DoD Awards $18.9M Fixed-Price Contract for Commercial Building Construction to Hanjin Heavy Industries
Contract Overview
Contract Amount: $18,914,010 ($18.9M)
Contractor: Hanjin Heavy Industries & Construction CO., Ltd.
Awarding Agency: Department of Defense
Start Date: 2006-01-24
End Date: 2008-09-30
Contract Duration: 980 days
Daily Burn Rate: $19.3K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIXED PRICE
Sector: Construction
Official Description: RFP NO. 06-R-0009, COMMUNITY PHYSICAL
Plain-Language Summary
Department of Defense obligated $18.9 million to HANJIN HEAVY INDUSTRIES & CONSTRUCTION CO., LTD. for work described as: RFP NO. 06-R-0009, COMMUNITY PHYSICAL Key points: 1. Contract awarded for commercial and institutional building construction. 2. Significant value of $18.9 million. 3. Awarded by the Department of the Army, part of the Department of Defense. 4. Fixed-price contract type suggests cost certainty for the government.
Value Assessment
Rating: fair
The contract value of $18.9 million for commercial building construction is substantial. Benchmarking against similar large-scale construction projects would be necessary to fully assess its value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers compared to a competitive process.
Taxpayer Impact: The lack of competition may result in a higher cost to taxpayers than if multiple bids were solicited and evaluated.
Public Impact
Taxpayers may have paid more due to the absence of competitive bidding. The project's success relies heavily on the performance of a single contractor. Transparency in the sole-source justification is crucial for public trust.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Potential for overpayment
- Sole-source award justification needed
Positive Signals
- Fixed-price contract type
- Clear contract end date
Sector Analysis
This contract falls under the Commercial and Institutional Building Construction sector. Spending in this sector can vary widely based on infrastructure needs and economic conditions.
Small Business Impact
The contract was awarded to Hanjin Heavy Industries & Construction Co., Ltd., a large foreign entity. There is no indication that small businesses were involved as subcontractors or partners in this award.
Oversight & Accountability
Oversight is critical for sole-source contracts to ensure fair pricing and contract performance. The Department of the Army is responsible for ensuring the contractor meets all requirements.
Related Government Programs
- Commercial and Institutional Building Construction
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award
- Lack of competition
- Potential for cost overruns
- No small business participation indicated
Tags
commercial-and-institutional-building-co, department-of-defense, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $18.9 million to HANJIN HEAVY INDUSTRIES & CONSTRUCTION CO., LTD.. RFP NO. 06-R-0009, COMMUNITY PHYSICAL
Who is the contractor on this award?
The obligated recipient is HANJIN HEAVY INDUSTRIES & CONSTRUCTION CO., LTD..
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $18.9 million.
What is the period of performance?
Start: 2006-01-24. End: 2008-09-30.
What was the justification for awarding this significant construction contract on a sole-source basis?
The justification for a sole-source award typically involves unique capabilities, urgent needs, or a lack of available sources. Without specific documentation, it's difficult to ascertain the precise reason. However, such justifications are subject to review to ensure they are valid and serve the government's best interest.
What are the potential risks associated with a sole-source construction contract of this magnitude?
The primary risk is the potential for inflated costs due to the absence of competitive pressure. Other risks include contractor performance issues, scope creep, and difficulties in enforcing contract terms without market alternatives. Robust oversight and clear performance metrics are essential to mitigate these risks.
How can the effectiveness of this contract be measured given the lack of competition?
Effectiveness can be measured by adherence to the fixed-price budget, timely completion of the project according to specifications, and the quality of the final construction. Post-completion assessments and user feedback are crucial. Comparing the final cost and performance to similar, competitively bid projects can also provide a benchmark.
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: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: W912UM06R0009
Offers Received: 1
Pricing Type: FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 546-1 KUUI-DONG, KWANGJIN-GU, SEOUL
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $19,026,144,714
Exercised Options: $19,026,144,714
Current Obligation: $18,914,010
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2006-01-24
Current End Date: 2008-09-30
Potential End Date: 2008-09-30 00:00:00
Last Modified: 2021-07-14
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)