Department of Defense awards $17.36M contract for border infrastructure construction in Texas

Contract Overview

Contract Amount: $17,361,420 ($17.4M)

Contractor: Southwest Valley Constructors CO

Awarding Agency: Department of Defense

Start Date: 2019-06-26

End Date: 2020-06-25

Contract Duration: 365 days

Daily Burn Rate: $47.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 9

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: ALL WORK REQUIRED TO COMPLETE RGV 06 FOR BORDER INFRASTRUCTURE CONSTRUCTION PROJECT. PERIOD OF PERFORMANCE IS 328 CALENDAR DAYS.

Place of Performance

Location: RIO GRANDE CITY, STARR County, TEXAS, 78582

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $17.4 million to SOUTHWEST VALLEY CONSTRUCTORS CO for work described as: ALL WORK REQUIRED TO COMPLETE RGV 06 FOR BORDER INFRASTRUCTURE CONSTRUCTION PROJECT. PERIOD OF PERFORMANCE IS 328 CALENDAR DAYS. Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The firm-fixed-price contract type indicates that the price was set at the outset, transferring some risk to the contractor. 3. The contract duration of 328 calendar days is relatively short for a construction project of this scale. 4. The award was made by the Department of the Army, a component of the Department of Defense. 5. The North American Industry Classification System (NAICS) code 237310 points to highway, street, and bridge construction. 6. The contract was awarded to Southwest Valley Constructors Co. 7. The project is located in Texas, specifically within the RGV (Rio Grande Valley) region. 8. This contract represents a portion of broader border infrastructure efforts.

Value Assessment

Rating: good

The contract value of $17.36 million for border infrastructure construction appears reasonable given the scope of work. Benchmarking against similar highway, street, and bridge construction projects within the Department of Defense or other federal agencies would provide a more precise value-for-money assessment. The firm-fixed-price structure suggests that the government has a clear understanding of costs, but it's important to ensure the contractor's bid was competitive and reflected efficient execution.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, with 9 bidders submitting proposals. This indicates a robust bidding environment, which typically leads to better price discovery and potentially more favorable terms for the government. The presence of multiple bidders suggests that the market has sufficient capacity and interest in undertaking this type of infrastructure project.

Taxpayer Impact: A competitive bidding process for this contract is beneficial for taxpayers as it likely resulted in a lower overall price compared to a sole-source or limited competition award. The government secured multiple offers, increasing the likelihood of obtaining the best value.

Public Impact

The primary beneficiaries are the Department of Defense and potentially border security agencies, receiving enhanced infrastructure. The services delivered include construction work for border infrastructure projects. The geographic impact is concentrated in the Rio Grande Valley region of Texas. Workforce implications include job creation for construction workers and related trades in the local Texas economy.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions arise, though mitigated by firm-fixed-price.
Ensuring timely completion within the 328-day period of performance is critical.
Quality control and adherence to construction standards must be rigorously monitored.

Positive Signals

Awarded through full and open competition, indicating a competitive market.
Firm-fixed-price contract type provides cost certainty for the government.
The contractor, Southwest Valley Constructors Co., has experience in construction projects.

Sector Analysis

This contract falls within the construction sector, specifically highway, street, and bridge construction. The market for federal infrastructure projects is substantial, with agencies like the Department of Defense frequently awarding contracts for facility upgrades and new construction. Benchmarks for similar projects would typically consider factors like project complexity, location, and material costs. The size of this award ($17.36M) is moderate for a federal construction project.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, nor does it explicitly mention subcontracting goals for small businesses. The award went to Southwest Valley Constructors Co., which may or may not be a small business itself. Further investigation would be needed to determine the extent of small business participation, either as prime contractors or subcontractors, in this project.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer's representative (COR) within the Department of the Army. Quality assurance surveillance plans (QASPs) would be employed to monitor performance, cost, and schedule. Transparency is generally maintained through contract award databases like FPDS. Inspector General jurisdiction would apply if allegations of fraud, waste, or abuse arise.

Related Government Programs

Border Security Infrastructure
Department of Defense Construction Projects
Army Corps of Engineers Projects
Texas Infrastructure Development

Risk Flags

Aggressive timeline may increase risk of delays or quality issues.
Potential for unforeseen site conditions impacting cost and schedule.
Need for stringent quality assurance and oversight.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.4 million to SOUTHWEST VALLEY CONSTRUCTORS CO. ALL WORK REQUIRED TO COMPLETE RGV 06 FOR BORDER INFRASTRUCTURE CONSTRUCTION PROJECT. PERIOD OF PERFORMANCE IS 328 CALENDAR DAYS.

Who is the contractor on this award?

The obligated recipient is SOUTHWEST VALLEY CONSTRUCTORS CO.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $17.4 million.

What is the period of performance?

Start: 2019-06-26. End: 2020-06-25.

What is the track record of Southwest Valley Constructors Co. with federal contracts, particularly within the Department of Defense?

Southwest Valley Constructors Co. has a history of federal contract awards. A review of available data indicates they have been awarded contracts primarily within the Department of Defense and other federal agencies for construction services. Their performance history on previous contracts, including on-time delivery, adherence to budget, and quality of work, would be crucial for assessing their reliability on this specific border infrastructure project. Analyzing past contract values and types can also provide insight into their capabilities and specialization. It is important to note any past performance issues or disputes that may have arisen on prior federal engagements.

How does the $17.36 million contract value compare to similar border infrastructure construction projects awarded by the federal government?

The $17.36 million contract value for border infrastructure construction in Texas is a significant but not exceptionally large sum for federal projects of this nature. To benchmark effectively, one would compare it against contracts for similar scope (e.g., road construction, facility building, barrier installation) in comparable geographic regions and under similar contract types (firm-fixed-price). Factors such as the specific terrain, security requirements, and material costs in the Rio Grande Valley would influence the price. A comprehensive analysis would involve examining the number of bids received and the range of proposed prices to understand the market's pricing dynamics for such projects.

What are the primary risks associated with this firm-fixed-price contract for border infrastructure construction?

The primary risks associated with this firm-fixed-price contract, while generally favorable to the government by capping costs, include potential contractor underestimation of project complexities or costs. If Southwest Valley Constructors Co. encounters unforeseen site conditions (e.g., difficult soil, unexpected environmental issues) or material price escalations beyond what was anticipated, they might face financial strain, potentially impacting project quality or schedule. The government's risk is primarily related to ensuring the contractor possesses adequate contingency planning and that the initial fixed price was set based on realistic assumptions. Robust oversight and clear contract terms are essential to mitigate these risks.

How effective is the full and open competition process in ensuring value for money for this type of construction contract?

The full and open competition process is generally considered highly effective in ensuring value for money for construction contracts. By allowing all responsible sources to submit bids, it fosters a competitive environment that drives down prices and encourages innovation. The fact that 9 bidders submitted proposals for this $17.36 million project indicates a healthy level of competition. This broad participation increases the likelihood that the government will receive a competitive price that reflects the true market cost of the work. Effective evaluation criteria are crucial to ensure the lowest price isn't chosen at the expense of quality or performance.

What are the historical spending patterns for border infrastructure construction projects by the Department of Defense?

Historical spending patterns for border infrastructure construction by the Department of Defense, particularly in regions like the Rio Grande Valley, have varied significantly based on national security priorities, policy directives, and available funding. The Department of the Army, often through the Army Corps of Engineers, is typically tasked with executing such projects. Spending can fluctuate year-to-year, influenced by the scale and urgency of infrastructure needs. Analyzing past budgets and contract awards for similar projects can reveal trends in project types, average contract values, and the duration of funding commitments for border-related construction initiatives.

What are the potential implications of the 328-day period of performance for a project of this scale?

A 328-day period of performance for a $17.36 million border infrastructure construction project suggests an aggressive timeline. While firm-fixed-price contracts aim to incentivize efficiency, such a compressed schedule could increase risks if not meticulously planned and executed. Potential implications include increased pressure on the contractor to expedite work, which could lead to quality compromises if oversight is insufficient. It may also limit the contractor's ability to absorb unexpected delays caused by weather, supply chain issues, or unforeseen site conditions without incurring additional costs or schedule slippage. The government must ensure robust project management and realistic expectations are set.

Industry Classification

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

Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCTION OF BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: W9126G18R0092

Offers Received: 9

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 5130 MASTHEAD ST NE, ALBUQUERQUE, NM, 87109

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

Financial Breakdown

Contract Ceiling: $17,361,420

Exercised Options: $17,361,420

Current Obligation: $17,361,420

Subaward Activity

Number of Subawards: 8

Total Subaward Amount: $3,315,234

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W9126G19D0033

IDV Type: IDC

Timeline