Department of the Army awards $31.4M contract for Misawa Air Base renovations, highlighting construction sector activity

Contract Overview

Contract Amount: $31,352,857 ($31.4M)

Contractor: NES Pacific Limited Liability CO.

Awarding Agency: Department of Defense

Start Date: 2016-11-22

End Date: 2020-01-24

Contract Duration: 1,158 days

Daily Burn Rate: $27.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF RENOVATE EDGREN HIGH SCHOOL, MISAWA AB, JAPAN

Plain-Language Summary

Department of Defense obligated $31.4 million to NES PACIFIC LIMITED LIABILITY CO. for work described as: IGF::OT::IGF RENOVATE EDGREN HIGH SCHOOL, MISAWA AB, JAPAN Key points: 1. Contract value represents a significant investment in infrastructure modernization. 2. Competition dynamics suggest a potentially competitive bidding environment for similar projects. 3. Contract duration of nearly three years indicates a substantial scope of work. 4. Fixed-price contract type aims to control costs and provide budget certainty. 5. Project location in Japan points to the global reach of U.S. military construction efforts. 6. The award to a single contractor implies a focused execution strategy.

Value Assessment

Rating: fair

The contract value of $31.4 million for building renovations at Misawa Air Base appears within a reasonable range for a project of this scale and complexity, especially considering the international location which can incur additional logistical costs. Benchmarking against similar Department of Defense construction contracts for educational facilities or barracks in overseas locations would provide a more precise value-for-money assessment. The firm fixed-price structure suggests an effort to manage cost overruns, but the final value achieved will depend on the contractor's efficiency and any change orders.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of three bidders suggests a moderate level of competition for this project. While three bidders are better than one or two, a higher number of bids typically leads to more aggressive pricing and a wider range of innovative solutions. The specific details of the bidding process and the evaluation criteria would further illuminate the effectiveness of the competition.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages multiple companies to vie for the contract, potentially driving down prices and ensuring the government receives the best value. The presence of three bidders suggests a reasonable, though not exceptionally high, level of competition, which likely contributed to a competitive price.

Public Impact

The primary beneficiaries are the military personnel and their families stationed at Misawa Air Base, who will gain access to improved educational facilities. The contract delivers essential renovation and construction services, enhancing the quality and safety of the Edgren High School. The geographic impact is localized to Misawa Air Base in Japan, supporting U.S. military infrastructure abroad. The project implies employment opportunities for construction workers, potentially both local and U.S.-based personnel, during the contract period.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions arise during renovation.
Risk of schedule delays due to the complexities of international construction projects.
Dependence on a single contractor for the successful completion of all renovation phases.

Positive Signals

Firm fixed-price contract type helps mitigate budget uncertainty.
Full and open competition suggests a thorough vetting of potential contractors.
Award to an established entity with experience in large-scale construction projects.

Sector Analysis

The Commercial and Institutional Building Construction sector is a vital part of the economy, encompassing a wide range of projects from schools and hospitals to office buildings and retail spaces. Federal spending in this sector, particularly for military installations, is crucial for maintaining operational readiness and quality of life for service members. This contract for Edgren High School falls within the broader category of facilities construction and maintenance, a consistent area of government expenditure. Comparable spending benchmarks would involve analyzing other Department of Defense contracts for educational facilities or base infrastructure upgrades.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, and there is no information provided regarding subcontracting plans. Therefore, the direct impact on the small business ecosystem is likely minimal unless the prime contractor voluntarily engages small businesses for specialized services. Further investigation into the contractor's subcontracting history and policies would be necessary to fully assess the implications for small businesses.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant contracting command within the Department of the Army. Performance monitoring, quality assurance checks, and compliance reviews are standard oversight mechanisms. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if allegations of fraud, waste, or abuse arise during the contract's performance or closeout.

Related Government Programs

Department of Defense Facilities Construction
Overseas Military Construction Projects
School Construction and Renovation
Base Realignment and Closure (BRAC) related projects
Military Family Housing Construction

Risk Flags

Potential for cost overruns due to international location
Risk of schedule delays impacting base operations
Dependence on single contractor for critical infrastructure upgrade

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $31.4 million to NES PACIFIC LIMITED LIABILITY CO.. IGF::OT::IGF RENOVATE EDGREN HIGH SCHOOL, MISAWA AB, JAPAN

Who is the contractor on this award?

The obligated recipient is NES PACIFIC LIMITED LIABILITY CO..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $31.4 million.

What is the period of performance?

Start: 2016-11-22. End: 2020-01-24.

What is the track record of NES PACIFIC LIMITED LIABILITY CO. with Department of Defense contracts, particularly in overseas construction?

NES PACIFIC LIMITED LIABILITY CO. has a history of receiving contracts from the Department of Defense, primarily in the construction and facilities maintenance domain. While specific details on their performance for overseas projects require deeper analysis of contract databases, their involvement in projects like the Edgren High School renovation suggests experience with the unique challenges of international military construction. A review of past performance evaluations, any documented disputes, or contract terminations would provide a more comprehensive understanding of their reliability and capability in executing similar federal contracts, especially those located outside the continental United States.

How does the awarded price of $31.4 million compare to similar school renovation projects at U.S. military bases, both domestically and internationally?

Benchmarking the $31.4 million award requires comparing it against projects with similar scope, size, and location. Renovating a high school on a military base, especially overseas like Misawa AB, involves complexities such as security requirements, logistical challenges, and potentially higher labor and material costs compared to domestic projects. Without specific data on comparable projects, it's difficult to definitively state if this price represents excellent or questionable value. However, the firm fixed-price nature and full and open competition suggest an effort to achieve competitive pricing. A detailed cost breakdown and comparison with similar projects managed by the Army Corps of Engineers or other DoD entities would be necessary for a precise valuation.

What are the primary risks associated with a nearly four-year construction project in Japan, and how are they mitigated?

Key risks for a long-duration construction project in Japan include potential delays due to weather patterns, unforeseen subsurface conditions, supply chain disruptions for materials, and fluctuations in labor costs or availability. International projects also face risks related to navigating local regulations, customs, and ensuring compliance with both U.S. military and Japanese requirements. Mitigation strategies typically involve robust project management, contingency planning in the schedule and budget, detailed site investigations prior to commencement, strong communication channels with local authorities, and performance bonds to ensure project completion. The firm fixed-price contract also incentivizes the contractor to manage these risks effectively to maintain profitability.

What is the expected impact of these renovations on the educational environment and student outcomes at Edgren High School?

The renovations are expected to significantly improve the educational environment at Edgren High School by providing modernized classrooms, updated facilities, and potentially enhanced learning spaces. Improved infrastructure can lead to better student engagement, increased comfort, and a more conducive atmosphere for learning. While direct impacts on student outcomes like test scores are complex and influenced by many factors, a better-equipped and more modern school facility is generally considered a positive contributor to the overall educational experience and can indirectly support improved academic performance by providing teachers and students with superior resources and a more stimulating environment.

How has federal spending on construction and renovation of educational facilities at overseas military bases trended over the past five years?

Federal spending on construction and renovation of educational facilities at overseas military bases has generally remained a consistent priority within the Department of Defense budget, reflecting the commitment to providing quality education for military dependents abroad. While specific figures fluctuate annually based on infrastructure needs, modernization initiatives, and available funding, there has been a sustained investment in upgrading aging facilities and constructing new ones to meet modern educational standards and security requirements. Factors such as geopolitical stability, base consolidation efforts, and the condition of existing infrastructure influence year-to-year spending levels. Detailed analysis of DoD budget requests and contract awards over the past five years would reveal specific trends and investment patterns in this category.

What is the significance of the 'DEFINITIVE CONTRACT' award type in this context?

A 'Definitive Contract' is a standard, legally binding agreement that specifies the exact terms and conditions, including price, quantity, and delivery schedule. In this case, it signifies a firm commitment from the government to purchase the specified renovation services from NES PACIFIC LIMITED LIABILITY CO. at a predetermined price. Unlike other contract types such as indefinite-delivery/indefinite-quantity (IDIQ) contracts, definitive contracts are typically used for straightforward acquisitions with clearly defined requirements. The use of a definitive contract here suggests that the scope of work for the Edgren High School renovation was well-defined at the time of award, providing clarity and predictability for both the government and the contractor.

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: SEALED BID

Solicitation ID: W912HV16B0001

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 411-3, IHEI, CHATANCHO, NAKAGAMI-GUN

Business Categories: Black American Owned Business, Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Minority Owned Business, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $31,352,857

Exercised Options: $31,352,857

Current Obligation: $31,352,857

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline