State Dept. Awards $21M for Canal Repair, Facing Limited Competition Concerns
Contract Overview
Contract Amount: $21,012,658 ($21.0M)
Contractor: Meridian Engineering CO
Awarding Agency: Department of State
Start Date: 2016-12-14
End Date: 2020-12-31
Contract Duration: 1,478 days
Daily Burn Rate: $14.2K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 3
Pricing Type: FIRM FIXED PRICE
Sector: Construction
Official Description: IGF::OT::IGF REPLACEMENT OF THE AMERICAN CANAL UPPER REACH
Place of Performance
Location: EL PASO, EL PASO County, TEXAS, 79922
State: Texas Government Spending
Plain-Language Summary
Department of State obligated $21.0 million to MERIDIAN ENGINEERING CO for work described as: IGF::OT::IGF REPLACEMENT OF THE AMERICAN CANAL UPPER REACH Key points: 1. Contract value of $21.01M for canal repair. 2. Competition was full and open after exclusion of sources, raising questions. 3. Risk of cost overruns due to fixed-price contract and potential for limited competition. 4. Construction sector spending benchmark analysis needed for fair comparison.
Value Assessment
Rating: fair
The $21.01M contract value appears reasonable for heavy civil engineering construction. However, without specific details on the scope of work and comparable projects, a precise pricing assessment is difficult. The firm fixed-price structure aims to control costs.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES.' This suggests that while competition was sought, specific sources may have been excluded, potentially limiting the competitive landscape and impacting price discovery.
Taxpayer Impact: Taxpayer funds are being used for critical infrastructure repair. The effectiveness of the competition method will directly influence the value for money achieved.
Public Impact
Ensures continued functionality of a vital binational waterway. Supports infrastructure development and maintenance in Texas. Potential for job creation within the construction sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition concerns
- Potential for scope creep impacting fixed-price contract
- Contract duration of nearly 4 years
Positive Signals
- Addresses critical infrastructure need
- Firm fixed-price contract for cost control
Sector Analysis
This contract falls within the heavy and civil engineering construction sector. Spending in this sector can vary significantly based on project complexity, location, and material costs. Benchmarking against similar canal repair or large-scale infrastructure projects is crucial.
Small Business Impact
The data does not indicate any specific provisions or set-asides for small businesses in this contract. Further analysis would be needed to determine if small businesses had an opportunity to participate or benefit from this award.
Oversight & Accountability
The International Boundary and Water Commission (IBWC) is responsible for this project. Oversight would involve monitoring project progress, quality, and adherence to contract terms to ensure efficient use of taxpayer funds.
Related Government Programs
- Other Heavy and Civil Engineering Construction
- Department of State Contracting
- International Boundary and Water Commission: U.S.-Mexico Programs
Risk Flags
- Limited competition
- Potential for cost overruns on fixed-price contract
- Contract duration
- Lack of small business participation data
Tags
other-heavy-and-civil-engineering-constr, department-of-state, tx, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of State awarded $21.0 million to MERIDIAN ENGINEERING CO. IGF::OT::IGF REPLACEMENT OF THE AMERICAN CANAL UPPER REACH
Who is the contractor on this award?
The obligated recipient is MERIDIAN ENGINEERING CO.
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 $21.0 million.
What is the period of performance?
Start: 2016-12-14. End: 2020-12-31.
What specific factors led to the exclusion of certain sources in the competition process, and how did this impact the final price?
The exclusion of sources likely stemmed from specific technical requirements, past performance, or unique capabilities needed for the American Canal's upper reach replacement. This limitation could reduce competitive pressure, potentially leading to a higher price than if a broader range of bidders were involved. Understanding the justification for exclusion is key to assessing value for money.
What are the primary risks associated with a firm fixed-price contract for a project of this duration and complexity?
The primary risks with a firm fixed-price contract for a long-duration, complex project include potential cost overruns if unforeseen issues arise (e.g., material price fluctuations, subsurface conditions) and the contractor may be incentivized to cut corners on quality to maintain profitability. Conversely, the government benefits from cost certainty, assuming the initial price is fair.
How effectively does this contract address the long-term maintenance and operational needs of the American Canal system?
This contract focuses on the replacement of the upper reach, addressing a specific infrastructure need. While crucial for immediate functionality, its effectiveness in addressing long-term maintenance and broader operational needs depends on the quality of the replacement work and integration with the rest of the canal system. It's a component of, not the entirety of, long-term system management.
Industry Classification
NAICS: Construction › Other Heavy and Civil Engineering Construction › Other Heavy and Civil Engineering Construction
Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCTION OF BUILDINGS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Solicitation Procedures: SEALED BID
Solicitation ID: IBM16B0003
Offers Received: 3
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 3223 LOS ARBOLES AVE NE, ALBUQUERQUE, NM, 87107
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $21,012,658
Exercised Options: $21,012,658
Current Obligation: $21,012,658
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2016-12-14
Current End Date: 2020-12-31
Potential End Date: 2020-12-31 00:00:00
Last Modified: 2025-10-03
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