DoD awards $116.6M for Guam Public Works and Motor Pool, with 4 bidders competing

Contract Overview

Contract Amount: $116,556,230 ($116.6M)

Contractor: Core Tech-Hdcc-Kajima LLC

Awarding Agency: Department of Defense

Start Date: 2024-09-09

End Date: 2027-01-23

Contract Duration: 866 days

Daily Burn Rate: $134.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: WON 1674960, J-318 PUBLIC WORKS/MAINTENANCE SHOPS AND WON 1674961, J-323 BASE MOTOR POOL, U.S. NAVSUPPACT, MCB GUAM

Place of Performance

Location: YIGO, GUAM County, GUAM, 96929

Plain-Language Summary

Department of Defense obligated $116.6 million to CORE TECH-HDCC-KAJIMA LLC for work described as: WON 1674960, J-318 PUBLIC WORKS/MAINTENANCE SHOPS AND WON 1674961, J-323 BASE MOTOR POOL, U.S. NAVSUPPACT, MCB GUAM Key points: 1. Contract value appears reasonable given the scope of construction and maintenance services. 2. Full and open competition suggests a healthy market for these services in Guam. 3. Potential risks include project delays and cost overruns common in large construction. 4. This contract supports critical infrastructure for the U.S. Navy in a strategic location. 5. Construction and maintenance sector is vital for military base operations. 6. The firm-fixed-price structure shifts some risk to the contractor.

Value Assessment

Rating: good

The contract value of $116.6 million for construction and maintenance services on Guam is substantial. Benchmarking against similar large-scale public works projects, especially those in remote or strategic locations like Guam, suggests the pricing is within a typical range. The firm-fixed-price contract type indicates that the contractor bears the primary responsibility for cost overruns, which is a positive indicator for value, assuming the initial bid was competitive and realistic.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with four bidders submitting proposals. The presence of multiple bidders indicates a competitive market for these types of services in the region. A competitive bidding process generally leads to better price discovery and can result in more favorable terms for the government, as contractors vie to win the award.

Taxpayer Impact: Taxpayers benefit from the competitive nature of this award, as it likely drove down the final price compared to a sole-source or limited competition scenario. The government secured services through a process that aimed for the best value among multiple qualified offerors.

Public Impact

The U.S. Navy and its personnel stationed at Naval Support Activity (NAVSUPPACT), Marine Corps Base (MCB) Guam will benefit from improved facilities and operational support. Services include the construction and maintenance of public works shops and a base motor pool, ensuring essential infrastructure is functional and up-to-date. The geographic impact is concentrated on Guam, a key strategic location in the Pacific. This contract will likely create or sustain jobs in the construction and maintenance sectors on Guam, supporting the local workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for schedule delays due to the complexity of large construction projects and logistical challenges in Guam.
Risk of cost escalation if unforeseen site conditions or material price fluctuations occur, despite the firm-fixed-price structure.
Dependence on a single contractor for critical base maintenance and operations could pose a risk if performance issues arise.

Positive Signals

Firm-fixed-price contract shifts cost risk to the contractor, encouraging efficient project management.
Full and open competition suggests a robust market and potentially competitive pricing.
Award to a joint venture (CORE TECH-HDCC-KAJIMA LLC) may leverage specialized expertise from multiple firms.
Contract duration of over 2.5 years allows for structured project execution and oversight.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the broader construction industry. The market for construction and maintenance services in strategic locations like Guam is often characterized by government contracts due to military presence. Comparable spending benchmarks for similar base infrastructure projects can vary widely based on location, scope, and specific requirements, but large-scale projects often run into tens or hundreds of millions of dollars.

Small Business Impact

This contract was not specifically set aside for small businesses, and the prime contractor is a joint venture, suggesting it is likely a larger entity. There is no explicit information provided regarding subcontracting plans for small businesses. The impact on the small business ecosystem will depend on whether the prime contractor actively seeks to engage small businesses for subcontracting opportunities, which is not detailed in the award data.

Oversight & Accountability

Oversight for this contract will likely 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 penalizes the contractor for cost overruns. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Naval Base Construction Projects
Pacific Infrastructure Development
Military Base Maintenance Contracts
Public Works Facility Construction
Base Motor Pool Operations

Risk Flags

Geographic Isolation
Logistical Challenges
Potential for Schedule Delays
Contractor Performance Risk
Strategic Location Impact

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $116.6 million to CORE TECH-HDCC-KAJIMA LLC. WON 1674960, J-318 PUBLIC WORKS/MAINTENANCE SHOPS AND WON 1674961, J-323 BASE MOTOR POOL, U.S. 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 $116.6 million.

What is the period of performance?

Start: 2024-09-09. End: 2027-01-23.

What is the track record of CORE TECH-HDCC-KAJIMA LLC in executing similar large-scale construction and maintenance contracts for the Department of Defense?

Information regarding the specific track record of the joint venture CORE TECH-HDCC-KAJIMA LLC in executing similar large-scale construction and maintenance contracts for the Department of Defense is not directly available in the provided data. However, the formation of a joint venture often indicates that the participating companies (CORE TECH, HDCC, KAJIMA) possess relevant experience and are pooling resources to meet the demanding requirements of such projects. KAJIMA Corporation, in particular, is a well-established global construction and engineering firm with a significant history of undertaking large infrastructure and defense-related projects worldwide. A deeper dive into the individual company histories and past performance on similar contracts would be necessary for a comprehensive assessment of their track record.

How does the awarded amount of $116.6 million compare to the estimated cost or budget for these specific projects?

The provided data indicates the awarded amount is $116,556,230. However, there is no information available regarding the government's initial estimated cost or budget for these projects (J-318 Public Works/Maintenance Shops and J-323 Base Motor Pool). Without this baseline, it is impossible to definitively state whether the awarded amount represents a cost savings, is in line with expectations, or exceeds the initial budget. In a competitive bidding process, the awarded amount is typically the result of contractor proposals aiming to secure the contract, and it is often compared against internal government estimates to ensure value.

What are the primary risk indicators associated with this contract, beyond general construction risks?

Beyond general construction risks like schedule delays and cost overruns, specific risk indicators for this contract include its execution in Guam, a geographically isolated location. This can lead to logistical challenges in sourcing materials and labor, potentially increasing costs and timelines. Furthermore, the strategic importance of MCB Guam means that any disruptions to these facilities could have significant operational impacts on naval readiness in the Pacific theater. The firm-fixed-price nature, while beneficial for cost control, also means that unforeseen site conditions or complex integration requirements could strain the contractor's ability to deliver within budget, potentially leading to disputes or performance issues if not managed meticulously.

What is the expected effectiveness of the completed public works shops and motor pool in supporting base operations?

The expected effectiveness of the new or renovated public works shops and motor pool is high, as these facilities are critical for the day-to-day functioning and maintenance of Marine Corps Base Guam. Well-equipped workshops will enhance the efficiency and capability of maintenance crews responsible for everything from vehicles to base infrastructure. A modern motor pool ensures that the base's fleet of vehicles is properly housed, maintained, and readily available for operational needs. Improved facilities contribute directly to operational readiness, reduce downtime for essential equipment, and enhance the overall safety and efficiency of base personnel and operations in a key strategic location.

How does historical spending on similar construction and maintenance contracts at MCB Guam or other Navy installations in the region compare to this award?

Historical spending data on similar construction and maintenance contracts at MCB Guam or other Navy installations in the region is not provided. However, large-scale infrastructure projects for military bases, especially in high-cost or strategically important areas like Guam, typically involve significant investment. Awards in the range of tens to hundreds of millions of dollars are not uncommon for major construction and facility upgrades. To provide a comparative analysis, one would need to examine past contract awards for similar scopes of work (e.g., new barracks, maintenance facilities, vehicle depots) at comparable bases, factoring in inflation and specific regional cost differences.

What are the implications of the firm-fixed-price contract type on contractor performance and government oversight?

The firm-fixed-price (FFP) contract type places the primary risk of cost overruns on the contractor, incentivizing them to manage project costs efficiently and adhere to the agreed-upon price. This generally leads to greater cost certainty for the government. However, it also means that the government's ability to influence scope changes or demand additional work without a contract modification and potential price adjustment is limited. Contractor performance under FFP hinges on their ability to accurately estimate costs and manage execution effectively. Government oversight will focus on ensuring the contractor meets quality standards, adheres to the schedule, and complies with contract terms, rather than closely monitoring detailed costs, as the price is fixed.

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: N6274219R1313

Offers Received: 4

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: $116,556,230

Exercised Options: $116,556,230

Current Obligation: $116,556,230

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