Army's $1.2B HOT CARGO PADS contract awarded to MILLER/WATTS CONSTRUCTORS for highway construction in Hawaii

Contract Overview

Contract Amount: $12,036,164 ($12.0M)

Contractor: Miller/Watts Constructors

Awarding Agency: Department of Defense

Start Date: 2006-03-30

End Date: 2008-12-08

Contract Duration: 984 days

Daily Burn Rate: $12.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: FY05 MILCON PN 57423, HOT CARGO PADS

Place of Performance

Location: HICKAM AFB, HONOLULU County, HAWAII, 96853

State: Hawaii Government Spending

Plain-Language Summary

Department of Defense obligated $12.0 million to MILLER/WATTS CONSTRUCTORS for work described as: FY05 MILCON PN 57423, HOT CARGO PADS Key points: 1. Contract value of $1.2 billion suggests a significant investment in infrastructure. 2. Awarded under full and open competition, indicating a potentially competitive bidding process. 3. The contract duration of 984 days points to a long-term project with substantial execution requirements. 4. Firm Fixed Price contract type may offer cost certainty but could limit flexibility. 5. The project's focus on highway, street, and bridge construction highlights critical infrastructure development. 6. Awarded to a single contractor, MILLER/WATTS CONSTRUCTORS, suggesting their capacity or specialized expertise.

Value Assessment

Rating: fair

Benchmarking the value of this $1.2 billion contract is challenging without specific project details and comparable projects. However, the scale of the award suggests a major infrastructure undertaking. The firm fixed-price nature of the contract implies that the contractor bears the risk of cost overruns, which can be a positive indicator for the government if managed effectively. Further analysis would require comparing the cost per mile or per unit of construction against similar projects in Hawaii or other regions with comparable construction costs.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' suggesting that all responsible sources were permitted to submit bids. With two bids received, the level of competition appears limited for a contract of this magnitude. A higher number of bidders typically leads to more competitive pricing and potentially better value for the government. The limited number of bids could indicate a specialized requirement, high barriers to entry, or a lack of market interest.

Taxpayer Impact: While full and open competition is generally favorable, only two bids may have limited the downward pressure on pricing, potentially resulting in a higher cost to taxpayers than if more firms had competed.

Public Impact

The primary beneficiaries are likely the Department of the Army and military personnel stationed in Hawaii, who will benefit from improved logistical capabilities. The contract will deliver essential highway, street, and bridge construction services, enhancing transportation infrastructure. The geographic impact is concentrated in Hawaii, supporting local economic activity and employment. The project is expected to create or sustain jobs in the construction sector within Hawaii. Improved infrastructure can support military readiness and operational efficiency.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition with only two bids received for a contract of this size could indicate potential issues with market reach or contractor collusion.
The firm fixed-price contract type, while offering cost certainty, might incentivize the contractor to cut corners on quality if not rigorously overseen.
The long contract duration (984 days) increases the risk of unforeseen economic changes or material cost fluctuations impacting the project's ultimate cost-effectiveness.
Lack of specific details on the 'HOT CARGO PADS' functionality makes it difficult to assess the true necessity and value of the project.

Positive Signals

Awarded under 'full and open competition' signifies an attempt to maximize the pool of potential bidders.
The firm fixed-price contract structure places cost risk on the contractor, potentially leading to greater cost control for the government.
The substantial value of the contract suggests a critical need for the infrastructure being developed.
The project's focus on highway, street, and bridge construction addresses fundamental infrastructure requirements.

Sector Analysis

This contract falls within the Highway, Street, and Bridge Construction sector, a significant segment of the broader construction industry. This sector is characterized by large-scale projects, often involving public funding and complex engineering requirements. The market size for federal highway and infrastructure spending is substantial, with agencies like the Department of Defense undertaking major construction projects to support their operational needs. Comparable spending benchmarks would typically involve analyzing the cost per mile or per square foot for similar military or civilian infrastructure projects.

Small Business Impact

The data indicates that small business participation was not a primary focus, as the contract was not set aside for small businesses and the contractor is not explicitly identified as a small business. There is no information provided regarding subcontracting plans for small businesses. This suggests that the primary award went to a larger entity, and the impact on the small business ecosystem will depend on whether the prime contractor engages small businesses for subcontracting opportunities.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve the Department of the Army's contracting officers, project managers, and potentially the Defense Contract Management Agency (DCMA). Accountability measures are inherent in the firm fixed-price contract, which holds the contractor responsible for delivering the specified work within the agreed-upon price. Transparency is generally facilitated through contract award databases like FPDS, although detailed project-specific oversight reports are not always publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Military Construction Program
Defense Access Road Program
Federal Highway Administration Grants
Army Corps of Engineers Construction Projects
Infrastructure Investment and Jobs Act Projects

Risk Flags

Limited Competition
Potential for Cost Overruns (if FFP poorly managed)
Contractor Performance Risk (unknown track record)
Scope Definition Ambiguity ('HOT CARGO PADS')

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.0 million to MILLER/WATTS CONSTRUCTORS. FY05 MILCON PN 57423, HOT CARGO PADS

Who is the contractor on this award?

The obligated recipient is MILLER/WATTS CONSTRUCTORS.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $12.0 million.

What is the period of performance?

Start: 2006-03-30. End: 2008-12-08.

What is the specific nature and purpose of the 'HOT CARGO PADS' being constructed?

The provided data does not specify the exact nature or purpose of the 'HOT CARGO PADS.' The designation 'HOT CARGO PADS' suggests a facility or area designed for the handling, storage, or staging of potentially hazardous or sensitive materials, likely related to military logistics or operations. These pads could be part of a larger complex for aircraft, vehicles, or munitions. Without further details from the contract's statement of work or associated documentation, it is difficult to ascertain the precise function, scale, and criticality of these pads. Understanding their purpose is crucial for evaluating the necessity and value of the $1.2 billion investment.

How does the awarded price of $1.2 billion compare to similar infrastructure projects of this scale?

Directly comparing the $1.2 billion award to similar projects is challenging without specific details on the scope, location, and type of construction. However, for context, major military construction projects, especially those involving significant logistical or operational infrastructure, can easily reach hundreds of millions or billions of dollars. For instance, the construction of new airfields, port facilities, or large barracks complexes often fall into this price range. The firm fixed-price nature suggests the government sought cost certainty. To benchmark effectively, one would need to identify comparable projects in Hawaii or similar high-cost regions, considering factors like square footage, complexity, and specific materials used. The limited competition (2 bids) might also suggest the price was not as aggressively negotiated as it could have been with more bidders.

What are the potential risks associated with a firm fixed-price contract for a project of this duration?

A firm fixed-price (FFP) contract, while aiming for cost certainty, carries specific risks for long-duration projects like this 984-day (approx. 2.7 years) undertaking. The primary risk is that the contractor may face unforeseen increases in material costs, labor rates, or fuel prices over the project's lifespan. If these escalations are significant and not adequately accounted for in the initial bid, the contractor might be forced to cut corners on quality to maintain profitability, potentially leading to subpar construction. Conversely, if the contractor significantly overestimates costs to mitigate risk, the government may end up paying a premium. Effective oversight is crucial to ensure the contractor manages these risks without compromising quality or excessively inflating costs.

What is the track record of MILLER/WATTS CONSTRUCTORS in executing large-scale federal construction contracts?

Information regarding the specific track record of MILLER/WATTS CONSTRUCTORS for large-scale federal construction contracts is not detailed in the provided data. To assess their capability, one would need to examine their past performance on similar projects, including their history of on-time and on-budget delivery, quality of work, and any past disputes or contract terminations. Federal procurement databases and contractor performance systems (like the Contractor Performance Assessment Reporting System - CPARS) would typically hold this information. Without this data, it's difficult to definitively gauge their reliability for a $1.2 billion project.

Given the limited competition, what assurance does the government have regarding the value for money received?

The government's assurance of value for money with only two bids stems primarily from the 'full and open competition' process itself, which theoretically allows any qualified bidder to participate. However, limited competition inherently reduces the pressure on bidders to offer the lowest possible price. Assurance of value is further derived from the firm fixed-price contract type, which shifts cost overrun risks to the contractor. Robust government oversight, including detailed technical reviews, quality assurance checks, and potentially independent cost estimates, would be essential to ensure the contractor is delivering the required scope of work at a fair price, even with limited bids. The government relies on its procurement specialists to negotiate the best possible terms within the competitive constraints.

How does this contract fit into the broader context of military infrastructure spending in Hawaii?

This $1.2 billion contract for 'HOT CARGO PADS' and highway construction represents a significant investment in Hawaii's military infrastructure. Hawaii serves as a critical strategic location for U.S. military operations in the Pacific. Large-scale construction projects are common to support troop presence, logistical capabilities, and operational readiness. This contract likely aligns with broader military modernization or expansion efforts in the region. Analyzing historical spending patterns for military construction in Hawaii would reveal if this award is an anomaly or part of a sustained investment trend. Such projects are vital for maintaining the U.S. military's strategic advantage and operational effectiveness in the Indo-Pacific theater.

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

Solicitation Procedures: SEALED BID

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: THE Weitz Company, LLC (UEI: 006941454)

Address: 77 DIGITAL DR. STE#100, NOVATO, CA, 02

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $12,036,164

Exercised Options: $12,036,164

Current Obligation: $12,036,164

Contract Characteristics

Cost or Pricing Data: NO

Timeline