DoD's $68.3M construction contract awarded to NAN INC for Hawaii facility

Contract Overview

Contract Amount: $68,295,891 ($68.3M)

Contractor: NAN Inc

Awarding Agency: Department of Defense

Start Date: 2005-09-08

End Date: 2006-02-06

Contract Duration: 151 days

Daily Burn Rate: $452.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Place of Performance

Location: FORT SHAFTER, HONOLULU County, HAWAII, 96858

State: Hawaii Government Spending

Plain-Language Summary

Department of Defense obligated $68.3 million to NAN INC for work described as: Key points: 1. The contract value of $68.3 million represents a significant investment in infrastructure. 2. Awarded under full and open competition, suggesting a robust bidding process. 3. The fixed-price contract type aims to control costs for the government. 4. The short performance period of 151 days indicates a focused project scope. 5. The contractor, NAN INC, has a track record that warrants further examination. 6. The project's location in Hawaii may present unique logistical and cost considerations.

Value Assessment

Rating: fair

Benchmarking the value of this $68.3 million construction contract is challenging without specific project details and comparable market rates in Hawaii. The firm fixed-price structure suggests an attempt to lock in costs, but the absence of detailed cost breakdowns or comparisons makes a definitive value-for-money assessment difficult. Compared to similar large-scale construction projects, the price could be reasonable if it includes extensive site preparation, specialized materials, or complex architectural requirements. However, without more data, it's hard to ascertain if this represents a competitive price or if there were opportunities for greater savings.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. The presence of 3 bidders suggests a moderate level of competition for this project. While multiple bidders are positive, the exact number (3) doesn't necessarily guarantee the most competitive pricing. A higher number of bidders often correlates with more aggressive pricing due to increased market pressure. Further analysis would be needed to understand if the bidding pool was sufficiently diverse and if the proposals received were truly competitive.

Taxpayer Impact: Full and open competition is generally beneficial for taxpayers as it aims to secure the best possible price and quality by allowing a wide range of contractors to participate. This approach increases the likelihood of receiving multiple competitive offers, which can drive down costs.

Public Impact

The primary beneficiaries are the Department of Defense and its personnel stationed in Hawaii, who will gain access to a new or improved facility. The contract delivers essential construction services, likely involving the building or renovation of a significant structure. The geographic impact is localized to Hawaii, potentially stimulating the local economy through construction jobs and material sourcing. Workforce implications include the creation of temporary construction jobs in Hawaii, benefiting skilled trades and related support services.

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 contract.
Dependence on NAN INC's performance and capacity to deliver within the specified timeframe and quality standards.
Logistical challenges and increased costs associated with construction in Hawaii due to its island location.

Positive Signals

Awarded through full and open competition, suggesting a fair and transparent procurement process.
Firm fixed-price contract type helps to mitigate cost escalation risks for the government.
The project addresses a clear need for infrastructure within the Department of Defense.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a broad category encompassing the building of non-residential structures. The market for federal construction is substantial, driven by the need to maintain and upgrade military bases, government facilities, and other public infrastructure. Comparable spending benchmarks would typically involve analyzing the cost per square foot for similar government construction projects in similar geographic regions, considering factors like building type, complexity, and local labor costs.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific impacts on the small business ecosystem stemming from a small business set-aside. The primary focus of this award was on larger, potentially more capable contractors able to undertake a project of this magnitude.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program management office within the Department of the Army. Accountability measures are embedded in the firm fixed-price contract terms, with penalties for non-performance or delays. Transparency is generally maintained through contract award databases, though specific project details and oversight reports may not always be publicly accessible. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arise.

Related Government Programs

Military Construction Projects
Department of Defense Facilities Management
Government Building Contracts
Infrastructure Development

Risk Flags

Potential for cost escalation despite fixed-price contract if scope changes or unforeseen issues arise.
Contractor performance risk, particularly given the project's location and potential logistical complexities.
Limited transparency on specific project details and performance metrics post-award.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $68.3 million to NAN INC. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is NAN INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $68.3 million.

What is the period of performance?

Start: 2005-09-08. End: 2006-02-06.

What is the track record of NAN INC with the Department of Defense and similar construction projects?

Assessing NAN INC's track record requires accessing historical contract data, performance reviews, and any past performance information available through government databases like the Contractor Performance Assessment Reporting System (CPARS). Without direct access to this specific data, it's difficult to provide a detailed analysis. However, the fact that they were awarded a $68.3 million contract by the Department of the Army suggests they have met certain pre-qualification criteria and demonstrated capability. Further investigation would involve looking for past projects of similar scale and complexity, examining any reported issues or commendations, and understanding their history of on-time and on-budget delivery for federal contracts. A review of their financial stability and any litigation history would also be pertinent.

How does the awarded price compare to similar construction projects in Hawaii or other high-cost regions?

A precise comparison of the $68.3 million award to similar projects in Hawaii is challenging without detailed project specifications (e.g., square footage, building type, specific materials, site conditions) and access to a robust database of comparable federal and private construction projects in the region. Hawaii is known for its higher construction costs due to logistical challenges, material transportation, and local labor rates. To benchmark effectively, one would need to identify projects of similar scope and scale awarded around the same time, adjust for inflation and regional cost differences, and analyze the cost per square foot. The firm fixed-price nature of this contract suggests the government sought to cap costs, but whether the initial bid represented optimal value requires detailed market analysis.

What are the key risks associated with this specific construction contract, and how are they being mitigated?

Key risks for this $68.3 million construction contract include potential cost overruns due to unforeseen site conditions (common in construction), delays caused by weather or supply chain disruptions (especially relevant in Hawaii), and performance issues from the contractor, NAN INC. Mitigation strategies are primarily embedded in the contract terms. The firm fixed-price structure shifts much of the cost overrun risk to the contractor. The short performance period (151 days) aims to limit exposure to extended delays. The Department of the Army's oversight, including potential site inspections and progress reviews, serves as a mitigation measure. Furthermore, the requirement for full and open competition theoretically selects a contractor with a proven ability to manage such risks, though past performance reviews are crucial.

What is the expected effectiveness and impact of the completed facility on DoD operations in Hawaii?

The effectiveness and impact of the completed facility depend entirely on its intended purpose, which is not specified in the provided data. If it's barracks, it improves troop housing; if it's a training facility, it enhances readiness; if it's operational infrastructure, it supports mission execution. The $68.3 million investment suggests a significant facility. Its impact on DoD operations in Hawaii would be measured by its contribution to mission capability, personnel well-being, operational efficiency, and potentially cost savings through modernization or consolidation of existing, less efficient structures. A thorough assessment would require understanding the specific operational requirements the new facility is designed to meet and how it aligns with the broader strategic goals for the DoD presence in the region.

How has historical spending on similar construction projects by the Department of the Army in Hawaii trended over the past five years?

Analyzing historical spending trends for similar construction projects by the Department of the Army in Hawaii requires access to comprehensive federal procurement data. A general trend observed in many high-cost areas like Hawaii is a steady or increasing investment in infrastructure maintenance and upgrades, driven by aging facilities and evolving military needs. Spending on construction projects in Hawaii can be volatile, influenced by specific base realignment and closure (BRAC) actions, new strategic initiatives, or emergency repairs. To provide a precise trend, one would need to query databases for contracts categorized under 'Construction' (NAICS 236220 or similar) awarded by the Army in Hawaii over the last five years, aggregate the total dollar values, and identify patterns in project types and average contract values. This would reveal if spending has been consistent, increasing, or decreasing.

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

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 636 LAUMAKA ST, HONOLULU, HI, 01

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline