Army awards $12.1M for canal construction in Puerto Rico, completed in 2003

Contract Overview

Contract Amount: $12,070,563 ($12.1M)

Contractor: RIO Construction Corporation

Awarding Agency: Department of Defense

Start Date: 2001-09-27

End Date: 2003-10-15

Contract Duration: 748 days

Daily Burn Rate: $16.1K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 8

Pricing Type: FIXED PRICE

Sector: Construction

Official Description: 200112!000946!96CE!CW17 !USA ENGINEER DIST JACKSONVILLE !DACW1701C0013 !A!N!*!N! !20010927!20031015!090386350!090386350!090386350!N!RIO CONSTRUCTION CORP !CARR#1 KM 18 5 BO CAIMIT!RIO PIEDRAS !PR!00928!05346!017!72!BARCELONETA !BARCELONETA !PUERTO RIC!+000001110000!N!N!000000000000!Y212!CANALS !C2 !CONSTRUCTION !5000!NOT DISCERNABLE OR CLASSIFIED !234930!*!*!3! ! ! !*!*!*!B!*!*!A! !A !N!J!2!008!K! !Z!N!C! ! !N!B!N!N! ! !D! !B!A!000!A!B!Y!U!N! ! ! ! !0001!

Place of Performance

Location: BARCELONETA, BARCELONETA County, PUERTO RICO, 00617

Plain-Language Summary

Department of Defense obligated $12.1 million to RIO CONSTRUCTION CORPORATION for work described as: 200112!000946!96CE!CW17 !USA ENGINEER DIST JACKSONVILLE !DACW1701C0013 !A!N!*!N! !20010927!20031015!090386350!090386350!090386350!N!RIO CONSTRUCTION CORP !CARR#1 KM 18 5 BO CAIMIT!RIO PIEDRAS !PR!00928!05346!017!72!BARCELONETA !BARCE… Key points: 1. Contract awarded for canal construction services, indicating a need for infrastructure maintenance or development. 2. The contract was competed, suggesting a degree of market engagement for these services. 3. Fixed-price contract type implies cost certainty for the government, but potential risk for the contractor. 4. The duration of the contract (over two years) suggests a project of significant scope. 5. The award was made by the Army Corps of Engineers, a primary entity for public works and infrastructure. 6. The geographic location in Puerto Rico highlights specific regional infrastructure needs.

Value Assessment

Rating: fair

The awarded amount of $12.1 million for canal construction over a period of approximately two years appears within a reasonable range for infrastructure projects of this nature. Without specific details on the scope of work, such as the length and depth of canals, or the complexity of the terrain, a precise value-for-money assessment is challenging. However, the fixed-price contract type suggests the government aimed for cost predictability. Benchmarking against similar Army Corps of Engineers projects in the region would provide a clearer picture of whether this represented a competitive price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition after exclusion of sources,' indicating that the solicitation was broadly advertised, but certain sources were intentionally excluded. This suggests a competitive process was intended, but the specific reasons for exclusion are not detailed. The number of bidders is not explicitly stated in the provided data, which limits the ability to fully assess the intensity of the competition and its impact on price discovery.

Taxpayer Impact: A competitive bidding process, even with exclusions, generally benefits taxpayers by encouraging multiple firms to offer their best prices to secure the contract.

Public Impact

Residents and businesses in Barceloneta, Puerto Rico, likely benefit from improved or maintained canal infrastructure, potentially reducing flood risks or improving water management. The contract delivered construction services related to canal maintenance or development. The geographic impact is localized to Barceloneta, Puerto Rico. The contract supported construction jobs, though the exact number of direct or indirect jobs created is not specified.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific details on the scope of work makes it difficult to fully assess value for money.
The 'exclusion of sources' clause in the competition type warrants further investigation into the rationale.
No information is provided on small business subcontracting, which could be a missed opportunity for local economic development.

Positive Signals

The contract was awarded through a full and open competition process, indicating a broad search for qualified contractors.
The use of a fixed-price contract type provides cost certainty for the government.
The project was executed by the Department of the Army, a major federal agency with extensive experience in infrastructure projects.

Sector Analysis

This contract falls within the heavy and civil engineering construction sector, specifically focusing on water infrastructure like canals. The market for such services is often characterized by a mix of large, established construction firms and specialized smaller companies. Government agencies like the Army Corps of Engineers are significant clients in this sector, awarding numerous contracts for public works. Comparable spending benchmarks would typically involve analyzing the cost per linear foot or cubic yard of excavation/construction for similar canal projects in different regions.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). There is no information available regarding subcontracting plans or actual performance with small businesses. This suggests that the primary contract was likely awarded to a larger entity, and the impact on the small business ecosystem would depend on whether the prime contractor engaged small businesses for subcontracting opportunities, which is not detailed here.

Oversight & Accountability

Oversight for this contract would have been primarily managed by the U.S. Army Corps of Engineers, Jacksonville District, given their role in awarding and managing the contract. Accountability measures are inherent in the fixed-price contract structure, requiring delivery of specified services. Transparency is generally facilitated through federal contract databases like FPDS, where basic award information is recorded. Specific Inspector General jurisdiction would depend on any allegations of fraud, waste, or abuse related to the contract.

Related Government Programs

Army Corps of Engineers Civil Works Projects
Puerto Rico Infrastructure Development
Federal Flood Control Projects
Waterway and Navigation Construction

Risk Flags

Potential for cost overruns if contractor underestimates complexity.
Risk of quality issues if contractor faces financial difficulties under fixed-price terms.
Limited transparency on specific reasons for source exclusion in competition.
Lack of data on small business participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.1 million to RIO CONSTRUCTION CORPORATION. 200112!000946!96CE!CW17 !USA ENGINEER DIST JACKSONVILLE !DACW1701C0013 !A!N!*!N! !20010927!20031015!090386350!090386350!090386350!N!RIO CONSTRUCTION CORP !CARR#1 KM 18 5 BO CAIMIT!RIO PIEDRAS !PR!00928!05346!017!72!BARCELONETA !BARCELONETA !PUERTO RIC!+000001110000!N!N!000000000000!Y212!CANALS !C2 !CONSTRUCTION !5000!NOT DISCERNABLE OR CLASSIFIED !234930!*!*!3! ! ! !*!*!*!B!*!*!A!

Who is the contractor on this award?

The obligated recipient is RIO CONSTRUCTION CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $12.1 million.

What is the period of performance?

Start: 2001-09-27. End: 2003-10-15.

What was the specific scope of work for the canal construction, and how did it compare to the awarded price?

The provided data indicates the contract was for 'CANALS' and falls under the NAICS code 237310 (Highway, Street, and Bridge Construction), suggesting work related to the construction or maintenance of canals. The awarded amount was $12,070,563. However, the specific details of the scope of work, such as the length of the canals, the type of excavation required, environmental considerations, or specific engineering challenges, are not detailed in the extract. Without this granular information, a precise comparison of the awarded price to the scope of work to determine value for money is not possible. Typically, such assessments would involve analyzing cost breakdowns, unit prices for specific tasks (e.g., per cubic yard of excavation, per linear foot of lining), and comparing these to industry standards or historical data for similar projects.

What does 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' mean in this context, and why might sources have been excluded?

'Full and open competition after exclusion of sources' signifies that the solicitation was publicly advertised, allowing all responsible sources to submit offers. However, it also implies that certain potential offerors were intentionally excluded from the competition. The reasons for exclusion are not specified in the provided data but could stem from various factors, such as specific technical capabilities required that only a subset of firms possessed, national security concerns, or previous performance issues with certain contractors. The exclusion of sources can sometimes limit the breadth of competition, potentially impacting price discovery, although the intent is usually to ensure the most suitable contractor is selected for a specific requirement.

How does the fixed-price contract type (PT: FIXED PRICE) impact risk and potential cost savings for the government on this project?

A fixed-price contract type, as indicated for this award, obligates the contractor to complete the work for a predetermined price, regardless of the actual costs incurred. This shifts the cost risk primarily to the contractor. For the government, this offers significant cost certainty and predictability, making budgeting easier. If the contractor can perform the work more efficiently than anticipated, they stand to make a larger profit, but the government is protected from cost overruns. Conversely, if the contractor faces unforeseen difficulties that increase their costs, they absorb those losses, which could potentially lead to quality compromises if not carefully monitored. The effectiveness of a fixed-price contract relies heavily on a well-defined scope of work and robust oversight to ensure quality standards are met.

What is the significance of the Army Corps of Engineers awarding this contract, and what does it suggest about the nature of the project?

The U.S. Army Corps of Engineers (USACE) is a federal agency responsible for a wide range of public works, including infrastructure development, navigation, flood control, and environmental protection. Awarding this contract for canal construction indicates that the project likely falls under the USACE's civil works mission. This suggests the canal serves a public purpose, such as improving water management, facilitating navigation, or mitigating flood risks within a community. The involvement of the USACE implies adherence to rigorous engineering standards, environmental regulations, and federal procurement processes, lending credibility to the project's execution and oversight.

Given the contract duration of 748 days (approx. 2 years), what are the potential implications for project management and oversight?

A contract duration of approximately two years for canal construction implies a project of substantial scale and complexity. This extended timeline necessitates robust project management and continuous oversight from the contracting agency (U.S. Army Corps of Engineers). Key implications include the need for phased planning and execution, regular progress monitoring, quality assurance checks at various stages, and proactive risk management to address potential delays or unforeseen issues. Long-term contracts also require sustained resource allocation for oversight personnel and effective communication channels between the government and the contractor to ensure milestones are met and the project stays on track and within budget.

Industry Classification

NAICS: Construction › Highway, Street, and Bridge Construction › Highway, Street, and Bridge Construction

Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCT NONBUILDING FACILITIES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Offers Received: 8

Pricing Type: FIXED PRICE (J)

Contractor Details

Address: CARR#1 KM 18 5 BO CAIMIT, RIO PIEDRAS, PR, 00928

Business Categories: Category Business, Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline