DoD's $16.15M Heavy Engineering Contract Awarded to Hyosung Corporation Shows Fair Competition

Contract Overview

Contract Amount: $16,150,115 ($16.2M)

Contractor: Hyosung Corporation

Awarding Agency: Department of Defense

Start Date: 2010-06-11

End Date: 2016-04-06

Contract Duration: 2,126 days

Daily Burn Rate: $7.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 14

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: FY10 MCA PN 56656 VMF

Plain-Language Summary

Department of Defense obligated $16.2 million to HYOSUNG CORPORATION for work described as: FY10 MCA PN 56656 VMF Key points: 1. Contract value of $16.15 million for heavy engineering construction. 2. Awarded by the Department of the Army, part of the DoD. 3. Utilized a full and open competition procurement method. 4. Contract type is a definitive contract with a firm fixed price. 5. Performance period spanned from June 2010 to April 2016. 6. No small business set-aside was utilized for this contract.

Value Assessment

Rating: fair

The contract value of $16.15 million for heavy engineering construction appears reasonable given the duration and scope. Benchmarking against similar large-scale civil engineering projects within the Department of Defense would provide a clearer picture of value for money. The firm fixed-price structure suggests that cost overruns were intended to be borne by the contractor, which can be a positive indicator of price control if managed effectively.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 14 bids suggests a healthy level of competition for this significant engineering project. A robust competitive environment generally leads to better price discovery and potentially more innovative solutions.

Taxpayer Impact: Taxpayers likely benefited from competitive pricing due to the numerous bids received, ensuring the government secured a fair market price for the construction services.

Public Impact

The primary beneficiaries are the Department of Defense and its operational readiness, through the construction of necessary heavy engineering infrastructure. Services delivered include significant civil engineering and construction work, crucial for military base development or support. The geographic impact is localized to the area where the construction took place, likely a military installation. Workforce implications include employment for construction workers, engineers, and project managers involved in the project.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the firm fixed-price contract did not adequately account for unforeseen complexities in heavy engineering.
Ensuring the quality and durability of the constructed infrastructure is paramount for long-term DoD utility.
Monitoring contractor performance over the extended duration of the contract is essential.

Positive Signals

The use of full and open competition suggests a commitment to achieving the best value through market forces.
A firm fixed-price contract incentivizes contractor efficiency and cost control.
The award to a single entity, Hyosung Corporation, implies they met all technical and cost requirements.

Sector Analysis

This contract falls within the heavy and civil engineering construction sector, a critical component of infrastructure development. The market for such services is often characterized by large, complex projects requiring specialized expertise and significant capital investment. Comparable spending benchmarks would involve analyzing other large-scale construction contracts awarded by federal agencies for military bases, infrastructure upgrades, or public works projects.

Small Business Impact

This contract did not include a small business set-aside, as indicated by the 'sb' field being false. Consequently, small businesses were not specifically targeted for this award. However, depending on the prime contractor's subcontracting plan, there may have been opportunities for small businesses to participate as subcontractors, contributing to the broader small business ecosystem.

Oversight & Accountability

Oversight for this contract would have been managed by the Department of the Army contracting officers and potentially quality assurance representatives. Accountability measures are inherent in the firm fixed-price contract type, which places financial risk on the contractor. Transparency is generally provided through contract award databases like FPDS, though detailed performance reviews are typically internal.

Related Government Programs

Military Construction
Army Corps of Engineers Projects
Heavy Equipment Procurement
Infrastructure Development Contracts

Risk Flags

Long contract duration may increase risk of scope creep or unforeseen cost impacts.
Firm Fixed Price contracts can lead to contractor disputes if unforeseen issues arise.
Heavy civil engineering projects are inherently complex and carry execution risks.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $16.2 million to HYOSUNG CORPORATION. FY10 MCA PN 56656 VMF

Who is the contractor on this award?

The obligated recipient is HYOSUNG CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $16.2 million.

What is the period of performance?

Start: 2010-06-11. End: 2016-04-06.

What was the specific nature of the heavy and civil engineering construction performed under this contract?

While the provided data specifies 'Other Heavy and Civil Engineering Construction' (NAICS 237990), the exact nature of the work is not detailed. This category typically includes projects such as the construction of highways, streets, bridges, tunnels, water and sewer systems, power lines, and pipelines. For a Department of Defense contract, it could involve airfield construction, base infrastructure development, or specialized engineering support facilities. Further investigation into the contract's statement of work would be required to ascertain the precise details of the construction undertaken.

How does the $16.15 million contract value compare to similar Department of the Army heavy engineering projects?

Benchmarking the $16.15 million contract value requires comparing it to similar projects awarded by the Department of the Army or other Department of Defense branches for heavy and civil engineering construction within the same timeframe (2010-2016). Factors such as project scope, complexity, location, and duration significantly influence cost. Without access to a database of comparable projects with detailed cost breakdowns, a precise comparison is difficult. However, for a multi-year, large-scale construction effort, $16.15 million represents a substantial investment, suggesting a project of considerable size and importance.

What were the key performance indicators (KPIs) used to assess Hyosung Corporation's performance on this contract?

The provided data does not specify the key performance indicators (KPIs) used to assess Hyosung Corporation's performance. Typically, for construction contracts, KPIs would include adherence to schedule, quality of workmanship, safety compliance, budget management (especially relevant for fixed-price contracts where deviations impact the contractor), and meeting technical specifications outlined in the contract's statement of work. Contract close-out documentation and any performance reports filed by the contracting officer would contain this information.

Were there any significant challenges or disputes encountered during the performance of this contract?

Information regarding challenges or disputes during the performance of this contract is not available in the provided data summary. Large construction projects, especially those spanning several years, can encounter unforeseen issues such as weather delays, material availability problems, design changes, or differing site conditions. The firm fixed-price nature of this contract implies that the contractor would bear the financial burden of most such challenges, potentially leading to claims or negotiations if significant scope changes were required. Reviewing contract modification history and any associated litigation or dispute records would be necessary to identify such issues.

What is Hyosung Corporation's general track record with federal government contracts, particularly in construction?

Hyosung Corporation is a South Korean multinational conglomerate with diverse business interests, including heavy industries and construction. While this specific contract is with the Department of the Army, Hyosung has likely engaged in other federal contracts, potentially through subsidiaries or joint ventures. A comprehensive assessment of their track record would involve searching federal procurement databases for all contracts awarded to Hyosung Corporation and its affiliates, analyzing past performance reviews, and examining any history of contract disputes or terminations. Their involvement in a $16.15 million DoD project suggests a capacity to handle significant government infrastructure work.

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: W912UM10R0012

Offers Received: 14

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 450 GONGDEOK-DONG, MAPO-GU, SEOUL

Business Categories: Category Business, Foreign Owned, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $19,244,005,007

Exercised Options: $19,244,005,007

Current Obligation: $16,150,115

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline