I-564 Intermodal Connector Project Awarded for $119M, Enhancing Naval Access and Infrastructure

Contract Overview

Contract Amount: $119,029,701 ($119.0M)

Contractor: Cherry Hill Construction Inc

Awarding Agency: Department of Transportation

Start Date: 2014-02-10

End Date: 2023-12-31

Contract Duration: 3,611 days

Daily Burn Rate: $33.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 8

Pricing Type: FIRM FIXED PRICE

Sector: Transportation

Official Description: IGF::OT::IGF THE I-564 INTERMODAL CONNECTOR LIMITS ARE LOCATED FROM EXISTING INTERSTATE 564 IN THE AREA OF TERMINAL BLVD ON THE EAST TO THE NAVAL STATION NORFOLK (SECOND STREET)AND NORFOLK INTERNATIONAL TERMINALS ON THE WEST, REPRESENTING APPROXIMATELY 2.82 MILES OF NEW FOUR-LANE LIMITED ACCESS HIGHWAY, AND A RECONFIGURED COMMERCIAL VEHICLE INSPECTION STATION FOR NAVAL STATION NORFOLK. PROPOSED IMPROVEMENTS INCLUDE, BUT ARE NOT LIMITED TO, CONSTRUCTION OF I-564 INTERCHANGE, BRIDGES AND LOCAL CONNECTORS, STORMWATER MANAGEMENT AREAS AND OTHER INFRASTRUCTURE ASSOCIATED WITH THE I-564 INTERMODAL CONNECTOR. IN ADDITION, THE PROJECT INCLUDES IMPROVEMENTS ON NAVAL STATION NORFOLK, NAVAL SUPPORT ACTIVITY HAMPTON ROADS AND NORFOLK INTERNATIONAL TERMINALS. ADJUSTMENTS AND TIE-INS WILL ALSO BE REQUIRED AT THE INTERFACE WITH NORFOLK INTERNATIONAL TERMINALS AND NORFOLK SOUTHERN RAILROAD. COE: TIM BROWN

Place of Performance

Location: NORFOLK, NORFOLK CITY County, VIRGINIA, 23502

State: Virginia Government Spending

Plain-Language Summary

Department of Transportation obligated $119.0 million to CHERRY HILL CONSTRUCTION INC for work described as: IGF::OT::IGF THE I-564 INTERMODAL CONNECTOR LIMITS ARE LOCATED FROM EXISTING INTERSTATE 564 IN THE AREA OF TERMINAL BLVD ON THE EAST TO THE NAVAL STATION NORFOLK (SECOND STREET)AND NORFOLK INTERNATIONAL TERMINALS ON THE WEST, REPRESENTING APPROXIMATELY 2.82 MILES OF NEW FOUR-LANE… Key points: 1. The project aims to improve access to Naval Station Norfolk and Norfolk International Terminals, a critical military and commercial hub. 2. Awarded under full and open competition, suggesting a competitive bidding process for the $119M contract. 3. The contract duration is extensive (over 3600 days), indicating a complex, multi-year infrastructure development. 4. The project involves significant construction, including new highway, bridges, and reconfigured inspection stations, impacting regional transportation.

Value Assessment

Rating: fair

The contract value of $119M for 2.82 miles of limited-access highway and associated infrastructure appears within a reasonable range for major transportation projects. However, without specific cost breakdowns for bridges, interchanges, and stormwater management, a precise benchmark is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through full and open competition, which typically fosters competitive pricing and allows for a wide range of contractors to bid. This method is expected to lead to a more efficient price discovery process.

Taxpayer Impact: The investment in critical infrastructure is intended to improve logistical efficiency for naval operations and commercial traffic, potentially leading to long-term economic benefits and cost savings for the government and region.

Public Impact

Improved transportation links for military personnel and equipment to Naval Station Norfolk. Enhanced efficiency for commercial vehicles accessing Norfolk International Terminals, boosting regional trade. Potential for job creation in the construction sector within the Hampton Roads area. Modernized infrastructure may reduce traffic congestion and improve safety on surrounding roadways.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration increases risk of cost overruns and schedule delays.
Complexity of integrating new infrastructure with existing naval facilities requires careful coordination.
Potential for unforeseen environmental or geological challenges during construction.

Positive Signals

Full and open competition likely secured a competitive price.
Project addresses critical infrastructure needs for national security and regional economy.
Firm Fixed Price contract provides cost certainty for the government.

Sector Analysis

This project falls within the Highway, Street, and Bridge Construction sector, a significant area of federal spending. Benchmarks for similar large-scale transportation infrastructure projects vary widely based on scope, location, and complexity, but $119M for 2.82 miles of limited-access highway with extensive associated work is substantial.

Small Business Impact

While the primary contractor is Cherry Hill Construction Inc., the contract details do not specify any subcontracting goals or participation by small businesses. Further investigation would be needed to determine the extent of small business involvement.

Oversight & Accountability

The Federal Highway Administration, under the Department of Transportation, is responsible for overseeing this contract. The extensive duration and scope suggest a need for robust oversight to ensure adherence to timelines, budget, and quality standards.

Related Government Programs

Highway, Street, and Bridge Construction
Department of Transportation Contracting
Federal Highway Administration Programs

Risk Flags

Extensive project duration (over 9 years).
Significant scope involving multiple infrastructure components.
Potential for coordination challenges with naval base operations.
Reliance on a single definitive contract for a large sum.

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $119.0 million to CHERRY HILL CONSTRUCTION INC. IGF::OT::IGF THE I-564 INTERMODAL CONNECTOR LIMITS ARE LOCATED FROM EXISTING INTERSTATE 564 IN THE AREA OF TERMINAL BLVD ON THE EAST TO THE NAVAL STATION NORFOLK (SECOND STREET)AND NORFOLK INTERNATIONAL TERMINALS ON THE WEST, REPRESENTING APPROXIMATELY 2.82 MILES OF NEW FOUR-LANE LIMITED ACCESS HIGHWAY, AND A RECONFIGURED COMMERCIAL VEHICLE INSPECTION STATION FOR NAVAL STATION NORFOLK. PROPOSED IMPROVEMENTS INCLUDE, BUT ARE NOT LIMITED TO, CONSTRUCTION OF I-564 INTERCHANGE, BRIDGES AND LOCAL CON

Who is the contractor on this award?

The obligated recipient is CHERRY HILL CONSTRUCTION INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $119.0 million.

What is the period of performance?

Start: 2014-02-10. End: 2023-12-31.

What is the projected economic impact of the I-564 Intermodal Connector on regional trade and military logistics?

The project is expected to significantly enhance the efficiency of military logistics by providing direct access to Naval Station Norfolk and Norfolk International Terminals. For regional trade, improved connectivity for commercial vehicles is anticipated to reduce transit times and costs, potentially boosting economic activity and competitiveness in the Hampton Roads area.

What are the primary risks associated with the long duration and complexity of this highway construction project?

The primary risks include potential cost escalations due to inflation over the extended period, unforeseen site conditions (e.g., soil, environmental), and potential delays caused by weather, material availability, or coordination issues with multiple stakeholders. Managing these risks requires proactive planning, contingency budgeting, and strong project management.

How effectively does the firm-fixed-price contract mitigate cost uncertainty for this large infrastructure project?

A firm-fixed-price contract is highly effective in mitigating cost uncertainty for the government, as it locks in the price regardless of contractor cost overruns. However, it places the risk of cost overruns on the contractor, which can incentivize them to be highly efficient or potentially lead to disputes if unforeseen issues arise.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: TWO STEP

Solicitation ID: DTFH7113R00015

Offers Received: 8

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Tutor Perini Corporation

Address: 8211 WASHINGTON BLVD, JESSUP, MD, 20794

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

Financial Breakdown

Contract Ceiling: $119,029,701

Exercised Options: $119,029,701

Current Obligation: $119,029,701

Actual Outlays: $16,013,769

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline