DoD's $58M FY07 Construction Contract Awarded to NAN INC Faces Scrutiny Over Value and Competition
Contract Overview
Contract Amount: $58,086,167 ($58.1M)
Contractor: NAN Inc
Awarding Agency: Department of Defense
Start Date: 2007-09-27
End Date: 2012-12-31
Contract Duration: 1,922 days
Daily Burn Rate: $30.2K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: FIRM FIXED PRICE
Sector: Construction
Official Description: FY07 PN 58294 PHASE 2G - CONSTRUCTION
Place of Performance
Location: SCHOFIELD BARRACKS, HONOLULU County, HAWAII, 96857
State: Hawaii Government Spending
Plain-Language Summary
Department of Defense obligated $58.1 million to NAN INC for work described as: FY07 PN 58294 PHASE 2G - CONSTRUCTION Key points: 1. The $58.1M contract awarded in FY07 for construction services shows a significant investment. 2. Competition details are limited, raising questions about price discovery and potential value. 3. The long duration (1922 days) and firm fixed-price nature warrant a review of cost controls. 4. Construction sector spending benchmarks are needed to assess the reasonableness of the award amount.
Value Assessment
Rating: questionable
The award amount of $58.1 million for commercial and institutional building construction is substantial. Without comparable contract data or detailed cost breakdowns, it is difficult to definitively assess its value. The benchmark of $30,222 for 'br' (likely a placeholder or internal metric) is too low to be meaningful for this contract size.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which is a positive indicator for price discovery. However, the lack of specific details on the number of bids received or the evaluation process makes it hard to confirm if the competition effectively drove down costs.
Taxpayer Impact: The use of full and open competition suggests an effort to achieve fair market prices, but the overall value and efficiency of this large expenditure for taxpayers remain to be fully validated.
Public Impact
Taxpayers funded a significant construction project for the Department of the Army. The long contract duration could impact the relevance of the initial pricing over time. The project's location in Hawaii may have specific cost drivers that influenced the final award.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of detailed cost justification
- Potential for cost overruns due to long duration
- Limited transparency on competition effectiveness
Positive Signals
- Awarded under full and open competition
- Firm fixed-price contract can limit cost uncertainty
Sector Analysis
This contract falls within the Commercial and Institutional Building Construction sector. Spending in this sector can vary widely based on project scope, location, and economic conditions. Benchmarking against similar DoD construction projects in Hawaii during FY07 would be crucial for a thorough value assessment.
Small Business Impact
The data provided does not indicate whether small businesses were involved as prime contractors or subcontractors. Further investigation would be needed to determine the extent of small business participation in this contract.
Oversight & Accountability
Oversight of this contract would typically involve the Department of the Army's contracting and project management offices. Ensuring adherence to contract terms, quality standards, and budget throughout the 1922-day performance period is critical for accountability.
Related Government Programs
- Commercial and Institutional Building Construction
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Significant contract value ($58.1M)
- Long contract duration (1922 days)
- Limited detail on competition specifics
- Unclear benchmark data ('br')
- Potential for cost escalation over time
Tags
commercial-and-institutional-building-co, department-of-defense, hi, dca, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $58.1 million to NAN INC. FY07 PN 58294 PHASE 2G - CONSTRUCTION
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 $58.1 million.
What is the period of performance?
Start: 2007-09-27. End: 2012-12-31.
What specific construction services were rendered under this $58.1 million contract, and how do the final costs compare to the initial estimates and industry benchmarks for similar projects in Hawaii?
Detailed project specifications and final cost accounting are necessary to evaluate the value proposition. Without this, it's challenging to ascertain if the $58.1 million expenditure was justified. Comparing the project's scope, materials, labor, and overhead against contemporary construction projects of similar scale and complexity in the Hawaiian market would provide essential context for assessing cost-effectiveness and identifying potential areas of overspending or underspending.
Given the contract's long duration (1922 days), what mechanisms were in place to manage potential risks such as inflation, material price fluctuations, and scope creep, and how effective were they?
A firm fixed-price contract generally shifts risk to the contractor, but long durations can still expose the government to risks if not managed properly. Mechanisms like economic price adjustment clauses (though not explicitly stated here) or robust change order management processes are crucial. The effectiveness of these would depend on the specific contract language and the diligence of the contracting officer in monitoring performance and controlling modifications throughout the nearly five-year period.
How did the 'full and open competition' process translate into actual cost savings or enhanced value for the Department of the Army, considering the substantial award amount?
While 'full and open competition' is a best practice, its effectiveness in driving value is contingent on the number and quality of bids received, the clarity of the solicitation, and the evaluation criteria. To assess the actual value, one would need to examine the bid spread, the government's cost estimate versus the winning bid, and any post-award performance data. Without this granular information, it's difficult to definitively state the extent of cost savings or value enhancement achieved through the competitive process.
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: W9128A07R0008
Offers Received: 3
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 636 LAUMAKA ST, HONOLULU, HI, 01
Business Categories: Asian Pacific American Owned Business, Category Business, Minority Owned Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $58,086,167
Exercised Options: $58,086,167
Current Obligation: $58,086,167
Contract Characteristics
Cost or Pricing Data: NO
Timeline
Start Date: 2007-09-27
Current End Date: 2012-12-31
Potential End Date: 2012-12-31 00:00:00
Last Modified: 2012-03-14
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