DoD contract for electrical grid repair on Shemya Island awarded for nearly $39 million

Contract Overview

Contract Amount: $38,957,582 ($39.0M)

Contractor: Contrack ECC LLC

Awarding Agency: Department of Defense

Start Date: 2022-03-03

End Date: 2026-06-01

Contract Duration: 1,551 days

Daily Burn Rate: $25.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: REPAIR ELECTRICAL GRID SHEMYA ISLAND, EARECKSON AIR STATION, ALASKA

Place of Performance

Location: ADAK, ALEUTIANS WEST County, ALASKA, 99546

State: Alaska Government Spending

Plain-Language Summary

Department of Defense obligated $39.0 million to CONTRACK ECC LLC for work described as: REPAIR ELECTRICAL GRID SHEMYA ISLAND, EARECKSON AIR STATION, ALASKA Key points: 1. Contract awarded to CONTRACK ECC LLC for significant infrastructure repair. 2. The contract is a firm-fixed-price delivery order, indicating defined scope and cost. 3. The duration of the contract is over 4 years, suggesting a substantial project. 4. The contract was awarded under full and open competition. 5. The project is located in a remote Alaskan location, potentially impacting logistics and costs. 6. The North American Industry Classification System (NAICS) code 236220 points to commercial and institutional building construction.

Value Assessment

Rating: fair

The contract value of $38,957,581.91 for electrical grid repair on Shemya Island appears substantial. Benchmarking this against similar large-scale infrastructure repair projects in remote or challenging environments would be necessary for a precise value-for-money assessment. The firm-fixed-price structure suggests the government has a clear cost expectation, but the remote location could introduce unforeseen expenses not fully captured in the initial pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely solicited and considered. The presence of two bids suggests a degree of competition, but the exact number of proposals received and the evaluation process are not detailed here. A competitive process is generally favorable for price discovery and ensuring the government receives a reasonable offer.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically drives down prices through market forces, ensuring the government is not overpaying for necessary services.

Public Impact

The primary beneficiaries are the Department of Defense and its personnel stationed at Eareckson Air Station, ensuring operational readiness. The contract delivers essential repair and maintenance services for the electrical grid infrastructure. The geographic impact is localized to Shemya Island, Alaska, a remote and strategically important location. The project will likely involve a workforce skilled in construction and electrical systems, potentially creating temporary employment opportunities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The remote location of Shemya Island presents significant logistical challenges and potential for cost overruns due to transportation and specialized labor requirements.
The long duration of the contract (over 4 years) increases the risk of scope creep or unforeseen technical issues impacting the final cost and timeline.
Limited competition, with only two bids received, may indicate a lack of market interest or specialized capabilities, potentially leading to less favorable pricing.

Positive Signals

The award under full and open competition suggests a robust procurement process was followed, aiming for the best value.
The firm-fixed-price contract type provides cost certainty for the government, mitigating the risk of unexpected price increases.
The contract addresses critical infrastructure needs for a military installation, ensuring continued operational capability.

Sector Analysis

This contract falls within the construction sector, specifically focusing on institutional building construction. The market for large-scale infrastructure repair and maintenance, particularly in remote or challenging environments like Alaska, is specialized. Comparable spending benchmarks would involve analyzing other federal contracts for similar infrastructure upgrades or repairs at remote military installations, considering factors like geographic isolation and the complexity of the systems being repaired.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses arising from a set-aside provision. The prime contractor, CONTRACK ECC LLC, would determine any subcontracting opportunities based on their own business strategy and project needs.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force, a component of the Department of Defense. Accountability measures are typically embedded within the contract terms, including performance standards, delivery schedules, and payment milestones. Transparency is facilitated through contract award databases like SAM.gov. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Military Base Infrastructure Modernization
Remote Facility Maintenance and Repair
Electrical Grid Upgrades
Department of Defense Construction Contracts
Alaska Infrastructure Projects

Risk Flags

Logistical challenges due to remote location
Potential for cost overruns due to unforeseen conditions
Risk of material price escalation over contract duration
Availability of specialized labor in remote areas
Environmental considerations specific to the Arctic region

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $39.0 million to CONTRACK ECC LLC. REPAIR ELECTRICAL GRID SHEMYA ISLAND, EARECKSON AIR STATION, ALASKA

Who is the contractor on this award?

The obligated recipient is CONTRACK ECC 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 $39.0 million.

What is the period of performance?

Start: 2022-03-03. End: 2026-06-01.

What is the track record of CONTRACK ECC LLC in performing similar large-scale infrastructure repair contracts for the Department of Defense?

A review of CONTRACK ECC LLC's contract history would be necessary to assess their track record. This would involve examining past performance on similar projects, particularly those involving electrical grid repair, remote locations, or significant infrastructure development. Key indicators would include on-time delivery, adherence to budget, quality of work, and any past performance issues or disputes. Understanding their experience with firm-fixed-price contracts and their ability to manage complex logistics in challenging environments like Alaska would provide crucial context for evaluating their suitability for this specific award.

How does the awarded price compare to industry benchmarks for electrical grid repair in remote Arctic regions?

Benchmarking this $38.9 million contract against similar projects is challenging due to the unique nature of Shemya Island's remote location and the specific scope of electrical grid repair. Generally, projects in the Arctic incur significant premiums due to extreme weather, limited access for personnel and materials, and specialized equipment requirements. A thorough benchmark would require identifying comparable contracts for infrastructure repair at other remote military installations or critical facilities in Alaska or similar Arctic environments. Factors such as the age and condition of the existing grid, the complexity of the required upgrades (e.g., underground vs. overhead lines, substation work), and the duration of the construction season would need to be considered to make a meaningful comparison of value for money.

What are the primary risks associated with the long duration and remote location of this contract?

The primary risks associated with this contract stem from its extended duration (over four years) and its remote location on Shemya Island. The long timeline increases the potential for material price escalation, labor shortages, and changes in operational requirements for the base. The remote location exacerbates these risks by complicating logistics, increasing transportation costs for personnel and equipment, and potentially limiting the availability of specialized repair services. Furthermore, unforeseen environmental conditions or geological challenges specific to the island could lead to delays and cost overruns. Effective risk mitigation would require robust project management, contingency planning for supply chain disruptions, and strong communication channels with the on-site personnel.

What is the expected impact of this contract on the operational effectiveness of Eareckson Air Station?

This contract is critical for maintaining and improving the operational effectiveness of Eareckson Air Station by ensuring the reliability and resilience of its electrical grid. A functional and modern electrical system is fundamental for powering all base operations, including communication systems, radar installations, living quarters, and essential support services. By addressing necessary repairs and upgrades, this contract mitigates the risk of power outages or system failures that could disrupt critical military functions, compromise personnel safety, and impact mission readiness. The successful completion of this project will contribute to a more stable and secure power supply, thereby enhancing the overall operational capability of the installation.

How has federal spending on electrical infrastructure repair at remote military installations trended in recent years?

Federal spending on electrical infrastructure repair at remote military installations has likely seen an increasing trend, driven by aging infrastructure across the Department of Defense and a growing recognition of the strategic importance of maintaining operational readiness in isolated locations. Investments in modernizing power grids are crucial for supporting advanced military technologies, ensuring cybersecurity, and enhancing the quality of life for service members. Specific data on spending trends for electrical infrastructure repair at remote installations would require detailed analysis of historical contract awards and budget allocations across various military branches and agencies. Factors such as geopolitical priorities, technological advancements, and deferred maintenance backlogs likely influence these spending patterns.

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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1240 BAYSHORE HWY STE 201, BURLINGAME, CA, 94010

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $38,957,582

Exercised Options: $38,957,582

Current Obligation: $38,957,582

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA890317D0039

IDV Type: IDC

Timeline