Navy awards $22.7M contract for construction services in Hawaii, highlighting firm fixed-price terms

Contract Overview

Contract Amount: $22,722,632 ($22.7M)

Contractor: Hawaiian Dredging Construction Company, Inc

Awarding Agency: Department of Defense

Start Date: 2009-09-29

End Date: 2012-01-17

Contract Duration: 840 days

Daily Burn Rate: $27.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 9

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: BASE ITEM

Place of Performance

Location: PEARL HARBOR, HONOLULU County, HAWAII, 96860

State: Hawaii Government Spending

Plain-Language Summary

Department of Defense obligated $22.7 million to HAWAIIAN DREDGING CONSTRUCTION COMPANY, INC for work described as: BASE ITEM Key points: 1. Contract awarded under firm fixed-price terms, indicating predictable costs for the government. 2. Full and open competition suggests a robust bidding process and potential for competitive pricing. 3. The contract duration of 840 days points to a significant, multi-year construction project. 4. Awarded by the Department of the Navy, this contract supports military infrastructure needs. 5. The contractor, Hawaiian Dredging Construction Company, Inc., has a track record in large-scale projects. 6. Geographic focus on Hawaii suggests specific regional infrastructure development or maintenance.

Value Assessment

Rating: good

The contract value of $22.7 million for commercial and institutional building construction appears reasonable given the scope and duration. Without specific details on the project's deliverables, a direct comparison is challenging. However, the firm fixed-price nature of the award suggests that the government secured a defined cost for the services, which is a positive indicator of value. Benchmarking against similar large-scale construction projects in Hawaii would provide further insight into the pricing efficiency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through full and open competition, indicating that all responsible sources were permitted to submit bids. This process typically involves a public solicitation and a competitive bidding phase. The presence of 9 bids suggests a healthy level of interest and competition for this construction project, which generally leads to better price discovery and potentially lower costs for the government.

Taxpayer Impact: A competitive bidding process like this one helps ensure that taxpayer dollars are used efficiently by driving down prices through market forces.

Public Impact

The primary beneficiaries are the Department of the Navy and its personnel stationed in Hawaii, who will receive improved or new facilities. The contract delivers commercial and institutional building construction services, likely encompassing new builds, renovations, or repairs. The geographic impact is concentrated in Hawaii, supporting local economic activity and potentially requiring specialized construction expertise for the region. Workforce implications include job creation for construction workers, engineers, project managers, and support staff in Hawaii.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions or material price fluctuations occur, despite the fixed-price nature.
Dependence on the contractor's ability to manage complex construction schedules and deliver on time.
Risk of quality control issues in large-scale construction projects if not rigorously overseen.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Full and open competition suggests a strong market response and competitive pricing.
Award to an established construction company with experience in large projects.
Clear project duration (840 days) allows for effective planning and resource allocation.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the construction industry. This sector encompasses the building of non-residential structures such as offices, retail spaces, educational facilities, and government buildings. The market size for federal construction projects is substantial, driven by the need to maintain and upgrade existing infrastructure and build new facilities. This specific award to Hawaiian Dredging Construction Company, Inc. by the Department of the Navy aligns with typical government spending patterns for infrastructure development and maintenance in strategic locations.

Small Business Impact

The data indicates this contract was awarded through full and open competition and does not specify any small business set-aside provisions. While the prime contractor is Hawaiian Dredging Construction Company, Inc., a large entity, there is potential for subcontracting opportunities for small businesses within the construction trades and material supply chain. The extent of small business participation would depend on the prime contractor's subcontracting plan and adherence to federal small business utilization goals.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and their representatives within the Department of the Navy. Accountability measures are inherent in the firm fixed-price contract terms, with penalties or incentives potentially tied to performance and delivery schedules. Transparency is facilitated through the federal procurement data system, where contract awards are publicly reported. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Military Construction Projects
Naval Facilities Engineering Command Contracts
Federal Building Construction
Infrastructure Development Contracts

Risk Flags

Potential for schedule delays
Risk of unforeseen site conditions
Contractor performance risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.7 million to HAWAIIAN DREDGING CONSTRUCTION COMPANY, INC. BASE ITEM

Who is the contractor on this award?

The obligated recipient is HAWAIIAN DREDGING CONSTRUCTION COMPANY, 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 $22.7 million.

What is the period of performance?

Start: 2009-09-29. End: 2012-01-17.

What is the track record of Hawaiian Dredging Construction Company, Inc. with federal contracts, particularly with the Department of the Navy?

Hawaiian Dredging Construction Company, Inc. has a significant history of performing federal construction contracts. While specific details for this $22.7 million award are limited to the basic data, their portfolio often includes large-scale projects for various government agencies, including the Department of Defense and its branches like the Navy. Their experience typically encompasses a wide range of construction types, from barracks and administrative facilities to more complex infrastructure. Reviewing their past performance ratings, any contract modifications, and the types of projects they have successfully completed for the Navy would provide a clearer picture of their reliability and capability for this specific award. It's common for large construction firms to have multiple ongoing federal contracts, and their performance on those can be indicative of their capacity.

How does the $22.7 million award compare to similar construction contracts awarded by the Navy in Hawaii?

Comparing the $22.7 million award requires access to a database of similar construction projects within the same geographic region and for the same agency. However, for large-scale commercial and institutional building construction, this figure represents a substantial investment. The Navy frequently undertakes significant infrastructure projects in Hawaii due to its strategic importance. Without specific project details (e.g., square footage, type of facility, scope of work), a precise benchmark is difficult. Generally, firm fixed-price contracts awarded through full and open competition for projects of this magnitude in high-cost areas like Hawaii are expected to be competitive. Further analysis would involve examining the number of bids received and the contract duration (840 days) in relation to the project's complexity.

What are the primary risks associated with this firm fixed-price construction contract?

The primary risks associated with this firm fixed-price contract, despite its cost certainty for the government, lie in potential contractor performance and unforeseen circumstances. If Hawaiian Dredging Construction Company, Inc. underestimated project costs, encountered significant unforeseen site conditions (e.g., geological issues, hazardous materials), or faced extreme material price escalations not covered by contract clauses, they might seek change orders or face financial strain, potentially impacting project timelines or quality. The government's risk is primarily related to ensuring adequate oversight to prevent scope creep and ensure adherence to specifications. Delays, even in fixed-price contracts, can have ripple effects on military readiness or operational needs. Robust contract administration and clear communication channels are crucial to mitigate these risks.

How effective is full and open competition in ensuring value for money for this type of construction contract?

Full and open competition is generally considered the most effective method for ensuring value for money in federal contracting, including large construction projects. By allowing all responsible sources to bid, it fosters a competitive environment that drives down prices and encourages innovation. The fact that 9 bids were received for this $22.7 million contract suggests a healthy level of competition, increasing the likelihood that the government secured a fair market price. This process allows the government to evaluate not only price but also technical proposals and past performance, leading to a more informed award decision. While vigilance is still required to ensure the winning bid represents true value and not just the lowest price at the expense of quality, the competitive nature itself is a strong safeguard.

What are the historical spending patterns for commercial and institutional building construction by the Department of the Navy?

The Department of the Navy consistently allocates significant funds towards commercial and institutional building construction to support its global operations and personnel. Historical spending data reveals a continuous need for new facilities, upgrades, and maintenance across its numerous bases and installations worldwide. Major construction efforts are often concentrated in areas with high operational tempo or significant personnel presence, such as Hawaii. Spending in this category can fluctuate based on military priorities, budget allocations, and the lifecycle of existing infrastructure. Awards like this $22.7 million contract are typical components of the Navy's broader capital investment strategy, aimed at modernizing facilities and ensuring operational readiness.

What are the implications of the 840-day duration for this construction project?

A duration of 840 days (approximately 2.3 years) for this $22.7 million construction contract indicates a project of considerable scale and complexity. Such a long timeframe suggests that the scope of work likely involves new construction, major renovations, or the development of significant facilities rather than minor repairs. This extended period allows for detailed planning, phased construction, and the integration of various building systems. For the government, it necessitates long-term budget planning and sustained oversight. For the contractor, it requires robust project management, resource allocation, and risk mitigation strategies to ensure timely completion and adherence to the firm fixed-price agreement over an extended period.

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: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N6274209R1311

Offers Received: 9

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Kajima Corporation (UEI: 690593314)

Address: 201 MERCHANT ST STE 900, HONOLULU, HI, 01

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $22,722,632

Exercised Options: $22,722,632

Current Obligation: $22,722,632

Contract Characteristics

Cost or Pricing Data: NO

Timeline