Army National Guard awards $28.8M for Hilo maintenance shop construction, with 3 bids received

Contract Overview

Contract Amount: $28,826,357 ($28.8M)

Contractor: Alutiiq General Contractors, LLC

Awarding Agency: Department of Defense

Start Date: 2017-09-01

End Date: 2025-07-01

Contract Duration: 2,860 days

Daily Burn Rate: $10.1K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF CONSTRUCTION OF PROJECT NO. 150035 COMBINED SUPPORT MAINTENANCE SHOP HILO HAWAII FOR THE HAWAII ARMY NATIONAL GUARD

Place of Performance

Location: HILO, HAWAII County, HAWAII, 96720

State: Hawaii Government Spending

Plain-Language Summary

Department of Defense obligated $28.8 million to ALUTIIQ GENERAL CONTRACTORS, LLC for work described as: IGF::OT::IGF CONSTRUCTION OF PROJECT NO. 150035 COMBINED SUPPORT MAINTENANCE SHOP HILO HAWAII FOR THE HAWAII ARMY NATIONAL GUARD Key points: 1. The contract value represents a significant investment in critical infrastructure for the Hawaii Army National Guard. 2. Competition was limited, with only three bids submitted, potentially impacting price discovery. 3. The fixed-price contract type shifts cost risk to the contractor, but requires careful scope management. 4. The project duration of nearly 8 years suggests a complex and long-term construction undertaking. 5. The award to Alutiiq General Contractors, LLC indicates a focus on established firms for major construction projects.

Value Assessment

Rating: fair

The contract value of $28.8 million for a combined support maintenance shop appears to be within a reasonable range for a project of this scale and duration. However, without specific benchmarks for similar facilities in Hawaii or detailed cost breakdowns, a precise value-for-money assessment is challenging. The fixed-price nature of the contract suggests an expectation of cost control, but the long duration could introduce unforeseen cost escalations if not managed meticulously. Benchmarking against similar construction projects for military branches in comparable geographic regions would provide a clearer picture of its cost-effectiveness.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' which implies that while the competition was intended to be open, certain sources were excluded, leading to a limited pool of bidders. Only three bids were received, indicating a relatively low level of competition for this substantial construction project. This limited competition may have resulted in higher prices than could have been achieved in a more robustly contested procurement, as contractors may face less pressure to offer their most competitive rates.

Taxpayer Impact: The limited number of bidders suggests that taxpayers may not have received the full benefit of competitive pricing. The government might have paid a premium due to the restricted competition, as fewer contractors vied for the work.

Public Impact

The Hawaii Army National Guard will benefit from a new, modern maintenance facility, enhancing operational readiness. The construction project will deliver a critical piece of infrastructure, supporting vehicle and equipment maintenance. The project's geographic impact is concentrated in Hilo, Hawaii, providing local economic stimulus through construction jobs. Workforce implications include employment opportunities for construction laborers, tradespeople, and project management professionals in the Hilo area.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may have led to suboptimal pricing for taxpayers.
The long contract duration increases the risk of scope creep and cost overruns if not managed effectively.
Exclusion of sources in the procurement process warrants further investigation into the justification.

Positive Signals

The fixed-price contract type provides cost certainty for the government, assuming the scope is well-defined.
Awarding to a single contractor streamlines project management and accountability.
The project addresses a clear need for improved maintenance facilities for the Hawaii Army National Guard.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the broader construction industry. The market for military construction is substantial, driven by the need for modern facilities to support defense operations. This project aligns with government spending trends focused on upgrading aging infrastructure and enhancing readiness. Comparable spending benchmarks for similar military facility construction projects can vary widely based on location, size, and complexity, but this $28.8 million award is a notable investment.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). As a large-value construction project, it is likely that the prime contractor, Alutiiq General Contractors, LLC, may engage small businesses as subcontractors to fulfill specific portions of the work. However, without explicit subcontracting plans or goals detailed in the award, the direct impact on the small business ecosystem remains uncertain. Further analysis of subcontracting reports would be necessary to assess the extent of small business participation.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Army, with potential involvement from the Hawaii Army National Guard's facilities engineering or contracting divisions. Accountability measures are inherent in the firm-fixed-price contract type, which obligates the contractor to deliver the specified work within the agreed-upon price. Transparency may be enhanced through public contract databases and reporting requirements. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Military Construction, Army
Facilities Sustainment, Restoration, and Modernization (FSRM)
Army National Guard Readiness Centers
Department of Defense Construction Projects

Risk Flags

Limited Competition
Potential for Cost Overruns due to Long Duration
Justification for Source Exclusion Needs Review

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.8 million to ALUTIIQ GENERAL CONTRACTORS, LLC. IGF::OT::IGF CONSTRUCTION OF PROJECT NO. 150035 COMBINED SUPPORT MAINTENANCE SHOP HILO HAWAII FOR THE HAWAII ARMY NATIONAL GUARD

Who is the contractor on this award?

The obligated recipient is ALUTIIQ GENERAL CONTRACTORS, 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 $28.8 million.

What is the period of performance?

Start: 2017-09-01. End: 2025-07-01.

What is the track record of Alutiiq General Contractors, LLC on similar government construction projects?

Alutiiq General Contractors, LLC has a history of performing various construction and support services for government entities, including military branches. Their past performance on similar projects, such as barracks, training facilities, and infrastructure upgrades, would be a key factor in their selection for this Hilo maintenance shop. A review of their contract history, including any past performance evaluations, dispute resolutions, or contract terminations, would provide insight into their reliability and capability. Examining the value and complexity of their previous projects would help benchmark their experience against the current $28.8 million award. Data on their on-time and on-budget completion rates for comparable projects would further inform an assessment of their track record.

How does the per-square-foot cost of this maintenance shop compare to similar military construction projects?

To compare the per-square-foot cost, we would need the total square footage of the completed maintenance shop. Assuming this information were available, we could calculate the cost per square foot by dividing the total contract value ($28.8 million) by the total square footage. This figure would then be benchmarked against data from similar military maintenance facilities or vehicle depots constructed in recent years, particularly those in the Pacific region or with similar climatic conditions. Factors such as specialized equipment installation, unique structural requirements, and site preparation costs can significantly influence per-square-foot pricing. A higher per-square-foot cost might be justified by specialized features or challenging site conditions, while a lower cost could indicate efficient project management or a less complex design.

What are the primary risks associated with the long duration (nearly 8 years) of this construction contract?

The nearly 8-year duration of this construction contract presents several significant risks. Firstly, there is an increased risk of material and labor cost escalation over such an extended period, even with a fixed-price contract, if contingency planning or escalation clauses are not robustly managed. Secondly, the potential for changes in military requirements or technology during the construction phase could lead to scope creep or the need for costly modifications. Thirdly, contractor performance can degrade over long durations due to personnel turnover or shifts in company priorities. Finally, prolonged construction can lead to extended disruption at the Hilo site and potential delays in realizing the full operational benefits of the new facility. Effective project management, regular performance reviews, and clear change control processes are crucial to mitigate these risks.

What is the historical spending pattern for similar maintenance facilities by the Hawaii Army National Guard?

Analyzing historical spending patterns for similar maintenance facilities by the Hawaii Army National Guard would involve reviewing past contract awards for construction or major renovation of vehicle and equipment maintenance shops. This would include identifying the number of such projects awarded over the last 5-10 years, their respective contract values, and the procurement methods used (e.g., full and open, sole source). Understanding the average cost per project and the typical duration would provide context for the current $28.8 million award. Significant deviations from historical spending averages, either higher or lower, would warrant further investigation into the specific drivers, such as inflation, increased scope, or changes in construction techniques. This historical data is crucial for assessing whether the current contract represents a typical investment or an outlier.

How does the exclusion of sources in the procurement process impact the government's ability to ensure best value?

The exclusion of sources, even within a 'full and open competition after exclusion of sources' framework, inherently limits the competitive landscape. When certain potential bidders are prevented from participating, the government foregoes the opportunity to receive bids from those entities. This reduction in the number of competing proposals can diminish the downward pressure on pricing that typically occurs with broader competition. Consequently, the government may not achieve the 'best value' in terms of the optimal balance of price, performance, and other factors. The justification for excluding sources must be carefully scrutinized to ensure it serves a legitimate government interest and does not unduly restrict competition, thereby potentially increasing costs for taxpayers.

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 AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W912J617R0002

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Afognak Native Corporation

Address: 3375 KOAPAKA STREET F238-09, HONOLULU, HI, 96819

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

Financial Breakdown

Contract Ceiling: $28,826,357

Exercised Options: $28,826,357

Current Obligation: $28,826,357

Subaward Activity

Number of Subawards: 654

Total Subaward Amount: $461,620,867

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline