DoD's $27.6M MEDCOM Health & Dental Clinic contract awarded to Obayashi Corporation for construction

Contract Overview

Contract Amount: $27,622,932 ($27.6M)

Contractor: Obayashi Corporation

Awarding Agency: Department of Defense

Start Date: 2012-09-27

End Date: 2016-12-30

Contract Duration: 1,555 days

Daily Burn Rate: $17.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: MEDCOM HEALTH&DENTAL CLINIC, BLDG. 704, CAMAP ZAMA

Plain-Language Summary

Department of Defense obligated $27.6 million to OBAYASHI CORPORATION for work described as: MEDCOM HEALTH&DENTAL CLINIC, BLDG. 704, CAMAP ZAMA Key points: 1. The contract value of $27.6 million for a health and dental clinic construction project appears to be within a reasonable range for a facility of this nature, though specific benchmarks are needed for definitive value assessment. 2. Awarded under full and open competition, the contract suggests a competitive bidding process that should have driven price discovery. 3. The definitive contract type indicates a clear scope of work and pricing structure, reducing ambiguity. 4. The project duration of 1555 days (approximately 4.25 years) suggests a complex construction undertaking. 5. The absence of small business set-asides or subcontracting requirements warrants further investigation into potential impacts on smaller businesses. 6. The contract was awarded by the Department of the Army, a component of the Department of Defense, indicating a significant federal investment in military healthcare infrastructure.

Value Assessment

Rating: fair

The contract value of $27.6 million for the construction of a health and dental clinic needs to be benchmarked against similar federal or commercial construction projects of comparable size and complexity. Without specific cost breakdowns or comparisons to industry standards for medical facility construction, it is difficult to definitively assess value for money. The firm fixed-price contract type suggests that the contractor assumed the risk for cost overruns, which can be a positive indicator if the price was competitive.

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 a bid. This suggests a robust bidding environment that likely led to competitive pricing. The number of bidders is not specified, but the nature of the competition implies that multiple companies likely vied for the contract, contributing to price discovery and potentially securing a better deal for the government.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that drives down costs and encourages efficiency from contractors.

Public Impact

The primary beneficiaries of this contract are military personnel and their families stationed at Camp Zama, Japan, who will gain access to improved healthcare facilities. The project delivers a new health and dental clinic, enhancing the quality and capacity of medical services available to the base population. The geographic impact is localized to Camp Zama, Japan, supporting the U.S. Army's infrastructure in the Pacific region. The construction activities would have involved a workforce of skilled laborers, engineers, and project managers, contributing to employment in the construction sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the initial scope was not fully defined, despite the firm fixed-price contract.
Construction delays could impact the availability of critical healthcare services for military personnel.
Quality control during construction is paramount to ensure the facility meets healthcare standards and long-term durability.
Logistical challenges associated with constructing a facility in an overseas location (Camp Zama, Japan).

Positive Signals

Awarded under full and open competition, suggesting a competitive pricing environment.
Firm fixed-price contract type shifts cost risk to the contractor.
Construction of essential healthcare infrastructure for military readiness and personnel well-being.
Long-term asset for the Department of Defense, providing sustained healthcare services.

Sector Analysis

This contract falls within the Heavy and Civil Engineering Construction sector, specifically for specialized facilities like medical clinics. The market for constructing government facilities, particularly overseas military installations, is often characterized by a mix of large, established construction firms and specialized subcontractors. Benchmarking this contract's value against similar military construction projects or large-scale healthcare facility builds would provide further context on its cost-effectiveness.

Small Business Impact

The contract details indicate that small business participation was not a primary focus, as there is no indication of a small business set-aside or specific subcontracting goals. This suggests that the prime contractor, Obayashi Corporation, likely managed the project with its own resources or through larger subcontractors. Further analysis would be needed to determine if any subcontracting opportunities were made available to small businesses.

Oversight & Accountability

Oversight for this contract would typically be managed by the U.S. Army Corps of Engineers or a designated contracting officer's representative within the MEDCOM. Accountability measures are inherent in the firm fixed-price contract, requiring the contractor to deliver the specified facility within the agreed-upon cost and timeline. Transparency is generally maintained through contract award databases and reporting requirements, though detailed project progress and specific oversight activities may not always be publicly accessible.

Related Government Programs

Military Construction (MILCON) Program
Department of Defense Healthcare Facilities
Global Infrastructure Projects
Army Medical Command (MEDCOM) Facilities

Risk Flags

Potential for cost overruns if scope was not fully defined.
Risk of construction delays impacting service availability.
Quality assurance challenges in overseas construction.
Logistical complexities of international projects.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $27.6 million to OBAYASHI CORPORATION. MEDCOM HEALTH&DENTAL CLINIC, BLDG. 704, CAMAP ZAMA

Who is the contractor on this award?

The obligated recipient is OBAYASHI CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $27.6 million.

What is the period of performance?

Start: 2012-09-27. End: 2016-12-30.

What is the track record of Obayashi Corporation in executing similar large-scale construction projects for the U.S. Department of Defense, particularly overseas?

Obayashi Corporation is a major global construction company with a significant history of undertaking large infrastructure and building projects worldwide. While specific details on their past performance with the U.S. Department of Defense are not provided in this data snippet, their status as a large, established firm suggests they have likely executed numerous complex projects. To assess their track record for this specific contract, one would need to review their past performance evaluations, any documented issues on previous DoD contracts, and their experience with similar facility types (e.g., healthcare, government buildings) and geographic locations. A review of federal procurement data and industry reports would be necessary to provide a comprehensive answer on their specific DoD project history and performance.

How does the awarded amount of $27.6 million compare to the estimated cost or market value for constructing a health and dental clinic of this size and scope in Japan?

Benchmarking the $27.6 million award against similar projects is crucial for assessing value. Without specific details on the clinic's square footage, complexity of medical equipment installation, and specific site conditions at Camp Zama, a precise comparison is difficult. However, large-scale medical facility construction is inherently expensive. Factors such as labor costs, material sourcing, regulatory compliance, and the logistical challenges of building on a U.S. military base in Japan would influence the final cost. A thorough value analysis would involve comparing this contract to other DoD medical facility constructions, or even large civilian hospital projects, adjusting for regional cost differences and project scope. The firm fixed-price nature suggests the government aimed to cap costs, but the initial bid price relative to independent cost estimates is key to determining if it represented good value.

What were the primary risk indicators identified during the procurement process for this contract, and how were they mitigated?

Potential risk indicators for a construction project of this magnitude include scope definition, schedule adherence, cost control, quality assurance, and logistical challenges, especially in an overseas location. For this contract, awarded as a firm fixed-price definitive contract under full and open competition, the primary risk mitigation strategy was likely the competitive bidding process itself, which incentivizes contractors to accurately estimate costs and risks to remain profitable. The firm fixed-price structure places the financial risk of cost overruns on the contractor. However, risks related to unforeseen site conditions, material availability, or labor disputes could still arise. The contract's duration (1555 days) suggests that schedule risk was also a significant consideration. Specific mitigation plans would typically be detailed in the contract's statement of work and performance requirements, overseen by the contracting officer's representative.

What is the expected impact of this new health and dental clinic on the overall healthcare service delivery and readiness for U.S. military personnel at Camp Zama?

The construction of a new, modern health and dental clinic is expected to significantly enhance healthcare service delivery and readiness for U.S. military personnel and their families at Camp Zama. A new facility typically offers improved capacity, updated medical technology, better patient flow, and potentially a wider range of services compared to older or smaller installations. This can lead to reduced wait times, improved quality of care, and better health outcomes. Enhanced healthcare infrastructure directly supports military readiness by ensuring that service members are medically fit for duty and that their families receive necessary care, minimizing disruptions and maintaining morale. The facility serves as a critical component of the base's support infrastructure.

How has federal spending on similar heavy and civil engineering construction projects for military installations evolved over the period this contract was active (2012-2016)?

During the period of 2012-2016, federal spending on heavy and civil engineering construction, particularly for military installations, was influenced by factors such as ongoing military operations, base realignment and closure initiatives, and the need to modernize aging infrastructure. The Department of Defense consistently allocates significant funds to its Military Construction (MILCON) program, which includes projects like the MEDCOM clinic. Spending levels can fluctuate based on congressional appropriations, geopolitical priorities, and the specific needs of different branches and commands. While this specific contract represents a $27.6 million investment, broader trends would show overall DoD construction budgets, potentially indicating whether this project was part of a larger investment strategy or a standalone requirement. Analyzing historical DoD budget requests and appropriations for construction would provide context on spending patterns during this timeframe.

Industry Classification

NAICS: Construction › Other Heavy and Civil Engineering Construction › Other Heavy and Civil Engineering Construction

Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCTION OF BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2-15-2, KONAN, MINATO-KU

Business Categories: Category Business, Corporate Entity Tax Exempt, Foreign Owned, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $27,665,423

Exercised Options: $27,622,932

Current Obligation: $27,622,932

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline