DoD Awards $60M Firm Fixed Price Contract for Bulk Storage Tanks at MCAS Iwakuni
Contract Overview
Contract Amount: $60,006,355 ($60.0M)
Contractor: Obayashi CMS JV
Awarding Agency: Department of Defense
Start Date: 2024-08-26
End Date: 2027-08-26
Contract Duration: 1,095 days
Daily Burn Rate: $54.8K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Construction
Official Description: DESC1803 CONSTRUCT BULK STORAGE TANKS PH1, MCAS IWAKUNI
Plain-Language Summary
Department of Defense obligated $60.0 million to OBAYASHI CMS JV for work described as: DESC1803 CONSTRUCT BULK STORAGE TANKS PH1, MCAS IWAKUNI Key points: 1. Contract awarded to OBAYASHI CMS JV for construction of bulk storage tanks. 2. Full and open competition was utilized for this procurement. 3. The contract has a duration of 1095 days, ending in August 2027. 4. This project falls under the Oil and Gas Pipeline and Related Structures Construction NAICS code.
Value Assessment
Rating: good
The contract value of $60,006,355.32 appears reasonable for a large-scale construction project of this nature. Benchmarking against similar DoD construction contracts for bulk storage facilities would provide further validation.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
Full and open competition was employed, suggesting a robust process for price discovery and ensuring the government received competitive bids. This method generally leads to better pricing outcomes.
Taxpayer Impact: The use of full and open competition is expected to maximize taxpayer value by driving down costs through market forces.
Public Impact
Enhances critical infrastructure at a key Marine Corps Air Station. Supports operational readiness by providing necessary fuel storage. Project completion by 2027 will ensure long-term facility capability. Potential for local economic impact through construction jobs and material sourcing.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns in large construction projects.
- Schedule delays are common in complex infrastructure builds.
- Ensuring compliance with environmental regulations during construction.
Positive Signals
- Firm Fixed Price contract limits cost risk to the government.
- Full and open competition suggests competitive pricing.
- Strategic importance of the facility for military operations.
Sector Analysis
This contract falls within the construction sector, specifically related to energy infrastructure. DoD construction spending benchmarks vary widely based on project type and location, but large-scale tank construction typically represents a significant investment.
Small Business Impact
While the prime contractor is OBAYASHI CMS JV, the data does not indicate specific subcontracting goals for small businesses. Further review would be needed to assess small business participation.
Oversight & Accountability
The Department of the Army is the contracting agency, with oversight expected through standard DoD procurement regulations and contract management practices. Monitoring progress and adherence to specifications will be crucial.
Related Government Programs
- Oil and Gas Pipeline and Related Structures Construction
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Potential for schedule slippage.
- Risk of unforeseen site conditions.
- Complexity of large-scale construction projects.
- Ensuring environmental compliance during construction.
Tags
oil-and-gas-pipeline-and-related-structu, department-of-defense, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $60.0 million to OBAYASHI CMS JV. DESC1803 CONSTRUCT BULK STORAGE TANKS PH1, MCAS IWAKUNI
Who is the contractor on this award?
The obligated recipient is OBAYASHI CMS JV.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $60.0 million.
What is the period of performance?
Start: 2024-08-26. End: 2027-08-26.
What is the estimated cost per gallon of storage capacity for these tanks, and how does it compare to industry averages?
Calculating the cost per gallon requires knowing the total storage volume. Without this information, a precise benchmark is impossible. However, comparing the total contract value against the projected storage capacity against similar DoD or commercial projects would reveal if the pricing is competitive on a per-unit basis.
What are the specific risks associated with the chosen construction materials and methods for these bulk storage tanks?
Risks could include material durability under specific environmental conditions at MCAS Iwakuni, potential for unforeseen site challenges impacting foundation requirements, and the long-term maintenance implications of the chosen construction techniques. A thorough risk assessment by the contracting agency should have addressed these.
How will the effectiveness of these new storage tanks be measured post-construction to ensure they meet operational needs?
Effectiveness will likely be measured through successful completion and commissioning of the tanks, followed by their sustained operational performance in fuel storage and distribution. Key metrics would include leak detection, capacity utilization, and minimal downtime for maintenance over their lifecycle.
Industry Classification
NAICS: Construction › Utility System Construction › Oil and Gas Pipeline and Related Structures Construction
Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCTION OF BUILDINGS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: W912HV24R0008
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 2-15-2, KONAN, MINATO-KU
Business Categories: Category Business, Foreign Owned, Not Designated a Small Business, Special Designations
Financial Breakdown
Contract Ceiling: $60,006,355
Exercised Options: $60,006,355
Current Obligation: $60,006,355
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2024-08-26
Current End Date: 2027-08-26
Potential End Date: 2027-08-26 00:00:00
Last Modified: 2025-08-13
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