Department of the Army awards $53M for Aviation Unit Operations Building construction in Hawaii

Contract Overview

Contract Amount: $53,067,153 ($53.1M)

Contractor: NAN Inc

Awarding Agency: Department of Defense

Start Date: 2024-05-31

End Date: 2027-10-12

Contract Duration: 1,229 days

Daily Burn Rate: $43.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: AVIATION UNIT OPERATIONS BUILDING, WHEELER ARMY AIRFIELD, OAHU, HAWAII

Place of Performance

Location: FORT SHAFTER, HONOLULU County, HAWAII, 96858

State: Hawaii Government Spending

Plain-Language Summary

Department of Defense obligated $53.1 million to NAN INC for work described as: AVIATION UNIT OPERATIONS BUILDING, WHEELER ARMY AIRFIELD, OAHU, HAWAII Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract type is a definitive contract with a firm fixed price, indicating price certainty. 3. Construction is slated for completion by October 2027, spanning over 3 years. 4. The project is located in Hawaii, potentially impacting local construction workforce and material sourcing. 5. The award value of $53,067,153 represents a significant investment in military infrastructure. 6. The contractor, NAN INC, has secured this substantial project, indicating their capacity. 7. The North American Industry Classification System (NAICS) code 236220 points to commercial and institutional building construction.

Value Assessment

Rating: fair

The contract value of $53,067,153 for a large construction project is within a typical range for military infrastructure development. Benchmarking against similar aviation facility construction projects would provide a clearer picture of value for money. The firm fixed price structure helps control costs, but the final cost will depend on execution and potential change orders. Without specific details on the building's size and complexity, a precise value assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through full and open competition, meaning all responsible sources were permitted to submit a bid. The presence of 5 bids indicates a moderate level of competition for this project. A higher number of bidders generally suggests more robust price discovery and potentially better pricing for the government. However, the specific nature of the construction project and the specialized requirements may have limited the pool of qualified bidders.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages multiple companies to bid, driving down prices and ensuring the government receives competitive offers. The 5 bids received suggest a reasonable effort to secure the best value.

Public Impact

The primary beneficiaries are the U.S. Army aviation units stationed at Wheeler Army Airfield, who will gain a new operational facility. The project will deliver a new Aviation Unit Operations Building, enhancing military readiness and operational capabilities. The geographic impact is localized to Oahu, Hawaii, potentially creating temporary jobs for the local construction workforce. The construction activities will likely involve local suppliers for materials and services, contributing to the regional economy. The completion of this facility will support the long-term operational needs of the Army in Hawaii.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen construction challenges arise.
Dependence on timely delivery of materials and skilled labor in Hawaii.
Risk of schedule delays due to weather or logistical issues specific to island construction.

Positive Signals

Firm fixed price contract provides cost certainty.
Full and open competition suggests a competitive bidding process.
Awarded to NAN INC, a contractor with experience in large-scale construction.
Project duration allows for phased construction and management.
Located in Hawaii, supporting regional economic activity.

Sector Analysis

The construction sector, particularly for government and military facilities, is a significant market. This contract falls under commercial and institutional building construction, a broad category encompassing a wide range of structures. The market for military construction is often characterized by specialized requirements, stringent security protocols, and long-term infrastructure needs. Comparable spending benchmarks would involve analyzing the cost per square foot or per unit of similar military aviation facilities constructed in recent years.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting requirements mandated by a small business set-aside. However, the prime contractor, NAN INC, may voluntarily engage small businesses for subcontracting opportunities as part of their project execution. The absence of a set-aside means that larger, established construction firms were the primary focus of the competition.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Army, with potential involvement from the Defense Contract Management Agency (DCMA). Accountability measures are embedded in the contract terms, including performance standards and payment schedules tied to milestones. Transparency is facilitated through contract award announcements and public databases. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Military Construction Projects
Aviation Facilities
Department of Defense Infrastructure
Construction Contracts
Army Corps of Engineers Projects

Risk Flags

Potential for cost escalation due to Hawaii's isolated location and higher logistical costs.
Risk of construction delays due to weather patterns or specialized labor availability.
Need for thorough contractor performance review to ensure successful project execution.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $53.1 million to NAN INC. AVIATION UNIT OPERATIONS BUILDING, WHEELER ARMY AIRFIELD, 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 $53.1 million.

What is the period of performance?

Start: 2024-05-31. End: 2027-10-12.

What is the track record of NAN INC in completing similar large-scale construction projects for the Department of Defense?

Assessing NAN INC's track record requires a review of their past performance on similar Department of Defense (DoD) contracts. This would involve examining project types, contract values, completion timeliness, and any reported performance issues or awards. Publicly available contract databases and contractor performance assessment reporting systems (CPARS) are key resources for this analysis. A history of successful, on-time, and within-budget project completion for comparable military construction, particularly aviation-related facilities, would indicate a lower risk profile for this current award. Conversely, a pattern of delays, cost overruns, or negative performance reviews would raise concerns about NAN INC's ability to execute this project successfully.

How does the awarded value of $53,067,153 compare to the cost of similar aviation unit operations buildings constructed by the DoD?

To benchmark the value of this $53 million contract, a comparative analysis with similar aviation unit operations buildings constructed by the Department of Defense (DoD) is necessary. This comparison should consider factors such as square footage, complexity of facilities (e.g., specialized hangars, maintenance areas, administrative spaces), geographic location (which impacts labor and material costs), and the year of construction. Data from past DoD construction projects, available through public contract databases and reports from organizations like the Government Accountability Office (GAO) or the Congressional Budget Office (CBO), can be used. If this contract's cost per square foot or per functional unit is significantly higher than comparable projects, it might suggest a less favorable value for money, assuming similar quality and scope.

What are the primary risk indicators associated with this specific construction contract?

Several risk indicators are associated with this construction contract. Firstly, the project's location in Hawaii presents potential logistical challenges and higher material/labor costs compared to the continental U.S. Secondly, the duration of the contract (over three years) increases the exposure to potential economic fluctuations, material price volatility, and changes in regulatory requirements. Thirdly, as with any large construction project, there's an inherent risk of unforeseen site conditions or design issues that could lead to delays and cost overruns, even with a firm fixed price contract. Finally, the contractor's past performance, if not thoroughly vetted, represents a risk. The number of bidders (5) suggests moderate competition, which is generally positive, but doesn't eliminate risks associated with execution.

What is the expected program effectiveness and impact of the new Aviation Unit Operations Building on Army operations in Hawaii?

The new Aviation Unit Operations Building is expected to significantly enhance the effectiveness of Army aviation units operating in Hawaii. Its primary impact will be to provide modern, purpose-built facilities for aircraft maintenance, flight operations support, administrative functions, and personnel readiness. This improved infrastructure can lead to increased operational efficiency, reduced downtime for aircraft, enhanced safety, and better overall mission capability. By consolidating operations into a dedicated facility, it can also foster better coordination and communication among aviation personnel. The effectiveness will be measured by the facility's ability to support current and future aviation missions, contribute to force projection capabilities in the Pacific theater, and improve the quality of life for aviation personnel.

How has historical spending on aviation infrastructure by the Department of the Army in Hawaii trended over the past five years?

Analyzing historical spending on aviation infrastructure by the Department of the Army in Hawaii over the past five years would provide context for this $53 million award. This trend analysis would involve identifying previous contracts for similar facilities, such as hangars, maintenance depots, flight control towers, and support buildings, awarded to various contractors in Hawaii. Examining the total annual expenditure, the average contract size, and the types of projects undertaken would reveal patterns. A consistent or increasing trend in spending might indicate a strategic focus on modernizing aviation infrastructure in the region, suggesting this current project aligns with ongoing investment. Conversely, a declining trend could warrant further investigation into the reasons behind reduced investment.

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: W9128A24R0002

Offers Received: 5

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: $53,067,153

Exercised Options: $53,067,153

Current Obligation: $53,067,153

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline