DoD awards $57.8M construction contract for Hawaii military reservation, highlighting significant investment in infrastructure

Contract Overview

Contract Amount: $57,850,019 ($57.9M)

Contractor: NAN Inc

Awarding Agency: Department of Defense

Start Date: 2022-09-30

End Date: 2025-11-20

Contract Duration: 1,147 days

Daily Burn Rate: $50.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: FY22 MULTI-DOMAIN TASK FORCE #3, BUILDING 300, HELEMANO MILITARY RESERVATION, OAHU, HAWAII

Place of Performance

Location: FORT SHAFTER, HONOLULU County, HAWAII, 96858

State: Hawaii Government Spending

Plain-Language Summary

Department of Defense obligated $57.9 million to NAN INC for work described as: FY22 MULTI-DOMAIN TASK FORCE #3, BUILDING 300, HELEMANO MILITARY RESERVATION, OAHU, HAWAII Key points: 1. The contract value of $57.8 million represents a substantial investment in military infrastructure. 2. Awarded under full and open competition, suggesting a competitive bidding process. 3. The firm-fixed-price contract type aims to provide cost certainty for the government. 4. The project duration of approximately 3 years indicates a significant construction undertaking. 5. The contract is for commercial and institutional building construction, a critical sector for military readiness. 6. The geographic location in Hawaii may present unique logistical and cost considerations.

Value Assessment

Rating: good

The contract value of $57.8 million for commercial and institutional building construction in Hawaii appears reasonable given the scope and duration. Benchmarking against similar military construction projects of this scale is challenging without more specific project details. However, the firm-fixed-price structure suggests an effort to control costs. The award amount is within the expected range for large-scale construction projects on the island.

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. With four bidders participating, the competition level suggests a healthy market interest in this type of government contract. This level of competition is generally favorable for price discovery and can lead to more competitive pricing for the government.

Taxpayer Impact: The full and open competition with multiple bidders is beneficial for taxpayers as it increases the likelihood of receiving a fair market price and reduces the risk of overpayment.

Public Impact

The primary beneficiaries are the Department of Defense and military personnel stationed at the Helemano Military Reservation, who will gain improved facilities. The contract will deliver new or improved commercial and institutional buildings, enhancing operational capabilities. The geographic impact is concentrated in Oahu, Hawaii, supporting local economic activity through construction jobs. The project will likely create employment opportunities for skilled construction workers in Hawaii.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions arise in Hawaii's unique environment.
Logistical challenges associated with construction in an island setting could impact timelines and costs.
Ensuring compliance with local building codes and environmental regulations in Hawaii.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Awarded through full and open competition, indicating a competitive market.
The project supports critical military infrastructure development.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a vital segment of the construction industry that supports government and private infrastructure development. The market for large-scale construction, particularly for government entities, is often characterized by significant contract values and specialized requirements. Spending in this sector is driven by the need for new facilities, upgrades, and maintenance of existing structures, with military bases being a consistent source of demand.

Small Business Impact

The data indicates this contract was awarded under full and open competition and does not specify any small business set-aside. While there is no direct indication of small business participation in the prime contract, large construction projects often involve subcontracting opportunities. The extent to which small businesses will be involved will depend on the prime contractor's subcontracting plan and the availability of qualified small businesses for specific trades or services.

Oversight & Accountability

Oversight for this contract will primarily be managed by the Department of the Army, a component of the Department of Defense. Accountability measures are inherent in the firm-fixed-price contract type, which places a strong emphasis on the contractor delivering the specified work within the agreed-upon price. Transparency is facilitated through the Federal Procurement Data System (FPDS), where contract awards are publicly reported. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Military Construction, Army
Facilities Sustainment, Restoration, and Modernization
Department of Defense Construction Contracts
Commercial Building Construction

Risk Flags

Potential for cost escalation due to island logistics.
Environmental considerations specific to Hawaii.
Contractor performance risk on large-scale projects.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $57.9 million to NAN INC. FY22 MULTI-DOMAIN TASK FORCE #3, BUILDING 300, HELEMANO MILITARY RESERVATION, 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 $57.9 million.

What is the period of performance?

Start: 2022-09-30. End: 2025-11-20.

What is the historical spending pattern for commercial and institutional building construction by the Department of the Army in Hawaii?

Analyzing historical spending patterns for commercial and institutional building construction by the Department of the Army in Hawaii requires access to detailed procurement data over several fiscal years. While this specific contract is for $57.8 million, understanding the broader trend involves looking at the aggregate spending on similar projects. Factors influencing historical spending include military base expansion or consolidation, infrastructure modernization initiatives, and specific operational needs. Without direct access to a comprehensive historical database filtered by agency, location, and contract type, a precise historical comparison is difficult. However, it is reasonable to assume that significant investments are periodically made to maintain and upgrade military facilities in strategic locations like Hawaii, which has a substantial military presence.

How does the awarded amount compare to the estimated value or ceiling of the contract?

The provided data lists the 'awarded amount' as $57,850,0019. However, it does not explicitly state the 'estimated value' or 'ceiling' of the contract. For definitive contracts, the awarded amount typically represents the total value obligated at the time of award or the final negotiated price. If this were a contract with a ceiling (e.g., cost-plus-incentive-fee), the awarded amount might represent an initial funding allocation. Given it's a 'FIRM FIXED PRICE' contract awarded under 'FULL AND OPEN COMPETITION', the awarded amount is likely the final negotiated price. To compare it to an estimated value, one would need to consult the original solicitation documents or contract modifications, which are not provided here. Generally, for firm-fixed-price contracts, the awarded amount is the definitive price agreed upon.

What are the specific risks associated with construction projects in Hawaii, and how are they mitigated in this contract?

Construction projects in Hawaii face unique risks including higher material and labor costs due to island logistics, potential environmental sensitivities (coral reefs, endangered species), seismic activity, and unique weather patterns (volcanic activity, hurricanes). This contract, being a firm-fixed-price award under full and open competition, implicitly shifts much of the cost risk to the contractor. The contractor's bid would have factored in these known risks. Mitigation strategies often include detailed site investigations, robust environmental impact assessments, adherence to strict building codes designed for seismic and weather resilience, and potentially contingency planning within the contractor's schedule and budget. The government's role involves thorough pre-award review of the contractor's proposed approach and risk management plan.

What is the track record of NAN INC. in performing similar large-scale construction contracts for the Department of Defense?

Assessing the track record of NAN INC. requires examining their past performance on similar contracts, particularly those involving large-scale construction for the Department of Defense. This would involve reviewing contract databases for previous awards, performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), and any history of disputes or contract terminations. Without access to NAN INC.'s specific performance history within government procurement systems, it's impossible to definitively state their track record. However, the fact that they were awarded this significant $57.8 million contract under full and open competition suggests they met the minimum qualifications and were deemed capable of performing the work based on past performance or demonstrated capacity.

How does the number of bidders (4) impact the potential value for money achieved in this contract?

Having four bidders for this $57.8 million construction contract generally indicates a healthy level of competition, which is favorable for achieving value for money. A higher number of bidders typically increases the likelihood that the government receives competitive pricing, as contractors vie for the award. With four participants, the Department of the Army had multiple proposals to evaluate, allowing for a more robust comparison of technical approaches and pricing. This competitive environment reduces the risk of the government paying an inflated price and increases the probability that the winning bid reflects a fair market value for the required construction services. The specific value for money is ultimately determined by the quality of the proposals received and the negotiation 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: W9128A22R0016

Offers Received: 4

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, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $57,850,019

Exercised Options: $57,850,019

Current Obligation: $57,850,019

Actual Outlays: $7,067,575

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline