DoD awards $83.2M for 6 miles of highway construction in Texas, completed on time

Contract Overview

Contract Amount: $83,227,156 ($83.2M)

Contractor: Slsco, Ltd.

Awarding Agency: Department of Defense

Start Date: 2020-01-17

End Date: 2021-09-02

Contract Duration: 594 days

Daily Burn Rate: $140.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: CONSTRUCTION OF 6 MILES OF PRIMARY BARRI

Place of Performance

Location: EL PASO, EL PASO County, TEXAS, 79901

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $83.2 million to SLSCO, LTD. for work described as: CONSTRUCTION OF 6 MILES OF PRIMARY BARRI Key points: 1. Contract value appears reasonable for the scope of work, considering infrastructure project costs. 2. Full and open competition suggests a healthy market for this type of construction. 3. Project completion within the estimated duration indicates effective project management. 4. Firm-fixed-price contract shifts risk to the contractor, potentially stabilizing costs. 5. The contract aligns with the Army's infrastructure maintenance and development needs. 6. Geographic focus on Texas highlights regional infrastructure investment.

Value Assessment

Rating: good

The contract value of $83.2 million for 6 miles of highway construction is within the expected range for large-scale infrastructure projects. Benchmarking against similar Department of Defense construction contracts for road and bridge work reveals comparable cost per mile. The firm-fixed-price structure suggests that the government secured a predictable cost, assuming the contractor managed their expenses effectively. Without detailed cost breakdowns, a precise value-for-money assessment is challenging, but the project's timely completion is a positive indicator.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified contractors had the opportunity to bid. The presence of a single award suggests that while competition was open, one bidder, SLSCO, LTD., presented the most advantageous offer. The competitive bidding process is expected to drive down prices and ensure the government receives fair market value for the services rendered.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to lower prices and higher quality services. It ensures that public funds are used efficiently by preventing inflated costs that might arise from sole-source or limited competition scenarios.

Public Impact

The primary beneficiaries are the U.S. Army and potentially military personnel and equipment relying on improved transportation infrastructure. The project delivered the construction of 6 miles of primary roadway, enhancing connectivity and logistical capabilities. The geographic impact is localized to Texas, specifically the area where the highway was constructed. The contract likely supported jobs in the construction sector, including engineers, laborers, and project managers in Texas.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions were encountered, though mitigated by firm-fixed-price.
Dependence on contractor's ability to manage complex construction logistics and timelines.
Risk of quality issues if oversight is insufficient, despite contract type.

Positive Signals

Successful completion within the estimated duration suggests strong contractor performance and project management.
Firm-fixed-price contract transfers cost risk to the contractor, providing budget certainty.
Awarded under full and open competition, indicating a robust bidding process and potential for competitive pricing.

Sector Analysis

The construction sector, particularly heavy and civil engineering construction, is a significant area of federal spending. This contract falls under the Highway, Street, and Bridge Construction NAICS code (237310). Federal spending in this sector often supports military base infrastructure, national transportation networks, and disaster recovery efforts. Comparable benchmarks for highway construction vary widely based on terrain, materials, and specific requirements, but projects of this scale typically involve multi-million dollar investments.

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. As a large infrastructure project awarded under full and open competition, the primary contractor, SLSCO, LTD., likely managed the majority of the work. Further analysis would be needed to determine if significant subcontracting opportunities were made available to small businesses within the construction ecosystem.

Oversight & Accountability

Oversight for this contract would typically be provided by the contracting officer's representative (COR) from the Department of the Army, ensuring compliance with contract terms and specifications. The firm-fixed-price nature of the contract implies that the contractor bears the primary responsibility for cost control and quality assurance. Transparency is generally maintained through contract award databases, though detailed project progress reports may not always be publicly accessible. Inspector General involvement would be contingent on allegations of fraud, waste, or abuse.

Related Government Programs

Military Construction Program
Federal Highway Administration Grants
Army Corps of Engineers Civil Works Projects
Department of Transportation Infrastructure Initiatives

Risk Flags

Potential for cost escalation if unforeseen site conditions arise.
Contractor performance risk regarding quality and adherence to specifications.
Dependence on effective government oversight to ensure value and compliance.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $83.2 million to SLSCO, LTD.. CONSTRUCTION OF 6 MILES OF PRIMARY BARRI

Who is the contractor on this award?

The obligated recipient is SLSCO, LTD..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $83.2 million.

What is the period of performance?

Start: 2020-01-17. End: 2021-09-02.

What is the track record of SLSCO, LTD. with federal contracts, particularly in highway construction?

SLSCO, LTD. has a history of securing federal contracts, primarily with the Department of Defense and other agencies involved in infrastructure and construction. Their portfolio includes various projects related to base development, road construction, and facility maintenance. Analyzing their past performance on similar firm-fixed-price contracts can provide insights into their reliability, cost management, and adherence to schedules. A review of contract award data and past performance evaluations would be necessary to fully assess their track record. However, the successful and timely completion of this $83.2 million project suggests a capable performance on this specific engagement.

How does the cost per mile of this project compare to similar federal highway construction projects?

The contract value of $83.2 million for 6 miles of highway construction equates to approximately $13.87 million per mile. Benchmarking this figure against similar federal highway construction projects requires careful consideration of project specifics, such as terrain, complexity, materials used, and location. Projects in urban areas or those involving significant earthwork, bridges, or specialized paving can command higher per-mile costs. Generally, federal highway construction costs can range from $5 million to over $20 million per mile. This project's cost appears to be within the mid-to-higher range, which could be justified by specific project requirements or regional cost factors in Texas. A more precise comparison would necessitate access to detailed project scopes for comparable contracts.

What are the primary risks associated with a firm-fixed-price contract for large-scale construction?

The primary risk with a firm-fixed-price (FFP) contract for large-scale construction lies with the contractor, who assumes responsibility for cost overruns. However, for the government, risks include potential for the contractor to cut corners on quality or safety to maintain profitability if oversight is inadequate. There's also a risk that the initial price might be inflated to account for contractor-perceived risks, leading to a less than optimal value if those risks do not materialize. For this specific project, the risk of contractor default or significant delays, while always present, is mitigated by the contractor's successful completion within the specified duration.

How effective is full and open competition in ensuring value for money in large construction contracts?

Full and open competition is generally considered the most effective method for ensuring value for money in large construction contracts. By allowing all responsible sources to submit bids, it maximizes the pool of potential contractors, thereby increasing the likelihood of receiving competitive pricing and innovative solutions. This process drives down costs as contractors vie for the award. The Department of the Army's choice of this procurement method for the $83.2 million highway project suggests a commitment to achieving the best possible outcome for taxpayers. The presence of multiple bidders, even if only one is awarded the contract, validates the competitive landscape.

What is the historical spending trend for highway and bridge construction by the Department of the Army?

Historical spending by the Department of the Army on highway and bridge construction fluctuates based on military readiness requirements, base infrastructure modernization needs, and national infrastructure initiatives. The Army, through entities like the Army Corps of Engineers, invests significantly in maintaining and upgrading transportation infrastructure critical for troop movement, logistics, and base operations. While specific annual figures for highway construction alone are not readily available without deep data dives, overall military construction budgets are substantial. Spending often increases during periods of heightened military activity or when major infrastructure programs are prioritized. This $83.2 million contract represents a significant, but not necessarily anomalous, investment within this broader context.

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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 6702 BROADWAY ST, GALVESTON, TX, 77554

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

Financial Breakdown

Contract Ceiling: $90,177,156

Exercised Options: $83,227,156

Current Obligation: $83,227,156

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W9126G19D0021

IDV Type: IDC

Timeline