Tutor Perini Corporation awarded $20.5M DHS contract for San Juan hurricane rebuild, facing potential cost overruns

Contract Overview

Contract Amount: $20,542,010 ($20.5M)

Contractor: Tutor Perini Corporation

Awarding Agency: Department of Homeland Security

Start Date: 2025-01-15

End Date: 2027-03-22

Contract Duration: 796 days

Daily Burn Rate: $25.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: DESIGN/BUILD SAN JUAN HURRICANE REBUILD RIO BAYAMON AT USCG BASE SAN JUAN, PR (PHASE-1 RE-PROCUREMENT)

Place of Performance

Location: BAYAMON, BAYAMON County, PUERTO RICO, 00959

Plain-Language Summary

Department of Homeland Security obligated $20.5 million to TUTOR PERINI CORPORATION for work described as: DESIGN/BUILD SAN JUAN HURRICANE REBUILD RIO BAYAMON AT USCG BASE SAN JUAN, PR (PHASE-1 RE-PROCUREMENT) Key points: 1. Contract value appears reasonable given the scope of hurricane reconstruction in a disaster zone. 2. Full and open competition suggests a competitive bidding process, potentially leading to better pricing. 3. Project duration of nearly three years indicates a complex and lengthy undertaking. 4. The firm fixed-price contract type shifts significant cost risk to the contractor. 5. This contract is part of a larger, ongoing effort to rebuild critical infrastructure. 6. The contractor has a history of large-scale construction projects, but also past performance issues.

Value Assessment

Rating: fair

The contract value of approximately $20.5 million for a design/build hurricane rebuild project in Puerto Rico is difficult to benchmark without more specific details on the scope of work. However, given the complexities of disaster recovery and construction in remote or affected areas, the price may be within a reasonable range. The firm fixed-price nature of the contract places the risk of cost overruns on Tutor Perini Corporation, which can be a positive for the government if managed effectively. Further analysis would require comparing unit costs for specific construction elements to similar projects in the region or nationally.

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. The data shows two bids were received. While two bidders is a relatively low number for a large federal contract, it still suggests some level of competition. The specific details of the bidding process, including the number of interested parties and the range of bids submitted, would provide a clearer picture of the competitive dynamics and their impact on price discovery.

Taxpayer Impact: A competitive process, even with a limited number of bidders, generally benefits taxpayers by encouraging multiple firms to offer their best pricing and terms to secure the contract.

Public Impact

The U.S. Coast Guard base in San Juan, Puerto Rico, will benefit from improved and resilient infrastructure. Services delivered include design and construction for hurricane recovery and rebuilding efforts. The geographic impact is concentrated in San Juan, Puerto Rico, addressing critical post-hurricane needs. The project will likely create or sustain jobs in the construction sector in Puerto Rico.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Tutor Perini Corporation has a history of significant contract awards but has also faced scrutiny and litigation related to project execution and financial reporting on other large projects.
The complexity of rebuilding in a disaster-stricken area presents inherent risks of unforeseen conditions, supply chain disruptions, and labor availability challenges that could impact project timelines and costs.

Positive Signals

The firm fixed-price contract structure transfers cost overrun risk to the contractor, aligning incentives for efficient project completion.
Awarding the contract under full and open competition suggests a deliberate effort to solicit the best value from the market.
The project addresses critical infrastructure needs for the U.S. Coast Guard in a vital strategic location.

Sector Analysis

The construction sector, particularly for large-scale infrastructure and government projects, is characterized by significant capital requirements, complex project management, and varying levels of competition. This contract falls within the commercial and institutional building construction sub-sector. The market for disaster recovery and rebuilding services can be highly specialized, with a limited number of firms possessing the necessary expertise and capacity. Benchmarking this contract's value would ideally involve comparing it to similar design-build projects for federal agencies in hurricane-prone regions, considering factors like square footage, complexity of repairs, and material costs.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of specific subcontracting requirements for small businesses in the provided data. The award to a large prime contractor like Tutor Perini Corporation suggests that the primary focus was on the prime contractor's capacity and qualifications. The impact on the small business ecosystem will depend on whether the prime contractor actively seeks out and utilizes small business subcontractors for specialized services or materials.

Oversight & Accountability

Oversight for this contract will primarily be managed by the U.S. Coast Guard, a component of the Department of Homeland Security. The firm fixed-price nature of the contract provides a degree of accountability by capping the government's financial exposure. Transparency will be facilitated through contract award databases and potentially through reporting requirements outlined in the contract. The Inspector General for the Department of Homeland Security would have jurisdiction to investigate any allegations of fraud, waste, or abuse related to this contract.

Related Government Programs

Hurricane Recovery and Rebuilding Programs
U.S. Coast Guard Infrastructure Modernization
Federal Design-Build Contracts
Puerto Rico Infrastructure Projects

Risk Flags

Potential for cost overruns despite fixed-price contract
Contractor's past performance issues on other large projects
Limited number of bidders may indicate market concentration or barriers to entry
Complexity of rebuilding in a disaster-affected area

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $20.5 million to TUTOR PERINI CORPORATION. DESIGN/BUILD SAN JUAN HURRICANE REBUILD RIO BAYAMON AT USCG BASE SAN JUAN, PR (PHASE-1 RE-PROCUREMENT)

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 $20.5 million.

What is the period of performance?

Start: 2025-01-15. End: 2027-03-22.

What is Tutor Perini Corporation's track record with similar federal design-build contracts, particularly in disaster recovery scenarios?

Tutor Perini Corporation has a substantial history of undertaking large-scale federal construction projects, including infrastructure and design-build contracts. However, their track record is mixed, with notable successes alongside instances of significant cost overruns, project delays, and legal disputes on other major projects. For instance, they have been involved in complex projects for the Department of Defense and other federal agencies. Specific to disaster recovery, their experience would need to be evaluated on a case-by-case basis, considering the scale, location, and specific challenges of those prior engagements. A thorough review would involve examining past performance evaluations, any debriefings from previous federal contracts, and public records of litigation or claims.

How does the awarded amount of $20.5 million compare to the estimated cost of similar hurricane rebuild projects for federal facilities?

Directly comparing the $20.5 million award to similar projects is challenging without detailed project specifications, such as square footage, type of damage, specific repair requirements, and location-specific construction costs. However, hurricane rebuild projects, especially those involving design-build capabilities for critical infrastructure like a U.S. Coast Guard base, are inherently complex and costly. Factors such as the need for resilient construction standards, potential remoteness of the location (San Juan, Puerto Rico), and the urgency of recovery can drive up prices. While $20.5 million may seem substantial, it could represent good value if it encompasses comprehensive design, materials, labor, and project management for a resilient facility in a challenging environment. Benchmarking against other federal design-build contracts for similar facilities in hurricane-prone areas, adjusted for inflation and regional cost differences, would be necessary for a more precise value assessment.

What are the primary risks associated with this specific contract, and how are they being mitigated?

The primary risks associated with this contract include potential cost overruns due to unforeseen site conditions common in disaster recovery, supply chain disruptions for materials, labor availability challenges in Puerto Rico, and potential schedule delays. The firm fixed-price contract structure is a key mitigation strategy, placing the financial risk of cost overruns on Tutor Perini Corporation. The U.S. Coast Guard's oversight and project management will be crucial for monitoring progress, quality, and adherence to the contract. Furthermore, the design-build nature allows for integrated planning, potentially identifying and addressing risks earlier in the process. The contractor's experience and proposed approach to risk management, detailed in their bid, would also be critical mitigation factors.

What is the expected effectiveness of the completed project in enhancing the U.S. Coast Guard's operational capabilities in San Juan?

The effectiveness of the completed project hinges on the successful execution of the design and construction phases to meet the U.S. Coast Guard's requirements for resilient infrastructure. By rebuilding and potentially upgrading facilities damaged by hurricanes, the project is expected to restore and enhance the operational capabilities of the Coast Guard base in San Juan. This includes ensuring the availability of secure workspaces, essential utilities, and potentially improved berthing or operational support facilities. The long-term effectiveness will depend on the durability of the construction, adherence to modern building codes and resilience standards, and how well the new or repaired facilities support the Coast Guard's mission in the region, which is critical for maritime security and safety.

How does historical spending on similar infrastructure projects by the U.S. Coast Guard in Puerto Rico compare to this award?

Analyzing historical spending requires access to detailed contract databases and specific project information for the U.S. Coast Guard in Puerto Rico. Without that granular data, a direct comparison is difficult. However, federal spending on infrastructure in Puerto Rico, particularly post-disaster, has been significant across various agencies due to the island's vulnerability to hurricanes and seismic activity. The U.S. Coast Guard, with its strategic presence, likely undertakes periodic investments in its facilities. This $20.5 million award for a design-build rebuild project appears to be a substantial investment, consistent with the scale of major infrastructure repairs or upgrades needed after significant natural disasters. Comparing it to previous Coast Guard projects of similar scope (e.g., barracks, maintenance facilities, command centers) in the region would provide better context on whether this award represents an increase, decrease, or stable level of investment.

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: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 15901, OLDEN STREET, 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: $20,542,010

Exercised Options: $20,542,010

Current Obligation: $20,542,010

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 70Z04723DPCNI0004

IDV Type: IDC

Timeline