DoD Awards $22.2M Design-Build Contract for Peruvian Navy Base Infrastructure
Contract Overview
Contract Amount: $22,189,297 ($22.2M)
Contractor: KGN Support Services LLC
Awarding Agency: Department of Defense
Start Date: 2025-06-17
End Date: 2027-05-23
Contract Duration: 705 days
Daily Burn Rate: $31.5K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: FIRM FIXED PRICE
Sector: Construction
Official Description: DESIGN BUILD CONSTRUCTION "C" STANDALONE CONTRACT FOR PERUVIAN NAVY INFRASTRUCTURE CONSTRUCTION REQUIREMENTS ON CALLAO NAVY BASE, LIMA, PERU.
Plain-Language Summary
Department of Defense obligated $22.2 million to KGN SUPPORT SERVICES LLC for work described as: DESIGN BUILD CONSTRUCTION "C" STANDALONE CONTRACT FOR PERUVIAN NAVY INFRASTRUCTURE CONSTRUCTION REQUIREMENTS ON CALLAO NAVY BASE, LIMA, PERU. Key points: 1. Contract awarded to KGN SUPPORT SERVICES LLC for construction. 2. Project involves infrastructure development at Callao Navy Base, Peru. 3. Competition method was Full and Open, indicating broad market access. 4. The sector is Commercial and Institutional Building Construction.
Value Assessment
Rating: fair
The contract value of $22.2 million for a design-build project of this scope appears within a reasonable range, though specific benchmarks for overseas military infrastructure are not readily available. Further analysis would require comparison to similar international construction projects.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a robust price discovery process. This method allows all responsible sources to submit offers, potentially leading to competitive pricing.
Taxpayer Impact: Taxpayer funds are being used for infrastructure development supporting allied naval operations, which can have long-term strategic benefits but requires careful cost management.
Public Impact
Enhances operational capabilities for the Peruvian Navy. Supports U.S. foreign policy and defense cooperation in South America. Potential for job creation in the construction sector. Requires careful monitoring to ensure project completion and quality.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Geopolitical risks associated with overseas construction.
- Potential for cost overruns in complex infrastructure projects.
- Ensuring compliance with local Peruvian regulations.
Positive Signals
- Strengthens international military partnerships.
- Utilizes competitive bidding for potential cost savings.
- Addresses critical infrastructure needs for an ally.
Sector Analysis
This contract falls under Commercial and Institutional Building Construction, a broad sector encompassing various building types. Spending in this area can fluctuate based on economic conditions and government priorities, particularly for overseas projects.
Small Business Impact
The contract was awarded under full and open competition, and there is no specific indication that small businesses were primary awardees or subcontractors. Further investigation would be needed to determine small business participation.
Oversight & Accountability
Oversight will be crucial given the overseas location and the complexity of design-build projects. The Department of the Army's contracting activity suggests established oversight mechanisms, but monitoring performance and adherence to contract terms is essential.
Related Government Programs
- Commercial and Institutional Building Construction
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Overseas project execution complexity.
- Potential for geopolitical instability impacting project.
- Reliance on foreign supply chains.
- Ensuring quality control in a remote location.
Tags
commercial-and-institutional-building-co, department-of-defense, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $22.2 million to KGN SUPPORT SERVICES LLC. DESIGN BUILD CONSTRUCTION "C" STANDALONE CONTRACT FOR PERUVIAN NAVY INFRASTRUCTURE CONSTRUCTION REQUIREMENTS ON CALLAO NAVY BASE, LIMA, PERU.
Who is the contractor on this award?
The obligated recipient is KGN SUPPORT SERVICES LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $22.2 million.
What is the period of performance?
Start: 2025-06-17. End: 2027-05-23.
What is the projected return on investment for this infrastructure project in terms of enhanced regional security and interoperability?
The return on investment is primarily measured in strategic and geopolitical terms rather than direct financial returns. Enhanced infrastructure at Callao Navy Base can improve the operational readiness and interoperability of both Peruvian and potentially U.S. naval forces, contributing to regional stability and counter-narcotics/illegal fishing efforts. Quantifying this in monetary terms is challenging but essential for long-term defense planning.
What are the primary risks associated with executing a construction project of this magnitude in Peru, and how are they being mitigated?
Key risks include navigating local regulations and permitting, potential supply chain disruptions, labor availability and management, and unforeseen site conditions. Mitigation strategies likely involve robust project management by KGN SUPPORT SERVICES LLC, close coordination with Peruvian authorities, contingency planning for material and labor, and thorough site assessments. The Department of Defense's oversight will be critical in monitoring these risks.
How does this contract align with broader U.S. defense objectives in Latin America, and what is the long-term strategic value?
This contract aligns with U.S. defense objectives by strengthening a key regional partner's naval capabilities and fostering interoperability. The long-term strategic value lies in enhancing maritime domain awareness, supporting counter-illicit trafficking operations, and projecting stability in a vital region. It demonstrates a commitment to security cooperation and can serve as a model for future infrastructure investments with allies.
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: TWO STEP
Solicitation ID: W9127823R0118
Offers Received: 3
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 1228 S ADAMS ST, FORT WORTH, TX, 76104
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Limited Liability Corporation, Minority Owned Business, Not Designated a Small Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Indian (Subcontinent) American Owned Business
Financial Breakdown
Contract Ceiling: $45,376,275
Exercised Options: $22,189,297
Current Obligation: $22,189,297
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2025-06-17
Current End Date: 2027-05-23
Potential End Date: 2027-05-23 00:00:00
Last Modified: 2025-12-17
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