DOD Awards $32.3M Kunsan Dorm Construction Contract to Lotte Engineering & Construction

Contract Overview

Contract Amount: $32,331,678 ($32.3M)

Contractor: Lotte Engineering & Construction CO., Ltd.

Awarding Agency: Department of Defense

Start Date: 2007-12-26

End Date: 2011-09-30

Contract Duration: 1,374 days

Daily Burn Rate: $23.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 16

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: CY07 ROKFC PN F07R220, KUNSAN DORM

Plain-Language Summary

Department of Defense obligated $32.3 million to LOTTE ENGINEERING & CONSTRUCTION CO., LTD. for work described as: CY07 ROKFC PN F07R220, KUNSAN DORM Key points: 1. Contract awarded to a single, large business entity. 2. Construction sector spending is significant, with potential for cost overruns. 3. Definitive contract type suggests a well-defined scope of work. 4. No small business participation noted in this award.

Value Assessment

Rating: fair

The contract value of $32.3M for dormitory construction appears within a reasonable range for a project of this scale. However, without specific benchmarks for Kunsan Air Base or similar military construction projects, a precise valuation is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating a competitive bidding process. This method generally promotes price discovery and potentially better pricing for the government.

Taxpayer Impact: The competitive award aims to ensure taxpayer funds are used efficiently for necessary infrastructure development.

Public Impact

Provides housing for military personnel at Kunsan Air Base, South Korea. Supports the U.S. military presence and operational readiness in the region. Contributes to the local economy through construction activities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of small business participation.
Potential for cost escalation in long-term construction projects.
Geopolitical risks associated with projects in South Korea.

Positive Signals

Awarded under full and open competition.
Definitive contract type suggests clear project scope.
Addresses critical infrastructure needs for military personnel.

Sector Analysis

This contract falls within the heavy and civil engineering construction sector, which is a significant area of government spending. Benchmarks for military dormitory construction can vary widely based on location, specifications, and market conditions.

Small Business Impact

This contract did not include any small business set-asides or participation. The prime contractor is a large business, indicating no direct benefit to small businesses through this specific award.

Oversight & Accountability

The definitive contract structure and full and open competition suggest a degree of oversight. However, long-term construction projects require continuous monitoring to ensure adherence to schedule, budget, and quality standards.

Related Government Programs

Other Heavy and Civil Engineering Construction
Department of Defense Contracting
Department of the Army Programs

Risk Flags

No small business participation.
Potential for cost overruns in long-term construction.
Geopolitical risks.
Limited data on specific performance metrics.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $32.3 million to LOTTE ENGINEERING & CONSTRUCTION CO., LTD.. CY07 ROKFC PN F07R220, KUNSAN DORM

Who is the contractor on this award?

The obligated recipient is LOTTE ENGINEERING & 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 $32.3 million.

What is the period of performance?

Start: 2007-12-26. End: 2011-09-30.

What was the final cost compared to the initial bid or estimated cost?

The provided data shows the award amount ($32.3M) and a 'br' value of 23531, which might represent a bid or budget figure. A comparison would reveal if the final award was significantly higher or lower than anticipated, impacting the perceived value for money.

What are the specific risks associated with construction in the Kunsan Air Base area?

Risks could include logistical challenges in South Korea, potential labor disputes, material cost fluctuations, and unforeseen site conditions specific to the base. Understanding these risks is crucial for assessing the overall project viability and potential for cost overruns.

How effectively did the full and open competition process ensure the best value for the government?

While full and open competition is designed to achieve best value, its effectiveness depends on the number and quality of bids received. Further analysis of the bidding landscape and the final price relative to independent cost estimates would be needed to confirm optimal value.

Industry Classification

NAICS: Construction › Other Heavy and Civil Engineering Construction › Other Heavy and Civil Engineering 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: W912UM07R0006

Offers Received: 16

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 50-2 CHAMWON-DONG, SOCHO-GU, SEOUL

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $38,054,384,950

Exercised Options: $38,054,384,950

Current Obligation: $32,331,678

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline