Department of Transportation awards $215M contract for Pretty Rocks Landslide bridge construction to Granite Construction Company

Contract Overview

Contract Amount: $214,934,133 ($214.9M)

Contractor: Granite Construction Company

Awarding Agency: Department of Transportation

Start Date: 2023-01-04

End Date: 2026-07-20

Contract Duration: 1,293 days

Daily Burn Rate: $166.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: THE PROJECT CONSISTS OF TWO PHASES: 1) PRE-CONSTRUCTION SERVICES CONTAINED IN THE BASE CONTRACT; AND 2) CONSTRUCTION SERVICES CONTAINED IN TWO OPTIONS. THE PROJECT WILL CONSIST OF SPANNING THE ACTIVE PRETTY ROCKS LANDSLIDE WITH AN APPROXIMATELY 475-F

Place of Performance

Location: DENALI NATIONAL PARK, DENALI County, ALASKA, 99755

State: Alaska Government Spending

Plain-Language Summary

Department of Transportation obligated $214.9 million to GRANITE CONSTRUCTION COMPANY for work described as: THE PROJECT CONSISTS OF TWO PHASES: 1) PRE-CONSTRUCTION SERVICES CONTAINED IN THE BASE CONTRACT; AND 2) CONSTRUCTION SERVICES CONTAINED IN TWO OPTIONS. THE PROJECT WILL CONSIST OF SPANNING THE ACTIVE PRETTY ROCKS LANDSLIDE WITH AN APPROXIMATELY 475-F Key points: 1. The contract includes pre-construction and construction phases, indicating a phased approach to a complex infrastructure project. 2. The project spans a significant landslide, highlighting the critical need for robust engineering and construction solutions. 3. The use of a definitive contract suggests a long-term relationship and potential for evolving requirements. 4. The firm-fixed-price structure aims to provide cost certainty for the government, though it places risk on the contractor. 5. The project is located in Alaska, a region known for challenging logistical and environmental conditions for construction. 6. The contract duration of over three years points to the scale and complexity of the bridge construction.

Value Assessment

Rating: good

The contract value of $215 million for a major bridge construction project in a challenging environment like Alaska appears reasonable. Benchmarking against similar large-scale bridge projects in remote or difficult terrains would provide a more precise value assessment. The firm-fixed-price nature of the contract suggests that the government has sought to control costs upfront, but the ultimate value realization will depend on the contractor's ability to manage expenses within the agreed price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely considered. This competitive process is generally expected to yield favorable pricing and innovative solutions. The number of bidders and the specific evaluation criteria would provide further insight into the effectiveness of the competition in driving value for the government.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically leads to lower prices and better quality services through market forces.

Public Impact

The primary beneficiaries are users of the transportation network in Alaska who will gain a more stable and reliable route. The project will deliver critical infrastructure in the form of a bridge spanning a significant landslide. The geographic impact is concentrated in Alaska, specifically along the route affected by the Pretty Rocks Landslide. The construction phase will likely create numerous jobs for skilled labor, engineers, and support staff in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen geological or environmental challenges arise during construction.
Logistical complexities in Alaska could impact project timelines and material delivery, potentially affecting costs.
The long duration of the contract increases the risk of scope creep or changes in project requirements.

Positive Signals

Awarded through full and open competition, suggesting a competitive bidding process that likely secured a fair price.
Firm-fixed-price contract provides cost certainty for the government, transferring some cost risk to the contractor.
The phased approach (pre-construction and construction) allows for detailed planning and risk mitigation before full-scale construction begins.

Sector Analysis

This contract falls within the Highway, Street, and Bridge Construction sector, a critical component of the broader Construction industry. This sector is characterized by large-scale projects requiring significant capital investment, specialized engineering expertise, and adherence to stringent safety and environmental regulations. The market size for such infrastructure projects is substantial, driven by government investment in maintaining and expanding transportation networks. This specific project addresses a unique geological challenge, requiring specialized solutions within the bridge construction sub-sector.

Small Business Impact

The data indicates that small business participation was not a primary set-aside criterion for this large prime contract, as indicated by 'sb': false. However, the prime contractor, Granite Construction Company, may engage small businesses as subcontractors for specialized services or materials. The overall impact on the small business ecosystem will depend on the subcontracting opportunities created and the extent to which small businesses can compete for those roles.

Oversight & Accountability

Oversight for this contract will likely be managed by the Federal Highway Administration (FHWA) within the Department of Transportation. Mechanisms may include regular progress reports, site inspections, and milestone reviews. Accountability will be ensured through the contract's performance clauses and payment schedules tied to deliverables. Transparency can be enhanced through public reporting on project status and expenditures, though specific details on IG jurisdiction would require further investigation into the contract's terms.

Related Government Programs

Federal Highway Administration Bridge Program
Alaska Department of Transportation and Public Facilities Projects
Major Infrastructure Projects
Landslide Mitigation Projects

Risk Flags

Geological instability risk
Logistical challenges in remote locations
Potential for weather-related delays
Long-term contract management complexity

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $214.9 million to GRANITE CONSTRUCTION COMPANY. THE PROJECT CONSISTS OF TWO PHASES: 1) PRE-CONSTRUCTION SERVICES CONTAINED IN THE BASE CONTRACT; AND 2) CONSTRUCTION SERVICES CONTAINED IN TWO OPTIONS. THE PROJECT WILL CONSIST OF SPANNING THE ACTIVE PRETTY ROCKS LANDSLIDE WITH AN APPROXIMATELY 475-F

Who is the contractor on this award?

The obligated recipient is GRANITE CONSTRUCTION COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Transportation (Federal Highway Administration).

What is the total obligated amount?

The obligated amount is $214.9 million.

What is the period of performance?

Start: 2023-01-04. End: 2026-07-20.

What is Granite Construction Company's track record with large federal infrastructure projects, particularly in challenging environments?

Granite Construction Company has a significant history of undertaking large-scale infrastructure projects for federal agencies, including highway, bridge, and transit systems. They have experience in various challenging environments, including remote locations and areas with complex geological conditions. Their portfolio often includes projects with substantial dollar values, similar to this contract. A detailed review of their past performance on projects of comparable size and complexity, including any past performance issues or commendations, would be necessary to fully assess their suitability and risk profile for this specific undertaking. Information on their safety records and on-time completion rates for similar federal contracts would also be pertinent.

How does the $215 million contract value compare to similar bridge construction projects over landslides?

Benchmarking the $215 million contract value against similar bridge construction projects that span active landslides is crucial for assessing value for money. Projects of this nature are inherently complex and costly due to the specialized engineering, geological surveys, and mitigation strategies required. Factors such as the span length, height, soil conditions, seismic activity, and environmental considerations significantly influence project costs. Without specific data on comparable landslide bridge projects, it's difficult to definitively state if this contract represents excellent, fair, or concerning value. However, given the location in Alaska, known for its challenging terrain and logistical costs, a higher price point compared to projects in more accessible areas might be anticipated. A detailed cost breakdown and comparison with industry benchmarks for similar specialized infrastructure would be required for a precise assessment.

What are the primary risks associated with constructing a bridge over the Pretty Rocks Landslide, and how are they being mitigated?

The primary risks associated with constructing a bridge over the Pretty Rocks Landslide are geological instability, potential for further landslide movement during construction, extreme weather conditions in Alaska, and logistical challenges related to material and personnel transport. Geological instability is a paramount concern, requiring extensive geotechnical investigations and potentially adaptive construction methods. Further landslide movement could damage ongoing work or compromise the foundation. Alaska's harsh weather can lead to project delays, increased costs, and safety hazards. Logistical challenges in remote areas can impact the timely delivery of materials and equipment. The contract's phased approach, starting with pre-construction services, is a key mitigation strategy, allowing for thorough site assessment and detailed planning before major construction begins. The firm-fixed-price contract also incentivizes the contractor to manage risks effectively to stay within budget.

What is the expected impact of this bridge on transportation efficiency and safety in the region?

The construction of this bridge is expected to significantly improve transportation efficiency and safety by providing a stable and reliable crossing over the Pretty Rocks Landslide. Currently, the landslide likely poses a significant hazard, potentially causing frequent closures, detours, or traffic disruptions, thereby hindering efficient movement of goods and people. A new, robust bridge will offer a permanent solution, ensuring consistent access and reducing the risk of accidents or delays caused by the unstable terrain. This improved connectivity will benefit commercial transport, emergency services, and general public travel, fostering economic activity and enhancing the overall resilience of the regional transportation network.

How has federal spending on highway and bridge construction in Alaska trended over the past five years?

Analyzing federal spending trends on highway and bridge construction in Alaska over the past five years would provide context for the $215 million Pretty Rocks Landslide project. Generally, federal investment in infrastructure is influenced by national priorities, economic conditions, and specific needs identified at the state level. Alaska, with its vast geography and unique challenges, often requires substantial federal support for its transportation infrastructure. Spending patterns can fluctuate based on the initiation of large-scale projects, the availability of funding through various transportation acts, and the severity of infrastructure damage caused by natural events. A detailed review of historical federal obligations to Alaska for highway and bridge construction would reveal whether this current contract represents a significant increase, a continuation of a trend, or a deviation from past spending levels.

Industry Classification

NAICS: Construction › Highway, Street, and Bridge Construction › Highway, Street, and Bridge 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: 69056722R000015

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Granite Construction Company Guam

Address: 585 W BEACH ST, WATSONVILLE, CA, 95076

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

Financial Breakdown

Contract Ceiling: $214,934,133

Exercised Options: $214,934,133

Current Obligation: $214,934,133

Actual Outlays: $183,679,807

Subaward Activity

Number of Subawards: 37

Total Subaward Amount: $24,004,802

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline