Army awards $33M road repair contract to ASRC Earthworks, LLC for Alaska infrastructure

Contract Overview

Contract Amount: $32,954,500 ($33.0M)

Contractor: Asrc Earthworks, LLC

Awarding Agency: Department of Defense

Start Date: 2024-10-10

End Date: 2028-04-07

Contract Duration: 1,275 days

Daily Burn Rate: $25.8K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: OLI002 OLIKTOK ROAD REPAIR

Place of Performance

Location: PRUDHOE BAY, NORTH SLOPE County, ALASKA, 99734

State: Alaska Government Spending

Plain-Language Summary

Department of Defense obligated $33.0 million to ASRC EARTHWORKS, LLC for work described as: OLI002 OLIKTOK ROAD REPAIR Key points: 1. Contract value appears reasonable for a multi-year infrastructure project in a remote location. 2. Full and open competition after exclusion of sources suggests a deliberate procurement strategy. 3. Project duration of over 1000 days indicates a significant scope of work. 4. Fixed-price contract type shifts risk to the contractor, potentially impacting final cost. 5. Awardee has experience in construction, aligning with the contract's requirements. 6. Geographic location in Alaska may present logistical challenges and higher costs.

Value Assessment

Rating: good

The contract value of $32.95 million for road repair over approximately 3.5 years appears to be within a reasonable range for a project of this scale and complexity, especially considering the remote location in Alaska. Benchmarking against similar federal road construction and repair contracts in Alaska would provide a more precise value-for-money assessment. The firm fixed-price nature of the contract suggests that the contractor has a strong incentive to manage costs effectively, but it also means that unexpected overruns will be borne by the contractor, which could influence initial pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded using 'Full and Open Competition After Exclusion of Sources.' This procurement method indicates that while the competition was intended to be broad, specific sources were excluded, possibly due to pre-qualification requirements or specific capabilities needed for the project. The number of bidders is not specified, but the method suggests a controlled competition rather than a completely unrestricted one. This approach can sometimes lead to less aggressive pricing compared to truly open competition if the pool of eligible bidders is small.

Taxpayer Impact: The exclusion of certain sources, even within a competitive framework, may limit the potential for the lowest possible price to be achieved for taxpayers. However, if the excluded sources were not capable of performing the specialized work, this method might still yield good value by ensuring a qualified contractor is selected.

Public Impact

The primary beneficiaries are the U.S. Army personnel and operations in Alaska, who will gain improved access and logistical capabilities. The contract will deliver essential road repair and maintenance services, ensuring the usability and safety of critical infrastructure. The geographic impact is localized to the specific military installation or area in Alaska where the road repairs are being conducted. The contract is expected to create or sustain jobs within the construction sector in Alaska, benefiting the local workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions or material price increases occur, despite the fixed-price nature.
Logistical challenges in remote Alaska could lead to delays and increased operational costs for the contractor.
Limited competition due to source exclusion might result in a higher-than-optimal price for taxpayers.
Contract duration is lengthy, increasing the risk of scope creep or changes in requirements over time.

Positive Signals

Firm fixed-price contract shifts cost risk to the contractor, promoting cost control.
Awardee has relevant construction experience, suggesting capability to perform the work.
Project addresses critical infrastructure needs, enhancing operational readiness.
Award in Alaska supports regional economic activity and employment.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, specifically focusing on infrastructure repair. The federal government is a significant investor in construction and maintenance, particularly for military installations. Projects like this are crucial for maintaining operational readiness and supporting the defense infrastructure. Comparable spending benchmarks would involve analyzing other road and infrastructure repair contracts awarded by the Department of Defense or other agencies in similar geographic regions.

Small Business Impact

The contract was not set aside for small businesses, and the awardee, ASRC Earthworks, LLC, is a subsidiary of Arctic Slope Regional Corporation, a large Alaska Native Corporation. While this specific contract may not directly benefit small businesses through a set-aside, large prime contractors are often required to subcontract portions of their work to small businesses. The extent of subcontracting opportunities for small businesses on this project is not detailed but is a common practice in federal construction contracts.

Oversight & Accountability

Oversight for this contract will likely be managed by the contracting officer and relevant personnel within the Department of the Army. Accountability measures are embedded in the firm fixed-price contract terms, requiring the contractor to deliver the specified repairs within the agreed-upon cost and schedule. Transparency is generally maintained through contract award databases, though detailed project progress reports may not be publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Military Construction
Base Realignment and Closure (BRAC) Projects
Infrastructure Maintenance and Repair
Federal Highway Administration (FHWA) Projects

Risk Flags

Potential for cost overruns
Logistical challenges in remote location
Weather-related delays
Limited competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $33.0 million to ASRC EARTHWORKS, LLC. OLI002 OLIKTOK ROAD REPAIR

Who is the contractor on this award?

The obligated recipient is ASRC EARTHWORKS, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $33.0 million.

What is the period of performance?

Start: 2024-10-10. End: 2028-04-07.

What is the track record of ASRC Earthworks, LLC in performing similar federal construction and repair contracts?

ASRC Earthworks, LLC, as a subsidiary of Arctic Slope Regional Corporation, has a history of performing various construction and infrastructure projects, often in challenging environments like Alaska. While specific details on past federal contracts of identical scope and value require deeper database searches, their parent company's extensive experience in government contracting, including military projects, suggests a foundational capability. Federal procurement data would need to be analyzed to confirm their performance history on similar road repair or heavy civil construction contracts, including on-time delivery, budget adherence, and quality of work. Past performance reviews and award data are critical indicators of their reliability for this specific project.

How does the awarded price of $32.95 million compare to similar road repair projects in Alaska or other remote federal locations?

Benchmarking this $32.95 million contract against similar federal road repair projects in Alaska or other remote locations is crucial for assessing value for money. Factors such as project scope (miles of road, type of repair), duration, specific site conditions (permafrost, terrain), and material costs significantly influence pricing. Generally, construction in remote areas like Alaska incurs higher costs due to logistical challenges, transportation of materials and personnel, and specialized labor requirements. A detailed comparison would involve analyzing contract databases for projects with comparable characteristics, adjusting for inflation and regional cost differences. Without such a detailed comparison, it's difficult to definitively state if the price is high or low, but the unique challenges of the location suggest a premium is likely.

What are the primary risks associated with this contract, and how are they being mitigated?

The primary risks associated with this contract include potential cost overruns due to unforeseen site conditions (e.g., permafrost thaw, unexpected soil instability), logistical challenges in remote Alaska impacting material delivery and workforce availability, and potential delays due to weather. The firm fixed-price contract structure mitigates the risk of cost overruns for the government by placing that burden on the contractor. Mitigation strategies for logistical and weather-related risks are likely embedded in the contractor's project management plan and schedule, potentially including buffer time and contingency planning. The 'Full and Open Competition After Exclusion of Sources' method might also be seen as a risk mitigation strategy to ensure a capable contractor is selected, though it could limit price competition.

What is the expected impact of this contract on the operational readiness and infrastructure of the specific Army installation in Alaska?

This contract is expected to significantly enhance the operational readiness and infrastructure of the specific Army installation in Alaska by ensuring the integrity and usability of critical road networks. Reliable roads are fundamental for the movement of personnel, equipment, and supplies, directly impacting training exercises, logistical support, and daily operations. Improved road conditions can reduce wear and tear on vehicles, enhance safety, and facilitate quicker response times for emergency services. Ultimately, the successful completion of these repairs will contribute to a more robust and efficient operational environment, supporting the Army's mission in a strategically important region.

How has federal spending on similar infrastructure repair contracts in Alaska trended over the past five years?

Analyzing federal spending trends on similar infrastructure repair contracts in Alaska over the past five years would provide valuable context. This would involve examining data from agencies like the Department of Defense, Department of Transportation, and others that fund infrastructure projects in the state. Key trends to look for include the total dollar amount awarded, the average contract size, the number of contracts issued, and the types of repairs most frequently funded. Factors such as increased military investment in Arctic readiness, aging infrastructure requiring maintenance, and fluctuations in construction material costs could influence these trends. A rising trend might indicate increased need or investment, while a stable or declining trend could suggest different priorities or budget constraints.

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Commercial and Institutional Building 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: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W911KB24R0041

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Arctic Slope Regional Corporation

Address: 3900 C ST, ANCHORAGE, AK, 99503

Business Categories: 8(a) Program Participant, Alaskan Native Corporation Owned Firm, Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $34,084,500

Exercised Options: $32,954,500

Current Obligation: $32,954,500

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $5,247,241

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline