Over $20.6 million awarded for Hidalgo floodway rehabilitation, highlighting significant infrastructure investment

Contract Overview

Contract Amount: $20,665,397 ($20.7M)

Contractor: Fidelity & Deposit CO of Maryland

Awarding Agency: Department of State

Start Date: 2009-10-19

End Date: 2013-10-31

Contract Duration: 1,473 days

Daily Burn Rate: $14.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: RECOVERY - REHABILITATION OF NORTH FLOODWAY 1 AND ARROYO COLORADO FLOODWAY 1 AND 2, HIDALGO, TX TAS::19 1079 000::TAS

Place of Performance

Location: MERCEDES, HIDALGO County, TEXAS, 78570, UNITED STATES OF AMERICA

State: Texas Government Spending

Plain-Language Summary

Department of State obligated $20.7 million to FIDELITY & DEPOSIT CO OF MARYLAND for work described as: RECOVERY - REHABILITATION OF NORTH FLOODWAY 1 AND ARROYO COLORADO FLOODWAY 1 AND 2, HIDALGO, TX TAS::19 1079 000::TAS Key points: 1. The contract value of over $20.6 million represents a substantial investment in critical infrastructure. 2. Competition dynamics for this project are assessed to understand pricing efficiency. 3. Risk indicators are evaluated based on contract type and duration. 4. Performance context is provided by comparing it to similar civil engineering projects. 5. The project's sector positioning is within heavy and civil engineering construction. 6. The firm fixed-price contract type suggests a defined scope and cost control.

Value Assessment

Rating: fair

The contract's total award of over $20.6 million for floodway rehabilitation in Hidalgo, TX, appears to be a significant investment. Benchmarking this against similar large-scale civil engineering projects is challenging without more granular cost data. However, the duration of the contract (over 4 years) suggests a complex undertaking. The firm fixed-price nature aims to control costs, but the final value needs to be assessed against the delivered scope and any change orders.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely considered. The presence of 5 bids suggests a reasonably competitive environment, which should theoretically lead to more favorable pricing for the government. The specific details of the bidding process and the number of responsive bids would provide further insight into the effectiveness of the competition.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down costs and encourage innovation, leading to better value for public funds.

Public Impact

The primary beneficiaries are residents and businesses in Hidalgo, Texas, who will experience improved flood protection. The project delivers essential rehabilitation services for critical flood control infrastructure. The geographic impact is localized to the North Floodway 1 and Arroyo Colorado Floodway 1 and 2 areas in Hidalgo, TX. While not directly a workforce development contract, the construction activities would have supported jobs in the heavy and civil engineering sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Contract duration of over 4 years could introduce risks related to cost escalation or scope creep if not managed tightly.
The firm fixed-price nature, while good for cost control, can sometimes lead to contractors cutting corners if margins are too thin, requiring diligent oversight.
The specific nature of floodway rehabilitation can involve unforeseen environmental or geological challenges that may impact project timelines and costs.

Positive Signals

Awarded under full and open competition, suggesting a robust bidding process and potential for competitive pricing.
The firm fixed-price contract type provides cost certainty for the government, assuming the scope is well-defined.
The project addresses critical infrastructure needs related to flood control, a vital public service.

Sector Analysis

This contract falls within the Other Heavy and Civil Engineering Construction sector, a significant part of the infrastructure market. This sector includes projects like dams, levees, flood control systems, and other large-scale public works. Spending in this area is often driven by government initiatives for infrastructure improvement and disaster resilience. Comparable spending benchmarks would typically involve looking at other flood control projects or major civil engineering undertakings by federal, state, or local agencies.

Small Business Impact

The data indicates this contract was not set aside for small businesses, nor does it explicitly mention subcontracting goals for small businesses. This suggests that the primary award went to a larger entity, and the direct impact on the small business ecosystem may be limited unless the prime contractor actively engages small businesses for subcontracting opportunities. Further investigation into subcontracting plans would be needed to fully assess the impact.

Oversight & Accountability

Oversight for this contract would typically be managed by the International Boundary and Water Commission (IBWC), a U.S. agency responsible for water-related matters with Mexico. Accountability measures would be embedded in the contract terms, including performance standards, payment schedules tied to milestones, and potential penalties for non-compliance. Transparency would be facilitated through contract award databases and public reporting on infrastructure projects.

Related Government Programs

Army Corps of Engineers Civil Works Programs
FEMA Hazard Mitigation Grants
Department of Transportation Infrastructure Projects
Bureau of Reclamation Water Projects

Risk Flags

Potential for unforeseen site conditions impacting cost and schedule.
Contract duration exceeding 4 years requires sustained oversight.
Firm fixed-price contracts can incentivize cost-cutting if not diligently monitored.
Dependence on prime contractor's performance and subcontractor management.

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $20.7 million to FIDELITY & DEPOSIT CO OF MARYLAND. RECOVERY - REHABILITATION OF NORTH FLOODWAY 1 AND ARROYO COLORADO FLOODWAY 1 AND 2, HIDALGO, TX TAS::19 1079 000::TAS

Who is the contractor on this award?

The obligated recipient is FIDELITY & DEPOSIT CO OF MARYLAND.

Which agency awarded this contract?

Awarding agency: Department of State (International Boundary and Water Commission: U.S.-Mexico).

What is the total obligated amount?

The obligated amount is $20.7 million.

What is the period of performance?

Start: 2009-10-19. End: 2013-10-31.

What was the specific scope of work for the RECOVERY - REHABILITATION OF NORTH FLOODWAY 1 AND ARROYO COLORADO FLOODWAY 1 AND 2 project?

The specific scope of work for this contract involved the rehabilitation of critical flood control infrastructure, namely North Floodway 1 and Arroyo Colorado Floodway 1 and 2, located in Hidalgo, Texas. This likely included activities such as clearing debris, repairing or reinforcing levees and floodwalls, dredging channels to improve water flow, and potentially upgrading associated structures like spillways or control gates. The objective was to enhance the capacity and resilience of these floodways to mitigate the impact of heavy rainfall and potential flooding events in the region, thereby protecting lives and property.

How does the awarded amount of over $20.6 million compare to similar flood control infrastructure projects in the region or nationally?

Comparing the $20.6 million award for the Hidalgo floodway rehabilitation requires context regarding the scale and complexity of similar projects. Large-scale flood control infrastructure projects, especially those involving extensive levee systems, channel modifications, or dam construction, can easily run into tens or even hundreds of millions of dollars. For instance, major river basin flood control projects managed by the U.S. Army Corps of Engineers often exceed this amount significantly. However, for localized floodway rehabilitation efforts, $20.6 million represents a substantial investment. Without specific details on the scope and duration of comparable projects, a precise benchmark is difficult, but it indicates a significant commitment to regional flood resilience.

What were the primary risks identified for this contract, and how were they mitigated?

Primary risks for a contract of this nature and duration (over 4 years) typically include unforeseen site conditions (geological, environmental), potential for scope creep, contractor performance issues, and material or labor cost escalation, despite the firm fixed-price structure. Mitigation strategies would have been incorporated into the contract itself, such as detailed site investigations prior to award, clear definition of scope and change order procedures, performance bonds from the contractor (Fidelity & Deposit Co. of Maryland), and potentially escalation clauses for specific materials if deemed necessary and permissible. Robust government oversight during execution is crucial for identifying and addressing risks proactively.

What is the track record of Fidelity & Deposit Co. of Maryland in handling large civil engineering and infrastructure contracts?

Fidelity & Deposit Co. of Maryland, as a surety, is not the direct contractor performing the work but rather provides the performance and payment bonds for the prime contractor. Their track record is therefore assessed by their financial stability and history of fulfilling bond obligations. As a long-standing surety, they have a significant history of bonding a wide array of construction projects, including large infrastructure and civil engineering works. Their involvement indicates that the prime contractor met the surety's underwriting requirements, suggesting a level of financial capability and project management experience deemed sufficient to secure the bond.

How has federal spending on flood control and civil engineering projects evolved over the past decade, and does this contract align with trends?

Federal spending on flood control and civil engineering projects has generally seen fluctuations driven by infrastructure needs, disaster recovery funding, and administration priorities. Following major natural disasters, there is often an increase in allocated funds for resilience and infrastructure repair. The IBWC's focus on border water infrastructure, including flood control, is a consistent area of federal investment. This $20.6 million contract aligns with the ongoing federal commitment to maintaining and improving critical water infrastructure, particularly in regions prone to flooding. Trends often show increased emphasis on climate resilience and modernization of aging systems, which this rehabilitation project likely addresses.

What are the potential long-term benefits and implications of this floodway rehabilitation for the Hidalgo region?

The long-term benefits of this floodway rehabilitation project for the Hidalgo region are substantial. Primarily, it enhances public safety by reducing the risk of devastating floods, protecting lives and preventing injuries. Economically, improved flood control can stimulate business investment and reduce insurance costs, fostering greater economic stability. It also preserves property values by mitigating flood damage risks. Environmentally, well-maintained floodways can contribute to healthier ecosystems by managing water flow effectively. The rehabilitation ensures the continued functionality of vital infrastructure, supporting the region's overall resilience and quality of life for years to come.

Industry Classification

NAICS: Construction › Other Heavy and Civil Engineering Construction › Other Heavy and Civil Engineering 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: IBM09B0004

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Zurich Financial Services AG (UEI: 481114317)

Address: 1400 AMERICAN LN, SCHAUMBURG, IL, 60196

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

Financial Breakdown

Contract Ceiling: $20,665,397

Exercised Options: $20,665,397

Current Obligation: $20,665,397

Contract Characteristics

Cost or Pricing Data: NO

Timeline