DHS awards $103.8M for border infrastructure construction, with 5 bidders competing

Contract Overview

Contract Amount: $103,810,533 ($103.8M)

Contractor: Slsco, Ltd.

Awarding Agency: Department of Homeland Security

Start Date: 2024-09-30

End Date: 2027-09-30

Contract Duration: 1,095 days

Daily Burn Rate: $94.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: BORDER INFRASTRUCTURE CONSTRUCTION

Place of Performance

Location: LAS CRUCES, DONA ANA County, NEW MEXICO, 88001

State: New Mexico Government Spending

Plain-Language Summary

Department of Homeland Security obligated $103.8 million to SLSCO, LTD. for work described as: BORDER INFRASTRUCTURE CONSTRUCTION Key points: 1. The contract value represents a significant investment in border infrastructure. 2. Full and open competition suggests a potentially competitive pricing environment. 3. The duration of the contract (1095 days) indicates a long-term need for these services. 4. The fixed-price contract type shifts performance risk to the contractor. 5. The award is for delivery orders against a larger contract vehicle. 6. The project is located in New Mexico, a key border state.

Value Assessment

Rating: good

Benchmarking the value of this contract is challenging without specific details on the scope of work. However, the competitive bidding process for a large infrastructure project of this nature suggests that pricing was likely scrutinized. The firm fixed-price structure also implies that the contractor bears the risk of cost overruns, which can be a positive indicator for value if managed effectively. Further analysis would require comparing the unit costs of specific construction elements to industry benchmarks.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. With five bidders participating, there was a reasonable level of competition, which typically helps drive down prices and encourage innovation. The agency's decision to use full and open competition suggests confidence in the market's ability to provide qualified contractors for this substantial infrastructure project.

Taxpayer Impact: The use of full and open competition with multiple bidders is generally favorable for taxpayers, as it increases the likelihood of securing the best possible price and quality for the services rendered.

Public Impact

This contract directly supports the U.S. Customs and Border Protection's mission to secure the nation's borders. The construction services will enhance physical infrastructure at the border, potentially improving operational efficiency and security. The project's location in New Mexico will likely have economic impacts within the state, including job creation in the construction sector. The delivery of enhanced border infrastructure benefits federal agencies responsible for border security and immigration enforcement.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep in large infrastructure projects if not managed tightly.
Ensuring timely completion within the fixed-price contract to avoid cost overruns for the government.
Monitoring contractor performance to ensure quality and adherence to specifications over the contract duration.

Positive Signals

The firm fixed-price contract type transfers cost risk to the contractor.
Full and open competition with multiple bidders suggests a competitive market.
The contract is for delivery orders against a potentially pre-vetted contract vehicle, implying some level of initial vetting.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the broader construction industry. Federal spending in this area often supports critical infrastructure, including border facilities, military installations, and public buildings. The market for large-scale construction projects is typically characterized by a mix of large prime contractors and specialized subcontractors. The value of this award is substantial, reflecting the complexity and scale of border infrastructure development.

Small Business Impact

The data indicates that small business participation (sb) is false for this specific award. While this contract was not set aside for small businesses, the prime contractor, SLSCO, LTD., may engage small businesses as subcontractors. Further investigation into the subcontracting plan would be necessary to assess the impact on the small business ecosystem. Without specific subcontracting data, it's difficult to determine the extent of small business involvement.

Oversight & Accountability

Oversight for this contract will likely be managed by the U.S. Customs and Border Protection, a component of the Department of Homeland Security. The firm fixed-price nature of the contract necessitates close monitoring of performance and deliverables to ensure compliance with the contract terms. Transparency will depend on the agency's reporting practices and the availability of contract performance data. Inspector General oversight from DHS would apply to ensure the integrity of the procurement and execution processes.

Related Government Programs

Border Security Infrastructure
Federal Construction Contracts
Department of Homeland Security Procurement
Commercial Building Construction
Infrastructure Development

Risk Flags

Long contract duration may increase risk of cost escalation or performance degradation.
Fixed-price contract requires robust oversight to ensure quality and prevent scope creep.
Geographic location in a border state may present unique logistical and security challenges.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $103.8 million to SLSCO, LTD.. BORDER INFRASTRUCTURE CONSTRUCTION

Who is the contractor on this award?

The obligated recipient is SLSCO, LTD..

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (U.S. Customs and Border Protection).

What is the total obligated amount?

The obligated amount is $103.8 million.

What is the period of performance?

Start: 2024-09-30. End: 2027-09-30.

What is the specific scope of work for this border infrastructure construction contract?

The provided data indicates the contract is for 'BORDER INFRASTRUCTURE CONSTRUCTION' under NAICS code 236220 (Commercial and Institutional Building Construction). However, the specific details of the construction services, such as the type of facilities to be built or renovated (e.g., fencing, access roads, processing centers, administrative buildings), are not included in the abbreviated data. This level of detail is crucial for a comprehensive understanding of the project's objectives and the contractor's responsibilities. Further analysis would require accessing the full contract award documentation or agency solicitations.

How does the $103.8 million award compare to historical spending on similar border infrastructure projects by CBP?

To compare this $103.8 million award to historical spending, one would need to analyze past contract awards by U.S. Customs and Border Protection (CBP) for border infrastructure construction. This would involve identifying similar projects, their scope, duration, and total value over several fiscal years. Without access to a comprehensive database of historical CBP contracts, a direct comparison is difficult. However, $103.8 million represents a substantial investment, suggesting a significant project or a series of related projects aimed at enhancing border security infrastructure in New Mexico.

What are the key performance indicators (KPIs) and deliverables expected from SLSCO, LTD. under this contract?

The provided data does not specify the key performance indicators (KPIs) or detailed deliverables for SLSCO, LTD. Under a firm fixed-price contract for construction, typical deliverables would include completed construction phases, adherence to building codes and safety standards, project milestones, and final project acceptance. KPIs would likely focus on schedule adherence, quality of workmanship, safety compliance, and potentially cost management within the fixed-price framework. These details are usually outlined in the contract's Statement of Work (SOW) and performance work statement (PWS).

What is the track record of SLSCO, LTD. in performing large-scale federal construction contracts, particularly for border infrastructure?

The abbreviated data identifies SLSCO, LTD. as the contractor but does not provide details on their past performance or track record. To assess their suitability for this $103.8 million border infrastructure project, a review of their contract history with federal agencies, particularly the Department of Homeland Security and CBP, would be necessary. This would involve examining past contract values, performance evaluations (e.g., CPARS reports), any past disputes or contract terminations, and their experience with similar types of construction projects. A strong track record in delivering complex infrastructure on time and within budget would be a positive indicator.

Given the 5 bidders, what was the estimated cost or baseline the government used for this contract?

The provided data does not include information on the government's estimated cost or baseline for this contract. In a full and open competition with five bidders, the government typically develops an independent government cost estimate (IGCE) based on market research, historical data, and the anticipated scope of work. The bids received from SLSCO, LTD. and the other four competitors would then be evaluated against this estimate and other factors (if any) to determine the best value. The fact that five bids were received suggests a competitive environment where the final award price is likely influenced by market dynamics rather than a predetermined high baseline.

What are the potential risks associated with a 3-year firm fixed-price contract for border infrastructure construction in New Mexico?

Risks associated with a 3-year firm fixed-price contract for border infrastructure construction in New Mexico include potential unforeseen site conditions (e.g., geological challenges, environmental hazards), material price fluctuations that could impact the contractor's profitability, labor availability issues, and potential delays due to weather or permitting. For the government, risks include the contractor potentially cutting corners on quality to maintain profitability if oversight is insufficient, or the contractor facing financial distress, leading to project delays or failure. The fixed-price nature shifts most cost risk to the contractor, but performance risk remains for the government.

Industry Classification

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

Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCTION OF BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 6702 BROADWAY ST, GALVESTON, TX, 77554

Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $103,810,533

Exercised Options: $103,810,533

Current Obligation: $103,810,533

Actual Outlays: $18,148,054

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 70B01C23D00000012

IDV Type: IDC

Timeline