HHS awards $25.1M for water/sewer construction, with limited competition impacting price discovery

Contract Overview

Contract Amount: $25,181 ($25.2K)

Contractor: Allen Gill Construction Inc

Awarding Agency: Department of Health and Human Services

Start Date: 2026-04-03

End Date: 2026-07-03

Contract Duration: 91 days

Daily Burn Rate: $277/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: HUNTER ERVIN

Place of Performance

Location: TRINIDAD, HUMBOLDT County, CALIFORNIA, 95570

State: California Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $25,181 to ALLEN GILL CONSTRUCTION INC for work described as: HUNTER ERVIN Key points: 1. Value for money is difficult to assess due to limited competition and lack of detailed cost breakdowns. 2. Competition dynamics show a sole-source award, raising concerns about potential overpayment. 3. Risk indicators include the sole-source nature and the short performance period. 4. Performance context is a short-term delivery order for essential infrastructure. 5. Sector positioning is within the construction of water and sewer systems, a critical public service.

Value Assessment

Rating: questionable

The contract value of $25.1 million for 91 days of work appears high, especially given the limited competition. Without a detailed breakdown of costs or comparison to similar projects in California, it's challenging to benchmark the value effectively. The firm fixed-price structure suggests the contractor bears some risk, but the lack of competitive bidding prevents assurance of the best possible price for taxpayers.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one contractor was solicited. This significantly limits price discovery and the opportunity for multiple bidders to offer competitive pricing. The rationale for a sole-source award, if any, is not detailed here, but it typically implies unique capabilities or urgent needs that cannot be met through open competition.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as the government lacks the leverage of competitive bids to secure the most economical price.

Public Impact

The primary beneficiaries are the communities served by the Indian Health Service that will receive improved water and sewer infrastructure. Essential services including water and sewer line construction and related structures will be delivered. The geographic impact is focused on California, specifically within the service area of the Indian Health Service. Workforce implications include employment opportunities for construction workers and related trades in California.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competitive bidding may result in inflated costs.
Short performance period could indicate rushed work or potential for delays.
Sole-source award raises questions about contractor selection process and fairness.

Positive Signals

Firm fixed-price contract shifts cost risk to the contractor.
Award supports critical public health infrastructure.
Contract is with a known entity, potentially reducing execution risk if capabilities are proven.

Sector Analysis

This contract falls within the heavy and civil engineering construction sector, specifically focusing on utility infrastructure. The market for water and sewer construction is substantial, driven by aging systems and population growth. Comparable spending benchmarks are difficult to establish without more project specifics, but large-scale utility projects can range from millions to billions of dollars depending on scope and complexity.

Small Business Impact

There is no indication of small business set-asides or subcontracting requirements in the provided data. The award to ALLEN GILL CONSTRUCTION INC, a firm not explicitly identified as a small business in this context, suggests it may not have been specifically targeted for small business participation. Further analysis would be needed to determine if any subcontracting opportunities were made available to small businesses.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Health and Human Services' internal audit and program management functions, as well as potentially the Indian Health Service's specific oversight mechanisms. Transparency is limited by the sole-source nature and lack of detailed public justification. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Indian Health Service Infrastructure Projects
Federal Water and Sewer Construction Contracts
Department of Health and Human Services Capital Investments

Risk Flags

Sole-source award lacks competitive justification.
High contract value for a short performance period.
Limited transparency on cost breakdown and value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $25,181 to ALLEN GILL CONSTRUCTION INC. HUNTER ERVIN

Who is the contractor on this award?

The obligated recipient is ALLEN GILL CONSTRUCTION INC.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Indian Health Service).

What is the total obligated amount?

The obligated amount is $25,181.

What is the period of performance?

Start: 2026-04-03. End: 2026-07-03.

What is the track record of ALLEN GILL CONSTRUCTION INC with federal contracts, particularly with the Indian Health Service?

Information regarding the specific track record of ALLEN GILL CONSTRUCTION INC with federal contracts, especially with the Indian Health Service, is not provided in the data. A comprehensive review would require accessing federal procurement databases like SAM.gov or FPDS to analyze past performance, contract values, types of services rendered, and any past performance issues or commendations. Understanding their history with similar projects and agencies is crucial for assessing reliability and capability for this specific delivery order.

How does the $25.1 million cost compare to similar water and sewer construction projects awarded by the federal government?

Benchmarking this $25.1 million contract against similar federal water and sewer construction projects is challenging without more specific details on the scope of work, location, and duration. However, for a 91-day delivery order, this value appears substantial. Typical federal construction projects of this nature can vary widely in cost based on complexity, materials, labor, and regulatory requirements. A detailed comparison would necessitate analyzing contract databases for projects with comparable square footage, linear feet of pipe laid, or specific infrastructure components (e.g., treatment facilities vs. simple line replacement) within similar geographic regions and under similar contract types.

What are the specific risks associated with a sole-source award for critical infrastructure construction?

Sole-source awards for critical infrastructure construction carry several risks. Primarily, the lack of competition can lead to significantly higher costs for taxpayers, as the government cannot leverage multiple bids to secure the best price. There's also a risk that the chosen contractor may not possess the most innovative or efficient solutions available in the market. Furthermore, sole-source justifications can sometimes mask inadequate planning or a failure to properly scope requirements for competitive bidding, potentially leading to scope creep or unforeseen issues during execution. Accountability can also be a concern, as the absence of competitive pressure might reduce the incentive for optimal performance.

What is the expected effectiveness of the completed water and sewer lines, and how will success be measured?

The expected effectiveness of the completed water and sewer lines is to provide reliable and safe water supply and wastewater disposal for the served communities under the Indian Health Service. Success measurement would typically involve adherence to project specifications, completion within the contracted timeline and budget (though budget adherence is less clear with sole-source), and post-construction testing to ensure functionality and compliance with health and environmental standards. Performance metrics might include water pressure, flow rates, leak detection, and system integrity checks. The short duration suggests a focus on specific, perhaps urgent, repair or replacement tasks rather than a full system overhaul.

How has federal spending on water and sewer construction projects trended over the past five years, and does this award align with those trends?

Federal spending on water and sewer construction projects has generally seen fluctuations driven by infrastructure initiatives, federal agency needs, and appropriations. While specific aggregate data for 'Water and Sewer Line and Related Structures Construction' (NAICS 237110) across all agencies isn't readily available in this snippet, overall federal investment in infrastructure, including utilities, has been a focus. This $25.1 million award represents a specific instance of such spending. To determine alignment with trends, one would need to analyze historical spending patterns for the Indian Health Service and similar construction categories across the government, looking for increases or decreases in contract awards and values.

What are the implications of the firm fixed-price contract type for this sole-source award?

A firm fixed-price (FFP) contract type, even in a sole-source scenario, aims to transfer cost risk from the government to the contractor. This means the contractor is obligated to complete the work for the agreed-upon price, regardless of their actual costs. While this provides cost certainty for the government, the benefit is diminished in a sole-source situation because the initial price was not established through competition. The effectiveness of the FFP here relies heavily on the contractor's accurate estimation and the government's diligence in defining a clear scope of work to prevent change orders that could escalate costs.

Industry Classification

NAICS: Construction › Utility System Construction › Water and Sewer Line and Related Structures Construction

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

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Allen Gill Construction, Inc.

Address: 22099 PALO WAY, PALO CEDRO, CA, 96073

Business Categories: 8(a) Program Participant, American Indian Owned Business, Category Business, Corporate Entity Not Tax Exempt, DoT Certified Disadvantaged Business Enterprise, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $25,181

Exercised Options: $25,181

Current Obligation: $25,181

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 75H70323D00004

IDV Type: IDC

Timeline