Interior Department's $17.75M Tularosa Basin Desalination Facility Contract Awarded to Laguna Construction Company

Contract Overview

Contract Amount: $17,750,125 ($17.8M)

Contractor: Laguna Construction Company, Inc

Awarding Agency: Department of the Interior

Start Date: 2004-06-10

End Date: 2008-08-15

Contract Duration: 1,527 days

Daily Burn Rate: $11.6K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: TULAROSA BASIN NATIONAL DESALINATION RESEARCH FACILITY

Place of Performance

Location: TULAROSA, OTERO County, NEW MEXICO, 88352

State: New Mexico Government Spending

Plain-Language Summary

Department of the Interior obligated $17.8 million to LAGUNA CONSTRUCTION COMPANY, INC for work described as: TULAROSA BASIN NATIONAL DESALINATION RESEARCH FACILITY Key points: 1. The contract for the Tularosa Basin National Desalination Research Facility was awarded to Laguna Construction Company, Inc. 2. The total value of the contract is $17,750,125.39. 3. The contract was awarded under a 'not available for competition' basis. 4. The project duration was 1527 days, spanning from June 10, 2004, to August 15, 2008. 5. The facility is located in New Mexico. 6. The contract type was Firm Fixed Price. 7. The North American Industry Classification System (NAICS) code is 236220 for Commercial and Institutional Building Construction.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging due to the lack of specific details on the scope of work and the 'not available for competition' award. However, the fixed-price nature suggests a defined cost expectation. Without comparable projects or detailed cost breakdowns, a precise value-for-money assessment is difficult. The duration of the contract (over four years) for a construction project of this value indicates a potentially complex undertaking.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a 'not available for competition' basis, indicating that a full and open competition was not conducted. This typically occurs when only one source is capable of meeting the government's needs, or in specific circumstances like national security or urgent requirements. The lack of multiple bidders means there was no opportunity for price discovery through competitive bidding, potentially leading to higher costs for the government.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure to drive down costs. The justification for the sole-source award needs to be robust to ensure public funds were used efficiently.

Public Impact

The primary beneficiaries are likely the residents and industries in the Tularosa Basin region of New Mexico, who would benefit from access to desalinated water. The project delivered a National Desalination Research Facility, contributing to advancements in water treatment technology. The geographic impact is concentrated in New Mexico, specifically the Tularosa Basin. The construction phase would have created temporary employment opportunities for skilled and unskilled labor in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases cost to taxpayers.
Lack of transparency in the justification for 'not available for competition' award.
Long project duration could indicate potential for cost overruns or delays if not managed effectively.

Positive Signals

Firm Fixed Price contract provides cost certainty for the government.
Award to Laguna Construction Company, Inc., a known entity in construction.
Project addresses critical water resource needs in a specific region.

Sector Analysis

The construction of specialized facilities like desalination plants falls within the broader construction sector, specifically commercial and institutional building construction. This sector is characterized by large-scale projects requiring significant capital investment and specialized expertise. The market size for such infrastructure projects can be substantial, driven by government initiatives and regional needs for resources like water. This contract represents a specific investment in water infrastructure research and development.

Small Business Impact

Information regarding small business set-asides or subcontracting plans is not provided in the data. Given the sole-source nature of the award, it is less likely that specific small business set-aside goals were a primary consideration in the initial award. However, the prime contractor may have engaged small businesses as subcontractors, the details of which are not available.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve the Bureau of Reclamation, a division of the Department of the Interior. As a fixed-price contract, oversight would focus on ensuring the contractor meets the specified deliverables and quality standards within the agreed-upon price and timeline. Transparency regarding the justification for the sole-source award and the project's progress would be key accountability measures.

Related Government Programs

Water Infrastructure Projects
Desalination Research and Development
Bureau of Reclamation Construction Contracts
Department of the Interior Facilities

Risk Flags

Sole-source award justification requires scrutiny.
Lack of competitive bidding may impact cost-effectiveness.
Long project duration increases potential for unforeseen issues.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Interior awarded $17.8 million to LAGUNA CONSTRUCTION COMPANY, INC. TULAROSA BASIN NATIONAL DESALINATION RESEARCH FACILITY

Who is the contractor on this award?

The obligated recipient is LAGUNA CONSTRUCTION COMPANY, INC.

Which agency awarded this contract?

Awarding agency: Department of the Interior (Bureau of Reclamation).

What is the total obligated amount?

The obligated amount is $17.8 million.

What is the period of performance?

Start: 2004-06-10. End: 2008-08-15.

What was the specific justification for awarding this contract on a 'not available for competition' basis?

The provided data indicates the contract was awarded under a 'not available for competition' basis. This typically means that only one responsible source was determined to be capable of satisfying the government's requirements. Common reasons include proprietary technology, unique capabilities, or urgent and compelling needs where competition is not feasible. Without further documentation from the awarding agency (Bureau of Reclamation), the precise justification remains unknown. This lack of transparency can raise concerns about whether the government explored all viable competitive options and secured the best possible value for taxpayers.

How does the $17.75 million cost compare to similar desalination facility construction projects?

Comparing the $17.75 million cost of the Tularosa Basin National Desalination Research Facility to similar projects is difficult without more specific details on the facility's capacity, technological complexity, and scope of work. Desalination plants vary widely in cost based on factors like the source of water (seawater vs. brackish), the technology employed (e.g., reverse osmosis, thermal), and the required output volume. Construction costs can range from tens of millions to billions of dollars. Given this contract's duration of over four years, it suggests a significant undertaking. However, without a direct benchmark for a research facility of this specific nature and location, a definitive cost comparison is not feasible.

What were the key performance indicators (KPIs) for Laguna Construction Company, Inc. under this contract?

The provided data does not specify the key performance indicators (KPIs) that were established for Laguna Construction Company, Inc. under this contract. Typically, for construction projects, KPIs would include adherence to project schedules, quality of workmanship, safety compliance, and meeting technical specifications outlined in the contract. For a research facility, specific performance metrics related to the functionality and operational readiness of the research components might also have been included. As this was a Firm Fixed Price contract, the primary performance expectation is the delivery of the completed facility according to the contract terms.

What is the historical spending pattern of the Bureau of Reclamation on desalination research facilities?

The provided data focuses on a single contract awarded in 2004. To understand the historical spending patterns of the Bureau of Reclamation on desalination research facilities, a broader analysis of their procurement history would be necessary. This would involve examining contracts awarded over multiple fiscal years, identifying trends in project types, funding levels, and the number of facilities commissioned or researched. Without access to this broader dataset, it is impossible to ascertain specific historical spending patterns for desalination research facilities by this agency.

What are the potential risks associated with a sole-source award for a large construction project like this?

Sole-source awards for large construction projects carry several potential risks. Primarily, the absence of competition can lead to inflated pricing, as the contractor faces less pressure to offer the most cost-effective solution. There's also a risk of reduced innovation, as the government doesn't benefit from the diverse approaches multiple bidders might propose. Furthermore, the justification for a sole-source award must be rigorously scrutinized to ensure it is legitimate and not a means to avoid competitive processes. If the justification is weak, it could indicate potential mismanagement or favoritism. Finally, without competitive benchmarking, assessing the overall value for money becomes more challenging.

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Commercial and Institutional Building Construction

Product/Service Code: ARCHITECT/ENGINEER SERVICES › ARCH-ENG SVCS - GENERAL

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: I-40 W EXIT 114, LAGUNA, NM, 02

Business Categories: 8(a) Program Participant, Category Business, HUBZone Firm, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $17,750,125

Exercised Options: $17,750,125

Current Obligation: $17,750,125

Contract Characteristics

Multi-Year Contract: Yes

Timeline