contract awards for similar services over multiple fiscal years. This would involve identifying relevant contract vehicles, tracking annual expenditures, and observing trends in contract values, durations, and awarded contractors. Understanding these patterns can reveal whether spending has been consistent, increasing, or decreasing, and identify any significant shifts in procurement strategies or operational needs related to ordnance management.

What is the significance of the NAICS code 236220 (Commercial and Institutional Building Construction) for an 'ordnance operations administration' contract?

The assignment of NAICS code 236220, which pertains to Commercial and Institutional Building Construction, to a contract described as 'ordnance operations administration' is noteworthy. This suggests that the administrative services may be intrinsically linked to the construction, maintenance, or management of physical facilities used for ordnance storage, handling, or operations. It could imply that the contractor is responsible for aspects of facility upkeep, infrastructure management, or construction-related administrative support directly tied to ordnance infrastructure. Alternatively, it might reflect the primary business category of the awarded contractor, even if the specific service is administrative.

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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N6274218R1305

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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

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

Financial Breakdown

Contract Ceiling: $17,202,812

Exercised Options: $17,202,812

Current Obligation: $17,202,812

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N6274219D1330

IDV Type: IDC

Timeline