Army awards $15.1M for highway construction, highlighting firm fixed-price contract and full competition

Contract Overview

Contract Amount: $15,122,839 ($15.1M)

Contractor: Bush & Burchett Inc

Awarding Agency: Department of Defense

Start Date: 2004-06-29

End Date: 2009-02-27

Contract Duration: 1,704 days

Daily Burn Rate: $8.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: 200409!001169!96CE!W91237!USA ENGINEER DISTRICT HUNTINGTON!W9123704C0006 !A!N! !N! ! !20040629!20040227!062957642!062957642!062957642!N!BUSH & BURCHETT, INC !1714 KY HWY 1428 !PRESTONSBURG !KY!41653!50286!071!21!MARTIN !FLOYD !KENTUCKY !+000002000000!N!N!000014514708!Y222!HIGHWAYS, ROADS, STREETS, BRIDGES AND RAILWAYS !C2 !CONSTRUCTION !000 !* !237310!E! !3! ! ! ! ! !99990909!B! ! !A! !A!U!J!2!002!A! !D!N!A! ! !N!B!N!Y! ! !C! !A!D!00 !A!B!Y!M!Y! ! ! ! !0001! !

Place of Performance

Location: MARTIN, FLOYD County, KENTUCKY, 41649

State: Kentucky Government Spending

Plain-Language Summary

Department of Defense obligated $15.1 million to BUSH & BURCHETT INC for work described as: 200409!001169!96CE!W91237!USA ENGINEER DISTRICT HUNTINGTON!W9123704C0006 !A!N! !N! ! !20040629!20040227!062957642!062957642!062957642!N!BUSH & BURCHETT, INC !1714 KY HWY 1428 !PRESTONSBURG !KY!41653!50286!071!21!MARTIN !FLOY… Key points: 1. Contract awarded under full and open competition, suggesting a competitive bidding process. 2. Firm fixed-price contract type indicates price certainty for the government. 3. The contract duration of 1704 days suggests a significant, long-term project. 4. The contractor, Bush & Burchett, Inc., is based in Kentucky, potentially benefiting the local economy. 5. The North American Industry Classification System (NAICS) code 237310 points to specialized highway construction services. 6. The contract's value of over $15 million positions it as a substantial federal investment in infrastructure.

Value Assessment

Rating: good

The contract value of $15,122,839.26 for highway construction appears reasonable given the project's scope and duration. Without specific benchmarks for similar projects in the Huntington District or comparable regions, a precise value-for-money assessment is challenging. However, the firm fixed-price structure generally provides cost control for the government. The number of bids received (2) is on the lower side for full and open competition, which could imply less aggressive pricing than a more crowded field.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit bids. The data indicates two bids were received. While full and open competition is generally preferred for maximizing choice and potentially lowering prices, receiving only two bids might suggest limitations in the market for this specific type of construction or geographic area, or perhaps the bidding process itself was not as widely advertised as possible.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it aims to secure the best possible price through a wide range of offers. However, with only two bidders, the potential for significant price reduction through intense competition may have been limited compared to scenarios with numerous bids.

Public Impact

The primary beneficiaries are likely the residents and businesses in the region served by the improved highways, roads, streets, bridges, and railways. The contract delivers essential infrastructure development and maintenance services, contributing to transportation efficiency and safety. The geographic impact is centered in Kentucky, specifically within the operational area of the US Army Engineer District Huntington. Workforce implications include job creation for construction workers, engineers, and support staff employed by the prime contractor and any subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition (2 bidders) may have reduced price discovery and potentially led to a higher-than-optimal price.
The long contract duration (1704 days) increases the risk of cost overruns due to unforeseen economic factors or material price fluctuations, despite the fixed-price nature.
Lack of specific performance metrics in the provided data makes it difficult to assess the quality and efficiency of the contractor's work.
The contract type is a Definitive Contract, which can sometimes be less flexible than other contract types for evolving project needs.

Positive Signals

Awarded under full and open competition, which is a positive indicator for market engagement.
Firm Fixed Price contract type provides budget certainty for the government.
The contractor, Bush & Burchett, Inc., is a US-based company, supporting domestic economic activity.
The project addresses critical infrastructure needs, which has long-term public benefits.

Sector Analysis

The construction sector, particularly highway, street, and bridge construction (NAICS 237310), is a significant component of federal infrastructure spending. This contract falls within the broader category of public works and transportation infrastructure. Federal spending in this area is often driven by the need to maintain and upgrade aging infrastructure, improve transportation networks, and stimulate economic activity. Comparable spending benchmarks would typically be found in historical data for similar Army Corps of Engineers projects or Department of Transportation initiatives.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications specifically mandated for small businesses through a set-aside program. The prime contractor, Bush & Burchett, Inc., is likely a medium to large-sized business given the contract value. Opportunities for small businesses would depend on the prime contractor's subcontracting decisions, which are not detailed in this data.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the US Army Engineer District Huntington, which awarded the contract. Accountability measures are inherent in the firm fixed-price contract structure, requiring the contractor to deliver specified work within the agreed price. Transparency is generally facilitated through contract databases like FPDS, where this information is sourced. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Federal Highway Administration (FHWA) Programs
Army Corps of Engineers Civil Works Projects
Department of Transportation Infrastructure Grants
Appalachian Regional Commission Projects

Risk Flags

Limited Competition
Potential for Cost Overruns (long duration fixed-price)
Lack of Detailed Performance Metrics

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $15.1 million to BUSH & BURCHETT INC. 200409!001169!96CE!W91237!USA ENGINEER DISTRICT HUNTINGTON!W9123704C0006 !A!N! !N! ! !20040629!20040227!062957642!062957642!062957642!N!BUSH & BURCHETT, INC !1714 KY HWY 1428 !PRESTONSBURG !KY!41653!50286!071!21!MARTIN !FLOYD !KENTUCKY !+000002000000!N!N!000014514708!Y222!HIGHWAYS, ROADS, STREETS, BRIDGES AND RAILWAYS !C2 !CONSTRUCTION !000 !* !237310!E! !3! ! ! ! ! !999

Who is the contractor on this award?

The obligated recipient is BUSH & BURCHETT 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 $15.1 million.

What is the period of performance?

Start: 2004-06-29. End: 2009-02-27.

What is the track record of Bush & Burchett, Inc. with federal contracts?

The provided data indicates Bush & Burchett, Inc. was awarded this specific contract valued at over $15 million by the Department of the Army. Further analysis of federal procurement databases would be necessary to ascertain their complete federal contract history, including past performance on similar projects, any history of contract disputes or terminations, and their overall performance ratings. Understanding their experience with firm fixed-price contracts and projects of this magnitude would provide a clearer picture of their capabilities and reliability as a federal contractor.

How does the $15.1 million contract value compare to similar highway construction projects awarded by the Army Corps of Engineers?

Benchmarking this $15.1 million contract requires comparing it to similar highway, street, and bridge construction projects awarded by the US Army Corps of Engineers, particularly those managed by the Huntington District or in the surrounding region. Factors such as project scope, complexity, duration, and specific construction requirements (e.g., materials, environmental considerations) must be considered. Without access to a detailed database of comparable projects with their awarded values and specifications, it is difficult to definitively state whether this contract represents a high, low, or average value. However, $15.1 million suggests a substantial infrastructure undertaking.

What are the primary risks associated with a firm fixed-price contract of this duration (1704 days)?

The primary risks associated with a firm fixed-price contract of this long duration (over 4.5 years) include potential cost escalation for materials and labor beyond the contractor's control, unforeseen site conditions, and scope creep if not managed tightly. While the fixed price protects the government from cost overruns due to contractor inefficiency, it places the risk of market fluctuations and unexpected project challenges primarily on the contractor. If these risks materialize significantly, the contractor might seek change orders, potentially increasing the contract's final cost, or face financial strain, impacting project completion.

How effective is 'full and open competition' when only two bids are received?

The effectiveness of 'full and open competition' is diminished when only two bids are received. While it adheres to the principle of allowing all responsible sources to compete, a low number of bidders suggests that the competition may not be robust enough to drive optimal pricing. This could be due to various factors, including the specialized nature of the work, geographic limitations, the bidding timeline, or the perceived profitability of the contract. For taxpayers, this means there might have been less downward pressure on the price than could have been achieved with a larger pool of interested and capable contractors.

What is the historical spending pattern for NAICS code 237310 by the Department of the Army?

Historical spending patterns for NAICS code 237310 (Highway, Street, and Bridge Construction) by the Department of the Army would reveal the frequency and magnitude of investments in this sector over time. Analyzing this data could show trends in contract awards, average contract values, and the distribution of spending across different Army districts or commands. Such analysis helps in understanding the Army's commitment to infrastructure development and maintenance, identifying periods of increased or decreased investment, and contextualizing individual contract awards within a broader strategic framework.

What are the potential impacts of awarding infrastructure contracts to geographically local businesses like Bush & Burchett, Inc.?

Awarding infrastructure contracts to geographically local businesses, such as Bush & Burchett, Inc. based in Kentucky for this project, can have several positive impacts. It supports the local economy by creating jobs for residents, stimulating local supply chains, and potentially increasing local tax revenues. Local contractors may also have a better understanding of regional conditions and a vested interest in the successful and timely completion of projects within their community. This can foster stronger relationships between the government and local industry.

Industry Classification

NAICS: Construction › Highway, Street, and Bridge Construction › Highway, Street, and Bridge Construction

Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCT NONBUILDING FACILITIES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Address: 1714 KY HWY 1428, PRESTONSBURG, KY, 41653

Business Categories: Category Business, HUBZone Firm, Small Business, Special Designations

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline