Army awards $30.5M flood reduction contract to Radmacher Brothers Excavating Co. Inc

Contract Overview

Contract Amount: $30,514,278 ($30.5M)

Contractor: Radmacher Brothers Excavating CO Inc

Awarding Agency: Department of Defense

Start Date: 2017-09-29

End Date: 2024-09-27

Contract Duration: 2,555 days

Daily Burn Rate: $11.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF TURKEY CREEK INTERCEPTOR, IS FLOOD REDUCTION PROJECT FOR THE GREATER KS AND MO URBAN AREAS AROUND CENTRAL KANSAS CITY. THE PROJECT CONSIST OF FEDERAL AND NON FEDERAL FUNDING TO SHARE COST AND RESOURCES OVER THE SPAN OF THE CONTRACT.

Place of Performance

Location: KANSAS CITY, JACKSON County, MISSOURI, 64108

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $30.5 million to RADMACHER BROTHERS EXCAVATING CO INC for work described as: IGF::OT::IGF TURKEY CREEK INTERCEPTOR, IS FLOOD REDUCTION PROJECT FOR THE GREATER KS AND MO URBAN AREAS AROUND CENTRAL KANSAS CITY. THE PROJECT CONSIST OF FEDERAL AND NON FEDERAL FUNDING TO SHARE COST AND RESOURCES OVER THE SPAN OF THE CONTRACT. Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The definitive contract type with a firm fixed price indicates a defined scope and cost structure. 3. Project duration of 2555 days (7 years) suggests a long-term commitment to flood reduction. 4. The contract is for heavy and civil engineering construction, a critical infrastructure sector. 5. The project involves shared federal and non-federal funding, indicating a collaborative approach to cost management.

Value Assessment

Rating: fair

The contract value of $30.5 million for a 7-year flood reduction project appears to be within a reasonable range for large-scale civil engineering works. However, without specific benchmarks for similar flood control projects in the region or detailed cost breakdowns, a precise value-for-money assessment is challenging. The firm fixed-price structure, while offering cost certainty, could lead to higher initial bids if the contractor perceives significant risks.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. The presence of 4 bidders (as indicated by 'no': 4) suggests a moderate level of competition for this project. A higher number of bidders typically leads to more competitive pricing and better value for the government.

Taxpayer Impact: Full and open competition is generally beneficial for taxpayers as it encourages multiple companies to vie for the contract, potentially driving down costs and improving the quality of services offered.

Public Impact

Residents and businesses in the greater Kansas City urban areas around central Kansas City will benefit from improved flood reduction measures. The project delivers essential heavy and civil engineering construction services focused on infrastructure resilience. The geographic impact is concentrated in Missouri, specifically within the Kansas City metropolitan area. The project will likely involve a significant construction workforce, contributing to local employment in the engineering and construction sectors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long project duration (7 years) increases the risk of cost overruns due to inflation or unforeseen site conditions.
Firm fixed-price contracts can sometimes disincentivize contractors from seeking cost efficiencies once the contract is awarded.
Reliance on shared federal and non-federal funding introduces potential complexities in budget management and coordination.

Positive Signals

Awarded through full and open competition, ensuring a broad range of potential contractors participated.
Firm fixed-price contract provides cost certainty for the government, limiting exposure to cost increases.
The project addresses a critical infrastructure need for flood reduction, enhancing public safety and economic stability.

Sector Analysis

This contract falls within the Heavy and Civil Engineering Construction sector, which is a significant part of the broader construction industry. This sector is responsible for large-scale public works projects such as highways, bridges, dams, and flood control systems. Spending in this area is often driven by government infrastructure initiatives and the need to maintain and upgrade existing public assets. Comparable spending benchmarks would typically be found in large federal or state-level infrastructure projects.

Small Business Impact

The data indicates that small business participation (sb: false) was not a specific set-aside requirement for this contract, nor is there explicit information on subcontracting goals for small businesses. This suggests that the primary focus was on securing the most competitive bid from qualified large contractors. The impact on the small business ecosystem would depend on whether Radmacher Brothers Excavating Co. Inc. utilizes small businesses as subcontractors, which is not detailed here.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Army, potentially through contracting officers and project managers. Accountability measures are inherent in the firm fixed-price contract type, which holds the contractor responsible for delivering the specified work within the agreed-upon cost. Transparency would be enhanced through public contract databases and reporting requirements, though specific details on ongoing oversight mechanisms or Inspector General involvement are not provided in this summary.

Related Government Programs

Army Corps of Engineers Civil Works Programs
Federal Flood Risk Management Programs
Infrastructure Investment and Jobs Act Projects
US Army Corps of Engineers Construction Contracts

Risk Flags

Long project duration may increase risk of cost escalation.
Firm fixed-price contract places cost overrun risk on contractor.
Shared funding model requires careful inter-agency coordination.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $30.5 million to RADMACHER BROTHERS EXCAVATING CO INC. IGF::OT::IGF TURKEY CREEK INTERCEPTOR, IS FLOOD REDUCTION PROJECT FOR THE GREATER KS AND MO URBAN AREAS AROUND CENTRAL KANSAS CITY. THE PROJECT CONSIST OF FEDERAL AND NON FEDERAL FUNDING TO SHARE COST AND RESOURCES OVER THE SPAN OF THE CONTRACT.

Who is the contractor on this award?

The obligated recipient is RADMACHER BROTHERS EXCAVATING CO 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 $30.5 million.

What is the period of performance?

Start: 2017-09-29. End: 2024-09-27.

What is the historical spending pattern for flood reduction projects by the Department of the Army in Missouri?

Analyzing historical spending for flood reduction projects by the Department of the Army in Missouri requires access to detailed historical contract databases. Generally, the Army Corps of Engineers manages a significant portfolio of civil works projects, including flood control, which can fluctuate annually based on appropriations, project lifecycles, and identified needs. Factors such as the severity of past flooding events, regional development, and federal infrastructure priorities influence the allocation of funds. Without specific historical data for Missouri, it's difficult to provide precise figures, but such projects are typically multi-year and can range from tens to hundreds of millions of dollars depending on scale and complexity. This $30.5 million contract represents a substantial investment in the region's flood resilience.

How does the number of bidders (4) compare to similar large-scale civil engineering contracts awarded by the Department of the Army?

A competition with 4 bidders for a large-scale civil engineering contract like the IGF Turkey Creek Interceptor project is moderately competitive. For major infrastructure projects, the number of bidders can vary significantly. Factors influencing bidder numbers include the project's complexity, specialized requirements, geographic location, and the overall health of the construction market. While more bidders generally lead to better price discovery, 4 bidders suggest that the opportunity was sufficiently attractive and accessible to qualified firms. Contracts with highly specialized technical requirements or in remote locations might see fewer bidders, while more standard, large-volume projects could attract a dozen or more. Therefore, 4 bidders indicate a reasonable, though not exceptionally high, level of market interest.

What are the potential risks associated with a 7-year firm fixed-price contract for heavy construction?

A 7-year firm fixed-price (FFP) contract for heavy construction, while offering cost certainty to the government, carries several potential risks. Firstly, the contractor assumes the risk of cost overruns due to unforeseen site conditions, material price escalation, labor cost increases, or extended project timelines. To mitigate this, contractors often build significant contingency into their initial FFP bids, which can result in a higher baseline cost for the government. Secondly, over such a long duration, changes in regulations, environmental requirements, or project scope (if not managed strictly through change orders) can create disputes. Lastly, contractor performance can sometimes degrade over extended periods if incentives for efficiency are not maintained or if the contractor faces financial difficulties. Robust contract management and clear communication channels are crucial to mitigate these risks.

What is the typical profit margin for contractors on large civil engineering projects of this nature?

Profit margins for large civil engineering projects can vary based on project complexity, risk, competition, and market conditions. Typically, for large-scale government construction contracts, profit margins might range from 5% to 15% of the total contract value. This specific contract, being a firm fixed-price award, implies the contractor has factored in their expected costs, overhead, and desired profit into the bid. The $30.5 million contract value suggests that the contractor's profit could be in the range of $1.5 million to $4.6 million, assuming standard industry margins. However, actual profit realized depends heavily on the contractor's ability to manage costs effectively throughout the 7-year project duration.

How does the 'Other Heavy and Civil Engineering Construction' NAICS code (237990) relate to flood reduction projects?

The NAICS code 237990, 'Other Heavy and Civil Engineering Construction,' is highly relevant to flood reduction projects. This code encompasses establishments primarily engaged in constructing heavy civil engineering projects not elsewhere classified. This includes projects such as flood control dams, levees, canals, waterways, reservoirs, and related structures. These types of projects are critical for managing water resources, preventing flood damage, and improving navigation. Therefore, a contract for the 'Turkey Creek Interceptor Flood Reduction Project' logically falls under this classification, as it involves the construction of significant infrastructure designed to mitigate flood risks.

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: W912DQ17B1018

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2201 N STATE RTE 7 STE B, PLEASANT HILL, MO, 64080

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

Financial Breakdown

Contract Ceiling: $30,514,278

Exercised Options: $30,514,278

Current Obligation: $30,514,278

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline