DoD's $119M contract for Palau infrastructure awarded to Gilbane Federal, highlighting construction needs

Contract Overview

Contract Amount: $119,281,280 ($119.3M)

Contractor: Gilbane Federal

Awarding Agency: Department of Defense

Start Date: 2022-12-30

End Date: 2026-07-24

Contract Duration: 1,302 days

Daily Burn Rate: $91.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: TACMOR UTILITIES AND INFRASTRUCTURE

Place of Performance

Location: PALAU

Plain-Language Summary

Department of Defense obligated $119.3 million to GILBANE FEDERAL for work described as: TACMOR UTILITIES AND INFRASTRUCTURE Key points: 1. Contract value of $119.3 million indicates significant investment in infrastructure development. 2. Awarded under full and open competition, suggesting a robust market for these services. 3. The contract duration of over 1300 days points to a long-term, complex project. 4. Fixed-price contract type aims to control costs for the government. 5. The geographic focus on Palau suggests strategic importance or unique environmental challenges. 6. The absence of small business set-asides warrants further investigation into subcontracting opportunities.

Value Assessment

Rating: good

The contract's firm fixed-price structure is a positive indicator for cost control. Benchmarking against similar large-scale civil engineering projects in remote or strategic locations would provide a clearer picture of value for money. The absence of specific performance metrics in the provided data makes a definitive value assessment challenging, but the competitive award process suggests a reasonable price was likely negotiated.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple capable contractors were likely solicited. With 3 bidders, the competition level appears moderate, which generally supports price discovery and potentially competitive pricing. The specific details of the bidding process and the number of proposals received would offer further insight into the intensity of the competition.

Taxpayer Impact: Full and open competition typically benefits taxpayers by fostering a competitive environment that can lead to lower prices and better quality services.

Public Impact

The primary beneficiaries are the Department of Defense and potentially local populations in Palau through improved infrastructure. Services delivered include heavy and civil engineering construction, likely encompassing utilities and infrastructure. The geographic impact is concentrated in Palau, a U.S. territory or strategic location. Workforce implications may include the mobilization of skilled construction labor to the region, potentially creating temporary employment opportunities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific performance metrics makes it difficult to assess the contractor's track record on similar projects.
Potential for cost overruns if unforeseen site conditions or logistical challenges arise in Palau.
Limited visibility into subcontracting plans and opportunities for small businesses.

Positive Signals

Awarded through full and open competition, indicating a competitive bidding process.
Firm fixed-price contract type provides cost certainty for the government.
Long contract duration suggests a commitment to a significant, potentially critical, infrastructure project.

Sector Analysis

This contract falls within the heavy and civil engineering construction sector, a critical component of national infrastructure development. The market for such large-scale projects is often dominated by a few major players capable of handling complex logistics and execution. Spending benchmarks for similar projects in overseas or remote locations would be highly variable due to unique logistical costs and geopolitical factors.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, and there is no explicit mention of subcontracting goals. This suggests that the primary award went to a large prime contractor. Further analysis would be needed to determine if small businesses will have opportunities to participate as subcontractors, which is crucial for their growth and for fostering a diverse industrial base.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting and project management offices. Accountability measures are inherent in the firm fixed-price contract type, which places the risk of cost overruns on the contractor. Transparency would be enhanced by public reporting of performance milestones and any modifications to the contract.

Related Government Programs

Department of Defense Infrastructure Projects
Naval Facilities Engineering Command Contracts
Pacific Region Construction Contracts
Heavy and Civil Engineering Construction Services

Risk Flags

Geographic isolation and logistical challenges
Potential for unforeseen site conditions
Environmental considerations in construction
Limited competition data available

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $119.3 million to GILBANE FEDERAL. TACMOR UTILITIES AND INFRASTRUCTURE

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 $119.3 million.

What is the period of performance?

Start: 2022-12-30. End: 2026-07-24.

What is Gilbane Federal's track record with large-scale civil engineering and infrastructure projects, particularly in overseas or remote locations?

Gilbane Federal, a subsidiary of Gilbane Building Company, has a substantial history of executing large-scale construction and infrastructure projects for government clients, including significant work for the Department of Defense. Their portfolio includes military base construction, facility upgrades, and complex engineering endeavors. While specific details on projects in Palau are not immediately available, their experience with similar projects globally suggests they possess the logistical and technical capabilities required. A deeper dive into their past performance on contracts with similar scope, duration, and geographic challenges would provide a more precise assessment of their capabilities and potential risks associated with this specific award.

How does the awarded amount of $119.3 million compare to similar infrastructure projects undertaken by the DoD in the Pacific region?

Benchmarking this $119.3 million contract against similar infrastructure projects in the Pacific region requires careful consideration of project scope, complexity, and location-specific factors. Projects involving utilities, heavy civil engineering, and construction in island environments or remote areas often incur higher logistical costs and specialized requirements compared to mainland projects. Without specific details on the exact scope of work (e.g., type of utilities, scale of construction), a direct comparison is challenging. However, for significant infrastructure development in strategic locations, this figure appears within a plausible range, especially given the potential for specialized construction needs and the long duration of the contract.

What are the primary risks associated with executing a large construction contract in Palau, and how might they impact cost and schedule?

Executing a large construction contract in Palau presents several potential risks. Logistical challenges related to transporting materials, equipment, and personnel to an island nation are significant and can lead to increased costs and schedule delays. Environmental factors, such as weather patterns and the need for specialized construction techniques in a tropical climate, also pose risks. Furthermore, local labor availability, regulatory compliance, and potential unforeseen site conditions can contribute to project complexities. The firm fixed-price nature of the contract places the burden of managing these risks on Gilbane Federal, but significant unforeseen issues could still lead to claims or necessitate contract modifications.

What specific infrastructure or utility improvements are anticipated under this contract, and what is their strategic importance to the Department of the Navy?

While the provided data categorizes the contract under 'Other Heavy and Civil Engineering Construction' and mentions 'Utilities and Infrastructure,' the specific improvements are not detailed. Given the location in Palau and the awarding agency (Department of the Navy), it is highly probable that the contract aims to enhance critical infrastructure supporting naval operations, force protection, or regional stability. This could include upgrades to power generation and distribution, water and wastewater systems, port facilities, airfields, or general base facilities. Such improvements are strategically important for maintaining a credible presence, ensuring operational readiness, and supporting U.S. interests in the Indo-Pacific region.

What is the historical spending pattern for similar heavy and civil engineering construction contracts awarded by the Department of the Navy in the Pacific?

Historical spending patterns for similar contracts by the Department of the Navy in the Pacific reveal a consistent investment in infrastructure to support its strategic presence in the region. These contracts often range from tens to hundreds of millions of dollars, depending on the scale and scope of the project. Spending is influenced by geopolitical priorities, the condition of existing facilities, and the need to modernize or expand capabilities. The Navy frequently engages in projects related to port improvements, airfields, barracks, and utility systems across various Pacific installations and territories. Analyzing past awards can indicate typical contract durations, pricing structures, and the types of contractors most frequently selected for such work.

Industry Classification

NAICS: Construction › Other Heavy and Civil Engineering Construction › Other Heavy and Civil Engineering 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: N6274222R1322

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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: $119,281,280

Exercised Options: $119,281,280

Current Obligation: $119,281,280

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline