DOT awards $15.5M for California highway construction, highlighting firm fixed-price contract

Contract Overview

Contract Amount: $15,473,419 ($15.5M)

Contractor: Reed George Incorporated

Awarding Agency: Department of Transportation

Start Date: 2006-09-08

End Date: 2009-06-27

Contract Duration: 1,023 days

Daily Burn Rate: $15.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: PULVERIZING, HOT ASPHALT CONCRETE PAVEMENT AND DRAINAGE ON 7.20 MILES OF ROADWAY.

Place of Performance

Location: YOSEMITE NATIONAL PARK, MARIPOSA County, CALIFORNIA, 95389

State: California Government Spending

Plain-Language Summary

Department of Transportation obligated $15.5 million to REED GEORGE INCORPORATED for work described as: PULVERIZING, HOT ASPHALT CONCRETE PAVEMENT AND DRAINAGE ON 7.20 MILES OF ROADWAY. Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. Firm fixed-price contract type indicates predictable costs for the government. 3. Project duration of 1023 days suggests a significant, long-term infrastructure undertaking. 4. The contract value of $15.5 million falls within a moderate spending range for highway projects. 5. Awarded by the Federal Highway Administration, aligning with national transportation infrastructure goals. 6. The project's scope involves pavement and drainage work, critical for road longevity.

Value Assessment

Rating: good

The contract value of $15.5 million for 7.20 miles of roadway construction, including pavement and drainage, appears reasonable. Without specific benchmarks for this exact type of work in California, it's difficult to provide a precise value-for-money assessment. However, the firm fixed-price structure helps control costs. Further analysis would require comparing per-mile costs to similar projects in the region and considering the complexity of the drainage work.

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 two bidders suggests a moderate level of competition for this project. While more bidders would typically lead to greater price discovery, two bidders still provide a basis for comparison and negotiation, likely resulting in a fair market price.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that drives down prices and encourages efficiency. The presence of multiple bidders ensures that the government is not locked into a single provider, promoting better value.

Public Impact

The primary beneficiaries are users of the 7.20 miles of roadway in California, who will experience improved driving conditions and reduced maintenance issues. The project delivers essential services related to highway construction, specifically pulverizing old asphalt and installing new pavement and drainage systems. The geographic impact is localized to the specific 7.20-mile stretch of roadway within California. The contract supports the construction workforce, likely employing laborers, engineers, and project managers involved in highway infrastructure development.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions arise, though mitigated by fixed-price contract.
Delays in project completion could impact the intended benefits and increase indirect costs.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Awarded through full and open competition, suggesting a competitive pricing environment.
Project addresses critical infrastructure needs for road longevity and safety.

Sector Analysis

This contract falls within the Highway, Street, and Bridge Construction sector, a significant segment of the broader construction industry. This sector is crucial for national infrastructure and economic development. Spending in this area is often driven by federal and state funding initiatives aimed at maintaining and upgrading transportation networks. Comparable spending benchmarks would typically be analyzed on a per-mile or per-square-foot basis, considering factors like terrain, complexity of work, and material costs.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, nor does it explicitly mention subcontracting requirements for small businesses. Therefore, the direct impact on the small business ecosystem is likely minimal unless the prime contractor voluntarily engages small businesses for subcontracting. Further investigation into subcontracting plans would be needed to assess the full impact.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Transportation's Federal Highway Administration, likely through contracting officers and project managers. Accountability measures would include adherence to contract specifications, timelines, and quality standards. Transparency is generally maintained through contract award databases and public reporting, though specific project-level oversight details may not be publicly detailed.

Related Government Programs

Federal Highway System Construction Projects
State and Local Transportation Infrastructure Grants
Pavement Rehabilitation Programs
Drainage System Upgrades

Risk Flags

Potential for unforeseen site conditions
Risk of weather-related delays
Contractor performance and quality assurance
Environmental and community impact management

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $15.5 million to REED GEORGE INCORPORATED. PULVERIZING, HOT ASPHALT CONCRETE PAVEMENT AND DRAINAGE ON 7.20 MILES OF ROADWAY.

Who is the contractor on this award?

The obligated recipient is REED GEORGE INCORPORATED.

Which agency awarded this contract?

Awarding agency: Department of Transportation (Federal Highway Administration).

What is the total obligated amount?

The obligated amount is $15.5 million.

What is the period of performance?

Start: 2006-09-08. End: 2009-06-27.

What is the track record of REED GEORGE INCORPORATED with federal contracts?

Information regarding REED GEORGE INCORPORATED's specific track record with federal contracts is not detailed in the provided data. A comprehensive analysis would require accessing federal procurement databases (like FPDS or SAM.gov) to review their past performance, contract history, any reported issues, and their overall performance ratings on previous federal awards. This would help assess their reliability and experience in handling similar projects. Without this data, it's difficult to gauge their past performance definitively.

How does the cost per mile for this project compare to national averages?

The provided data indicates a contract value of $15,473,418.55 for 7.20 miles of roadway work. This equates to approximately $2,149,085.84 per mile. National averages for highway construction can vary significantly based on location, complexity, and the specific scope of work (e.g., new construction vs. rehabilitation, inclusion of bridges or complex interchanges). However, this figure appears to be within a plausible range for significant road construction and rehabilitation projects, especially considering the inclusion of drainage work. A more precise comparison would necessitate benchmarking against similar projects in California and the broader FHWA data for projects of comparable scope and complexity.

What are the primary risks associated with this type of highway construction contract?

Primary risks for this highway construction contract include unforeseen subsurface conditions (e.g., unexpected soil types, underground utilities, or hazardous materials) that could lead to delays and cost increases, despite the firm fixed-price nature. Weather delays are also a significant risk, particularly for outdoor construction projects, potentially extending the project timeline. Contractor performance and quality control are ongoing risks, requiring diligent oversight to ensure work meets specifications. Furthermore, potential community or environmental impact issues could arise, necessitating careful management and communication.

How effective is the firm fixed-price contract type in managing costs for this project?

The firm fixed-price (FFP) contract type is generally effective in managing costs for projects like this because it shifts the risk of cost overruns to the contractor. The government agrees to pay a set price, regardless of the contractor's actual costs incurred. This provides budget certainty for the agency. However, contractors may build in a contingency premium to account for potential risks, which could result in a higher initial price compared to cost-reimbursement contracts. For a project with a defined scope like pulverizing asphalt and drainage work, FFP is often a suitable choice for cost control, provided the scope is well-defined and risks are adequately assessed upfront.

What is the historical spending trend for highway construction by the Department of Transportation?

Historical spending trends for highway construction by the Department of Transportation (DOT), particularly through the Federal Highway Administration (FHWA), are substantial and generally follow national infrastructure priorities and funding cycles. Federal investment in highways fluctuates based on congressional appropriations, surface transportation acts (like the FAST Act or its successors), and economic conditions. While specific annual figures vary, DOT consistently allocates billions of dollars towards highway construction, repair, and maintenance annually. This contract represents a single award within that larger, ongoing federal commitment to transportation infrastructure.

What is the significance of the project duration (1023 days)?

A project duration of 1023 days (approximately 2.8 years) indicates a substantial undertaking. This extended timeline suggests the project involves significant scope, potentially complex phases, or is subject to seasonal work limitations. For taxpayers, a longer duration can mean prolonged disruption in the affected area, but it also allows for more thorough execution of complex tasks like extensive drainage work. From a contractor's perspective, it requires sustained resource allocation and project management over an extended period. The FHWA likely determined this duration was necessary to achieve the project's objectives effectively and safely.

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: SEALED BID

Solicitation ID: DTFH68-06-B-00026

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 928 12TH ST 700, MODESTO, CA, 05

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

Financial Breakdown

Contract Ceiling: $15,473,419

Exercised Options: $15,473,419

Current Obligation: $15,473,419

Contract Characteristics

Multi-Year Contract: Yes

Timeline