DoD Awards $18.6M for John Day Dam Gate Replacement, Raising Cost Concerns

Contract Overview

Contract Amount: $18,587,552 ($18.6M)

Contractor: Advanced American Construction, Inc.

Awarding Agency: Department of Defense

Start Date: 2009-09-21

End Date: 2011-06-30

Contract Duration: 647 days

Daily Burn Rate: $28.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: TAS::96 3135::TAS RECOVERYPROJECT#::323857 JOHN DAY DOWNSTREAM GATE REPLACEMENT. FABRICATION, REMOVAL AND INSTALLATION, GATE PAINTING, WIRE ROPE TENSIONING AND COUNTERWEIGHT MODIFICATION.

Place of Performance

Location: PORTLAND, MULTNOMAH County, OREGON, 97283

State: Oregon Government Spending

Plain-Language Summary

Department of Defense obligated $18.6 million to ADVANCED AMERICAN CONSTRUCTION, INC. for work described as: TAS::96 3135::TAS RECOVERYPROJECT#::323857 JOHN DAY DOWNSTREAM GATE REPLACEMENT. FABRICATION, REMOVAL AND INSTALLATION, GATE PAINTING, WIRE ROPE TENSIONING AND COUNTERWEIGHT MODIFICATION. Key points: 1. The contract for the John Day Dam gate replacement was awarded to ADVANCED AMERICAN CONSTRUCTION, INC. for $18.6 million. 2. The project involves fabrication, removal, installation, painting, and modification of gate components. 3. The firm fixed-price contract was awarded under full and open competition. 4. The duration of the contract was 647 days, with a start date of 2009-09-21 and end date of 2011-06-30. 5. The project falls under the 'Other Heavy and Civil Engineering Construction' NAICS code.

Value Assessment

Rating: questionable

The final award amount of $18,587,552.25 appears to be significantly higher than the initial bid benchmark of $2,872,900. This substantial increase warrants further investigation into the cost drivers and justification for the overage.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting a competitive bidding process. However, the significant increase in the final award amount compared to the benchmark raises questions about the effectiveness of price discovery during the bidding and negotiation phases.

Taxpayer Impact: The substantial cost overrun on this project represents a significant impact on taxpayer funds, as the final expenditure far exceeded initial estimates.

Public Impact

Taxpayers may have overpaid due to a large discrepancy between the benchmark and final award price. The project's completion over budget could impact funding for other critical infrastructure or defense projects. Transparency in the cost escalation process is crucial for public trust and accountability in government spending.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Significant cost overrun compared to benchmark
Potential for inefficient use of taxpayer funds
Lack of clear justification for price increase

Positive Signals

Awarded under full and open competition
Clear scope of work defined

Sector Analysis

This project falls within the heavy and civil engineering construction sector, which is vital for national infrastructure. Spending in this sector can fluctuate based on government investment in public works and defense facilities. Benchmarks for similar projects are difficult to ascertain without more specific details on the scope and complexity.

Small Business Impact

The data indicates that this contract was not awarded to small businesses, as the 'sb' field is false. Further analysis would be needed to determine if small business participation was sought or if opportunities were missed.

Oversight & Accountability

While awarded under full and open competition, the significant cost increase necessitates robust oversight to ensure accountability and prevent future overruns. A thorough review of the contract modifications and justification for the price escalation is recommended.

Related Government Programs

Other Heavy and Civil Engineering Construction
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Significant cost overrun
Potential for inefficient resource allocation
Lack of transparency in cost escalation
Questionable value for taxpayer money

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.6 million to ADVANCED AMERICAN CONSTRUCTION, INC.. TAS::96 3135::TAS RECOVERYPROJECT#::323857 JOHN DAY DOWNSTREAM GATE REPLACEMENT. FABRICATION, REMOVAL AND INSTALLATION, GATE PAINTING, WIRE ROPE TENSIONING AND COUNTERWEIGHT MODIFICATION.

Who is the contractor on this award?

The obligated recipient is ADVANCED AMERICAN CONSTRUCTION, 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 $18.6 million.

What is the period of performance?

Start: 2009-09-21. End: 2011-06-30.

What specific factors led to the nearly seven-fold increase from the bid benchmark to the final award price for the John Day Dam gate replacement?

The substantial increase from the $2.87 million benchmark to the $18.59 million award price likely stems from unforeseen complexities during the fabrication, removal, and installation phases. This could include unexpected material costs, labor challenges, site-specific issues discovered during demolition, or necessary design modifications to ensure structural integrity and long-term performance of the gate system. Detailed contract modification records would be required to pinpoint the exact drivers.

How does the final cost of $18.6 million compare to industry benchmarks for similar heavy civil engineering construction projects involving dam gate replacements?

Without specific details on the exact specifications, size, and complexity of the gate system, a precise comparison to industry benchmarks is challenging. However, a nearly seven-fold increase over the initial benchmark suggests a potential deviation from typical cost expectations. Industry averages for such specialized projects can vary widely, but a cost escalation of this magnitude typically indicates significant scope changes, unforeseen site conditions, or substantial material and labor cost increases not initially accounted for.

What measures were in place to ensure the effectiveness and value for money of this contract, given the significant cost escalation?

The contract's effectiveness and value for money are questionable due to the substantial cost overrun. While awarded under full and open competition, the significant price increase suggests potential issues with initial cost estimation, bid evaluation, or contract management. Robust oversight and a detailed post-award review of the factors contributing to the escalation are crucial to assess whether the final cost reflects true value and to inform future procurement strategies for similar projects.

Industry Classification

NAICS: Construction › Other Heavy and Civil Engineering Construction › Other Heavy and Civil Engineering Construction

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W9127N09R0058

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 8444 NW SAINT HELENS RD, PORTLAND, OR, 97231

Business Categories: Category Business, Not Designated a Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $18,587,552

Exercised Options: $18,587,552

Current Obligation: $18,587,552

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline