Border Fence IV-2 contract awarded to Granite Construction Company for $13.29M, focusing on highway and bridge construction

Contract Overview

Contract Amount: $13,290,038 ($13.3M)

Contractor: Granite Construction Company

Awarding Agency: Department of Defense

Start Date: 2008-09-25

End Date: 2008-12-31

Contract Duration: 97 days

Daily Burn Rate: $137.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 10

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: BORDER FENCE IV-2

Place of Performance

Location: COLUMBUS, LUNA County, NEW MEXICO, 88029

State: New Mexico Government Spending

Plain-Language Summary

Department of Defense obligated $13.3 million to GRANITE CONSTRUCTION COMPANY for work described as: BORDER FENCE IV-2 Key points: 1. The contract's value of $13.29 million for a 97-day duration suggests a significant investment in infrastructure. 2. Awarded under full and open competition, this contract likely benefited from a competitive bidding process. 3. The firm-fixed-price nature of the contract shifts cost risk to the contractor, Granite Construction Company. 4. The contract falls under the Highway, Street, and Bridge Construction NAICS code, indicating a focus on civil engineering projects. 5. The project's location in New Mexico (NM) highlights regional infrastructure development efforts. 6. With 10 delivery orders, the contract demonstrates a structured approach to phased project execution.

Value Assessment

Rating: good

The contract value of $13.29 million for a 97-day duration appears substantial for the scope of highway, street, and bridge construction. Benchmarking against similar large-scale infrastructure projects would be necessary for a precise value-for-money assessment. However, the firm-fixed-price contract type suggests that the government secured a defined cost, which is generally favorable.

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 a bid. The presence of 10 delivery orders suggests a potentially robust bidding environment for each phase or component of the project, which typically leads to better price discovery and potentially lower costs for the government.

Taxpayer Impact: Full and open competition generally results in more competitive pricing, which is beneficial for taxpayers by ensuring that the government is not overpaying for services or goods.

Public Impact

The primary beneficiaries are likely the Department of Defense and potentially border security agencies, receiving enhanced infrastructure. The services delivered include highway, street, and bridge construction, crucial for logistical support and operational access. The geographic impact is concentrated in New Mexico, supporting regional development and infrastructure. Workforce implications include employment opportunities for construction workers, engineers, and related support staff in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions arise, despite the firm-fixed-price structure.
Dependence on contractor performance for timely completion within the 97-day duration.
Risk of scope creep if delivery orders are not precisely defined.
Environmental impact considerations for construction activities in New Mexico.

Positive Signals

Firm-fixed-price contract mitigates cost uncertainty for the government.
Full and open competition suggests a competitive pricing environment.
Multiple delivery orders allow for structured project management and phased execution.
Award to Granite Construction Company, a known entity in the construction sector, may indicate a level of established capability.

Sector Analysis

The contract falls under the Highway, Street, and Bridge Construction sector, a critical component of the broader construction industry. This sector is characterized by large-scale projects, significant capital investment, and a need for specialized engineering and labor. Spending in this area is often driven by government infrastructure initiatives. Comparable spending benchmarks would typically involve analyzing other large federal or state-level road and bridge construction contracts.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications specifically mandated for small businesses through a set-aside program. However, the prime contractor, Granite Construction Company, may engage small businesses as subcontractors based on their own procurement strategies and project needs.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant Department of the Army contracting office. Accountability measures are embedded in the firm-fixed-price contract terms, requiring delivery of specified construction services. Transparency is generally provided through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Border Security Infrastructure Projects
Department of Defense Construction Contracts
Federal Highway Administration Projects
Army Corps of Engineers Construction

Risk Flags

Potential for cost overruns if unforeseen site conditions arise.
Risk of delays impacting project completion timeline.
Quality control concerns in large-scale construction projects.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $13.3 million to GRANITE CONSTRUCTION COMPANY. BORDER FENCE IV-2

Who is the contractor on this award?

The obligated recipient is GRANITE CONSTRUCTION COMPANY.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $13.3 million.

What is the period of performance?

Start: 2008-09-25. End: 2008-12-31.

What is the historical spending pattern of the Department of the Army on highway, street, and bridge construction contracts?

The Department of the Army, as part of the Department of Defense, consistently allocates significant funds towards infrastructure development, including highway, street, and bridge construction. Historical data reveals a pattern of awarding large-scale contracts for base improvements, logistical access routes, and border-related infrastructure. Spending in this category often fluctuates based on national security priorities, military readiness needs, and congressionally appropriated infrastructure budgets. Analyzing past contract awards within the NAICS code 237310 (Highway, Street, and Bridge Construction) for the Army shows a trend of multi-million dollar awards, often with firm-fixed-price structures, to large construction firms. The 'BORDER FENCE IV-2' contract aligns with this historical pattern of investing in critical infrastructure to support operational requirements.

How does the awarded amount of $13.29 million for BORDER FENCE IV-2 compare to similar border infrastructure projects?

The $13.29 million award for the BORDER FENCE IV-2 contract appears to be a substantial, but not unprecedented, investment for a specific segment of border infrastructure. When compared to other large-scale border barrier projects, which can range from hundreds of millions to billions of dollars in total, this contract represents a focused effort on a particular phase or section. For instance, major border wall construction initiatives have seen significantly higher aggregate spending. However, when considering specific delivery orders or smaller, targeted construction tasks like bridge or road enhancements in border regions, $13.29 million is a considerable sum, suggesting a complex or extensive scope for this particular project. A direct comparison requires detailed analysis of the specific deliverables and geographic scope of other border-related construction contracts.

What is Granite Construction Company's track record with Department of Defense contracts, particularly in infrastructure?

Granite Construction Company has a significant track record of working with the Department of Defense and other federal agencies on large-scale infrastructure projects. As a major construction firm, they have been awarded numerous contracts for civil engineering, transportation, and defense-related construction. Their experience often includes projects involving roads, bridges, airfields, and other critical facilities. While specific details on all their DoD contracts would require extensive database searches, their involvement in projects like BORDER FENCE IV-2 indicates a demonstrated capability to meet the demanding requirements of military construction. Their history suggests they are a capable contractor for complex infrastructure tasks, often competing successfully for large federal awards.

What are the potential risks associated with a firm-fixed-price contract for a construction project of this nature?

While firm-fixed-price (FFP) contracts are generally favored for cost control, they carry specific risks, especially in construction. For the contractor (Granite Construction Company), the primary risk is absorbing unforeseen cost increases due to factors like material price volatility, labor shortages, or unexpected site conditions (e.g., difficult soil, underground obstructions). If costs exceed the fixed price, the contractor's profit margin shrinks or they incur a loss. For the government, the risk is that the contractor may cut corners on quality or scope to protect their profit margin if they encounter significant cost overruns, although contract specifications and oversight are designed to mitigate this. In the context of BORDER FENCE IV-2, any challenges in New Mexico's terrain or environmental regulations could increase costs for the contractor.

How does the competition level (full and open) impact the value received by taxpayers for this contract?

A 'full and open' competition level is generally highly beneficial for taxpayers. It means that the government solicited bids from all responsible sources, maximizing the pool of potential contractors. This broad competition typically drives down prices as contractors vie to win the award. For the BORDER FENCE IV-2 contract, this suggests that the $13.29 million awarded likely reflects a competitive market rate for the specified highway, street, and bridge construction services in New Mexico. Taxpayers benefit from the assurance that the government secured the services at a price shaped by market forces rather than limited options, reducing the likelihood of inflated costs and enhancing overall value for money.

What is the significance of the 10 delivery orders under this contract?

The issuance of 10 delivery orders under the BORDER FENCE IV-2 contract signifies a structured, phased approach to project execution. Instead of a single large award, the work is broken down into smaller, manageable components. This can offer several advantages: it allows for more precise task definition and management for each phase, potentially improving oversight and quality control. It also provides flexibility; if issues arise with one delivery order, it may not halt the entire project. For taxpayers, this can lead to better cost management as funds are allocated incrementally, and it allows for adjustments based on progress or changing requirements. It also implies a potentially ongoing relationship with the contractor, allowing for continuity of work.

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

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 10

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Granite Construction Incorporated (UEI: 622826360)

Address: 585 WEST BEACH ST, WATSONVILLE, CA, 95076

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $13,290,038

Exercised Options: $13,290,038

Current Obligation: $13,290,038

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W912BV07D2028

IDV Type: IDC

Timeline