Defense Health Agency awards $8.3M for Guam clinic outfitting, with Holitna Construction as sole provider

Contract Overview

Contract Amount: $8,310,662 ($8.3M)

Contractor: Holitna Construction, LLC

Awarding Agency: Department of Defense

Start Date: 2023-09-08

End Date: 2026-07-13

Contract Duration: 1,039 days

Daily Burn Rate: $8.0K/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: THE DEFENSE HEALTH AGENCY-FACILITIES ENTERPRISE (DHA-FE) REQUIRES INITIAL OUTFITTING (IO) FOR THE FY23 NEW MEDICAL-DENTAL CLINIC LOCATED ON MARINE CORPS BASE CAMP BLAZ, GUAM.

Place of Performance

Location: DEDEDO, GUAM County, GUAM, 96929

Plain-Language Summary

Department of Defense obligated $8.3 million to HOLITNA CONSTRUCTION, LLC for work described as: THE DEFENSE HEALTH AGENCY-FACILITIES ENTERPRISE (DHA-FE) REQUIRES INITIAL OUTFITTING (IO) FOR THE FY23 NEW MEDICAL-DENTAL CLINIC LOCATED ON MARINE CORPS BASE CAMP BLAZ, GUAM. Key points: 1. Contract focuses on initial outfitting of a new medical-dental clinic, a critical step for facility readiness. 2. The award was not competed under simplified acquisition procedures, suggesting potential for higher costs. 3. Sole-source nature raises questions about price reasonableness and market competition. 4. The firm fixed-price contract type shifts cost risk to the contractor. 5. Project duration extends over three years, indicating a significant scope of work. 6. Geographic location in Guam may present logistical challenges and impact pricing.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the lack of competitive bidding and limited public data on similar initial outfitting projects in Guam. The firm fixed-price structure is standard for this type of work, but without competition, it's difficult to assess if the $8.3 million represents a fair market price. The absence of a competitive process means there's no direct comparison to gauge value for money, making the pricing appear potentially inflated.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one contractor, Holitna Construction, LLC, was considered. There is no indication that other potential bidders were solicited or had an opportunity to compete. This approach bypasses the standard competitive processes designed to foster price discovery and ensure the government receives the best value.

Taxpayer Impact: The lack of competition means taxpayers may not have benefited from the cost savings typically achieved through a bidding process. The government did not leverage market forces to drive down the price for this essential facility outfitting.

Public Impact

Military personnel and their families stationed at Marine Corps Base Camp Blaz, Guam, will benefit from a new, fully equipped medical-dental clinic. The contract delivers essential furniture and equipment for the initial outfitting of the facility. The geographic impact is localized to Guam, enhancing healthcare infrastructure on the island. The project supports the construction and operational readiness of a key military healthcare facility.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs for taxpayers.
Lack of transparency in the procurement process hinders independent value assessment.
Geographic isolation of Guam could lead to higher logistical costs and potential delays.
The significant contract value warrants closer scrutiny of cost components.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Award to Holitna Construction, LLC, supports a specific contractor's capabilities.
Project directly addresses a critical need for enhanced medical facilities at a military base.

Sector Analysis

This contract falls within the broader construction and facilities management sector, specifically focusing on the specialized niche of initial outfitting for government facilities. The market for such services can be competitive, but often involves specialized contractors with experience in government projects. The total value of $8.3 million is moderate for a project of this nature, but the sole-source award limits insights into broader market pricing dynamics. Comparable spending benchmarks are difficult to establish without more data on similar sole-source outfitting contracts.

Small Business Impact

The contract data indicates that this was not a small business set-aside, nor does it explicitly mention subcontracting opportunities for small businesses. As a sole-source award, the prime contractor, Holitna Construction, LLC, likely has significant control over subcontracting decisions. Without specific set-aside goals or reporting requirements, the direct impact on the small business ecosystem is unclear and potentially minimal.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Health Agency's contracting and program management offices. As a definitive contract, it is subject to standard federal procurement regulations and oversight. However, the sole-source nature of the award means that oversight will focus more on performance and adherence to contract terms rather than on the fairness of the initial price negotiation. Transparency is limited due to the lack of a competitive bidding process.

Related Government Programs

Military Construction
Healthcare Facilities
Base Operations Support
Medical Equipment Procurement

Risk Flags

Sole-source award
Lack of competition
Potential for inflated pricing
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $8.3 million to HOLITNA CONSTRUCTION, LLC. THE DEFENSE HEALTH AGENCY-FACILITIES ENTERPRISE (DHA-FE) REQUIRES INITIAL OUTFITTING (IO) FOR THE FY23 NEW MEDICAL-DENTAL CLINIC LOCATED ON MARINE CORPS BASE CAMP BLAZ, GUAM.

Who is the contractor on this award?

The obligated recipient is HOLITNA CONSTRUCTION, 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 $8.3 million.

What is the period of performance?

Start: 2023-09-08. End: 2026-07-13.

What is Holitna Construction, LLC's track record with federal contracts, particularly with the Defense Health Agency or similar entities?

Information regarding Holitna Construction, LLC's specific track record with federal contracts, especially with the Defense Health Agency (DHA) or similar defense entities, is not readily available in the provided data snippet. A comprehensive review would require accessing federal procurement databases like SAM.gov or FPDS to analyze past performance, contract values, and any reported issues or successes. Without this data, it's difficult to assess their experience level and reliability for a project of this magnitude and criticality. The sole-source nature of this award suggests either a unique capability or a pre-existing relationship, but further investigation into their history is warranted.

How does the $8.3 million contract value compare to similar initial outfitting projects for military medical facilities?

Direct comparison of the $8.3 million contract value for this initial outfitting project is challenging without access to a broader dataset of similar sole-source awards or detailed cost breakdowns. Initial outfitting costs can vary significantly based on facility size, complexity, location, and the specific types of medical and dental equipment required. Given this is a sole-source award for a new clinic on Guam, the price may reflect factors such as limited local vendor availability, logistical challenges, and the specific requirements of the Defense Health Agency. A competitive bidding process would typically provide a clearer benchmark for assessing value for money against market rates.

What are the primary risks associated with a sole-source award for a project of this scale?

The primary risks associated with a sole-source award for a project of this scale, such as the $8.3 million DHA-FE contract, include a lack of price competition, potentially leading to inflated costs for taxpayers. Without multiple bids, there's less incentive for the contractor to offer the most competitive pricing. Additionally, sole-source awards can sometimes indicate a lack of market research or an over-reliance on a single vendor, which could pose risks if that vendor underperforms or faces financial difficulties. Transparency is also reduced, making it harder to independently verify the fairness of the price and the overall value proposition.

What specific services or items are included in the 'initial outfitting' for this medical-dental clinic?

The 'initial outfitting' for this medical-dental clinic, as per the contract description, encompasses the necessary furniture, fixtures, and equipment (FF&E) required to make the facility operational. This typically includes items such as patient beds, examination tables, dental chairs, diagnostic equipment, waiting room furniture, administrative desks, medical cabinetry, and potentially specialized IT infrastructure related to medical records and communication systems. The scope is focused on equipping the newly constructed clinic space so it can begin providing services to military personnel and their families stationed at Marine Corps Base Camp Blaz, Guam.

What is the historical spending pattern for initial outfitting contracts by the Defense Health Agency or its predecessors?

Historical spending patterns for initial outfitting contracts by the Defense Health Agency (DHA) and its predecessors (like the Military Health System) would reveal trends in contract values, types of services procured, and the typical procurement methods used. Analyzing past awards could indicate whether sole-source awards are common for such projects or if competitive bidding is the norm. It would also help establish typical cost ranges for outfitting similar facilities. Without access to historical spending data, it's difficult to contextualize the $8.3 million award and assess if it aligns with past investments or represents an outlier due to specific project circumstances or market conditions.

What are the implications of the contract duration (1039 days) on project completion and potential cost overruns?

The contract duration of 1039 days (approximately 2.8 years) for the initial outfitting of the medical-dental clinic suggests a substantial scope of work and potentially complex logistical requirements, especially given the Guam location. While a longer duration can allow for more thorough planning and execution, it also increases the risk of cost escalation due to inflation, material price fluctuations, or unforeseen delays. For a firm fixed-price contract, the contractor bears the primary risk of cost overruns. However, extended timelines can sometimes be associated with less efficient project management or scope creep if not tightly controlled by the contracting agency.

Industry Classification

NAICS: Manufacturing › Household and Institutional Furniture and Kitchen Cabinet Manufacturing › Institutional Furniture Manufacturing

Product/Service Code: FURNITURE

Competition & Pricing

Extent Competed: NOT COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Solicitation ID: W9127S23Q6006

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 4300 B ST STE 405, ANCHORAGE, AK, 99503

Business Categories: 8(a) Program Participant, Alaskan Native Corporation Owned Firm, American Indian Owned Business, Category Business, Corporate Entity Not Tax Exempt, DoT Certified Disadvantaged Business Enterprise, Limited Liability Corporation, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $8,310,662

Exercised Options: $8,310,662

Current Obligation: $8,310,662

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline