Knik Construction awarded $33.2M for Alaska navigation improvements, facing limited competition

Contract Overview

Contract Amount: $33,184,764 ($33.2M)

Contractor: Knik Construction CO., Inc.

Awarding Agency: Department of Defense

Start Date: 2010-02-11

End Date: 2013-06-28

Contract Duration: 1,233 days

Daily Burn Rate: $26.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 7

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: TAS::96 3134::TAS RECOVERYPROJECT#::10542::RP# ARRA NAVIGATION IMPROVEMENTS, AKUTAN, ALASKA THE BASE AND OPTION WORK INCLUDES CONSTRUCTION OF A MOORING BASIN, THE BREAKWATERS, AND AN ENTRANCE CHANNEL. WORK FOR THE BASE AND OPTIONS WORK INCLUDES OBTAINING, DELIVERING, AND PLACING CORE ROCK, B ROCK AND ARMOR ROCK FOR THE BREAKWATERS. WORK ALSO INCLUDED EXCAVATING/DREDGING OF MATERIAL FOR THE ENTRANCE CHANNEL AND MOORING BASIN.

Place of Performance

Location: AKUTAN, ALEUTIANS EAST County, ALASKA, 99553

State: Alaska Government Spending

Plain-Language Summary

Department of Defense obligated $33.2 million to KNIK CONSTRUCTION CO., INC. for work described as: TAS::96 3134::TAS RECOVERYPROJECT#::10542::RP# ARRA NAVIGATION IMPROVEMENTS, AKUTAN, ALASKA THE BASE AND OPTION WORK INCLUDES CONSTRUCTION OF A MOORING BASIN, THE BREAKWATERS, AND AN ENTRANCE CHANNEL. WORK FOR THE BASE AND OPTIONS WORK INCLUDES OBTAINING, DELIVERING, AND PLACI… Key points: 1. Contract addresses critical infrastructure needs for navigation and harbor access. 2. Significant investment in regional economic development and maritime capabilities. 3. Project scope includes substantial rock placement and dredging operations. 4. Awarded through full and open competition, indicating broad market engagement. 5. Potential for cost efficiencies due to fixed-price contract type. 6. Geographic remoteness may present logistical and cost challenges.

Value Assessment

Rating: fair

The contract value of $33.2 million for navigation improvements in Akutan, Alaska, appears to be within a reasonable range for large-scale civil engineering projects of this nature. Benchmarking against similar federal contracts for harbor construction and dredging in remote or challenging environments would provide a more precise assessment of value for money. The fixed-price nature of the contract suggests that the government has transferred some cost risk to the contractor, which can be beneficial if managed effectively.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple bidders had the opportunity to compete. With 7 bids received, the level of competition appears adequate, which typically helps in achieving competitive pricing. However, the specific nature of the work and the remote location might have limited the pool of qualified bidders, potentially impacting the intensity of the competition.

Taxpayer Impact: A competitive bidding process for this project is beneficial for taxpayers as it likely led to a more favorable price than a sole-source award. The presence of multiple bids indicates that taxpayer funds were used efficiently by leveraging market forces.

Public Impact

Residents and businesses in Akutan, Alaska, will benefit from improved harbor access and navigation. The project delivers essential construction services, including breakwater and channel development. Geographic impact is concentrated in Akutan, Alaska, enhancing local maritime infrastructure. The project supports the local and regional economy through construction employment and related services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns due to the complexity and remote location of the project.
Logistical challenges in delivering materials and equipment to Akutan could impact schedule and budget.
Environmental considerations during dredging and rock placement require careful management.

Positive Signals

Awarded through full and open competition, suggesting a robust bidding process.
Fixed-price contract type helps control costs and transfer risk to the contractor.
Project addresses critical infrastructure needs, indicating strong public benefit.

Sector Analysis

This contract falls within the Heavy and Civil Engineering Construction sector, specifically related to port and harbor development. The market for such specialized construction is often characterized by a limited number of large firms capable of undertaking complex, large-scale projects, especially in remote locations. Federal spending in this area is typically driven by the need to maintain and improve national maritime infrastructure, support trade, and ensure access to remote communities.

Small Business Impact

The data indicates this contract was not set aside for small businesses and was awarded to Knik Construction Co., Inc., a large business. There is no explicit information on subcontracting plans for small businesses within this award. Further analysis would be needed to determine if small business participation was a requirement or a goal for this specific contract and its execution.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Army, likely through contracting officers and project managers. Accountability measures would be embedded in the contract terms, including performance standards, payment schedules tied to milestones, and potential penalties for non-compliance. Transparency is generally facilitated through contract award databases and public reporting, though detailed project-specific oversight activities may not be publicly disclosed.

Related Government Programs

Army Corps of Engineers Civil Works Program
Port and Harbor Infrastructure Projects
ARRA Navigation Improvements

Risk Flags

Remote Location Logistics
Environmental Impact of Dredging
Potential for Unforeseen Site Conditions
Weather-Related Delays

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $33.2 million to KNIK CONSTRUCTION CO., INC.. TAS::96 3134::TAS RECOVERYPROJECT#::10542::RP# ARRA NAVIGATION IMPROVEMENTS, AKUTAN, ALASKA THE BASE AND OPTION WORK INCLUDES CONSTRUCTION OF A MOORING BASIN, THE BREAKWATERS, AND AN ENTRANCE CHANNEL. WORK FOR THE BASE AND OPTIONS WORK INCLUDES OBTAINING, DELIVERING, AND PLACING CORE ROCK, B ROCK AND ARMOR ROCK FOR THE BREAKWATERS. WORK ALSO INCLUDED EXCAVATING/DREDGING OF MATERIAL FOR THE ENTRANCE CHANNEL AND MOORING BASIN.

Who is the contractor on this award?

The obligated recipient is KNIK CONSTRUCTION CO., INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $33.2 million.

What is the period of performance?

Start: 2010-02-11. End: 2013-06-28.

What is the track record of Knik Construction Co., Inc. on similar federal contracts?

Knik Construction Co., Inc. has a history of performing large-scale civil engineering and construction projects for federal agencies, including the Department of Defense and the Department of Transportation. Their experience often involves complex projects such as road construction, airfield development, and marine infrastructure. Analyzing their past performance on similar navigation improvement or dredging contracts would reveal their ability to manage scope, budget, and schedule effectively. A review of contract performance reports and any past disputes or claims would provide further insight into their reliability as a contractor for projects of this magnitude and complexity.

How does the cost per unit of rock placement or dredging compare to industry benchmarks for this region?

Determining the precise cost per unit for rock placement or dredging requires detailed breakdowns of quantities and associated costs within the contract, which are not fully provided in the summary data. However, the total contract value of $33.2 million for extensive breakwater construction and channel dredging in a remote Alaskan location suggests a significant investment. Industry benchmarks for such work can vary widely based on material availability, transportation costs, environmental regulations, and labor rates. Given the remote nature of Akutan, Alaska, it is probable that unit costs for materials and logistics would be higher than in more accessible mainland locations. A detailed cost analysis comparing specific line items against regional averages for similar projects would be necessary for a definitive benchmark assessment.

What are the primary risks associated with this specific navigation improvement project?

The primary risks associated with this navigation improvement project in Akutan, Alaska, include logistical challenges due to the remote location, which can lead to increased costs and schedule delays for material delivery and personnel. Environmental risks are also significant, particularly concerning dredging operations and the potential impact on marine ecosystems, requiring strict adherence to environmental permits and mitigation measures. Furthermore, the geological conditions at the site, such as the stability of the seabed or the quality of rock for breakwaters, could present unforeseen challenges during construction. The harsh Alaskan weather conditions can also disrupt work schedules and impact project timelines.

How effective has the ARRA (American Recovery and Reinvestment Act) funding been in delivering tangible infrastructure improvements like this one?

The American Recovery and Reinvestment Act (ARRA) of 2009 aimed to stimulate the economy through significant investments in infrastructure, energy, and other sectors. Projects like the Akutan navigation improvements funded by ARRA were intended to create jobs and enhance critical public infrastructure. The effectiveness of ARRA funding can be assessed by examining the completion of projects, their long-term utility, and the economic impact generated. While this specific project addresses a clear need for improved maritime access in Akutan, a broader evaluation of ARRA's overall effectiveness would involve analyzing a portfolio of funded projects, their cost-efficiency, and their contribution to national economic goals. The tangible improvement in navigation capabilities for Akutan serves as a positive example of ARRA's infrastructure investment goals.

What is the historical spending trend for similar navigation improvement projects by the Department of the Army?

The Department of the Army, primarily through the U.S. Army Corps of Engineers (USACE), has a long history of funding and executing navigation improvement projects nationwide. Historical spending trends for these projects are influenced by factors such as congressional appropriations, national infrastructure priorities, and the condition of existing waterways and harbors. USACE typically manages a substantial portfolio of civil works projects, including channel deepening, harbor maintenance, and breakwater construction. Spending can fluctuate annually based on project lifecycles, new authorizations, and emergency needs. Analyzing historical USACE budget allocations and contract awards for navigation projects would reveal patterns in investment levels and geographic focus, indicating a consistent commitment to maintaining and enhancing maritime transportation infrastructure.

Industry Classification

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

Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR NONBUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W911KB10R0001

Offers Received: 7

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lynden Inc (UEI: 062774674)

Address: 18000 INTL BLVD STE 800, SEATTLE, WA, 98188

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

Financial Breakdown

Contract Ceiling: $33,184,764

Exercised Options: $33,184,764

Current Obligation: $33,184,764

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline