Transportation Department awards $122.8M contract for highway and street construction in Virginia

Contract Overview

Contract Amount: $122,766,577 ($122.8M)

Contractor: Kokosing Construction Company, Inc.

Awarding Agency: Department of Transportation

Start Date: 2021-09-08

End Date: 2026-12-31

Contract Duration: 1,940 days

Daily Burn Rate: $63.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 8

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: PROJECT VA ST ANC(1): THE PROJECT CONSISTS OF THE REALIGNMENT OF COLUMBIA PIKE AND S. JOYCE STREET, REPLACEMENT OF SOUTHGATE ROAD WITH A NEW SEGMENT OF S. NASH STREET, THE EXPANSION OF FOXCROFT HEIGHTS PARK, AND THE MODIFICATION OF THE COLUMBIA PI

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22201

State: Virginia Government Spending

Plain-Language Summary

Department of Transportation obligated $122.8 million to KOKOSING CONSTRUCTION COMPANY, INC. for work described as: PROJECT VA ST ANC(1): THE PROJECT CONSISTS OF THE REALIGNMENT OF COLUMBIA PIKE AND S. JOYCE STREET, REPLACEMENT OF SOUTHGATE ROAD WITH A NEW SEGMENT OF S. NASH STREET, THE EXPANSION OF FOXCROFT HEIGHTS PARK, AND THE MODIFICATION OF THE COLUMBIA PI Key points: 1. Contract awarded to Kokosing Construction Company, Inc. for significant infrastructure work. 2. Project scope includes realignment of major roads and park expansion. 3. Competition was full and open, suggesting a competitive bidding process. 4. Contract duration extends over five years, indicating a long-term commitment. 5. The project is categorized under Highway, Street, and Bridge Construction. 6. Firm Fixed Price contract type aims to control costs. 7. No small business set-aside was utilized for this procurement.

Value Assessment

Rating: fair

The contract value of $122.8 million for highway, street, and bridge construction is substantial. Benchmarking this against similar large-scale infrastructure projects is challenging without more specific project details and comparable contract data. However, the firm fixed-price nature of the contract suggests an attempt to establish cost certainty. Further analysis would require comparing the per-unit costs of specific construction elements (e.g., per mile of road, per square foot of parkland) to industry averages or similar government projects.

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 a bid. The data shows 8 bids were received, suggesting a healthy level of interest and competition for this significant infrastructure project. This level of competition is generally favorable for price discovery and can lead to more competitive pricing for the government.

Taxpayer Impact: A competitive bidding process for this contract likely resulted in a more favorable price for taxpayers compared to a sole-source or limited competition award. The presence of multiple bidders helps ensure that the government is not overpaying for the construction services.

Public Impact

Residents and commuters in Virginia will benefit from improved road infrastructure and expanded park facilities. The project will deliver significant upgrades to the transportation network in the specified area. Geographic impact is concentrated in Virginia, specifically within the 237310 ZIP code area. The construction activities will likely create numerous jobs for skilled labor in the construction sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 5 years) increases the risk of cost overruns due to inflation or unforeseen project complexities.
The sheer scale of the project ($122.8M) presents inherent risks related to project management and execution.
Reliance on a single prime contractor for such a large and complex project could pose risks if the contractor faces financial or operational difficulties.

Positive Signals

Firm Fixed Price contract type helps mitigate cost escalation risks for the government.
Full and open competition with 8 bidders suggests a robust selection process and potential for high-quality bids.
The project addresses critical infrastructure needs, indicating a clear and justifiable government requirement.

Sector Analysis

This contract falls within the Highway, Street, and Bridge Construction sector, a significant segment of the broader construction industry. This sector is characterized by large-scale projects, often funded by government entities at federal, state, and local levels. The market size for such infrastructure projects is substantial, driven by the ongoing need for maintenance, repair, and expansion of public transportation networks. Comparable spending benchmarks would typically involve analyzing other large federal highway projects awarded by agencies like the Department of Transportation.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This means that the competition was open to all eligible contractors, regardless of size. While this ensures maximum competition, it also means that small businesses may not have had a specific advantage in bidding. Subcontracting opportunities may arise, and it will be important to monitor whether the prime contractor, Kokosing Construction Company, Inc., engages small businesses for portions of the work to foster broader economic impact.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of Transportation, specifically the Federal Highway Administration. As a definitive contract, it implies a structured agreement with defined terms and conditions. Accountability measures are inherent in the firm fixed-price structure, which incentivizes the contractor to complete the work within budget. Transparency will depend on the agency's reporting practices regarding project milestones, expenditures, and any potential modifications. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Federal Highway Administration Projects
Infrastructure Investment and Jobs Act Funding
Department of Transportation Construction Contracts
Virginia Department of Transportation Projects

Risk Flags

Long-term contract duration may increase risk of cost escalation.
Large contract value presents significant project management challenges.
Potential for unforeseen site conditions in infrastructure projects.

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $122.8 million to KOKOSING CONSTRUCTION COMPANY, INC.. PROJECT VA ST ANC(1): THE PROJECT CONSISTS OF THE REALIGNMENT OF COLUMBIA PIKE AND S. JOYCE STREET, REPLACEMENT OF SOUTHGATE ROAD WITH A NEW SEGMENT OF S. NASH STREET, THE EXPANSION OF FOXCROFT HEIGHTS PARK, AND THE MODIFICATION OF THE COLUMBIA PI

Who is the contractor on this award?

The obligated recipient is KOKOSING CONSTRUCTION COMPANY, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $122.8 million.

What is the period of performance?

Start: 2021-09-08. End: 2026-12-31.

What is the track record of Kokosing Construction Company, Inc. on similar federal contracts?

Kokosing Construction Company, Inc. has a history of performing large-scale construction projects. While specific details on their past federal contracts require deeper database searches, their ability to win a $122.8 million definitive contract from the Department of Transportation suggests they have the capacity and experience for such endeavors. Analyzing their past performance ratings, any past performance issues, and the types of projects they have completed for the government would provide a clearer picture of their reliability and expertise in highway, street, and bridge construction. It is crucial to review their history for any significant cost overruns, schedule delays, or quality control issues on comparable federal projects to assess their suitability for this current undertaking.

How does the awarded price compare to similar highway construction projects?

Directly comparing the $122.8 million award to 'similar' projects is challenging without granular data on the specific scope, location, and complexity of other contracts. However, the fact that this contract was awarded under full and open competition with 8 bids suggests that the pricing achieved is likely competitive within the market for large-scale infrastructure. To perform a robust value comparison, one would need to break down the contract into key components (e.g., cost per mile of road construction, cost per bridge element) and benchmark these against industry standards and historical government data for similar work. The firm fixed-price nature also implies that the contractor has factored in risks, which could influence the overall price.

What are the primary risks associated with this specific contract?

The primary risks associated with this contract include the long duration (over five years), which increases exposure to inflation, material cost fluctuations, and potential changes in project requirements or regulations. The sheer scale of the $122.8 million project presents significant management and execution risks, including potential for schedule delays and cost overruns if not managed effectively. Furthermore, reliance on a single prime contractor, Kokosing Construction Company, Inc., introduces risk if the company encounters financial instability, labor disputes, or unforeseen operational challenges. Environmental factors, permitting complexities, and coordination with multiple stakeholders (e.g., local authorities, utility companies) also represent potential risks that could impact project delivery.

How effective is the firm fixed-price contract type in managing costs for this project?

The firm fixed-price (FFP) contract type is generally considered effective in managing costs for projects where the scope of work is well-defined, as is typical for large construction projects like this. Under an FFP agreement, the contractor assumes the primary risk for cost overruns, providing a strong incentive to control expenses and complete the project within the agreed-upon price. This shifts the financial risk away from the government, offering greater cost certainty. However, for FFP contracts to be truly effective, the initial scope must be clearly articulated and comprehensive to minimize the need for costly change orders. If significant unforeseen issues arise, change orders can still occur, potentially increasing the total cost.

What is the historical spending pattern for highway and bridge construction by the Department of Transportation?

Historical spending patterns for highway and bridge construction by the Department of Transportation (DOT) are substantial, reflecting the agency's core mission. The DOT, through the Federal Highway Administration (FHWA), allocates billions of dollars annually towards the nation's infrastructure. This spending is influenced by federal transportation bills, economic conditions, and national infrastructure priorities. Analyzing past DOT budgets and contract awards would reveal trends in funding levels, types of projects prioritized (e.g., new construction vs. maintenance), and the average contract values. This specific $122.8 million contract is one component of a much larger federal investment in transportation infrastructure, and its value should be considered within that broader context.

What are the potential impacts of the 8 bids received on the final contract price?

The receipt of 8 bids for this contract is a strong positive indicator of robust competition. A higher number of bidders generally leads to more competitive pricing as companies vie for the award. Each additional bidder increases the likelihood that the government will receive proposals closer to the true market cost of the work. This competitive pressure can drive down profit margins for contractors and encourage them to optimize their bids by finding efficiencies in their proposed methods and resource allocation. Therefore, the 8 bids likely contributed to achieving a more favorable final contract price for the Department of Transportation and, by extension, the taxpayers, compared to a scenario with fewer bidders.

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: TWO STEP

Solicitation ID: 693C7321R000018

Offers Received: 8

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 6235 WESTERVILLE RD, WESTERVILLE, OH, 43081

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

Financial Breakdown

Contract Ceiling: $122,766,577

Exercised Options: $122,766,577

Current Obligation: $122,766,577

Actual Outlays: $109,037,091

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline