DOT awards $27M for Salmon River Road construction, highlighting highway infrastructure needs

Contract Overview

Contract Amount: $27,065,047 ($27.1M)

Contractor: Ascorp Inc

Awarding Agency: Department of Transportation

Start Date: 2007-11-09

End Date: 2011-07-25

Contract Duration: 1,354 days

Daily Burn Rate: $20.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Construction

Official Description: ID PFH 60-1(3) SALMON RIVER ROAD

Place of Performance

Location: RIGGINS, IDAHO County, IDAHO, 83549

State: Idaho Government Spending

Plain-Language Summary

Department of Transportation obligated $27.1 million to ASCORP INC for work described as: ID PFH 60-1(3) SALMON RIVER ROAD Key points: 1. Contract value represents a significant investment in regional transportation infrastructure. 2. Full and open competition suggests a potentially competitive bidding environment. 3. Fixed-price contract with economic price adjustment introduces some cost fluctuation risk. 4. Project duration of over three years indicates a substantial construction undertaking. 5. Awarded by the Federal Highway Administration, aligning with national transportation goals.

Value Assessment

Rating: good

The contract value of $27.1 million for highway construction appears reasonable given the project's scope and duration. Benchmarking against similar large-scale highway projects managed by the Federal Highway Administration would provide a more precise value-for-money assessment. The fixed-price with economic price adjustment structure aims to balance contractor risk with potential cost overruns due to market fluctuations, which is a common approach for long-term construction projects.

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. This approach typically fosters a competitive environment, potentially leading to better pricing and value for the government. The fact that there were 5 bids suggests a healthy level of interest from the industry for this type of project.

Taxpayer Impact: A competitive bidding process generally benefits taxpayers by driving down costs and ensuring that the government receives the best possible price for services rendered.

Public Impact

Benefits residents and businesses in Idaho by improving transportation networks. Facilitates the movement of goods and people through improved road infrastructure. Supports local and regional economic development through enhanced connectivity. Likely to create employment opportunities in the construction sector within Idaho.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Economic price adjustment clause introduces potential for cost increases beyond initial estimates.
Long contract duration (1354 days) increases exposure to market volatility and unforeseen construction challenges.

Positive Signals

Awarded under full and open competition, suggesting a robust bidding process.
Fixed-price element provides a baseline cost control measure.
Project addresses critical infrastructure needs, aligning with federal transportation objectives.

Sector Analysis

This contract falls within the Highway, Street, and Bridge Construction sector, a critical component of the broader Construction industry. This sector is characterized by large-scale projects requiring specialized equipment, skilled labor, and significant capital investment. Spending in this area is often driven by federal and state initiatives to maintain and upgrade national transportation infrastructure, with annual federal outlays in highway construction typically in the billions of dollars.

Small Business Impact

While the contract was awarded under full and open competition and there is no explicit mention of small business set-asides, the prime contractor, ASCORP INC, may engage small businesses as subcontractors. The extent of small business participation would depend on the subcontracting plan, if any, required for this project. Without specific subcontracting data, the direct impact on the small business ecosystem remains unclear, though large infrastructure projects often create opportunities for specialized small firms.

Oversight & Accountability

Oversight for this contract would primarily fall under the Federal Highway Administration (FHWA), a division of the Department of Transportation. The FHWA has established procedures for monitoring contract performance, ensuring compliance with specifications, and managing payments. The Inspector General of the Department of Transportation would have jurisdiction to investigate any potential fraud, waste, or abuse related to this award. Transparency is generally maintained through contract award databases and public reporting requirements.

Related Government Programs

Federal Highway Administration Construction Projects
National Highway System Improvements
State Infrastructure Grants (Idaho)

Risk Flags

Potential for cost overruns due to economic price adjustment clause.
Risk of project delays given the long duration and complexity of highway construction.
Dependence on contractor's past performance and financial stability.

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $27.1 million to ASCORP INC. ID PFH 60-1(3) SALMON RIVER ROAD

Who is the contractor on this award?

The obligated recipient is ASCORP INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $27.1 million.

What is the period of performance?

Start: 2007-11-09. End: 2011-07-25.

What is the track record of ASCORP INC in completing similar large-scale highway construction projects on time and within budget?

ASCORP INC's track record on similar projects is crucial for assessing future performance. A review of their past contracts with the Federal Highway Administration and other transportation agencies would reveal their history of meeting deadlines, managing costs, and adhering to quality standards. Analyzing project completion reports, any documented cost overruns or delays, and client satisfaction surveys would provide a comprehensive picture. For instance, if ASCORP INC has a history of successfully delivering complex infrastructure projects, it increases confidence in their ability to manage the Salmon River Road construction effectively. Conversely, a pattern of significant delays or budget issues would raise concerns about their capacity and risk management.

How does the awarded amount of $27,065,046.58 compare to the estimated cost or the bids received from other competitors?

The awarded amount of approximately $27.1 million provides a benchmark for the cost of this specific highway construction project. To assess its value, this figure should be compared against the government's initial cost estimate and the bids submitted by the other four competitors. If the awarded amount is significantly lower than the estimate and other bids, it suggests strong competition and potentially good value. However, if it is close to or exceeds the estimate, further scrutiny of the scope, specifications, and market conditions at the time of bidding is warranted. Understanding the variance between bids can also highlight differences in technical approaches or risk assessments by the contractors.

What are the primary risks associated with a fixed-price contract with economic price adjustment for a project of this duration?

A fixed-price contract with economic price adjustment (FP-EPA) for a 1354-day project like the Salmon River Road construction carries specific risks. The primary risk for the government is the potential for cost escalation due to the economic price adjustment clause, which allows for modifications based on changes in specified economic factors (e.g., labor rates, material costs). While this protects the contractor from unforeseen market fluctuations, it can lead to higher final costs than a firm fixed-price contract. For the contractor, the risk lies in accurately forecasting these economic factors and managing the project within the fixed-price component. Inadequate forecasting or extreme market volatility could erode their profit margins.

What is the expected impact of this contract on the local workforce and economy in Idaho?

This $27.1 million highway construction contract is expected to have a positive impact on the local workforce and economy in Idaho. Large infrastructure projects typically require a significant number of skilled and unskilled laborers, creating direct employment opportunities in construction trades such as heavy equipment operators, engineers, surveyors, and general laborers. Furthermore, the project will likely stimulate indirect economic activity by increasing demand for local materials, equipment rentals, and support services, benefiting businesses within the supply chain. The improved transportation infrastructure resulting from the project can also enhance long-term economic development by facilitating commerce and accessibility in the region.

How does the Federal Highway Administration typically manage oversight for long-term, high-value construction contracts like this one?

The Federal Highway Administration (FHWA) employs a multi-faceted approach to oversee long-term, high-value construction contracts. This typically involves establishing a dedicated contract administration team responsible for monitoring progress, ensuring compliance with contract terms and specifications, and managing payments. Key oversight mechanisms include regular site inspections, review of contractor submittals (e.g., schedules, material certifications), progress meetings, and independent cost reviews. The FHWA may also utilize construction quality assurance programs and require detailed reporting from the contractor. For projects of this magnitude, the FHWA often assigns resident engineers or project managers to provide on-site supervision and act as the primary point of contact.

What historical spending patterns exist for highway construction projects managed by the Federal Highway Administration in Idaho?

Analyzing historical spending patterns for highway construction projects managed by the Federal Highway Administration (FHWA) in Idaho can provide context for this $27.1 million award. This involves examining past contract awards, their values, durations, and the types of projects undertaken within the state. Understanding the average cost per mile for similar road construction, the typical number of bidders on FHWA projects in Idaho, and the frequency of large-scale awards can help assess whether this contract is an outlier or part of a consistent investment trend. Such analysis can reveal whether federal funding for Idaho's transportation infrastructure has been increasing, decreasing, or remaining stable over time.

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: DTFH7007B00010

Offers Received: 5

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

Evaluated Preference: NONE

Contractor Details

Address: 217 COLLEGE AVE 2, OROFINO, ID, 01

Business Categories: Category Business, HUBZone Firm, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $27,065,047

Exercised Options: $27,065,047

Current Obligation: $27,065,047

Contract Characteristics

Cost or Pricing Data: NO

Timeline