Central Construction Co. awarded $18.6M contract for Army housing, facing 12 bids in full and open competition

Contract Overview

Contract Amount: $18,634,595 ($18.6M)

Contractor: Central Construction CO., Ltd.

Awarding Agency: Department of Defense

Start Date: 2010-11-28

End Date: 2014-05-20

Contract Duration: 1,269 days

Daily Burn Rate: $14.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 12

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: BASIC PROPOSAL ITEM, 0001 THRU 0009

Plain-Language Summary

Department of Defense obligated $18.6 million to CENTRAL CONSTRUCTION CO., LTD. for work described as: BASIC PROPOSAL ITEM, 0001 THRU 0009 Key points: 1. Contract value appears reasonable given the scope of new multifamily housing construction. 2. Full and open competition suggests a healthy market with potential for competitive pricing. 3. Contract duration of over three years indicates a significant, long-term project. 4. Fixed-price contract type shifts risk to the contractor, potentially impacting final cost. 5. Project aligns with broader DoD initiatives to improve military family housing. 6. The absence of small business set-asides warrants further investigation into subcontracting opportunities.

Value Assessment

Rating: good

The $18.6 million contract for new multifamily housing construction is a substantial investment. While specific benchmarks for this exact type of construction are difficult to ascertain without detailed project specifications, the number of bids (12) suggests a competitive environment that likely drove pricing towards market rates. The firm fixed-price nature of the contract means the contractor bears the risk of cost overruns, which is generally favorable for the government in stable construction environments. Compared to similar large-scale housing projects, the per-unit cost would need to be analyzed against regional construction costs and project complexity.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 12 bidders suggests a robust competitive landscape for this type of construction service. A higher number of bidders generally leads to more competitive pricing as contractors vie for the award. This level of competition is a positive sign for price discovery and ensures the government receives proposals from a wide range of qualified firms.

Taxpayer Impact: The extensive competition for this contract is beneficial for taxpayers, as it likely resulted in a lower overall price than if the contract had been awarded through a less competitive process. It demonstrates that taxpayer funds are being used efficiently by leveraging market forces.

Public Impact

Military families stationed at the relevant Army base will benefit from improved housing conditions. The contract delivers new multifamily housing units, addressing potential shortages or outdated facilities. Geographic impact is localized to the Army installation where the housing is constructed. The project will likely create numerous jobs in the construction sector, including skilled trades and labor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions or material price fluctuations occur, despite fixed-price contract.
Risk of delays impacting military family housing availability if project management or execution falters.
Limited visibility into subcontracting opportunities for small businesses due to lack of specific set-aside.
Quality control and adherence to construction standards will be critical throughout the project lifecycle.

Positive Signals

Firm fixed-price contract structure transfers significant cost risk to the contractor.
Full and open competition with 12 bidders suggests a strong pool of qualified contractors.
Project addresses a critical need for improved military family housing.
Long contract duration allows for phased construction and potential learning curve efficiencies.

Sector Analysis

The construction industry, particularly for large-scale residential projects, is a significant sector of federal spending. This contract falls under the 'New Multifamily Housing Construction' NAICS code (236116), which encompasses building residential structures, except for-sale builders. Federal spending in this area often supports military readiness and quality of life initiatives. Comparable spending benchmarks would typically be assessed against regional construction cost indices and the specific scope of work, such as unit size, amenities, and site development requirements.

Small Business Impact

This contract was not awarded as a small business set-aside, nor does it appear to have specific small business subcontracting goals mandated in the provided data. This suggests that the primary award went to a large business. Further analysis would be needed to determine if Central Construction Co., Ltd. has a history of subcontracting with small businesses on similar projects. The absence of explicit set-asides could limit direct opportunities for small businesses to participate in this specific contract's execution, though they might be involved as lower-tier subcontractors.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant Department of the Army contracting office. Performance monitoring, quality assurance, and compliance checks are standard oversight mechanisms. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction may apply if allegations of fraud, waste, or abuse arise during the contract's performance.

Related Government Programs

Military Construction, Army
Family Housing Construction
Department of Defense Construction Contracts
General Building Construction, Heavy and Civil Engineering Construction

Risk Flags

Potential for cost escalation impacting contractor profitability and project quality.
Risk of project delays affecting military family housing availability.
Limited visibility into small business subcontracting opportunities.
Contractor's financial stability and capacity to manage a large, long-term project.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.6 million to CENTRAL CONSTRUCTION CO., LTD.. BASIC PROPOSAL ITEM, 0001 THRU 0009

Who is the contractor on this award?

The obligated recipient is CENTRAL 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 $18.6 million.

What is the period of performance?

Start: 2010-11-28. End: 2014-05-20.

What is the historical performance record of Central Construction Co., Ltd. on federal contracts, particularly those involving housing construction?

A review of Central Construction Co., Ltd.'s historical performance on federal contracts is crucial for assessing their reliability and capability. While the provided data indicates a single large award, a deeper dive into contract databases like SAM.gov or FPDS would reveal past performance ratings, any instances of contract disputes, termination for default, or significant deviations from schedule or budget on previous projects. Understanding their track record, especially on similar multifamily housing projects for the Department of Defense or other agencies, provides valuable insight into their likelihood of successful project completion within the stipulated terms and conditions of this new contract.

How does the per-unit construction cost of this contract compare to similar multifamily housing projects awarded by the Department of Defense or other federal agencies in the same geographic region?

To benchmark the value for money, the total contract value of $18.6 million needs to be divided by the number of housing units constructed to derive a per-unit cost. This figure should then be compared against data from recently awarded federal multifamily housing contracts in comparable geographic locations. Factors such as prevailing wage rates, material costs, site complexity, and the specific amenities included in the housing units can significantly influence per-unit costs. A higher per-unit cost than comparable projects, after accounting for these variables, could indicate potential issues with pricing or scope definition, while a lower cost might suggest exceptional value or aggressive bidding.

What are the primary risk indicators associated with this firm fixed-price contract for new multifamily housing construction, considering the contractor's experience and the project's duration?

The primary risk indicator for this firm fixed-price contract is the contractor's potential exposure to unforeseen cost increases, particularly related to labor, materials, and site conditions, which could lead to quality compromises or delays if the contractor attempts to cut corners to maintain profitability. The project's duration of over three years (1269 days) amplifies this risk, as market conditions can change significantly over such a period. While the fixed-price structure shifts financial risk to the contractor, the government's risk lies in ensuring the contractor has adequate financial stability and management capacity to absorb potential cost escalations and deliver the project to the required specifications without compromising quality or schedule.

What is the expected impact of this contract on the availability and quality of housing for military families at the specific Army installation?

This contract is directly intended to improve the availability and quality of housing for military families stationed at the relevant Army installation. The construction of new multifamily units aims to alleviate potential housing shortages, replace outdated or substandard accommodations, and enhance the overall living conditions for service members and their families. The successful and timely completion of this project is critical for maintaining military readiness and morale, as adequate housing is a key factor in personnel retention and family well-being. The specific impact will depend on the number of units built and their suitability for modern family needs.

How does the $18.6 million contract award compare to historical federal spending on similar multifamily housing construction projects over the past five fiscal years?

Comparing this $18.6 million contract to historical federal spending on similar multifamily housing projects requires accessing aggregated data on construction contracts within the 'New Multifamily Housing Construction' NAICS code (236116) or broader military construction categories over the last five fiscal years. Analysis would involve identifying the average contract size, the total federal outlay for such projects, and trends in award values. This contract appears to be a significant individual award, but its relative size within the broader federal construction budget would determine if it represents a typical investment or an outlier. Understanding historical spending patterns can help contextualize the scale and importance of this particular project.

Industry Classification

NAICS: Construction › Residential Building Construction › New Multifamily Housing Construction (except For-Sale Builders)

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: W912UM10R0021

Offers Received: 12

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: #1564 GEUMAM-DONG, DUCKJIN-GU, JEONJU-SI

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

Financial Breakdown

Contract Ceiling: $17,553,788,736

Exercised Options: $17,553,788,736

Current Obligation: $18,634,595

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline