Department of the Army awarded $32M contract for construction services in Hawaii, with 9 bidders

Contract Overview

Contract Amount: $32,045,610 ($32.0M)

Contractor: Hawaiian Dredging Construction Company, Inc

Awarding Agency: Department of Defense

Start Date: 2009-09-24

End Date: 2013-07-29

Contract Duration: 1,404 days

Daily Burn Rate: $22.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 9

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: FY09 MCA PN68823, UEPH SB, OAHU, HAWAII

Place of Performance

Location: FORT SHAFTER, HONOLULU County, HAWAII, 96858

State: Hawaii Government Spending

Plain-Language Summary

Department of Defense obligated $32.0 million to HAWAIIAN DREDGING CONSTRUCTION COMPANY, INC for work described as: FY09 MCA PN68823, UEPH SB, OAHU, HAWAII Key points: 1. Contract value appears reasonable given the scope and duration. 2. Strong competition indicates potential for competitive pricing. 3. No immediate red flags identified in contract terms. 4. Project aligns with infrastructure needs in the Pacific region. 5. Construction sector is a significant area of federal spending. 6. Contract duration suggests a substantial, long-term project.

Value Assessment

Rating: good

The contract value of $32 million for a nearly four-year duration appears within a reasonable range for large-scale construction projects of this nature. Benchmarking against similar Department of Defense construction contracts in Hawaii or other high-cost areas would provide a more precise value-for-money assessment. The firm fixed-price structure generally offers cost certainty, but the final cost could be influenced by change orders if not managed tightly. Without specific details on the scope of work (e.g., type of buildings, specific upgrades), a definitive comparison is challenging, but the number of bidders suggests market interest.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, with nine bidders participating. This level of competition is a positive indicator, suggesting that the solicitation was widely disseminated and that multiple firms were interested and capable of performing the work. A higher number of bidders generally leads to more competitive pricing and a greater likelihood of selecting the best value proposal. The agency's decision to use full and open competition implies that there were no specific restrictions or preferences applied, aiming for the broadest possible market engagement.

Taxpayer Impact: The robust competition for this contract is beneficial for taxpayers as it likely drove down prices and ensured the government received competitive bids, maximizing the value of federal funds.

Public Impact

Military personnel and their families stationed in Oahu, Hawaii, will benefit from improved or new facilities. The contract delivers essential construction services, likely involving the building or renovation of barracks, administrative buildings, or other critical infrastructure. The geographic impact is localized to Oahu, Hawaii, supporting military readiness and operations in the Pacific. The project will likely create or sustain jobs within the construction sector in Hawaii, benefiting local workers and businesses.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if scope creep occurs on a long-duration project.
Dependence on a single contractor for a significant period could pose risks if performance issues arise.
Geographic isolation of Hawaii can sometimes lead to higher material and labor costs, impacting overall project expense.

Positive Signals

Awarded under full and open competition, indicating a competitive bidding process.
Firm fixed-price contract type provides cost certainty for the government.
Multiple bidders (9) suggest strong market interest and potential for quality selection.
Contract duration of over 3 years indicates a substantial and well-defined project.

Sector Analysis

The federal government is a major consumer of construction services, particularly for military installations and infrastructure. This contract falls within the broader commercial and institutional building construction sector. Spending in this sector is influenced by military readiness requirements, base realignments, and infrastructure modernization efforts. Comparable spending benchmarks would typically be found within Department of Defense construction budgets for the Pacific region, considering factors like local labor rates and material availability.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses (SB is false). While the prime contractor, Hawaiian Dredging Construction Company, Inc., is a large business, there may be opportunities for small businesses to participate as subcontractors. The extent of small business subcontracting would depend on the prime contractor's strategy and any specific requirements or goals set by the Department of the Army, which are not detailed here. Without a small business set-aside, the primary focus is on best value from the entire market.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant project management office within the Department of the Army. Accountability measures are embedded in the firm fixed-price contract terms, requiring delivery of specified services within the agreed budget. Transparency is generally maintained through contract award databases and public reporting, although specific project details and performance metrics may not always be publicly accessible. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Military Construction (MILCON)
Base Realignment and Closure (BRAC) projects
Department of Defense Facilities Modernization
Army Corps of Engineers Construction Contracts

Risk Flags

Potential for cost escalation due to Hawaii's high cost of living and logistics.
Long contract duration requires sustained oversight to ensure quality and prevent scope creep.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $32.0 million to HAWAIIAN DREDGING CONSTRUCTION COMPANY, INC. FY09 MCA PN68823, UEPH SB, OAHU, HAWAII

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 Army).

What is the total obligated amount?

The obligated amount is $32.0 million.

What is the period of performance?

Start: 2009-09-24. End: 2013-07-29.

What is the specific scope of work for this construction contract?

The provided data indicates the contract is for 'Commercial and Institutional Building Construction' (NAICS code 236220) awarded to Hawaiian Dredging Construction Company, Inc. by the Department of the Army. However, the specific details of the scope of work, such as whether it involves new construction, renovation, or specific types of buildings (e.g., barracks, administrative facilities, training centers), are not included in the abbreviated data. Further investigation into the contract file or related documentation would be necessary to ascertain the precise nature of the construction services required on Oahu, Hawaii.

How does the awarded amount of $32 million compare to similar construction projects in Hawaii?

Benchmarking the $32 million contract against similar construction projects in Hawaii requires access to a database of comparable contracts, including their scope, duration, and specific location. Given Hawaii's status as an island state with a high cost of living and doing business, construction costs are generally higher than in the continental U.S. The presence of nine bidders suggests the contract was perceived as valuable and achievable within the market. A detailed comparison would involve analyzing the square footage, complexity of the build, and specific materials used in this project versus others of similar scale and purpose within the Hawaiian Islands.

What are the potential risks associated with a firm fixed-price contract of this duration?

Firm fixed-price (FFP) contracts aim to provide cost certainty, but risks can emerge, especially over a long duration (1404 days, approx. 3.8 years). The primary risk for the government is that the contractor may cut corners on quality or materials to maximize profit if not adequately overseen. Conversely, the contractor bears the risk of cost overruns due to unforeseen circumstances, which could lead to disputes or requests for equitable adjustments. For this contract, potential risks include unexpected increases in material costs, labor shortages in Hawaii, or unforeseen site conditions that could necessitate change orders, potentially increasing the final cost despite the FFP structure.

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

Hawaiian Dredging Construction Company, Inc. has a history of performing significant construction work, including for the Department of Defense and other federal agencies. While specific details on past performance metrics for this particular contract are not provided, the company's longevity and repeated awards suggest a capacity to meet federal requirements. A comprehensive assessment would involve reviewing their past federal contract awards, performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), and any history of disputes or contract terminations to gauge their reliability and expertise.

What historical spending patterns exist for similar construction contracts in the Department of the Army?

The Department of the Army consistently awards substantial contracts for construction and infrastructure projects, both domestically and internationally, to support military readiness and operations. Historical spending patterns reveal a significant allocation towards facilities sustainment, modernization, and new construction, often driven by strategic defense priorities and congressional appropriations. Contracts for building construction, similar to this one, are a recurring category. Analyzing past spending trends within the Army for projects in the Pacific region, or for similar building types, would provide context on the typical scale, duration, and cost profiles of such endeavors.

How does the geographic location in Hawaii influence the contract's cost and execution?

The contract's location in Hawaii (Oahu) significantly influences its cost and execution. Hawaii presents unique logistical challenges due to its remote island location, leading to higher transportation costs for materials and equipment. Labor costs are also generally higher compared to the mainland U.S. Furthermore, environmental regulations and permitting processes in Hawaii can be complex. These factors contribute to a higher baseline cost for construction projects in the state. The fact that nine bidders competed suggests that companies are equipped to handle these challenges, but it likely contributed to the overall contract value.

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: W9128A09R0001

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: $32,045,610

Exercised Options: $32,045,610

Current Obligation: $32,045,610

Contract Characteristics

Cost or Pricing Data: NO

Timeline