Air Force awards $11.8M contract for Hangar 140 renovation to Olgoonik Enterprises, LLC

Contract Overview

Contract Amount: $11,820,480 ($11.8M)

Contractor: Olgoonik Enterprises, LLC

Awarding Agency: Department of Defense

Start Date: 2024-12-16

End Date: 2026-06-05

Contract Duration: 536 days

Daily Burn Rate: $22.1K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: RENOVATE HANGER 140

Place of Performance

Location: COLORADO SPRINGS, EL PASO County, COLORADO, 80914

State: Colorado Government Spending

Plain-Language Summary

Department of Defense obligated $11.8 million to OLGOONIK ENTERPRISES, LLC for work described as: RENOVATE HANGER 140 Key points: 1. Contract value of $11.8 million for renovation services. 2. Olgoonik Enterprises, LLC, a large business, is the awardee. 3. The contract is a firm-fixed-price delivery order. 4. Performance period spans over 1.5 years. 5. The contract was awarded under full and open competition. 6. The North American Industry Classification System (NAICS) code is 236220 (Commercial and Institutional Building Construction).

Value Assessment

Rating: fair

The contract value of $11.8 million for renovating a hangar appears to be within a reasonable range for such a project, though specific benchmarks are unavailable without more detailed project scope. The firm-fixed-price structure shifts risk to the contractor, which can be beneficial for the government if managed effectively. However, without comparative data on similar hangar renovations or detailed cost breakdowns, a precise value-for-money assessment is challenging. The award to a single entity suggests a focused procurement, but the overall value proposition depends heavily on the quality and timeliness of the delivered renovation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition after exclusion of sources, indicating that multiple potential bidders were considered. The presence of 4 bids suggests a moderate level of competition for this project. While not the highest level of competition, it provides a basis for price discovery and allows the government to select from a pool of qualified contractors. The specific exclusion of sources needs further investigation to understand its impact on the competitive landscape.

Taxpayer Impact: The full and open competition, even with exclusions, generally benefits taxpayers by fostering a competitive environment that can lead to more favorable pricing and better service offerings compared to sole-source or limited competition scenarios.

Public Impact

The primary beneficiaries are the Department of the Air Force, which will receive renovated hangar facilities. The services delivered include commercial and institutional building construction, specifically focused on renovating Hangar 140. The geographic impact is localized to the base where Hangar 140 is located, likely within Colorado. Workforce implications may include employment opportunities for construction workers and related trades during the renovation period.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'exclusion of sources' clause in the competition type warrants further scrutiny to ensure it did not unduly limit competition or inflate costs.
Lack of detailed project scope and cost breakdown makes it difficult to benchmark value-for-money effectively.
The contract is for a large business, with no explicit mention of small business subcontracting goals, which could limit opportunities for small businesses.

Positive Signals

Awarded under full and open competition, indicating a broad search for qualified contractors.
Firm-fixed-price contract type helps control costs and manage budget predictability.
The delivery order structure suggests it is part of a larger contracting vehicle, potentially indicating pre-negotiated terms and conditions.

Sector Analysis

The construction sector, particularly for specialized facilities like military hangars, is a significant part of federal spending. This contract falls under commercial and institutional building construction, a broad category that includes a wide range of projects. Federal spending in this area is often driven by infrastructure upgrades, maintenance, and modernization efforts. Comparable spending benchmarks for hangar renovations are highly project-specific, influenced by size, complexity, and location, but this $11.8 million award represents a substantial investment in facility improvement.

Small Business Impact

This contract was awarded to a large business (Olgoonik Enterprises, LLC) and there is no indication of a small business set-aside. The contract details do not explicitly mention subcontracting requirements for small businesses. This suggests that opportunities for small businesses may be limited to direct subcontracting by the prime contractor, if they choose to engage them, rather than through a mandated set-aside program. Further review of the contract's subcontracting plan would be necessary to determine the extent of small business participation.

Oversight & Accountability

Oversight for this contract will likely be managed by the contracting officer and the relevant program management office within the Department of the Air Force. Accountability measures are embedded in the firm-fixed-price contract terms, requiring the contractor to deliver the specified renovation within the agreed-upon price. Transparency is facilitated by the public nature of contract awards, though detailed project progress and specific cost expenditures may not be fully public. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Military Base Infrastructure Modernization
Air Force Facility Renovation Projects
Commercial and Institutional Building Construction Contracts
Federal Construction Spending

Risk Flags

Potential for scope creep
Contractor performance risk
Quality control concerns
Limited competition impact

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.8 million to OLGOONIK ENTERPRISES, LLC. RENOVATE HANGER 140

Who is the contractor on this award?

The obligated recipient is OLGOONIK ENTERPRISES, LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $11.8 million.

What is the period of performance?

Start: 2024-12-16. End: 2026-06-05.

What is the track record of Olgoonik Enterprises, LLC with the Department of Defense?

Olgoonik Enterprises, LLC has a history of receiving contracts from the Department of Defense. While specific details on past performance for this particular type of renovation are not provided in the summary data, a review of federal procurement databases would reveal the extent and nature of their prior work. This includes examining past contract values, performance ratings, and any instances of disputes or contract terminations. Understanding their experience with similar projects, especially within military aviation facilities, is crucial for assessing their capability to successfully execute this hangar renovation. A positive track record with the DoD suggests familiarity with federal acquisition regulations and military standards, which can contribute to smoother project execution and better value.

How does the $11.8 million cost compare to similar hangar renovation projects?

Benchmarking the $11.8 million cost for Hangar 140 renovation against similar projects is challenging without detailed project specifications. Factors such as the size of the hangar, the scope of work (e.g., structural repairs, HVAC upgrades, electrical systems, specialized equipment installation), the age and condition of the facility, and geographic location significantly influence costs. Federal procurement data can provide some comparative insights, but direct comparisons require matching projects with similar complexity and scale. Generally, large-scale renovations of specialized military facilities can range from several million to tens of millions of dollars. The firm-fixed-price nature of this contract suggests the government has negotiated a ceiling price, but the true value-for-money depends on the contractor's efficiency and the quality of the final product relative to the investment.

What are the primary risks associated with this contract?

The primary risks associated with this contract include potential cost overruns if the scope of work expands beyond initial estimates (though mitigated by the firm-fixed-price structure), delays in project completion due to unforeseen site conditions or contractor performance issues, and quality control deficiencies in the renovation work. Given the 'exclusion of sources' in the competition type, there's a risk that the competitive landscape might have been narrower than ideal, potentially impacting price. Furthermore, the contractor's past performance on similar complex renovations is a key risk indicator; any deficiencies in their track record could translate to execution challenges. Ensuring robust oversight and clear communication channels will be critical to mitigating these risks.

How effective is the firm-fixed-price contract type in ensuring program effectiveness for this renovation?

The firm-fixed-price (FFP) contract type is generally effective in ensuring cost control and predictability for renovation projects like this. By establishing a fixed price upfront, the contractor assumes the primary risk of cost overruns, incentivizing them to manage resources efficiently and complete the work within budget. This can lead to greater cost certainty for the government. However, the effectiveness in achieving program goals (i.e., a high-quality, fully functional hangar) relies heavily on the clarity of the contract's scope of work and performance specifications. If these are poorly defined, the contractor might cut corners to meet the fixed price, potentially compromising quality. Robust inspection and acceptance criteria are therefore crucial to ensure the renovation meets all functional requirements and standards.

What are the historical spending patterns for hangar renovations at the Department of the Air Force?

Historical spending patterns for hangar renovations at the Department of the Air Force typically show significant investment driven by the need to maintain and modernize aging infrastructure critical for aviation operations. Spending can fluctuate based on military readiness requirements, budget allocations, and the lifecycle of existing facilities. Contracts for such renovations often range from hundreds of thousands to tens of millions of dollars, depending on the scale and complexity. The Air Force frequently utilizes various contract vehicles, including competitive bidding and delivery orders against indefinite-delivery/indefinite-quantity (IDIQ) contracts, to procure these services. Analyzing past spending trends can reveal common contractors, typical project durations, and average costs per square foot or per project type, providing context for the current $11.8 million award.

What is the significance of the NAICS code 236220 for this contract?

The North American Industry Classification System (NAICS) code 236220 signifies that the primary business activity for this contract is 'Commercial and Institutional Building Construction.' This code encompasses establishments primarily engaged in the construction or remodeling of nonresidential buildings, such as commercial, industrial, and institutional structures. For this hangar renovation, it indicates that the work involves the construction and alteration of a building that serves an institutional purpose (a military facility). This classification helps in categorizing the contract for statistical purposes, identifying relevant industry standards, and understanding the market of potential contractors qualified to perform such construction work. It also aids in benchmarking against other similar federal construction projects.

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Commercial and Institutional Building Construction

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 411 S TEJON ST STE G, COLORADO SPRINGS, CO, 80903

Business Categories: 8(a) Program Participant, Alaskan Native Corporation Owned Firm, Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $11,820,480

Exercised Options: $11,820,480

Current Obligation: $11,820,480

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA251720D0004

IDV Type: IDC

Timeline