DoD's $76.7M Schofield Barracks renovation contract awarded to NAN INC, facing scrutiny over value and competition

Contract Overview

Contract Amount: $76,695,862 ($76.7M)

Contractor: NAN Inc

Awarding Agency: Department of Defense

Start Date: 2013-05-17

End Date: 2021-01-19

Contract Duration: 2,804 days

Daily Burn Rate: $27.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 10

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: FY13 MCA PN76586 QUAD B BUILDING RENOVATION, WHOLE BARRACKS RENEWAL, PHASE 2B, AND FY13 MCA PN76587 QUAD B BUILDING RENOVATION, WHOLE BARRACKS RENEWAL, PHASE 2C, SCHOFIELD BARRACKS, OAHU, HAWAII

Place of Performance

Location: FORT SHAFTER, HONOLULU County, HAWAII, 96858

State: Hawaii Government Spending

Plain-Language Summary

Department of Defense obligated $76.7 million to NAN INC for work described as: FY13 MCA PN76586 QUAD B BUILDING RENOVATION, WHOLE BARRACKS RENEWAL, PHASE 2B, AND FY13 MCA PN76587 QUAD B BUILDING RENOVATION, WHOLE BARRACKS RENEWAL, PHASE 2C, SCHOFIELD BARRACKS, OAHU, HAWAII Key points: 1. The contract's value appears high relative to its duration and scope, raising questions about cost-effectiveness. 2. Limited public data on comparable projects makes a precise value-for-money assessment challenging. 3. The 'full and open competition' was expected to drive competitive pricing, but the final award details warrant closer examination. 4. Performance context is limited, with a long duration suggesting potential for scope creep or unforeseen issues. 5. This contract falls within the broad 'Commercial and Institutional Building Construction' sector, a common area for federal spending. 6. The absence of small business set-asides or subcontracting plans is noted. 7. Oversight mechanisms are standard for a definitive contract of this nature, but specific performance monitoring details are not publicly available.

Value Assessment

Rating: fair

The contract's total value of approximately $76.7 million over nearly eight years (2804 days) suggests a significant investment in infrastructure. Benchmarking this against similar large-scale barracks renovation projects is difficult without more granular data on the specific scope of work, materials, and labor costs involved. The firm-fixed-price nature indicates the contractor assumed most of the risk, but the extended duration could still lead to cost overruns if not managed meticulously. Without specific cost breakdowns or comparisons to industry standards for similar renovations in Hawaii, a definitive value assessment remains challenging.

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 bids. Ten bids were received, suggesting a reasonably competitive process. However, the fact that NAN INC was awarded the contract implies their bid was deemed the most advantageous. Further analysis would be needed to understand the bid evaluation criteria and whether the competitive landscape effectively drove down prices or if there were other factors influencing the award.

Taxpayer Impact: A full and open competition with multiple bidders generally benefits taxpayers by fostering price discovery and encouraging competitive offers, potentially leading to lower overall costs for the government.

Public Impact

Military personnel stationed at Schofield Barracks, Oahu, Hawaii, are the primary beneficiaries, receiving improved living quarters. The contract delivers renovation services for barracks buildings, enhancing the quality of life and readiness of service members. The geographic impact is localized to Schofield Barracks, Oahu, Hawaii. The contract supports the construction and renovation workforce, likely including skilled trades and project management professionals in Hawaii.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Extended contract duration (2804 days) increases the risk of cost escalation and scope creep.
Lack of detailed public information on specific renovation components makes value assessment difficult.
No indication of small business participation or subcontracting goals.
The sole awardee, NAN INC, may have limited public track record for large-scale federal construction projects of this magnitude.

Positive Signals

Awarded under full and open competition, suggesting a broad search for qualified contractors.
Multiple bids (10) indicate a competitive environment at the time of solicitation.
Firm-fixed-price contract structure shifts cost risk to the contractor.
The contract addresses critical infrastructure needs for military housing.

Sector Analysis

This contract falls under the Commercial and Institutional Building Construction sector, a significant segment of federal procurement. The Department of Defense is a major consumer of construction services for its vast network of bases and facilities. Comparable spending benchmarks for large-scale barracks renovations can vary widely based on location, scope, and specific building requirements. The market for such services in Hawaii is influenced by local labor costs, material availability, and the presence of qualified construction firms.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, nor does it explicitly mention subcontracting requirements for small businesses. This suggests that the primary focus was on securing the best overall offer from any qualified source, rather than specifically promoting small business participation. The absence of small business involvement could mean missed opportunities for smaller firms to contribute to this significant federal project and potentially limit the broader economic impact on the small business ecosystem in Hawaii.

Oversight & Accountability

Standard oversight mechanisms for a definitive contract of this size would typically involve contract officers, contracting specialists, and potentially quality assurance representatives from the Department of the Army. The Inspector General's office may also have jurisdiction for audits or investigations if specific concerns arise. Transparency is generally facilitated through contract award databases like FPDS, but detailed performance reports or specific oversight actions are not readily available to the public for this contract.

Related Government Programs

Military Housing Construction
Barracks Renovation Projects
Department of Defense Infrastructure
Federal Building Construction
Schofield Barracks Facilities

Risk Flags

Extended contract duration may increase risk.
Limited public data for value benchmarking.
No explicit small business participation noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $76.7 million to NAN INC. FY13 MCA PN76586 QUAD B BUILDING RENOVATION, WHOLE BARRACKS RENEWAL, PHASE 2B, AND FY13 MCA PN76587 QUAD B BUILDING RENOVATION, WHOLE BARRACKS RENEWAL, PHASE 2C, SCHOFIELD BARRACKS, OAHU, HAWAII

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 $76.7 million.

What is the period of performance?

Start: 2013-05-17. End: 2021-01-19.

What is the specific scope of work for the FY13 MCA PN76586 and PN76587 Quad B Building Renovations at Schofield Barracks?

The provided data identifies the contract as 'WHOLE BARRACKS RENEWAL, PHASE 2B, AND FY13 MCA PN76587 QUAD B BUILDING RENOVATION, WHOLE BARRACKS RENEWAL, PHASE 2C'. This indicates the project involves comprehensive renovation of barracks buildings within Quad B at Schofield Barracks, Oahu, Hawaii. While the exact details of the renovation (e.g., structural repairs, HVAC upgrades, plumbing, electrical, interior finishes, modernization of living spaces) are not fully elaborated in the summary data, the 'Whole Barracks Renewal' designation suggests a deep and extensive overhaul aimed at modernizing and improving the habitability and functionality of the barracks. The phased approach (Phase 2B and 2C) implies a multi-stage project, likely to minimize disruption to ongoing military operations.

How does the awarded price of $76.7 million compare to industry benchmarks for similar barracks renovation projects?

Benchmarking the $76.7 million contract value against similar barracks renovation projects is challenging due to the limited specific details provided and the inherent variability in construction costs. Factors such as the age and condition of the original structures, the extent of modernization required (e.g., seismic upgrades, energy efficiency improvements, technology integration), local labor rates in Hawaii, and material costs significantly influence project expenses. Generally, large-scale, multi-year renovations of military housing can run into tens of millions of dollars. Without access to detailed cost breakdowns, square footage, or specific renovation tasks performed, a precise comparison to industry benchmarks or other federal contracts is difficult. However, the extended duration of nearly eight years suggests a substantial and complex undertaking.

What are the potential risks associated with a firm-fixed-price contract lasting nearly eight years?

While a firm-fixed-price (FFP) contract is designed to transfer cost risk to the contractor, an extended duration of 2804 days (nearly eight years) introduces specific risks. The primary risk is that unforeseen economic conditions, such as significant inflation in material costs or labor rates over such a long period, could severely impact the contractor's profitability, potentially leading to disputes, requests for equitable adjustments, or even contractor default if the initial pricing was overly optimistic. Additionally, the long timeframe increases the likelihood of design changes or scope creep if requirements evolve during the project, which, if not managed through formal change orders, can undermine the FFP structure. Contractor performance degradation over time is also a risk, as motivation may wane on a prolonged project.

What is the track record of NAN INC in executing large federal construction contracts?

Information regarding NAN INC's specific track record in executing large federal construction contracts of this magnitude ($76.7 million) is not detailed in the provided summary data. Federal procurement databases often contain award history, but a comprehensive assessment of performance, including past project successes, challenges, and client satisfaction, requires deeper investigation into contract performance reports and historical data. Without this detailed background, it is difficult to definitively assess NAN INC's experience and capability in managing complex, long-term infrastructure projects for the federal government. Further research into their project portfolio and performance reviews would be necessary.

What historical spending patterns exist for barracks renovations at Schofield Barracks or within the Department of the Army?

The provided data focuses on a single contract award. To understand historical spending patterns for barracks renovations at Schofield Barracks or within the Department of the Army, one would need to analyze aggregated contract data over multiple fiscal years. This would involve querying federal procurement databases (like FPDS) for similar contract actions (e.g., by agency, product/service code, keywords like 'barracks renovation') associated with Schofield Barracks or the Army. Such an analysis could reveal trends in contract values, average durations, types of competition, and the frequency of such projects, providing context for the $76.7 million award and identifying any significant shifts in spending levels or contract strategies over time.

What are the implications of the 'Commercial and Institutional Building Construction' classification for this contract?

The classification 'Commercial and Institutional Building Construction' (NAICS code 236220) signifies that the contract falls under the general category of constructing, remodeling, and repairing nonresidential buildings. For federal spending, this broad category encompasses a wide range of projects, including administrative facilities, educational institutions, hospitals, and, as in this case, military barracks. This classification suggests the project involves standard construction practices and materials applicable to institutional settings. It also implies that the procurement process and oversight would align with regulations governing general construction services, rather than highly specialized or unique federal requirements. The market size for this NAICS code is substantial, reflecting the government's continuous need for facility construction and maintenance.

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: SEALED BID

Solicitation ID: W9128A13B0001

Offers Received: 10

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 636 LAUMAKA ST, HONOLULU, HI, 96819

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

Financial Breakdown

Contract Ceiling: $76,695,862

Exercised Options: $76,695,862

Current Obligation: $76,695,862

Contract Characteristics

Consolidated Contract: Yes

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline