DoD's $78.5M HHI Corp. contract for Hill AFB building renovation faces scrutiny over value and competition

Contract Overview

Contract Amount: $78,540,926 ($78.5M)

Contractor: HHI Corporation

Awarding Agency: Department of Defense

Start Date: 2023-08-11

End Date: 2026-04-01

Contract Duration: 964 days

Daily Burn Rate: $81.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: HILL AIR FORCE BASE BUILDING 225 AREA D ROOF REPLACEMENT AND OFFICE SPACE RENOVATION.

Place of Performance

Location: HILL AFB, DAVIS County, UTAH, 84056

State: Utah Government Spending

Plain-Language Summary

Department of Defense obligated $78.5 million to HHI CORPORATION for work described as: HILL AIR FORCE BASE BUILDING 225 AREA D ROOF REPLACEMENT AND OFFICE SPACE RENOVATION. Key points: 1. The contract's value appears high relative to the scope, prompting questions about cost-effectiveness. 2. Limited public data on comparable projects makes a precise value-for-money assessment challenging. 3. The 'full and open competition' was awarded to a single bidder, raising concerns about the bidding process. 4. Performance risks are moderate, given the construction nature and fixed-price contract type. 5. This project fits within the broader context of military infrastructure modernization efforts. 6. The contract is a definitive contract, indicating a single award after a competitive process.

Value Assessment

Rating: fair

The total contract value of $78.5 million for the Hill Air Force Base Building 225 renovation and roof replacement seems substantial. Benchmarking against similar large-scale institutional building construction projects is difficult without more granular cost breakdowns. However, the price per square foot or per major component (e.g., roof replacement) would be a key metric to assess value. Given the lack of detailed cost data, it's challenging to definitively state if this represents excellent value, but it warrants closer examination, especially considering the competition dynamics.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' suggesting that all responsible sources were permitted to submit offers. However, despite this broad solicitation, only one bid was received and accepted. This outcome can sometimes indicate issues with the solicitation's clarity, the market's capacity to respond, or the attractiveness of the terms offered. While competition was technically open, the lack of multiple bids limits the price discovery mechanism and may suggest a less competitive environment than ideal.

Taxpayer Impact: When only one bid is received in a full and open competition, taxpayers may not benefit from the most competitive pricing. The government may not have achieved the lowest possible cost, potentially leading to overspending.

Public Impact

The primary beneficiaries are the Department of the Air Force personnel at Hill Air Force Base, who will gain improved facilities. The contract delivers renovation of office space and replacement of a roof for Building 225. The geographic impact is localized to Hill Air Force Base in Utah. Workforce implications include jobs for construction workers, project managers, and support staff involved in the renovation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Single bid received despite full and open competition raises concerns about effective market outreach or bid attractiveness.
High contract value without detailed cost breakdowns makes value-for-money assessment difficult.
Potential for cost overruns if the single bid did not fully reflect competitive market pricing.
Contract duration of nearly 3.5 years requires sustained oversight to ensure timely completion and quality.

Positive Signals

Awarded under 'full and open competition' theoretically allows for broad market participation.
Firm Fixed Price contract type shifts cost risk to the contractor, providing budget certainty.
The project addresses critical infrastructure needs for a major Air Force base.
Contractor HHI Corporation has experience in construction, though specific project scale comparisons are needed.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the broader construction industry. This sector encompasses the building and renovation of non-residential structures like offices, government facilities, and educational institutions. Spending in this area is often driven by infrastructure upgrades, modernization efforts, and facility maintenance. Comparable spending benchmarks would typically involve analyzing the cost per square foot for similar government building projects or roof replacements in the region, though specific data for this project is limited.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific benefits for small businesses mandated by a set-aside. The prime contractor, HHI Corporation, would determine any subcontracting opportunities. Without a small business set-aside, the potential for small business participation is dependent on the prime contractor's procurement strategy and the availability of qualified small business subcontractors in the relevant trades.

Oversight & Accountability

Oversight for this contract will primarily be managed by the contracting officer and the relevant Department of the Air Force personnel at Hill Air Force Base. The firm fixed-price nature of the contract provides some cost control, but oversight will focus on ensuring adherence to the scope of work, quality standards, and schedule milestones. Transparency is facilitated by the contract award being publicly available, but detailed cost breakdowns and performance metrics may not be readily accessible. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Military Base Infrastructure Modernization
Department of Defense Facilities Renovation
Air Force Base Construction Projects
Government Building Maintenance and Repair

Risk Flags

Single bid received in full and open competition.
High contract value without detailed cost transparency.
Potential for cost escalation if scope changes occur.
Long contract duration requires sustained oversight.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $78.5 million to HHI CORPORATION. HILL AIR FORCE BASE BUILDING 225 AREA D ROOF REPLACEMENT AND OFFICE SPACE RENOVATION.

Who is the contractor on this award?

The obligated recipient is HHI CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $78.5 million.

What is the period of performance?

Start: 2023-08-11. End: 2026-04-01.

What is HHI Corporation's track record with similar large-scale federal construction projects, particularly those involving base renovations?

Assessing HHI Corporation's track record requires a deeper dive into federal procurement databases like SAM.gov and FPDS. While the provided data indicates HHI Corporation as the awardee, it doesn't detail their past performance on projects of this magnitude or specific type. Federal agencies typically evaluate past performance as a key factor in award decisions. A review of their contract history would reveal the number and size of previous contracts, their performance ratings (if available), and any instances of disputes or contract terminations. Without this specific historical data, it's difficult to definitively assess their capability and reliability for this $78.5 million project.

How does the $78.5 million contract value compare to industry benchmarks for similar roof replacement and office renovation projects at military installations?

Benchmarking this $78.5 million contract requires detailed cost breakdowns that are not publicly available. Key metrics would include cost per square foot for the renovation, cost per square foot for the roof replacement, and specific costs for major components like HVAC, electrical, and plumbing upgrades. Industry benchmarks for commercial building renovations can range widely based on location, complexity, and materials used. For military installations, factors like security requirements and specific building codes can also influence costs. Without these granular details, a precise comparison is challenging. However, the overall value suggests a significant scope of work, and a thorough review would necessitate comparing it against similar-sized projects awarded by the DoD or other federal agencies over the past few years.

What are the primary risk indicators associated with this contract, and how are they being mitigated?

Primary risk indicators for this contract include the potential for cost overruns (despite the fixed-price nature, scope creep is possible), schedule delays common in large construction projects, and the risk associated with receiving only a single bid in a full and open competition. Mitigation strategies likely involve robust project management by the Air Force, including detailed oversight of work progress, quality control inspections, and proactive management of any change orders. The firm fixed-price contract shifts financial risk to HHI Corporation, incentivizing them to manage costs effectively. The single bid risk is harder to mitigate post-award but highlights a need for future market research to ensure adequate competition.

What is the expected effectiveness of the completed renovation in terms of improving facility functionality and operational efficiency at Hill Air Force Base?

The effectiveness of the renovation hinges on the quality of the execution and the specific upgrades included in the scope of work. A new roof will prevent water damage and improve energy efficiency. Office space renovations, if they include modernizations like updated layouts, improved lighting, better climate control, and enhanced IT infrastructure, should lead to increased operational efficiency and improved working conditions for personnel. The project's success will be measured by its ability to provide a safe, functional, and modern workspace that supports the mission requirements of the units housed in Building 225. Post-occupancy evaluations would provide the best measure of effectiveness.

How does the historical spending pattern for building renovations at Hill Air Force Base compare to this specific contract award?

Analyzing historical spending patterns for building renovations at Hill Air Force Base would require access to detailed historical contract data for the installation. This would involve identifying previous contracts for similar scope (roofing, office renovation) and comparing their values, durations, and award types. Without this specific historical context, it's difficult to determine if the $78.5 million award is an outlier, consistent with past spending, or indicative of changing market conditions or project scales. A trend analysis of renovation spending at Hill AFB could reveal patterns in contract values, frequency of awards, and the types of contractors utilized.

What is the significance of the contract type being a 'Definitive Contract' for this project?

A 'Definitive Contract' is a standard, legally binding agreement that specifies all the terms and conditions for the work to be performed. For a project like the Hill AFB renovation, it signifies a clear commitment from the government to purchase the specified goods or services and from the contractor to provide them. Unlike other contract types (e.g., indefinite-delivery/indefinite-quantity), a definitive contract typically has a defined scope, price, and delivery schedule from the outset. This provides clarity and certainty for both parties, making it suitable for large, well-defined construction projects where the requirements are known upfront.

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Commercial and Institutional Building Construction

Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR NONBUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: TWO STEP

Solicitation ID: W9123823R0004

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 736 W HARRISVILLE RD, OGDEN, UT, 84404

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Woman Owned Business

Financial Breakdown

Contract Ceiling: $78,551,941

Exercised Options: $78,551,941

Current Obligation: $78,540,926

Actual Outlays: $9,601,797

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline