DOD awards $41M construction contract for Border Patrol station, raising value-for-money questions

Contract Overview

Contract Amount: $40,956,106 ($41.0M)

Contractor: Zachry Federal Construction Corporation

Awarding Agency: Department of Defense

Start Date: 2016-09-23

End Date: 2019-09-09

Contract Duration: 1,081 days

Daily Burn Rate: $37.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF BORDER PATROL STATION, FALFURRIAS CHECKPOINT, TEXAS

Place of Performance

Location: FALFURRIAS, BROOKS County, TEXAS, 78355

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $41.0 million to ZACHRY FEDERAL CONSTRUCTION CORPORATION for work described as: IGF::OT::IGF BORDER PATROL STATION, FALFURRIAS CHECKPOINT, TEXAS Key points: 1. The contract's value-for-money is questionable given the lack of detailed cost breakdowns and the significant duration. 2. Competition dynamics show a full and open process, but the number of bids received is not specified. 3. Risk indicators are moderate, with potential for cost overruns due to the fixed-price nature and extended timeline. 4. Performance context is limited, with no specific performance metrics or past performance data readily available. 5. Sector positioning places this contract within commercial and institutional building construction, a competitive but specialized field.

Value Assessment

Rating: questionable

Benchmarking this contract's value is challenging without detailed cost breakdowns. The $41 million award for a Border Patrol station over approximately three years suggests a significant investment. Compared to similar large-scale construction projects, the price per square foot or per unit of functionality is not readily available for direct comparison. The fixed-price nature of the contract aims to control costs, but the extended duration could introduce risks if unforeseen issues arise.

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 a bid. However, the number of bids received (5) is relatively low for a contract of this magnitude, which could suggest limited market interest or a highly specialized requirement. The level of competition, while present, does not definitively guarantee the lowest possible price without further analysis of the bidding process and the specific requirements.

Taxpayer Impact: A full and open competition is generally favorable for taxpayers as it theoretically encourages multiple bidders to offer competitive pricing. However, with only 5 bids, the potential for significant price reductions through intense competition may have been limited.

Public Impact

The primary beneficiaries are federal law enforcement agencies, specifically U.S. Customs and Border Protection, through the provision of essential infrastructure. The services delivered include the construction of a new Border Patrol station, likely encompassing administrative offices, detention facilities, and operational support areas. The geographic impact is concentrated in Falfurrias, Texas, supporting border security operations in that region. Workforce implications include job creation for construction workers, engineers, and project managers involved in the building process.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Extended contract duration (1081 days) increases the risk of cost escalation and potential delays.
Lack of detailed cost breakdowns makes it difficult to assess the reasonableness of the $41 million award.
Fixed-price contract type can lead to disputes or change orders if project scope evolves significantly.
Limited public information on contractor past performance for similar large-scale federal construction projects.

Positive Signals

Awarded under full and open competition, suggesting a broad outreach to potential contractors.
The Department of the Army, a reputable contracting agency, managed the procurement.
The contract is for a critical piece of infrastructure supporting national security objectives.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the construction industry. This sector includes the building of government facilities, educational institutions, healthcare facilities, and other non-residential structures. The market size for federal construction projects is substantial, driven by the need for infrastructure upgrades and new facilities across various government agencies. Comparable spending benchmarks for large federal building projects can vary widely based on location, complexity, and specific requirements, but $41 million represents a significant investment for a single facility.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses in the provided data. This suggests that the primary award went to a large business, and the direct impact on the small business ecosystem through this specific contract is likely minimal unless the prime contractor actively engages small businesses for subcontracting opportunities not detailed here.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting agency (Department of the Army) and the end-user agency (Department of Homeland Security/CBP). Accountability measures are embedded in the contract terms, including performance standards and payment schedules. Transparency is limited by the public availability of detailed project costs and performance reports. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Border Security Infrastructure Projects
Federal Law Enforcement Facilities Construction
Department of Homeland Security Construction Contracts
Department of Defense Construction Contracts
General Services Administration (GSA) Public Buildings Service Projects

Risk Flags

Extended contract duration may increase cost and schedule risk.
Limited public data on contractor's past performance for similar projects.
Lack of detailed cost breakdown hinders value-for-money assessment.
Relatively low number of bids for a large contract could indicate limited competition or specialized requirements.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $41.0 million to ZACHRY FEDERAL CONSTRUCTION CORPORATION. IGF::OT::IGF BORDER PATROL STATION, FALFURRIAS CHECKPOINT, TEXAS

Who is the contractor on this award?

The obligated recipient is ZACHRY FEDERAL CONSTRUCTION CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $41.0 million.

What is the period of performance?

Start: 2016-09-23. End: 2019-09-09.

What is the contractor's track record with similar large-scale federal construction projects?

Zachry Federal Construction Corporation has a history of engaging in federal construction projects. However, specific details regarding their track record with projects of comparable scale and complexity to the Falfurrias Border Patrol Station are not readily available in the public domain. A deeper dive into their past performance ratings, any significant disputes or claims on previous federal contracts, and their experience with secure facility construction would be necessary to fully assess their capability and reliability for this specific project. Without this granular data, it's difficult to definitively gauge their suitability beyond the initial award.

How does the awarded amount compare to the estimated cost or market value for similar facilities?

Direct comparison of the $41 million award to market value is challenging without detailed project specifications, square footage, and specific facility requirements (e.g., security features, specialized equipment). However, for large federal facilities, construction costs can range significantly. The duration of the contract (over 3 years) also implies a substantial project. To benchmark effectively, one would need to identify comparable Border Patrol stations or similar law enforcement facilities constructed recently, considering their size, location, and features, and then analyze their cost per square foot or total project cost relative to this award. The lack of readily available cost breakdowns makes this comparison difficult.

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

Key risk indicators include the extended contract duration (1081 days), which increases exposure to potential cost overruns due to inflation, material price fluctuations, and unforeseen site conditions. The fixed-price nature, while intended to control costs, can lead to disputes if scope changes or if initial cost estimates were inaccurate. Mitigation strategies would typically involve robust project management by the Army Corps of Engineers, clear contract terms, contingency planning for unforeseen issues, and potentially performance bonds. The limited number of bidders (5) could also indicate a risk if the chosen contractor underperforms, as replacement options might be scarce.

What is the expected effectiveness of the new Border Patrol station in enhancing operational capabilities?

The effectiveness of the new Border Patrol station is expected to be significant, providing modern infrastructure tailored to the operational needs of U.S. Customs and Border Protection in the Falfurrias area. This likely includes improved facilities for personnel, enhanced processing capabilities, better-equipped workspaces, and potentially more secure holding areas. The new station aims to consolidate operations, improve efficiency, and provide a more robust physical presence to support border security missions. The specific metrics for measuring effectiveness post-construction would likely be defined by CBP operational goals and performance indicators.

How has federal spending on border infrastructure evolved over the past five years, and where does this contract fit?

Federal spending on border infrastructure has been a significant and often debated component of national security budgets over the past five years. While specific aggregate figures fluctuate annually based on appropriations and administration priorities, there has been a consistent allocation towards enhancing border security technology, personnel, and physical infrastructure. This $41 million contract for a Border Patrol station in Texas represents a substantial, targeted investment within that broader spending trend. It aligns with efforts to modernize and expand the physical footprint of border security operations in key strategic locations.

Are there any specific performance metrics or KPIs tied to this construction contract that are publicly available?

Publicly available performance metrics or Key Performance Indicators (KPIs) specifically tied to this construction contract are not detailed in the provided data. Typically, construction contracts include milestones for completion of different phases (e.g., foundation, framing, roofing, interior work), adherence to safety standards, and final project delivery by the specified completion date. The contracting agency (Department of the Army) would monitor these internally. Post-occupancy, the effectiveness of the facility would be measured by CBP's operational outcomes, but these are distinct from the construction contract's performance metrics.

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

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W9126G16R0085

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Zachry Construction & Materials, Inc. (UEI: 803364582)

Address: 2330 N LOOP 1604 W, SAN ANTONIO, TX, 78248

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

Financial Breakdown

Contract Ceiling: $40,956,106

Exercised Options: $40,956,106

Current Obligation: $40,956,106

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline