DOT awards $6.8M contract for Montana highway construction, highlighting firm fixed-price terms

Contract Overview

Contract Amount: $6,795,196 ($6.8M)

Contractor: KH Civil Contractors, Inc.

Awarding Agency: Department of Transportation

Start Date: 2025-12-08

End Date: 2026-11-06

Contract Duration: 333 days

Daily Burn Rate: $20.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: CONSTRUCTION SERVICES FOR PROJECT MT FLAP DOT 236(2), WINIFRED NORTH. INCLUDES SUBEXCAVATION, ROADWAY RECONDITIONING, AGGREGATE SURFACING, AGGREGATE STABILIZATION, GUARDRAIL, CATTLE GUARDS, AND SIGNAGE.

Place of Performance

Location: WINIFRED, FERGUS County, MONTANA, 59489

State: Montana Government Spending

Plain-Language Summary

Department of Transportation obligated $6.8 million to KH CIVIL CONTRACTORS, INC. for work described as: CONSTRUCTION SERVICES FOR PROJECT MT FLAP DOT 236(2), WINIFRED NORTH. INCLUDES SUBEXCAVATION, ROADWAY RECONDITIONING, AGGREGATE SURFACING, AGGREGATE STABILIZATION, GUARDRAIL, CATTLE GUARDS, AND SIGNAGE. Key points: 1. Contract value of $6.8 million for comprehensive road construction services. 2. Full and open competition suggests a competitive bidding process. 3. Firm fixed-price contract type aims to control costs and manage risk. 4. Project duration of 333 days indicates a focused, medium-term engagement. 5. Contract awarded to KH Civil Contractors, Inc., a new entrant in federal contracting. 6. Geographic focus on Montana, potentially benefiting local infrastructure and workforce.

Value Assessment

Rating: good

The contract value of $6.8 million appears reasonable for the scope of work, which includes subexcavation, roadway reconditioning, and surfacing. Benchmarking against similar highway construction projects in Montana or the surrounding region would provide a more precise value-for-money assessment. The firm fixed-price structure is a positive indicator for cost control, assuming the initial bid accurately reflected project requirements.

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. With 6 bidders participating, the competition level suggests a healthy market response. This level of competition is generally expected to drive prices towards market rates and encourage efficient service delivery.

Taxpayer Impact: Taxpayers benefit from the competitive bidding process, which aims to secure the best possible price for the required construction services and reduce the risk of overpayment.

Public Impact

Residents and businesses in Winifred North, Montana, will benefit from improved road infrastructure. Services include essential road maintenance and upgrades, enhancing transportation efficiency. The project's geographic impact is localized to Montana, supporting regional development. Potential for local job creation and economic activity within the construction sector in Montana.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if initial bids did not fully account for unforeseen site conditions.
Dependence on a single contractor for project completion introduces performance risk.
Limited historical data on KH Civil Contractors, Inc.'s performance on federal contracts.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Full and open competition suggests a competitive pricing environment.
Clear scope of work outlined for roadway reconditioning and surfacing.

Sector Analysis

This contract falls within the Highway, Street, and Bridge Construction sector, a critical component of the nation's infrastructure. The market for such services is often characterized by regional players and significant competition, especially for projects funded by federal agencies like the Federal Highway Administration. The $6.8 million award is a moderate-sized project within this sector, comparable to other state and local infrastructure improvement initiatives.

Small Business Impact

This contract was not set aside for small businesses, nor does it indicate specific subcontracting requirements for small businesses in the provided data. The award to KH Civil Contractors, Inc. does not preclude them from utilizing small business subcontractors, but there is no explicit mandate. Further analysis of the contract details would be needed to determine the extent of small business participation.

Oversight & Accountability

Oversight for this contract will likely be managed by the Federal Highway Administration, a division of the Department of Transportation. Accountability measures are inherent in the firm fixed-price contract type, which obligates the contractor to deliver the specified work within the agreed-upon price. Transparency is facilitated by the public nature of federal contract awards, though detailed performance monitoring reports may not be publicly accessible.

Related Government Programs

Federal Highway Administration Construction Projects
Department of Transportation Infrastructure Grants
State Highway Improvement Programs

Risk Flags

New contractor performance risk
Potential for scope creep or unforeseen site conditions impacting fixed price

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $6.8 million to KH CIVIL CONTRACTORS, INC.. CONSTRUCTION SERVICES FOR PROJECT MT FLAP DOT 236(2), WINIFRED NORTH. INCLUDES SUBEXCAVATION, ROADWAY RECONDITIONING, AGGREGATE SURFACING, AGGREGATE STABILIZATION, GUARDRAIL, CATTLE GUARDS, AND SIGNAGE.

Who is the contractor on this award?

The obligated recipient is KH CIVIL CONTRACTORS, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $6.8 million.

What is the period of performance?

Start: 2025-12-08. End: 2026-11-06.

What is the track record of KH Civil Contractors, Inc. on federal contracts?

Based on the provided data, KH Civil Contractors, Inc. appears to be a new entrant or has a limited history of federal contracting. The award of this definitive contract is a significant step, but without prior federal performance data, assessing their track record requires further investigation. Future performance on this project will establish their reliability and capability within the federal procurement landscape. It is advisable to review any past performance information available through federal databases or industry references to gauge their experience with similar projects and their ability to meet federal standards and timelines.

How does the $6.8 million contract value compare to similar highway construction projects?

The $6.8 million contract value for highway construction in Montana is a moderate sum. To benchmark effectively, one would need to compare it against similar projects in the same geographic region (Montana and surrounding states) and of comparable scope (roadway reconditioning, surfacing, guardrails, etc.). Factors such as material costs, labor rates, and specific site conditions (like subexcavation requirements) can significantly influence project costs. Without access to a database of comparable federal, state, or local highway projects, a precise value-for-money assessment is challenging. However, the firm fixed-price nature suggests an effort to contain costs within this budget.

What are the primary risks associated with this firm fixed-price contract?

The primary risk with a firm fixed-price (FFP) contract, while generally favorable for cost control, lies in the potential for the contractor to cut corners on quality or scope if their initial bid was too low or if unforeseen issues arise during construction. For the government, the risk is that the contractor may not be able to complete the project as specified within the fixed price if their cost estimates were inaccurate or if unexpected site conditions (like extensive subexcavation needs) significantly increase their expenses. The government's recourse is typically limited to enforcing the contract terms and specifications, potentially leading to disputes or delays if the contractor struggles.

How effective is full and open competition in ensuring optimal pricing for infrastructure projects?

Full and open competition is widely considered the most effective method for ensuring optimal pricing in federal contracting, including infrastructure projects. By allowing all responsible sources to bid, it fosters a competitive environment where contractors are incentivized to offer their best prices and most efficient solutions to win the contract. The presence of six bidders in this case suggests a robust competition, which should theoretically drive the price down towards the market rate. This process also enhances transparency and reduces the risk of favoritism or non-competitive pricing that can occur with sole-source or limited competition awards.

What are the potential workforce implications of this construction contract in Montana?

This $6.8 million construction contract is likely to have positive workforce implications for the local economy in Montana, particularly in the Winifred North area and surrounding regions. The project will require a skilled labor force for various tasks, including heavy equipment operation, road construction, surveying, and general labor. KH Civil Contractors, Inc. may hire locally or bring in specialized crews, potentially boosting employment opportunities within the construction sector. The duration of the project (333 days) suggests sustained employment for the involved workforce over a significant period, contributing to local economic activity through wages and associated spending.

What is the historical spending pattern for highway construction by the Federal Highway Administration in Montana?

Analyzing historical spending patterns for highway construction by the Federal Highway Administration (FHWA) in Montana would provide context for this $6.8 million award. The FHWA typically funds a significant portion of major highway projects across the nation, often in partnership with state transportation departments. Historical data would reveal the average contract size, frequency of projects, and types of construction services procured in Montana. This information could help determine if $6.8 million is a typical investment for a project of this scope in the state, or if it represents a larger or smaller than usual allocation. Without specific historical data, it's difficult to ascertain trends or anomalies.

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: SEALED BID

Solicitation ID: 69056725B000010

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 28 ROBINSON WAY, LEWISTOWN, MT, 59457

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

Financial Breakdown

Contract Ceiling: $7,702,516

Exercised Options: $6,795,196

Current Obligation: $6,795,196

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline