Department of Defense awards $105M contract for residential remodelers, highlighting long-term infrastructure needs

Contract Overview

Contract Amount: $105,353,813 ($105.4M)

Contractor: Obayashi Corporation

Awarding Agency: Department of Defense

Start Date: 2008-09-29

End Date: 2013-02-26

Contract Duration: 1,611 days

Daily Burn Rate: $65.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: BASE BID #1

Plain-Language Summary

Department of Defense obligated $105.4 million to OBAYASHI CORPORATION for work described as: BASE BID #1 Key points: 1. Contract value suggests significant investment in housing infrastructure. 2. Competition dynamics indicate a potentially healthy market for construction services. 3. Long contract duration may present risks related to cost escalation and scope creep. 4. Fixed-price contract type shifts risk to the contractor. 5. The award to Obayashi Corporation warrants a review of their past performance in similar projects. 6. The absence of small business set-aside raises questions about broader economic impact.

Value Assessment

Rating: fair

The contract value of $105 million for residential remodelers is substantial and suggests a large-scale or long-term project. Benchmarking this against similar large-scale housing infrastructure projects would be necessary to fully assess value for money. The firm fixed-price nature of the contract aims to control costs, but the long duration (over 4 years) could lead to unforeseen expenses if not managed meticulously. Without specific details on the scope of work, a precise value assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely considered. With 4 bids received, this suggests a reasonable level of competition for the project. A higher number of bidders generally leads to better price discovery and potentially lower costs for the government. The specific details of the bidding process and the range of bids would provide further insight into the competitiveness.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages competitive pricing and potentially leads to cost savings for the government.

Public Impact

Military personnel and their families residing in government-provided housing are the primary beneficiaries. The contract facilitates the maintenance and upgrade of residential facilities, improving living conditions. Geographic impact is likely concentrated around military installations where housing is being remodeled. The construction and remodeling sector workforce, including skilled trades, will be directly impacted by this contract.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (1611 days) increases risk of cost overruns due to inflation and material price fluctuations.
Scope creep is a potential risk given the extensive remodeling work implied by the contract value.
Reliance on a single awardee for a large sum over several years could limit flexibility.
Lack of specific details on the scope of work makes it difficult to assess the true value and potential risks.
The absence of small business participation may limit the broader economic benefits of the contract.

Positive Signals

Firm fixed-price contract structure shifts cost risk to the contractor.
Full and open competition suggests a robust bidding process and potential for competitive pricing.
Award to Obayashi Corporation, a known entity, may indicate a level of confidence in their capabilities.
The contract addresses essential infrastructure needs for military housing, contributing to service member welfare.

Sector Analysis

This contract falls within the construction and facilities maintenance sector, specifically focusing on residential remodeling. The construction industry is a significant part of the US economy, with federal contracts playing a crucial role in infrastructure development and maintenance. Comparable spending benchmarks would involve analyzing other large-scale military housing renovation projects or similar government-funded residential construction efforts.

Small Business Impact

The contract does not indicate any small business set-aside provisions (ss=false, sb=false). This suggests that the primary award was not specifically targeted towards small businesses. While large prime contractors may engage small businesses as subcontractors, the absence of a direct set-aside means that opportunities for small businesses may be limited unless actively pursued through subcontracting channels. This could impact the broader small business ecosystem involved in construction and remodeling.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant agency (Department of the Air Force). The firm fixed-price nature provides some cost control, but performance monitoring is crucial to ensure quality and adherence to scope. Transparency would be enhanced by public contract data, but detailed project oversight mechanisms are internal to the agency. Inspector General jurisdiction would apply if fraud, waste, or abuse were suspected.

Related Government Programs

Military Housing Privatization Initiative
Base Realignment and Closure (BRAC) related construction
Department of Defense Family Housing Construction
General Services Administration (GSA) Public Buildings Service contracts

Risk Flags

Long contract duration
Potential for scope creep
Lack of small business participation noted
Limited bid price transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $105.4 million to OBAYASHI CORPORATION. BASE BID #1

Who is the contractor on this award?

The obligated recipient is OBAYASHI CORPORATION.

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 $105.4 million.

What is the period of performance?

Start: 2008-09-29. End: 2013-02-26.

What is the specific scope of work for this residential remodeling contract, and how does it align with the $105 million budget?

The provided data does not detail the specific scope of work for this residential remodeling contract. The $105 million base bid suggests a substantial undertaking, potentially involving the renovation of a significant number of housing units or extensive upgrades across multiple properties. Without a detailed statement of work, it is difficult to ascertain the exact nature of the remodeling (e.g., kitchens, bathrooms, structural repairs, energy efficiency upgrades) or to definitively assess if the budget is appropriate. Further analysis would require access to the contract's SOW, which typically outlines deliverables, specifications, and performance standards.

How does the awarded price compare to historical spending on similar residential remodeling projects by the Department of Defense?

Comparing this $105 million contract to historical spending requires access to a broader dataset of similar Department of Defense (DoD) residential remodeling projects. Factors such as the number of units remodeled, the scope of upgrades (e.g., basic repairs vs. luxury renovations), geographic location (which impacts labor and material costs), and the time period of the contract are crucial for a meaningful comparison. A preliminary assessment suggests the value is significant, potentially indicating a large-scale initiative or a period of substantial investment in military housing infrastructure. A detailed analysis would involve identifying comparable contracts and adjusting for inflation and scope differences.

What are the key performance indicators (KPIs) and quality assurance measures in place for this contract?

The provided data does not specify the Key Performance Indicators (KPIs) or quality assurance measures for this contract. However, for a firm fixed-price contract of this magnitude and duration, the Department of the Air Force would typically establish performance standards related to construction quality, adherence to schedules, safety compliance, and resident satisfaction (if applicable). Quality assurance would likely involve regular site inspections, material testing, and milestone reviews. The contracting officer's representative (COR) would be responsible for monitoring contractor performance against these standards throughout the contract's lifecycle.

What is Obayashi Corporation's track record with the Department of Defense, particularly on large-scale residential construction or remodeling projects?

Obayashi Corporation's track record with the Department of Defense (DoD) on large-scale residential construction or remodeling projects is a critical factor in assessing this award. While the data indicates they are the awardee, it doesn't provide their performance history. A thorough review would involve examining past DoD contracts awarded to Obayashi, including project scope, value, timeliness of completion, budget adherence, and any documented performance issues or commendations. Their experience with similar firm fixed-price contracts and their capacity to manage large, multi-year projects would be key areas of investigation.

Given the 4 bids received, what was the range of pricing, and how does the winning bid compare to the average or lowest bid?

The provided data indicates that 4 bids were received for this contract, but it does not specify the pricing range or the value of the other bids. To assess the competitiveness and value for money, it is essential to know how the winning bid of $105,353,813.43 compares to the other submitted proposals. If the winning bid was significantly lower than others, it might suggest aggressive pricing or a potentially lower scope. Conversely, if it was the highest, it would raise questions about cost-effectiveness. Accessing the full bid data would be necessary for this analysis.

What are the potential risks associated with the long duration (1611 days) of this firm fixed-price contract?

The 1611-day duration (approximately 4.4 years) of this firm fixed-price contract presents several potential risks. For the contractor (Obayashi Corporation), risks include fluctuating material costs, labor shortages, and unforeseen site conditions that could erode profit margins if not adequately accounted for in the fixed price. For the government, risks include potential delays in project completion, the possibility of the contractor cutting corners on quality to maintain profitability over the long term, and the challenge of managing contract modifications if the scope needs to change. Effective oversight and clear communication channels are crucial to mitigate these risks.

Industry Classification

NAICS: Construction › Residential Building Construction › Residential Remodelers

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: FA527008R0011

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2-15-2, KONAN, MINATO-KU

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

Financial Breakdown

Contract Ceiling: $105,353,813

Exercised Options: $105,353,813

Current Obligation: $105,353,813

Contract Characteristics

Cost or Pricing Data: NO

Timeline