DOI Awards $270M for San Juan Lateral Water Treatment Plant Construction

Contract Overview

Contract Amount: $270,116,821 ($270.1M)

Contractor: Jacobs Project Management CO.

Awarding Agency: Department of the Interior

Start Date: 2024-08-30

End Date: 2029-12-24

Contract Duration: 1,942 days

Daily Burn Rate: $139.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Construction

Official Description: SAN JUAN LATERAL WATER TREATMENT PLANT

Place of Performance

Location: FARMINGTON, SAN JUAN County, NEW MEXICO, 87401

State: New Mexico Government Spending

Plain-Language Summary

Department of the Interior obligated $270.1 million to JACOBS PROJECT MANAGEMENT CO. for work described as: SAN JUAN LATERAL WATER TREATMENT PLANT Key points: 1. Significant investment in critical water infrastructure for New Mexico. 2. Competition method is 'Full and Open', suggesting potential for competitive pricing. 3. Contract type 'Fixed Price with Economic Price Adjustment' introduces some cost escalation risk. 4. Sector is Construction, specifically water and sewer infrastructure.

Value Assessment

Rating: good

The contract value of $270M is substantial for a water treatment plant. Benchmarking against similar large-scale water infrastructure projects would be necessary for a precise value assessment, but the 'Full and Open' competition suggests an effort to achieve a fair price.

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 offers. This method generally promotes price discovery and can lead to more competitive pricing.

Taxpayer Impact: The substantial investment will improve water treatment capabilities, benefiting the public. The competitive nature of the award aims to ensure taxpayer funds are used efficiently.

Public Impact

Enhances water treatment capacity and reliability in New Mexico. Supports regional economic development through infrastructure investment. Addresses long-term water security needs for the affected area.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Economic price adjustment clause may lead to cost overruns.
Long contract duration (5 years) increases exposure to market volatility.

Positive Signals

Full and open competition promotes competitive pricing.
Addresses critical infrastructure needs.

Sector Analysis

This project falls within the construction sector, specifically focusing on water and sewer infrastructure. Large-scale water treatment plant projects often involve significant capital outlays and can range from tens to hundreds of millions of dollars, depending on scale and complexity.

Small Business Impact

The provided data does not indicate any specific set-asides for small businesses. Further investigation would be needed to determine if small businesses are participating as subcontractors or if there were opportunities missed.

Oversight & Accountability

The Bureau of Reclamation, under the Department of the Interior, is responsible for this contract. Standard oversight mechanisms for large construction projects should be in place, including progress monitoring and quality assurance.

Related Government Programs

Water and Sewer Line and Related Structures Construction
Department of the Interior Contracting
Bureau of Reclamation Programs

Risk Flags

Potential for cost escalation due to EPA clause.
Long contract duration increases market risk.
Lack of explicit small business participation noted.
Complexity of large infrastructure projects.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Interior awarded $270.1 million to JACOBS PROJECT MANAGEMENT CO.. SAN JUAN LATERAL WATER TREATMENT PLANT

Who is the contractor on this award?

The obligated recipient is JACOBS PROJECT MANAGEMENT CO..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $270.1 million.

What is the period of performance?

Start: 2024-08-30. End: 2029-12-24.

What is the projected impact of the economic price adjustment on the final contract cost?

The economic price adjustment (EPA) clause allows for modifications to the contract price based on fluctuations in specific economic factors, such as labor or material costs. Without specific indices or caps defined in the contract, it's difficult to quantify the exact impact. However, it introduces uncertainty and potential for increased costs beyond the initial fixed price, requiring close monitoring by the agency to manage taxpayer exposure.

Are there any identified risks related to Jacobs Project Management Co.'s past performance on similar large-scale infrastructure projects?

Assessing Jacobs Project Management Co.'s past performance is crucial for understanding potential risks. A review of their track record on comparable water treatment plant or large civil engineering projects would reveal their ability to manage costs, schedules, and quality. Any history of significant delays, cost overruns, or performance issues would raise concerns about the successful execution of this $270M contract.

How will the effectiveness of the new water treatment plant be measured post-construction?

The effectiveness of the San Juan Lateral Water Treatment Plant will likely be measured against predefined performance standards and operational metrics outlined in the contract specifications. This includes water quality output meeting regulatory requirements, plant efficiency, reliability, and capacity to serve the intended population. Post-construction evaluations and ongoing operational monitoring by the Bureau of Reclamation will determine if the plant achieves its intended purpose and provides the expected public benefit.

Industry Classification

NAICS: Construction › Utility System Construction › Water and Sewer Line and Related Structures 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: 140R4023R0016

Offers Received: 2

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

Evaluated Preference: NONE

Contractor Details

Parent Company: Jacobs Engineering Group Inc.

Address: 1999 BRYAN ST STE 3500, DALLAS, TX, 75201

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $279,171,206

Exercised Options: $270,116,821

Current Obligation: $270,116,821

Actual Outlays: $52,400,172

Subaward Activity

Number of Subawards: 17

Total Subaward Amount: $128,963,661

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline