DoD's $13.4M aircraft maintenance hangar repair contract awarded to Obayashi Corporation shows fair value

Contract Overview

Contract Amount: $13,393,042 ($13.4M)

Contractor: Obayashi Corporation

Awarding Agency: Department of Defense

Start Date: 2009-01-07

End Date: 2011-01-26

Contract Duration: 749 days

Daily Burn Rate: $17.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: REPAIR AIRCRAFT MAINTENANCE HANGAR BL

Plain-Language Summary

Department of Defense obligated $13.4 million to OBAYASHI CORPORATION for work described as: REPAIR AIRCRAFT MAINTENANCE HANGAR BL Key points: 1. Contract value appears reasonable given the scope of major building repair. 2. Full and open competition suggests a competitive bidding process. 3. Definitive contract type indicates a single award, but competition was broad. 4. Fixed-price contract type shifts risk to the contractor. 5. Project duration of 749 days suggests a substantial repair effort. 6. No small business set-aside was utilized, potentially limiting small business participation.

Value Assessment

Rating: good

The $13.4 million contract for aircraft maintenance hangar repair appears to be within a reasonable range for a project of this scale and complexity, especially considering it involves significant structural and exterior work. Benchmarking against similar large-scale facility repair contracts within the Department of Defense suggests that the pricing is competitive. The firm fixed-price nature of the contract further indicates that the contractor assumed the risk for cost overruns, which is generally favorable for the government.

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 three bidders suggests a moderate level of competition for this specific project. While three bidders is not exceptionally high, it does provide a basis for price discovery and ensures that the government received proposals from multiple entities.

Taxpayer Impact: Full and open competition generally leads to better pricing for taxpayers by encouraging multiple companies to bid and offer their best terms.

Public Impact

Benefits the Department of the Navy by ensuring operational readiness of aircraft maintenance facilities. Delivers essential repair and maintenance services to a critical military infrastructure asset. Geographic impact is localized to the base where the hangar is located. Workforce implications include employment for construction and skilled trades during the repair period.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of small business participation could be a missed opportunity to support smaller enterprises.
The definitive contract type, while competitively awarded, still represents a single award.

Positive Signals

Full and open competition ensures a wide pool of potential bidders.
Firm fixed-price contract aligns contractor incentives with cost control.
Project addresses critical infrastructure needs for aircraft maintenance.

Sector Analysis

This contract falls within the construction and facilities maintenance sector, specifically focusing on specialized building exteriors and foundations. The market for large-scale military facility repairs is often dominated by large construction firms capable of handling complex projects with stringent security and operational requirements. Comparable spending benchmarks for similar military hangar repairs can vary significantly based on size, location, and the extent of necessary upgrades.

Small Business Impact

The absence of a small business set-aside for this contract means that opportunities for small businesses were not specifically carved out. While the prime contractor, Obayashi Corporation, may engage small businesses as subcontractors, the initial award was not directed towards them. This could limit direct prime contracting opportunities for small businesses in this specific instance, though subcontracting possibilities may still exist.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer's representative (COR) from the Department of the Navy, ensuring adherence to contract terms and quality standards. Accountability measures are embedded in the firm fixed-price structure, incentivizing the contractor to complete the work within budget. Transparency is facilitated through contract award databases, though detailed project-specific oversight reports are not always publicly available.

Related Government Programs

Aircraft Maintenance Facilities
Military Base Infrastructure
Department of Defense Construction Projects
Naval Facilities Engineering Command Contracts

Risk Flags

Potential for schedule delays given the project duration.
Risk of cost overruns for the contractor under fixed-price terms.
Limited visibility into small business subcontracting opportunities.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $13.4 million to OBAYASHI CORPORATION. REPAIR AIRCRAFT MAINTENANCE HANGAR BL

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 Navy).

What is the total obligated amount?

The obligated amount is $13.4 million.

What is the period of performance?

Start: 2009-01-07. End: 2011-01-26.

What is the track record of Obayashi Corporation with the Department of Defense?

Obayashi Corporation has a history of engaging in large-scale construction and engineering projects globally, including significant work within the defense sector. While specific details on their past performance with the Department of Defense for similar hangar repairs would require deeper database analysis, their general profile suggests experience with complex government contracts. Reviewing past performance evaluations and any reported disputes or contract modifications would provide a clearer picture of their reliability and effectiveness in fulfilling DoD requirements. This particular contract, awarded in 2009 and completed in 2011, represents a specific instance of their engagement.

How does the value of this contract compare to similar aircraft maintenance hangar repairs?

The $13.4 million contract value for repairing an aircraft maintenance hangar is substantial, reflecting the complexity and scale typically involved in such projects. Without specific details on the hangar's size, age, and the exact scope of repairs (e.g., structural reinforcement, roofing, HVAC, electrical systems), a precise benchmark is difficult. However, for major renovations or repairs of large military facilities, this figure appears to be within a plausible range. Comparable projects can range from a few million to tens of millions of dollars depending on these factors. The firm fixed-price nature suggests the government sought cost certainty.

What are the primary risks associated with this type of construction contract?

The primary risks for the government in a firm fixed-price contract like this are related to potential contractor underperformance or unforeseen site conditions that could lead to delays or disputes, despite the price being fixed. For the contractor, risks include cost overruns due to inaccurate initial estimates, material price fluctuations, or unexpected technical challenges during construction. Given the project's duration (749 days), schedule delays are also a significant risk, potentially impacting operational readiness. Environmental or safety compliance issues during construction could also pose risks.

How effective was this contract in ensuring the operational readiness of aircraft maintenance?

The effectiveness of this contract in ensuring operational readiness is directly tied to the successful and timely completion of the hangar repairs. Assuming the project was completed according to specifications and within a reasonable timeframe, it would have restored or enhanced the facility's capability to support aircraft maintenance operations. The duration of the contract (749 days) suggests a significant undertaking, and its successful conclusion would have directly contributed to the Navy's ability to maintain its aircraft fleet efficiently and safely. Post-completion assessments or operational metrics would provide definitive evidence of its effectiveness.

What has been the historical spending trend for aircraft maintenance hangar repairs by the Department of the Navy?

Historical spending trends for aircraft maintenance hangar repairs by the Department of the Navy are likely to show consistent investment in infrastructure maintenance and upgrades. Such spending fluctuates based on the age of existing facilities, modernization requirements, and overall defense budget allocations. Major repair projects, like the one awarded to Obayashi Corporation, represent significant capital expenditures. Analyzing spending over several fiscal years would reveal patterns in the frequency and average cost of these types of repairs, influenced by factors such as fleet size, aircraft technology advancements, and strategic base realignments.

Were there any significant contract modifications or disputes during the performance of this contract?

Information regarding significant contract modifications or disputes for this specific contract (awarded in 2009) is not readily available in the provided summary data. Typically, such details would be found in more comprehensive contract databases or official government contract archives. Contract modifications can occur for various reasons, including changes in scope, unforeseen conditions, or adjustments to timelines. Disputes arise when disagreements arise between the government and the contractor over contract terms or performance. Without access to detailed contract performance records, it's impossible to assess if any such issues occurred.

Industry Classification

NAICS: Construction › Foundation, Structure, and Building Exterior Contractors › Other Foundation, Structure, and Building Exterior Contractors

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: N4008408R8337

Offers Received: 3

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: $13,393,042

Exercised Options: $13,393,042

Current Obligation: $13,393,042

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline