DoD Awards $98.9M for Corrosion Control at Yokota Air Base, Japan, Under Full and Open Competition

Contract Overview

Contract Amount: $98,892,996 ($98.9M)

Contractor: Gilbane Japan GK

Awarding Agency: Department of Defense

Start Date: 2023-10-31

End Date: 2026-07-17

Contract Duration: 990 days

Daily Burn Rate: $99.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: MIL CON CORROSION CONTROL HANGER YOKOTA AIR BASE JAPAN

Plain-Language Summary

Department of Defense obligated $98.9 million to GILBANE JAPAN GK for work described as: MIL CON CORROSION CONTROL HANGER YOKOTA AIR BASE JAPAN Key points: 1. Significant investment in critical infrastructure maintenance for U.S. forces abroad. 2. Competition method suggests potential for competitive pricing, but contract type needs review. 3. Risk of cost overruns exists due to long duration and fixed-price contract. 4. Construction sector spending benchmark is relevant for assessing value.

Value Assessment

Rating: fair

The contract value of $98.9M for a 990-day duration appears substantial. Benchmarking against similar military construction projects in overseas locations is necessary to determine if the pricing is competitive, considering factors like labor costs and material sourcing in Japan.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which typically fosters competitive pricing. However, the use of a definitive contract and firm fixed price structure warrants scrutiny to ensure the government secured the best possible value and managed potential risks effectively.

Taxpayer Impact: Taxpayer funds are being utilized for essential military infrastructure maintenance, ensuring operational readiness and asset longevity. The competitive award process aims to maximize the value of this expenditure.

Public Impact

Ensures the structural integrity and longevity of U.S. military facilities in Japan. Supports U.S. strategic presence and operational capabilities in the Indo-Pacific region. Potential for job creation and economic activity in the local Japanese economy.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (990 days) increases risk of unforeseen cost increases.
Firm Fixed Price contract may not fully account for potential material cost volatility.
Overseas location can complicate oversight and increase logistical costs.

Positive Signals

Awarded under Full and Open Competition, indicating a competitive bidding process.
Focus on essential infrastructure maintenance enhances long-term asset value.
Contract aims to improve facility resilience and reduce future repair needs.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector. Spending in this sector for military construction, especially overseas, is subject to specific government regulations and benchmarks to ensure cost-effectiveness and quality.

Small Business Impact

The data indicates the prime contractor is GILBANE JAPAN GK, and the contract was awarded under full and open competition. There is no explicit mention of small business participation, which warrants further investigation to ensure opportunities were provided.

Oversight & Accountability

Oversight will be critical given the contract's duration and overseas location. The Department of Defense and Department of the Army will need robust mechanisms to monitor progress, quality, and costs to ensure accountability and prevent waste.

Related Government Programs

Commercial and Institutional Building Construction
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Potential for cost overruns due to long duration.
Risk of quality degradation under fixed-price contract without strong oversight.
Logistical challenges and costs associated with overseas operations.
Lack of explicit small business participation noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $98.9 million to GILBANE JAPAN GK. MIL CON CORROSION CONTROL HANGER YOKOTA AIR BASE JAPAN

Who is the contractor on this award?

The obligated recipient is GILBANE JAPAN GK.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $98.9 million.

What is the period of performance?

Start: 2023-10-31. End: 2026-07-17.

What is the benchmark cost per square foot or per unit for similar corrosion control projects in overseas military installations, and how does this contract's pricing compare?

Benchmarking corrosion control projects overseas is complex due to varying labor, material, and logistical costs. Typical government estimates might range from $300-$600 per square foot for specialized industrial coatings and structural repairs, depending on the extent of damage and specific environmental challenges. This contract's total value against the scope of work needs detailed analysis against these benchmarks to confirm value for money.

What specific risks are associated with performing construction in Japan, and how are they mitigated by the contract terms and the contractor's plan?

Risks in Japan include navigating local regulations, potential labor shortages, currency fluctuations, and seismic activity. The contract's firm fixed price structure aims to transfer some cost risk to the contractor. However, the government must ensure the contractor has robust risk management plans, including contingency measures for unforeseen site conditions or regulatory changes, and adequate insurance.

How effectively will the firm fixed price contract incentivize the contractor to maintain high quality standards throughout the 990-day project duration?

A firm fixed price contract incentivizes cost control but can sometimes lead to quality compromises if not rigorously overseen. The government's quality assurance surveillance plan (QASP) is crucial. Regular inspections, performance metrics tied to payment milestones, and clear defect rectification clauses will be essential to ensure the contractor maintains high quality standards throughout the project's extended timeline.

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: SEALED BID

Solicitation ID: W912HV23B0002

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3-12-2 NIHOMBASHIKAYABACHO, CHUO-KU

Business Categories: Category Business, Foreign Owned, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations

Financial Breakdown

Contract Ceiling: $98,892,996

Exercised Options: $98,892,996

Current Obligation: $98,892,996

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline