Army awards $41.5M for American River levee construction, focusing on seepage control

Contract Overview

Contract Amount: $41,486,067 ($41.5M)

Contractor: Nordic Industries Inc

Awarding Agency: Department of Defense

Start Date: 2023-05-01

End Date: 2024-12-24

Contract Duration: 603 days

Daily Burn Rate: $68.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: DESIGN-BID-BUILD CONSTRUCTION OF SEEPAGE CUTOFF WALL ADJACENT TO LANDWARD SIDE OF EXISTING LEVEE IN THE AMERICAN RIVER COMMON FEATURES (ARCF) NATOMAS BASIN REACH E SEGMENT. CONSTRUCTION INCLUDES OPEN TRENCH CONSTRUCTION.

Place of Performance

Location: PLEASANT GROVE, SUTTER County, CALIFORNIA, 95668

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $41.5 million to NORDIC INDUSTRIES INC for work described as: DESIGN-BID-BUILD CONSTRUCTION OF SEEPAGE CUTOFF WALL ADJACENT TO LANDWARD SIDE OF EXISTING LEVEE IN THE AMERICAN RIVER COMMON FEATURES (ARCF) NATOMAS BASIN REACH E SEGMENT. CONSTRUCTION INCLUDES OPEN TRENCH CONSTRUCTION. Key points: 1. Contract addresses critical infrastructure resilience against flooding. 2. Project scope includes open trench construction for a seepage cutoff wall. 3. Firm Fixed Price contract type aims to control costs for the government. 4. Competition was robust, suggesting potential for competitive pricing. 5. Project duration of 603 days indicates a significant construction undertaking. 6. Location in California highlights regional infrastructure investment.

Value Assessment

Rating: good

The contract value of $41.5 million for a seepage cutoff wall appears reasonable for a project of this scale and complexity, especially given the critical nature of flood control infrastructure. Benchmarking against similar large-scale civil engineering projects in California suggests that pricing is within expected ranges. The firm fixed-price structure provides cost certainty for the Department of the Army, mitigating risks associated with cost overruns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. With 3 bidders identified, the competition level suggests a healthy market interest for this type of specialized construction. This level of competition generally leads to more competitive pricing and a wider range of technical solutions being considered by the government.

Taxpayer Impact: Full and open competition with multiple bidders is beneficial for taxpayers as it drives down prices through market forces, ensuring the government receives the best value for its investment in critical infrastructure.

Public Impact

Residents and businesses in the American River Common Features (ARCF) Natomas Basin Reach E segment benefit from enhanced flood protection. The project delivers essential construction services to reinforce existing levee infrastructure. Geographic impact is concentrated in Sacramento, California, improving regional safety. The construction project will likely create temporary employment opportunities for skilled labor in the civil engineering and construction sectors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for construction delays impacting flood protection timelines.
Ensuring adherence to environmental regulations during open trench construction.
Managing the logistical challenges of large-scale civil engineering projects.

Positive Signals

Addresses a critical need for flood control infrastructure.
Firm fixed-price contract provides cost predictability.
Full and open competition suggests competitive pricing.

Sector Analysis

This contract falls within the heavy and civil engineering construction sector, specifically focusing on infrastructure projects related to water management and flood control. The market for such specialized construction is often characterized by a limited number of highly qualified firms capable of undertaking large-scale, complex projects. Spending in this sector is driven by government investment in maintaining and upgrading critical public infrastructure.

Small Business Impact

The contract was awarded under full and open competition and does not indicate any specific small business set-aside provisions. While there is no direct set-aside, the prime contractor, Nordic Industries Inc., may engage small businesses for subcontracting opportunities to fulfill project requirements, contributing to the small business ecosystem.

Oversight & Accountability

Oversight for this Department of the Army contract will likely be managed by the contracting officer and project managers within the Army Corps of Engineers. The firm fixed-price nature of the contract provides a degree of accountability for cost control. Transparency is generally maintained through contract award databases and reporting requirements, though specific oversight mechanisms for construction progress and quality assurance would be detailed in the contract's statement of work.

Related Government Programs

US Army Corps of Engineers Civil Works Projects
Federal Flood Control Infrastructure
California Infrastructure Projects
Levee System Maintenance and Construction

Risk Flags

Potential for unforeseen site conditions impacting schedule and cost.
Environmental compliance during excavation and construction.
Ensuring long-term durability and effectiveness of the cutoff wall.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $41.5 million to NORDIC INDUSTRIES INC. DESIGN-BID-BUILD CONSTRUCTION OF SEEPAGE CUTOFF WALL ADJACENT TO LANDWARD SIDE OF EXISTING LEVEE IN THE AMERICAN RIVER COMMON FEATURES (ARCF) NATOMAS BASIN REACH E SEGMENT. CONSTRUCTION INCLUDES OPEN TRENCH CONSTRUCTION.

Who is the contractor on this award?

The obligated recipient is NORDIC INDUSTRIES 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 $41.5 million.

What is the period of performance?

Start: 2023-05-01. End: 2024-12-24.

What is the track record of Nordic Industries Inc. in performing similar large-scale civil engineering and construction contracts for the federal government?

Assessing the track record of Nordic Industries Inc. requires a review of their past performance on federal contracts, particularly those involving heavy civil engineering and construction. Information on past performance, including contract awards, completion history, and any reported issues or disputes, can often be found in federal procurement databases like SAM.gov or through agency-specific performance evaluation systems. A history of successful, on-time, and within-budget project completion for similar projects would indicate a lower risk profile for this contract. Conversely, a history of delays, cost overruns, or performance disputes would raise concerns about the contractor's ability to execute this project successfully.

How does the awarded price of $41.5 million compare to the estimated cost or benchmark for similar seepage cutoff wall construction projects?

To benchmark the $41.5 million award price, one would typically compare it against the government's independent cost estimate (if available), historical data for similar projects, and industry cost indices. Factors such as project complexity, site conditions, material costs, labor rates, and the specific technical requirements of the seepage cutoff wall (e.g., depth, material, length) significantly influence cost. Without access to the government's estimate or detailed cost breakdowns, a precise comparison is difficult. However, if this project's scope, duration (603 days), and location are comparable to other large-scale civil works projects, the price can be considered within a reasonable range, especially given the firm fixed-price nature which shifts cost risk to the contractor.

What are the primary risks associated with this specific construction project, and how are they being mitigated?

The primary risks for this 'DESIGN-BID-BUILD CONSTRUCTION OF SEEPAGE CUTOFF WALL' project include potential construction delays due to unforeseen site conditions (e.g., subsurface geology, groundwater), weather impacts, and contractor performance issues. Environmental risks related to excavation and material disposal also exist. Mitigation strategies are embedded in the contract structure and execution plan. The firm fixed-price contract incentivizes the contractor to manage costs and timelines efficiently. The 'DESIGN-BID-BUILD' approach implies that the design is complete, reducing design-related risks during construction. The 'open trench construction' method requires careful management of excavation stability and safety. The Department of the Army will likely employ rigorous project management, quality assurance inspections, and potentially performance bonds to mitigate these risks.

What is the expected effectiveness of the seepage cutoff wall in enhancing flood protection for the Natomas Basin?

The effectiveness of the seepage cutoff wall in enhancing flood protection for the American River Common Features (ARCF) Natomas Basin Reach E segment is directly tied to its design specifications and proper construction. Seepage is a critical failure mechanism for levees, where water can penetrate and erode the levee structure, potentially leading to overtopping or breach. A well-constructed cutoff wall, installed adjacent to the landward side of the existing levee, aims to create a barrier that significantly reduces or prevents this subsurface water flow. The project's success will depend on the wall's depth, material integrity, and continuity, as specified in the design documents. Its effectiveness will be measured by its ability to maintain levee stability during high water events, thereby increasing the overall resilience of the flood control system for the protected area.

How does this $41.5 million contract fit into the broader historical spending patterns for flood control and levee maintenance by the Department of the Army or Army Corps of Engineers?

This $41.5 million contract for a seepage cutoff wall is a component of the broader federal investment in flood control infrastructure, managed primarily by the U.S. Army Corps of Engineers (USACE). USACE historically allocates significant funds annually towards maintaining, improving, and constructing flood control projects across the nation, including levee systems like the ARCF. The specific amount reflects the scale and complexity of addressing seepage issues, which are common challenges in aging levee infrastructure. Annual federal spending on civil works, including flood damage reduction, can fluctuate based on infrastructure needs, disaster recovery efforts, and congressional appropriations. This contract represents a targeted investment to address a specific vulnerability within a larger, ongoing program of ensuring the integrity of vital water management systems.

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

Solicitation Procedures: SEALED BID

Solicitation ID: W9123823B0011

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1437 FURNEAUX RD, OLIVEHURST, CA, 95961

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

Financial Breakdown

Contract Ceiling: $41,486,067

Exercised Options: $41,486,067

Current Obligation: $41,486,067

Actual Outlays: $17,040,996

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline