DHS awards $117M design-build contract for San Juan hurricane rebuild, impacting Puerto Rico's infrastructure

Contract Overview

Contract Amount: $117,046,492 ($117.0M)

Contractor: Tutor Perini Corporation

Awarding Agency: Department of Homeland Security

Start Date: 2022-09-13

End Date: 2027-12-30

Contract Duration: 1,934 days

Daily Burn Rate: $60.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: DESIGN/BUILD HURRICANE REBUILD TASK ORDER FOR SAN JUAN PHASE II EAST BASE BID AND OPTION 5: SE X WATERFRONT BOAT RAMP

Place of Performance

Location: SAN JUAN, SAN JUAN County, PUERTO RICO, 00901

Plain-Language Summary

Department of Homeland Security obligated $117.0 million to TUTOR PERINI CORPORATION for work described as: DESIGN/BUILD HURRICANE REBUILD TASK ORDER FOR SAN JUAN PHASE II EAST BASE BID AND OPTION 5: SE X WATERFRONT BOAT RAMP Key points: 1. Contract value of $117M for hurricane rebuild task order. 2. Competition dynamics indicate a full and open process. 3. Risk indicators include a long performance period and firm-fixed-price structure. 4. Performance context is critical for post-hurricane recovery in San Juan. 5. Sector positioning is within commercial and institutional building construction. 6. The contract is a delivery order under a larger award. 7. Geographic focus is Puerto Rico, specifically San Juan. 8. The U.S. Coast Guard is the specific agency involved.

Value Assessment

Rating: fair

The contract value of $117 million for a design-build hurricane rebuild task order is substantial. Benchmarking against similar large-scale infrastructure projects in disaster-affected areas is necessary to fully assess value for money. The firm-fixed-price structure aims to control costs, but the long duration (over 4 years) introduces potential for cost escalation if not managed tightly. Without specific comparable data on per-square-foot costs or unit prices for similar construction elements (like boat ramps), a definitive value assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, suggesting that multiple bidders had the opportunity to submit proposals. The specific number of bidders is not provided, but a full and open competition generally fosters a more competitive environment, potentially leading to better pricing and innovative solutions. This approach is typically favored for significant procurements to ensure fair access and maximize taxpayer value.

Taxpayer Impact: A full and open competition increases the likelihood of receiving competitive bids, which can translate into cost savings for taxpayers compared to sole-source or limited competition awards.

Public Impact

Residents and businesses in San Juan, Puerto Rico, will benefit from improved waterfront infrastructure. The contract delivers design and construction services for a hurricane rebuild task order. Geographic impact is concentrated in San Juan, Puerto Rico, specifically the East Base area. Workforce implications include job creation in the construction sector within Puerto Rico. The project aims to enhance resilience against future storm events. The U.S. Coast Guard's operational capabilities in the region may be improved.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 4 years) increases exposure to market volatility and potential cost overruns.
Firm-fixed-price contracts can sometimes lead to reduced scope or quality if not carefully monitored, especially in complex rebuild scenarios.
Reliance on a single contractor for both design and build phases requires robust oversight to ensure quality and adherence to specifications.
The complexity of rebuilding infrastructure post-hurricane can present unforeseen challenges impacting schedule and cost.

Positive Signals

Full and open competition suggests a robust bidding process that could yield competitive pricing.
The contract is a task order under a larger award, potentially indicating a pre-vetted contractor with relevant experience.
Focus on hurricane rebuild addresses critical infrastructure needs and community resilience.
The firm-fixed-price structure provides cost certainty for the government, assuming scope is well-defined.

Sector Analysis

The contract falls within the Commercial and Institutional Building Construction sector, a broad category encompassing a wide range of construction activities. This specific task order focuses on infrastructure repair and development, particularly waterfront facilities like boat ramps, in the aftermath of a hurricane. The market for such services can be highly competitive, especially in regions prone to natural disasters, with significant government spending allocated to rebuilding and resilience efforts. Comparable spending benchmarks would typically involve analyzing other large-scale disaster recovery construction contracts awarded by federal agencies.

Small Business Impact

The data indicates that small business participation (sb) is false, and there is no explicit mention of small business set-asides (ss) for this specific task order. This suggests that the primary award was not specifically targeted towards small businesses. However, the prime contractor, Tutor Perini Corporation, may engage small businesses as subcontractors to fulfill portions of the work, which is common in large construction projects. An analysis of subcontracting plans would be necessary to determine the extent of small business involvement and its impact on the local small business ecosystem in Puerto Rico.

Oversight & Accountability

Oversight for this contract will likely be managed by the U.S. Coast Guard, the procuring agency, and potentially the Department of Homeland Security's Office of Inspector General. Given the significant value and long duration, robust oversight mechanisms are expected, including regular progress reviews, site inspections, and financial audits. Transparency will depend on the agency's reporting practices regarding contract performance and expenditures. The firm-fixed-price nature of the contract necessitates close monitoring of scope and quality to ensure compliance with the contract terms.

Related Government Programs

FEMA Disaster Relief Fund
Army Corps of Engineers Construction Contracts
Department of Transportation Infrastructure Grants
Public Works and Infrastructure Development Programs

Risk Flags

Potential for cost overruns due to long duration and unforeseen conditions.
Risk of quality compromise in a firm-fixed-price contract for complex rebuild.
Dependency on contractor's performance for critical infrastructure restoration.
Environmental considerations for marine construction in a sensitive ecosystem.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $117.0 million to TUTOR PERINI CORPORATION. DESIGN/BUILD HURRICANE REBUILD TASK ORDER FOR SAN JUAN PHASE II EAST BASE BID AND OPTION 5: SE X WATERFRONT BOAT RAMP

Who is the contractor on this award?

The obligated recipient is TUTOR PERINI CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (U.S. Coast Guard).

What is the total obligated amount?

The obligated amount is $117.0 million.

What is the period of performance?

Start: 2022-09-13. End: 2027-12-30.

What is the track record of Tutor Perini Corporation on similar large-scale federal infrastructure projects, particularly those involving disaster recovery or waterfront construction?

Tutor Perini Corporation is a large, publicly traded construction company with a significant history of undertaking complex infrastructure projects for government agencies. They have been involved in numerous federal contracts, including those for military bases, transportation systems, and disaster recovery efforts. Specific to waterfront construction and disaster recovery, their portfolio includes projects like port expansions, bridge repairs, and post-hurricane rebuilding initiatives. A detailed review of their past performance on similar projects, including any history of cost overruns, schedule delays, or quality issues, would be crucial for assessing their capability and reliability for this San Juan task order. Examining past contract awards and performance evaluations from agencies like the Army Corps of Engineers or the Department of Transportation would provide valuable insights into their track record.

How does the awarded amount of $117 million compare to the estimated costs for similar design-build hurricane rebuild projects in other U.S. territories or disaster-prone regions?

Benchmarking the $117 million award requires comparing it to similar design-build hurricane rebuild projects, considering factors like project scope, scale, location, and complexity. Projects involving waterfront infrastructure, such as boat ramps, can have unique cost drivers related to marine construction, environmental considerations, and specialized engineering. Without specific comparable data points (e.g., cost per linear foot of dock, cost per square foot of associated facilities), a precise comparison is difficult. However, large-scale disaster recovery projects often see significant cost variations due to immediate post-disaster demand for materials and labor, supply chain disruptions, and the urgency of rebuilding. It's essential to look at projects of similar magnitude awarded by agencies like FEMA or the Army Corps of Engineers in regions affected by hurricanes like Katrina, Maria, or Ian to establish a relevant benchmark.

What are the primary risks associated with a firm-fixed-price contract for a multi-year hurricane rebuild project, and how are they being mitigated?

The primary risks with a firm-fixed-price (FFP) contract for a multi-year hurricane rebuild project include potential scope creep, unforeseen site conditions, and contractor performance issues. For the government, the risk is that the contractor may cut corners on quality or materials to maintain profitability if costs escalate beyond initial estimates, or that the fixed price may not adequately cover unforeseen complexities inherent in disaster recovery. Mitigation strategies typically involve a very clearly defined scope of work, detailed specifications, robust government oversight, and performance-based incentives or penalties. For this specific contract, the long duration (ending in late 2027) amplifies the risk of market price fluctuations for materials and labor. The government's mitigation likely relies on thorough pre-award planning, detailed contract clauses addressing change orders and unforeseen conditions, and active project management to ensure adherence to the agreed-upon terms and quality standards.

What specific performance metrics or key performance indicators (KPIs) are likely being used to evaluate the success of this hurricane rebuild task order?

For a design-build hurricane rebuild task order, performance metrics would likely focus on several key areas. These would include schedule adherence (meeting milestones for design completion, procurement, and construction phases), cost control (staying within the firm-fixed-price, managing change orders effectively), quality of work (compliance with building codes, engineering standards, and project specifications, particularly for marine structures), safety performance (incident rates on site), and overall project completion meeting the functional requirements for the U.S. Coast Guard's operational needs in San Juan. Specific KPIs might involve defect rates, timely resolution of punch list items, and successful commissioning of the rebuilt facilities. The ultimate measure of success would be the delivery of resilient, functional waterfront infrastructure that enhances the Coast Guard's mission capabilities in the region.

How does the historical spending pattern for U.S. Coast Guard infrastructure projects in Puerto Rico compare to this $117 million award?

Analyzing historical spending patterns for U.S. Coast Guard infrastructure projects in Puerto Rico is crucial for contextualizing this $117 million award. Puerto Rico, particularly areas like San Juan, has faced significant infrastructure challenges exacerbated by natural disasters, leading to substantial federal investment in repairs and upgrades. The Coast Guard, with its presence in critical ports and coastal areas, would require ongoing investment in facilities, including piers, boat ramps, and operational buildings. A $117 million award for a single task order focused on hurricane rebuild suggests a significant, targeted investment, potentially higher than average annual spending on routine maintenance or smaller projects. Comparing this to previous large-scale reconstruction efforts following Hurricane Maria, or to other major federal infrastructure investments in the region, would provide a clearer picture of its scale and significance within the historical context of federal spending in Puerto Rico.

What are the potential long-term implications of this contract for the resilience of San Juan's waterfront infrastructure against future climate events?

This contract holds significant potential implications for the long-term resilience of San Juan's waterfront infrastructure. By focusing on a 'design-build hurricane rebuild,' the project inherently aims to not only restore but likely enhance the structural integrity and protective measures of the targeted facilities, such as the East Base boat ramp. This could involve incorporating updated building codes, utilizing more robust materials, and designing for higher wind speeds and storm surge levels than the original structures were built to withstand. Successful execution of this contract could serve as a model for future resilience projects, demonstrating effective strategies for rebuilding critical infrastructure in a way that better prepares the community and the U.S. Coast Guard's operations for the increasing threats posed by climate change and more intense weather events.

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

Solicitation ID: 70Z04072RSJPHII00

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 15901 OLDEN ST, SYLMAR, CA, 91342

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

Financial Breakdown

Contract Ceiling: $117,046,492

Exercised Options: $117,046,492

Current Obligation: $117,046,492

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 70Z04718DTUTPER00

IDV Type: IDC

Timeline