DOD's $106M Camp Foster construction contract awarded to Obayashi Corporation for school and housing demolition

Contract Overview

Contract Amount: $106,288,110 ($106.3M)

Contractor: Obayashi Corporation

Awarding Agency: Department of Defense

Start Date: 2014-09-26

End Date: 2017-07-06

Contract Duration: 1,014 days

Daily Burn Rate: $104.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF CONSTRUCT ZUKERAN ELEMENTARY SCHOOL AND DEMOLISH HOUSING UNITS, CAMP FOSTER, OKINAWA, JAPAN FY13 DODEA MILCON PA00030, REPLACE ZUKERAN ELEMENTARY SCHOOL, AND UMMC P305 DEMOLISH 45 HOUSING UNITS, KISHABA HOUSING, CAMP FOSTER, OKINAWA, JAPAN

Plain-Language Summary

Department of Defense obligated $106.3 million to OBAYASHI CORPORATION for work described as: IGF::OT::IGF CONSTRUCT ZUKERAN ELEMENTARY SCHOOL AND DEMOLISH HOUSING UNITS, CAMP FOSTER, OKINAWA, JAPAN FY13 DODEA MILCON PA00030, REPLACE ZUKERAN ELEMENTARY SCHOOL, AND UMMC P305 DEMOLISH 45 HOUSING UNITS, KISHABA HOUSING, CAMP FOSTER, OKINAWA, JAPAN Key points: 1. Contract value of $106.3M for construction and demolition services. 2. Awarded to Obayashi Corporation, a single entity, indicating a specific contractor's capability. 3. The contract duration of 1014 days suggests a significant, multi-year project. 4. Full and open competition was utilized, implying a broad solicitation process. 5. The project scope includes both new construction (school) and demolition (housing). 6. Fixed-price contract type suggests cost certainty for the government, shifting risk to the contractor.

Value Assessment

Rating: good

The contract value of $106.3 million for a school replacement and housing demolition project appears within a reasonable range for large-scale military construction in an overseas location. Benchmarking against similar Department of Defense MILCON (Military Construction) projects would provide a more precise assessment of value for money. The fixed-price nature of the contract is generally favorable for cost control, provided the scope was well-defined.

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. The presence of 4 bids suggests a competitive environment, though the specific number of bidders does not inherently guarantee the best price without further analysis of bid amounts and scope adherence. This level of competition is generally positive for price discovery.

Taxpayer Impact: Full and open competition typically leads to more competitive pricing for taxpayers by encouraging multiple firms to bid, potentially driving down costs.

Public Impact

Benefits military families and personnel stationed at Camp Foster, Okinawa, by providing updated educational facilities. Delivers new construction services for Zukeran Elementary School and demolition services for 45 housing units. Geographic impact is localized to Camp Foster, Okinawa, Japan, a significant U.S. military installation. Workforce implications include construction jobs for skilled laborers and tradespeople, both locally and potentially from the contractor's established workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the scope of demolition or new construction is underestimated.
Delays in construction due to logistical challenges inherent in overseas projects.
Quality control issues in construction or demolition could lead to rework or safety concerns.

Positive Signals

Fixed-price contract provides cost certainty for the government.
Full and open competition suggests a robust bidding process.
Award to an established corporation like Obayashi Corporation may indicate a higher likelihood of successful project completion.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, specifically focusing on military construction (MILCON). The global market for military construction is substantial, driven by defense spending in various countries. Projects of this scale, involving new educational facilities and infrastructure upgrades on overseas bases, are common within the Department of Defense's capital investment programs. Comparable spending benchmarks would typically be found within DoD's historical MILCON data and industry reports on large-scale construction projects.

Small Business Impact

The contract was awarded under full and open competition and does not indicate any specific small business set-aside. While the prime contractor, Obayashi Corporation, is a large entity, there may be opportunities for small businesses to participate as subcontractors. The extent of small business subcontracting would depend on the prime contractor's procurement practices and the specific needs of the project.

Oversight & Accountability

Oversight for this Department of Defense contract would typically be managed by the contracting officer and the Defense Contract Management Agency (DCMA). Accountability measures are built into the contract through performance clauses, payment schedules tied to milestones, and potential penalties for delays or deficiencies. Transparency is generally maintained through contract award databases and reporting requirements, though specific project-level oversight details are often internal.

Related Government Programs

Department of Defense Military Construction
Overseas Military Base Construction
School Construction Projects
Demolition Services Contracts
Federal Facilities Management

Risk Flags

Potential for unforeseen environmental hazards during demolition.
Logistical complexities of overseas construction projects.
Risk of construction delays impacting operational readiness.
Quality control and assurance for new construction.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $106.3 million to OBAYASHI CORPORATION. IGF::OT::IGF CONSTRUCT ZUKERAN ELEMENTARY SCHOOL AND DEMOLISH HOUSING UNITS, CAMP FOSTER, OKINAWA, JAPAN FY13 DODEA MILCON PA00030, REPLACE ZUKERAN ELEMENTARY SCHOOL, AND UMMC P305 DEMOLISH 45 HOUSING UNITS, KISHABA HOUSING, CAMP FOSTER, OKINAWA, JAPAN

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 $106.3 million.

What is the period of performance?

Start: 2014-09-26. End: 2017-07-06.

What is the historical performance record of Obayashi Corporation with the Department of Defense?

Obayashi Corporation has a significant history of undertaking large-scale construction projects globally, including for military clients. While specific performance metrics for this particular contract are not detailed here, their track record generally indicates experience with complex projects. A deeper dive into past DoD contracts awarded to Obayashi would reveal their on-time delivery rates, cost performance, and any documented issues or commendations. This context is crucial for assessing the risk associated with their current contract. Federal procurement databases and contract award histories can provide insights into their past performance, including any contract modifications, disputes, or terminations.

How does the per-square-foot cost of the Zukeran Elementary School construction compare to similar DoD school projects?

To compare the per-square-foot cost, we would need the total square footage of the new Zukeran Elementary School and the portion of the $106.3 million allocated to its construction. Assuming a significant portion of the budget is for the school, and if it were, for example, a 100,000 sq ft facility costing $80 million, that would be $800/sq ft. This figure would then be benchmarked against recent DoD school construction projects, which can range widely based on location, complexity, and specific requirements (e.g., security features, specialized labs). Overseas construction often incurs higher costs due to logistics and labor. Without the specific square footage and cost allocation, a precise comparison is not possible, but costs exceeding $500-$700 per square foot for modern, secure educational facilities in high-cost areas are not uncommon.

What are the primary risks associated with performing demolition of housing units in an active military installation?

Performing demolition of housing units within an active military installation like Camp Foster presents several key risks. These include potential environmental hazards (e.g., asbestos, lead paint, underground storage tanks) requiring careful abatement procedures. Safety risks are paramount, involving structural collapse, debris management, and ensuring the safety of nearby personnel and infrastructure. Logistical challenges are also significant, such as managing heavy equipment access, traffic control, waste disposal, and coordinating with base operations to minimize disruption. Furthermore, unforeseen subsurface conditions or hazardous materials could lead to scope changes and cost increases. Strict adherence to environmental regulations and safety protocols, along with robust site assessment, is critical to mitigate these risks.

What is the historical spending trend for construction and demolition at Camp Foster over the last five fiscal years?

Analyzing historical spending trends for construction and demolition at Camp Foster over the last five fiscal years would provide context for the $106.3 million award. This data would reveal whether this contract represents a significant increase or decrease in typical spending for such services at the base. It could indicate a period of heightened infrastructure investment or a lull. Examining past contracts would also highlight the types of projects undertaken (e.g., barracks, training facilities, utilities) and the average contract values. Such a trend analysis helps in assessing if the current contract is an anomaly or part of a sustained investment strategy for the base's infrastructure.

How were the specific requirements for the Zukeran Elementary School determined and validated?

The requirements for the Zukeran Elementary School were likely determined through a rigorous needs assessment process conducted by the Department of Defense Education Activity (DoDEA) in conjunction with base leadership and educational stakeholders. This process typically involves evaluating current facility conditions, enrollment projections, educational program needs, and modern learning environment standards. Validation would involve reviews by architects, engineers, and DoDEA officials to ensure the design meets functional, safety, and educational efficacy requirements. Public-private partnerships or community input might also play a role in defining specific features, though military construction often follows standardized requirements for security and durability.

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

Offers Received: 4

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: $106,288,110

Exercised Options: $106,288,110

Current Obligation: $106,288,110

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline