Naval Base Guam Embarkation Facility contract awarded to CORE TECH-HDCC-KAJIMA LLC for over $111.9 million

Contract Overview

Contract Amount: $111,969,490 ($112.0M)

Contractor: Core Tech-Hdcc-Kajima LLC

Awarding Agency: Department of Defense

Start Date: 2023-05-17

End Date: 2027-01-08

Contract Duration: 1,332 days

Daily Burn Rate: $84.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: JFY18 PROJECT J-609 APRA EMBARKATION FACILITY, NAVAL BASE GUAM, JOINT REGION MARIANAS, GUAM

Place of Performance

Location: YIGO, GUAM County, GUAM, 96929

Plain-Language Summary

Department of Defense obligated $112.0 million to CORE TECH-HDCC-KAJIMA LLC for work described as: JFY18 PROJECT J-609 APRA EMBARKATION FACILITY, NAVAL BASE GUAM, JOINT REGION MARIANAS, GUAM Key points: 1. The contract value of over $111.9 million represents a significant investment in military infrastructure. 2. Competition dynamics for this project are assessed to understand potential impacts on pricing and value. 3. Risk indicators are evaluated to ensure project success and mitigate potential cost overruns or delays. 4. Performance context is crucial for understanding the scope and expected outcomes of the facility construction. 5. The project's positioning within the Defense sector highlights its strategic importance for military operations. 6. The firm-fixed-price contract type suggests a defined cost structure, though potential for change orders exists.

Value Assessment

Rating: good

The awarded amount of $111.9 million for the JFY18 Project J-609 APRA Embarkation Facility appears to be within a reasonable range for large-scale construction projects of this nature. Benchmarking against similar military construction projects, particularly those involving new facility builds on naval bases, would provide a more precise value-for-money assessment. The firm-fixed-price contract type generally aims to control costs, but the final expenditure will depend on the execution and any potential modifications.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely solicited and considered. The presence of three bidders (no=3) suggests a competitive environment, which typically drives better pricing and value for the government. The specific details of the bidding process and the evaluation criteria would further illuminate the extent of the competition's effectiveness in securing optimal terms.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a market where contractors strive to offer their best prices and innovative solutions to win contracts, leading to more efficient use of public funds.

Public Impact

The primary beneficiaries are the U.S. Navy and Department of Defense personnel who will utilize the new embarkation facility. The project delivers critical infrastructure for troop and equipment movement and staging. The geographic impact is concentrated on Naval Base Guam, enhancing its operational capabilities. Workforce implications include job creation for construction workers and related support services in Guam.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep in large construction projects, impacting final cost and timeline.
Logistical challenges associated with construction in Guam could lead to delays or increased costs.
Ensuring compliance with environmental regulations during construction is a key consideration.

Positive Signals

Awarded under full and open competition, suggesting a competitive bidding process.
Firm-fixed-price contract type provides cost certainty for the base scope of work.
The project addresses a clear need for enhanced military infrastructure at a strategic location.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, specifically supporting defense infrastructure. The market for large-scale military construction is characterized by significant project values and stringent requirements. Comparable spending benchmarks would involve analyzing other major construction projects awarded by the Department of Defense or other federal agencies for similar facilities, considering factors like size, complexity, and location.

Small Business Impact

The provided data indicates that small business participation (sb=false) was not a specific set-aside criterion for this contract. Therefore, the direct impact on small business set-asides is minimal. However, the prime contractor, CORE TECH-HDCC-KAJIMA LLC, may engage small businesses as subcontractors, contributing to the broader small business ecosystem. Further analysis of subcontracting plans would be needed to assess the extent of small business involvement.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy, with potential involvement from the Naval Facilities Engineering Command (NAVFAC). Accountability measures are embedded within the contract terms, including performance standards and payment schedules. Transparency is generally maintained through contract award databases and public reporting, though specific oversight reports from an Inspector General would provide deeper insights into the effectiveness of accountability.

Related Government Programs

Naval Facilities Construction
Military Base Infrastructure
Department of Defense Construction Projects
Embarkation and Logistics Facilities

Risk Flags

Potential for cost overruns due to construction complexity and location.
Risk of schedule delays related to logistics and material availability in Guam.
Need for vigilant oversight to ensure quality and adherence to specifications over the project duration.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $112.0 million to CORE TECH-HDCC-KAJIMA LLC. JFY18 PROJECT J-609 APRA EMBARKATION FACILITY, NAVAL BASE GUAM, JOINT REGION MARIANAS, 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 $112.0 million.

What is the period of performance?

Start: 2023-05-17. End: 2027-01-08.

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

Assessing the track record of CORE TECH-HDCC-KAJIMA LLC requires a review of their past performance on federal contracts, particularly those of similar size and complexity. This would involve examining contract completion history, any instances of disputes or litigation, and client satisfaction ratings. Databases like the Federal Procurement Data System (FPDS) and CPARS (Contractor Performance Assessment Reporting System) are primary sources for this information. A history of successful project delivery on time and within budget would indicate a lower risk profile for this current project. Conversely, a pattern of delays, cost overruns, or performance issues would raise concerns about their capacity to execute the APRA Embarkation Facility project effectively.

How does the awarded amount compare to similar embarkation facility construction projects?

To benchmark the $111.9 million award for the APRA Embarkation Facility, we would need to identify comparable projects. This involves searching for other federal contracts for the construction of embarkation, logistics, or similar support facilities at military bases, ideally within the last 3-5 years. Key comparison points include the facility's square footage, specific functionalities (e.g., capacity for personnel and equipment), location (considering regional construction cost variations), and the complexity of the construction. Without specific comparable project data, it's challenging to definitively state if this award represents excellent, good, or fair value. However, given the scale and strategic importance, the price appears plausible for a project of this magnitude.

What are the primary risk indicators associated with this specific contract?

Primary risk indicators for this contract include the inherent complexities of large-scale construction projects, especially in remote or overseas locations like Guam. Potential risks involve logistical challenges in material and personnel transport, potential for unforeseen site conditions (geotechnical issues, environmental concerns), and the possibility of labor shortages or disputes. The duration of the contract (over 3 years) also increases exposure to fluctuating material costs and potential changes in project requirements. Furthermore, the performance history of the specific joint venture partners (CORE TECH-HDCC-KAJIMA LLC) on similar projects needs to be evaluated to identify any past performance-related risks.

How effective is the firm-fixed-price contract type in managing costs for this project?

The firm-fixed-price (FFP) contract type is generally effective in managing costs by shifting the risk of cost overruns to the contractor. This means the government agrees to pay a set price for the defined scope of work. However, the effectiveness is contingent on the clarity and completeness of the contract's specifications. If significant changes or unforeseen issues arise that necessitate modifications to the scope, change orders could increase the total cost. The contractor is incentivized to control their own costs to maximize profit. For a project like the APRA Embarkation Facility, where the scope is relatively well-defined upfront, FFP is a suitable choice for cost control, provided robust change management processes are in place.

What is the historical spending pattern for similar infrastructure projects at Naval Base Guam?

Analyzing historical spending patterns for similar infrastructure projects at Naval Base Guam would provide valuable context. This involves reviewing past contracts awarded for construction, renovation, or expansion of facilities on the base over the last decade. Key data points to examine include the number of contracts, their total value, the types of facilities constructed, and the primary contractors involved. Understanding whether spending has been consistent, increasing, or decreasing, and whether projects have generally stayed within budget, can inform expectations for the APRA Embarkation Facility. Significant deviations from historical norms might warrant further investigation into the specific drivers of cost for this project.

What are the implications of the contract duration (1332 days) on project risk and oversight?

A contract duration of 1332 days (approximately 3.6 years) for the APRA Embarkation Facility introduces several implications for project risk and oversight. Longer durations increase the potential for economic fluctuations, such as inflation impacting material costs, and the risk of contractor performance degradation over time. It also necessitates sustained oversight from the contracting agency to ensure milestones are met and quality is maintained throughout the project lifecycle. Managing a multi-year project requires robust project management systems, regular progress reviews, and proactive risk mitigation strategies to prevent delays and cost overruns. The extended timeline also means that the initial requirements might need adjustments due to evolving operational needs or technological advancements.

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: N6274222R1300

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: $111,969,490

Exercised Options: $111,969,490

Current Obligation: $111,969,490

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N6274221D1325

IDV Type: IDC

Timeline