DoD's $19.75M construction contract awarded to NAMWHA CONSTRUCTION CO., LTD. in 2010

Contract Overview

Contract Amount: $19,749,880 ($19.7M)

Contractor: Namwha Construction CO., Ltd.

Awarding Agency: Department of Defense

Start Date: 2010-04-16

End Date: 2017-05-31

Contract Duration: 2,602 days

Daily Burn Rate: $7.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 9

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: FY10 DLA, OSAN AB(CLIN 0001 THRU 0004)

Plain-Language Summary

Department of Defense obligated $19.7 million to NAMWHA CONSTRUCTION CO., LTD. for work described as: FY10 DLA, OSAN AB(CLIN 0001 THRU 0004) Key points: 1. Contract value represents a significant investment in civil engineering construction. 2. Full and open competition suggests a robust bidding process. 3. The contract duration of over 2600 days indicates a long-term project. 4. Fixed-price contract type aims to control costs for the government. 5. The award was made by the Department of the Army, a major component of the DoD. 6. The North American Industry Classification System (NAICS) code 237990 points to heavy civil engineering construction.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific project details and scope. However, a $19.75 million award for heavy civil engineering construction over a multi-year period suggests a substantial project. The firm fixed-price nature of the contract implies that cost overruns beyond the agreed-upon price would typically be borne by the contractor, which can be a positive indicator for value if the contractor manages risks effectively. Without comparable project data or detailed cost breakdowns, a precise value-for-money assessment is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. With 9 bidders participating, this suggests a healthy level of competition for the project. A higher number of bidders generally leads to more competitive pricing and a greater likelihood that the government receives the best value. The specific details of the bidding process and the evaluation criteria would provide further insight into the effectiveness of the competition.

Taxpayer Impact: The full and open competition and the presence of multiple bidders likely resulted in more favorable pricing for taxpayers compared to a sole-source or limited competition scenario.

Public Impact

The primary beneficiaries are the Department of the Army and potentially other Department of Defense entities requiring civil engineering construction services. The contract delivers essential heavy and civil engineering construction services, likely for infrastructure development or maintenance. The geographic impact is not specified but would be localized to the project site(s) managed by the Department of the Army. Workforce implications would include employment opportunities for construction workers, engineers, project managers, and support staff employed by the prime contractor and any subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the fixed-price contract scope is not meticulously managed.
Risk of schedule delays impacting the delivery of critical infrastructure.
Dependence on the contractor's ability to manage complex construction projects effectively.
Ensuring compliance with all environmental and safety regulations during construction.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Full and open competition suggests a competitive bidding process leading to potentially better pricing.
Award to a single contractor for a large project can streamline management and execution.
Long contract duration allows for phased development and adaptation to evolving needs.

Sector Analysis

The construction sector, particularly heavy and civil engineering, is a significant area of federal spending. This contract falls under NAICS code 237990, which includes the construction of tunnels, subways, pipelines, and other heavy infrastructure projects. Federal spending in this area often supports national defense, transportation, and energy infrastructure. Comparable spending benchmarks would depend on the specific type and scale of the civil engineering work undertaken.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications specifically mandated for small businesses through a set-aside program. The prime contractor, NAMWHA CONSTRUCTION CO., LTD., would determine its own subcontracting strategy, which may or may not involve small businesses. The absence of a small business set-aside means that opportunities for small businesses would depend on the prime contractor's procurement practices and the availability of qualified small business subcontractors for the specific construction needs.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Army, the awarding agency. Mechanisms likely include contract administration, performance monitoring, site inspections, and regular progress reporting. Accountability measures would be tied to the contract's terms and conditions, including adherence to schedule, budget (within the fixed-price framework), and quality standards. Transparency would be facilitated through contract award databases and potentially through public reporting on project milestones, though detailed project-specific oversight information is often internal.

Related Government Programs

Department of Defense Construction Contracts
Army Corps of Engineers Projects
Heavy and Civil Engineering Construction Services
Federal Infrastructure Development

Risk Flags

Long contract duration may increase risk of scope creep or unforeseen conditions.
Fixed-price contract requires careful management to ensure value for money.
Lack of specific project details limits in-depth value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.7 million to NAMWHA CONSTRUCTION CO., LTD.. FY10 DLA, OSAN AB(CLIN 0001 THRU 0004)

Who is the contractor on this award?

The obligated recipient is NAMWHA 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 $19.7 million.

What is the period of performance?

Start: 2010-04-16. End: 2017-05-31.

What was the specific scope of work for this $19.75 million construction contract?

The provided data indicates the contract falls under NAICS code 237990, 'Other Heavy and Civil Engineering Construction.' This broad category encompasses projects such as the construction of tunnels, subways, elevated highways, bridges, pipelines, and marine facilities. Without more specific contract details, the exact scope of work for this particular award to NAMWHA CONSTRUCTION CO., LTD. remains unspecified. It could range from building new infrastructure to renovating or expanding existing facilities. The duration of over 2600 days suggests a project of significant scale and complexity, likely involving substantial planning, execution, and oversight.

How did NAMWHA CONSTRUCTION CO., LTD.'s pricing compare to other bidders?

The contract was awarded under full and open competition with 9 bidders. While the data confirms the award price of $19,749,879.86 to NAMWHA CONSTRUCTION CO., LTD., it does not provide the bid amounts of the other 8 competitors. To assess how NAMWHA's pricing compared, we would need access to the bid tabulation. A competitive award suggests that NAMWHA's price was likely deemed the best value among the submissions, considering both price and other evaluation factors. However, without the comparative data, we cannot definitively state if it was the lowest bid or if it represented a particularly advantageous price point relative to the others.

What are the key risks associated with a long-duration, fixed-price construction contract of this magnitude?

Long-duration, fixed-price construction contracts, like this $19.75 million award spanning over 2600 days, carry inherent risks. For the government, the primary risk is that the fixed price may not adequately account for unforeseen conditions, material price escalations, or scope creep if not managed tightly, potentially leading to a less-than-optimal value if the contractor's initial estimates were too high. For the contractor, the risk is significant: they bear the brunt of cost overruns due to poor estimating, inefficient execution, or unexpected site conditions. Schedule delays can also be a major risk, impacting the contractor's profitability and the government's project timeline. Effective risk mitigation relies on robust contract administration, clear scope definition, contingency planning, and diligent oversight from the awarding agency.

What is the historical spending pattern for similar heavy and civil engineering construction contracts by the Department of the Army?

The Department of the Army, through entities like the Army Corps of Engineers, is a major procurer of heavy and civil engineering construction services. Historical spending patterns in this category are substantial, driven by military base infrastructure, flood control projects, navigation improvements, and other public works. Annual spending can fluctuate based on congressional appropriations, national priorities, and specific infrastructure needs. Contracts of this magnitude ($19.75 million) are common within the Army's construction portfolio, often awarded through competitive processes. Analyzing past awards for similar NAICS codes (237990) and contract types (firm fixed-price) would reveal trends in contract values, durations, and the number of bidders, providing context for this specific award.

Does the contract's firm fixed-price (FFP) structure adequately protect the government against potential cost increases?

A Firm Fixed-Price (FFP) contract is generally designed to provide the government with cost certainty, as the price is set and not subject to adjustment based on the contractor's actual cost experience. In theory, this structure protects the government from cost increases. However, the effectiveness of this protection depends heavily on the accuracy of the initial price negotiation and the contractor's ability to manage project costs. If the initial price was set too high due to inadequate competition or flawed estimates, the government might overpay. Conversely, if the contractor underestimates costs or encounters unforeseen issues, they bear the financial risk. Robust oversight and a clearly defined scope are crucial to ensure the FFP structure delivers value and prevents costly change orders or disputes.

Industry Classification

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

Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR NONBUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W912UM10R0008

Offers Received: 9

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: #635-11, SHINSA-DONG,, SEOUL

Business Categories: Category Business, Corporate Entity Tax Exempt, Foreign Owned, Not Designated a Small Business, Special Designations, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $19,757,331

Exercised Options: $19,757,331

Current Obligation: $19,749,880

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline