DoD's $68M electrical system contract for Pearl Harbor awarded to Stronghold Engineering Inc

Contract Overview

Contract Amount: $68,227,128 ($68.2M)

Contractor: Stronghold Engineering Inc

Awarding Agency: Department of Defense

Start Date: 2024-07-31

End Date: 2027-12-02

Contract Duration: 1,219 days

Daily Burn Rate: $56.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: RM15-2763 REPAIR AND REPLACE ELECTRICAL SYSTEM REQUIREMENTS WITHIN THE NAVAL SUPPLY SYSTEMS COMMAND (NAVSUP) FLEET LOGISTICS CENTER PEARL HARBOR (FLCPH) AREA, JOINT BASE PEARL HARBOR-HICKAM (JBPHH), HAWAII

Place of Performance

Location: PEARL HARBOR, HONOLULU County, HAWAII, 96860

State: Hawaii Government Spending

Plain-Language Summary

Department of Defense obligated $68.2 million to STRONGHOLD ENGINEERING INC for work described as: RM15-2763 REPAIR AND REPLACE ELECTRICAL SYSTEM REQUIREMENTS WITHIN THE NAVAL SUPPLY SYSTEMS COMMAND (NAVSUP) FLEET LOGISTICS CENTER PEARL HARBOR (FLCPH) AREA, JOINT BASE PEARL HARBOR-HICKAM (JBPHH), HAWAII Key points: 1. Contract value of $68.2 million for critical infrastructure upgrades. 2. Awarded under full and open competition, suggesting a competitive bidding process. 3. Firm Fixed Price contract type aims to control costs and manage risk. 4. Long duration of over 3 years indicates a substantial and complex project. 5. Focus on essential facility maintenance and repair within a key naval command. 6. Potential for follow-on work or similar projects in the region.

Value Assessment

Rating: good

The contract's value of $68.2 million for electrical system repair and replacement appears reasonable given the scope and duration. While direct comparisons are difficult without specific project details, similar large-scale facility modernization projects for military installations often fall within this range. The firm fixed-price structure suggests an effort to establish a clear cost baseline. Benchmarking against similar projects would require more granular data on the specific systems being replaced and the complexity of the work.

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 4 bids suggests a healthy level of interest and competition for this significant project. A competitive process generally leads to better price discovery and potentially more favorable terms for the government.

Taxpayer Impact: Full and open competition helps ensure that taxpayer dollars are used efficiently by driving down prices through market forces. It provides assurance that the selected contractor offers the best value proposition.

Public Impact

Naval Supply Systems Command (NAVSUP) Fleet Logistics Center Pearl Harbor (FLCPH) will benefit from modernized electrical infrastructure. Ensures reliable power for critical operations at Joint Base Pearl Harbor-Hickam (JBPHH). Supports the readiness and operational capabilities of naval forces in Hawaii. Potential for job creation and economic activity in Hawaii's construction sector. Enhances the safety and security of personnel and assets at the facility.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration could introduce risks related to material cost escalation or unforeseen site conditions.
Dependence on a single contractor for a critical infrastructure component requires robust oversight.
Potential for scope creep if unforeseen issues arise during the extensive repair work.

Positive Signals

Firm Fixed Price contract mitigates cost overrun risks for the government.
Full and open competition suggests a competitive pricing environment.
Award to an established engineering firm with experience in government contracts.
Focus on essential infrastructure repair ensures long-term operational stability.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, specifically focusing on electrical systems. The market for large-scale government facility construction and maintenance is substantial, with significant annual spending by the Department of Defense. This project aligns with broader government efforts to modernize aging infrastructure and ensure the operational readiness of military bases. Comparable spending benchmarks would include other major renovation and repair contracts for federal buildings and installations.

Small Business Impact

The contract was not set aside for small businesses, and the awardee, Stronghold Engineering Inc., is not identified as a small business. This suggests that the primary focus was on securing the best technical and price proposal from the broader market. There is no explicit indication of subcontracting requirements for small businesses within the provided data, which could be a missed opportunity to engage the small business ecosystem.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy's contracting and facilities management divisions. The firm fixed-price nature of the contract provides a degree of cost control. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Naval Facilities Engineering Command (NAVFAC) Contracts
Department of Defense Infrastructure Modernization Programs
Military Base Facility Maintenance and Repair
Electrical Infrastructure Upgrades for Federal Buildings

Risk Flags

Potential for cost escalation due to long contract duration.
Need for robust government oversight to ensure quality and prevent scope creep.
Reliance on a single contractor for critical infrastructure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $68.2 million to STRONGHOLD ENGINEERING INC. RM15-2763 REPAIR AND REPLACE ELECTRICAL SYSTEM REQUIREMENTS WITHIN THE NAVAL SUPPLY SYSTEMS COMMAND (NAVSUP) FLEET LOGISTICS CENTER PEARL HARBOR (FLCPH) AREA, JOINT BASE PEARL HARBOR-HICKAM (JBPHH), HAWAII

Who is the contractor on this award?

The obligated recipient is STRONGHOLD ENGINEERING INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $68.2 million.

What is the period of performance?

Start: 2024-07-31. End: 2027-12-02.

What is Stronghold Engineering Inc.'s track record with similar large-scale electrical infrastructure projects for the Department of Defense?

Stronghold Engineering Inc. has a history of performing construction and engineering services for the Department of Defense. While specific details on past electrical system overhauls of this magnitude are not immediately available in this summary, their portfolio typically includes projects involving facility repair, renovation, and construction on military installations. A deeper dive into their contract history with agencies like NAVFAC or other branches of the military would reveal the scale and complexity of their previous electrical work, providing a clearer picture of their experience relevant to this specific contract's requirements. Their ability to secure this significant award suggests they possess the necessary qualifications and past performance.

How does the $68.2 million contract value compare to similar electrical system upgrades at other naval facilities?

Benchmarking the $68.2 million contract value requires comparing it to similar projects in terms of scope, complexity, and location. Large-scale electrical system replacements or major upgrades at naval facilities can vary significantly. Factors such as the age of the existing infrastructure, the specific systems being replaced (e.g., primary distribution, backup generators, internal wiring), and the operational tempo of the facility all influence cost. Without detailed project specifications, a precise comparison is challenging. However, for a multi-year project involving comprehensive electrical system modernization at a major naval command like FLCPH, this value appears within a plausible range for significant infrastructure investment.

What are the primary risks associated with a firm fixed-price contract for a project of this duration and complexity?

The primary risk with a firm fixed-price (FFP) contract, especially for a long-duration project like this (over 3 years), is the potential for the contractor to incur losses if costs escalate beyond initial estimates due to unforeseen circumstances. While FFP shifts cost risk to the contractor, it can also incentivize them to cut corners on quality or scope if not managed diligently. For the government, the risk lies in ensuring the contractor has adequately priced the contract and that the fixed price truly represents best value. If the contractor underestimated complexities or material costs, they might seek change orders, potentially increasing the overall cost. Robust government oversight is crucial to monitor performance and prevent scope creep or quality compromises.

How does the firm fixed-price contract type influence price discovery and potential for cost savings for taxpayers?

A firm fixed-price (FFP) contract establishes a ceiling price that the government will not exceed, provided the contractor meets all terms and conditions. This contract type is generally favored for its cost control benefits. Price discovery occurs during the bidding phase, where competition among bidders determines the initial price. For taxpayers, FFP offers predictability in spending. If the contractor can execute the work efficiently and manage their costs effectively, they will realize a higher profit margin. Conversely, if costs rise unexpectedly, the contractor absorbs the loss, protecting the taxpayer from overruns. This incentivizes the contractor to be efficient and accurate in their initial pricing and execution.

What are the implications of awarding this contract under 'full and open competition' with 4 bidders for price negotiation?

Awarding this contract under 'full and open competition' with four bidders is a positive signal for price negotiation and taxpayer value. It indicates that the government actively sought proposals from a wide range of qualified contractors, fostering a competitive environment. With four distinct bids, the government has a basis for comparison to ensure the selected price is market-driven and represents good value. This level of competition typically pressures bidders to offer their most competitive pricing and terms to win the contract. It reduces the risk of a contractor having undue leverage and helps ensure that the final negotiated price is fair and reasonable, maximizing the efficient use of public funds.

What is the expected impact on the local Hawaii economy and workforce due to this $68.2 million contract?

This $68.2 million contract is expected to have a positive impact on the local Hawaii economy and workforce. The project will require a significant number of skilled laborers, electricians, technicians, and construction management personnel throughout its duration. Stronghold Engineering Inc. may hire locally or bring in specialized teams, contributing to employment opportunities. Furthermore, the procurement of materials, equipment, and potentially local support services will stimulate economic activity. The investment in critical infrastructure also enhances the long-term operational capacity and resilience of a key military installation, indirectly supporting the regional economy.

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

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N6247817R4032

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2000 MARKET ST, RIVERSIDE, CA, 92501

Business Categories: Asian Pacific American Owned Business, Category Business, Minority Owned Business, Not Designated a Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Woman Owned Business

Financial Breakdown

Contract Ceiling: $68,227,128

Exercised Options: $68,227,128

Current Obligation: $68,227,128

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N6247820D4007

IDV Type: IDC

Timeline