Agriculture Department awards $18.8M for Hawaii research center construction, highlighting firm fixed-price contract

Contract Overview

Contract Amount: $18,847,582 ($18.8M)

Contractor: Taisei Construction Corporation

Awarding Agency: Department of Agriculture

Start Date: 2005-05-19

End Date: 2008-05-21

Contract Duration: 1,098 days

Daily Burn Rate: $17.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: CONSTRUCTION OF THE U.S. PACIFIC BASIN AGRICULTURAL RESEARCH CENTER (PBARC), PHASE 1, HILO, HAWAII

Place of Performance

Location: HILO, HAWAII County, HAWAII, 96720

State: Hawaii Government Spending

Plain-Language Summary

Department of Agriculture obligated $18.8 million to TAISEI CONSTRUCTION CORPORATION for work described as: CONSTRUCTION OF THE U.S. PACIFIC BASIN AGRICULTURAL RESEARCH CENTER (PBARC), PHASE 1, HILO, HAWAII Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The firm fixed-price structure shifts cost risk to the contractor, potentially benefiting the government. 3. Project duration of approximately three years indicates a significant construction undertaking. 4. The contract was awarded by the Agricultural Research Service, focusing on agricultural research infrastructure. 5. The location in Hilo, Hawaii, suggests a specific regional need for agricultural research facilities.

Value Assessment

Rating: good

The contract value of $18.8 million for the construction of a research center appears reasonable given the scope and duration. As a firm fixed-price contract, the government has a defined cost, which is a positive indicator for value. Benchmarking against similar large-scale institutional construction projects would provide further context, but the competitive award process suggests a fair market price was likely achieved.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit a bid. With six bidders participating, the level of competition was robust. This indicates that the government likely received a competitive price due to multiple firms vying for the contract, promoting price discovery and potentially leading to cost savings.

Taxpayer Impact: The full and open competition ensures that taxpayer dollars are used efficiently by fostering a market-driven price. The presence of multiple bidders reduces the risk of overpayment and encourages contractors to offer their best pricing.

Public Impact

The primary beneficiaries are agricultural researchers and institutions in the Pacific Basin region who will utilize the new facility. The contract delivers the construction of a critical research infrastructure, the U.S. Pacific Basin Agricultural Research Center (PBARC). The geographic impact is concentrated in Hilo, Hawaii, supporting regional agricultural development and research capabilities. The project will likely create construction jobs in Hawaii during its execution phase.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for construction delays impacting the research center's operational readiness.
Ensuring the quality of construction meets the specific needs of an agricultural research facility.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Awarded through full and open competition, indicating a competitive bidding process.
The project addresses a specific need for agricultural research infrastructure in the Pacific Basin.

Sector Analysis

This contract falls within the construction sector, specifically for institutional and commercial buildings. The market for such projects is driven by government and private investment in infrastructure. The $18.8 million award is a significant but not extraordinary sum for a specialized research facility, placing it within the mid-to-large range for government construction contracts.

Small Business Impact

The data indicates this contract was not set aside for small businesses, and there is no explicit mention of small business subcontracting goals. Therefore, the direct impact on small businesses is likely limited unless they are part of larger subcontracting efforts by the prime contractor. Further investigation into subcontracting plans would be needed to assess the broader impact on the small business ecosystem.

Oversight & Accountability

Oversight for this construction contract would typically be managed by the contracting officer's representative (COR) within the Agricultural Research Service. The firm fixed-price nature of the contract implies that the contractor bears the primary responsibility for managing costs and schedule. Transparency is generally maintained through contract reporting mechanisms, and while specific IG jurisdiction isn't detailed here, construction projects are often subject to review for waste, fraud, and abuse.

Related Government Programs

Agricultural Research Service Facilities
Federal Research Center Construction
Department of Agriculture Capital Investments

Risk Flags

Potential for cost overruns if contractor mismanages budget.
Risk of schedule delays impacting research center operational start date.
Ensuring construction quality meets specialized research facility requirements.

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $18.8 million to TAISEI CONSTRUCTION CORPORATION. CONSTRUCTION OF THE U.S. PACIFIC BASIN AGRICULTURAL RESEARCH CENTER (PBARC), PHASE 1, HILO, HAWAII

Who is the contractor on this award?

The obligated recipient is TAISEI CONSTRUCTION CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Agriculture (Agricultural Research Service).

What is the total obligated amount?

The obligated amount is $18.8 million.

What is the period of performance?

Start: 2005-05-19. End: 2008-05-21.

What is the track record of Taisei Construction Corporation with federal contracts, particularly in Hawaii?

Taisei Construction Corporation is a large, international construction firm. While specific details on their federal contract history within Hawaii are not provided in this data snippet, their involvement in a significant project like the PBARC suggests they have the capacity and potentially prior experience with government work. A deeper dive into federal procurement databases would reveal their past performance, any past performance issues, and the types of federal projects they have undertaken. This would help assess their reliability and suitability for this specific contract.

How does the $18.8 million cost compare to similar agricultural research facility constructions?

Benchmarking the $18.8 million cost against similar agricultural research facility constructions is crucial for assessing value for money. Factors such as facility size, specialized equipment requirements, and geographic location significantly influence construction costs. Without specific data on comparable projects (e.g., square footage, specialized labs, climate control systems), a precise comparison is difficult. However, the firm fixed-price nature and the competitive bidding process suggest that the price was likely aligned with market rates at the time of award. Further analysis would require identifying and comparing metrics from similar projects awarded around the same period.

What are the primary risks associated with this firm fixed-price construction contract?

The primary risks associated with this firm fixed-price construction contract are largely borne by the contractor, Taisei Construction Corporation. These include potential cost overruns if material prices or labor costs increase unexpectedly, unforeseen site conditions that require additional work, and schedule delays due to weather or supply chain issues. For the government, the main risks are ensuring the contractor meets quality standards and completes the project on time and to specifications. If the contractor underperforms or faces significant challenges, the government might face delays in accessing the facility, though the financial risk is capped.

How effective is the firm fixed-price contract type in ensuring project completion for large-scale construction?

The firm fixed-price (FFP) contract type is generally considered effective for large-scale construction projects when the scope of work is well-defined and risks can be reasonably estimated. It provides cost certainty for the buyer (the government) by establishing a ceiling price. The contractor assumes the risk of cost overruns, incentivizing them to manage the project efficiently and control costs. For this PBARC project, the FFP structure likely encouraged Taisei Construction Corporation to adhere to the budget and schedule. However, effectiveness can be diminished if unforeseen issues arise that were not adequately accounted for in the initial scope, potentially leading to change orders or disputes.

What is the historical spending pattern for the Agricultural Research Service on construction projects of this magnitude?

Historical spending patterns for the Agricultural Research Service (ARS) on construction projects of this magnitude would provide context for the $18.8 million award. Analyzing past ARS construction contracts, particularly for research centers or similar facilities, would reveal average project costs, typical contract durations, and the prevalence of different contract types. This data could indicate whether this PBARC project represents a typical investment, an outlier, or a strategic increase in capital expenditure for the agency. Understanding these patterns helps in assessing the current contract's financial significance and the agency's commitment to infrastructure development.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Taisei Corporation (UEI: 690548979)

Address: 680 IWILEI RD STE 670, HONOLULU, HI, 01

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $18,847,582

Exercised Options: $18,847,582

Current Obligation: $18,847,582

Contract Characteristics

Multi-Year Contract: Yes

Timeline