Kiewit Infrastructure Co. awarded $194.9M for Everglades Restoration, with 3 bidders in a competitive process

Contract Overview

Contract Amount: $194,856,888 ($194.9M)

Contractor: Kiewit Infrastructure CO.

Awarding Agency: Department of Defense

Start Date: 2024-10-15

End Date: 2028-05-10

Contract Duration: 1,303 days

Daily Burn Rate: $149.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: COMPREHENSIVE EVERGLADES RESTORATION PLAN, INDIAN RIVER LAGOON SOUTH, C-23/C-24 NORTH RESERVOIR, S-426, CONTRACT 4A PROJECT, ST. LUCIE COUNTY, FLORIDA.

Place of Performance

Location: FORT PIERCE, SAINT LUCIE County, FLORIDA, 34945

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $194.9 million to KIEWIT INFRASTRUCTURE CO. for work described as: COMPREHENSIVE EVERGLADES RESTORATION PLAN, INDIAN RIVER LAGOON SOUTH, C-23/C-24 NORTH RESERVOIR, S-426, CONTRACT 4A PROJECT, ST. LUCIE COUNTY, FLORIDA. Key points: 1. The contract value represents a significant investment in environmental infrastructure. 2. Competition dynamics suggest a potentially efficient pricing structure due to multiple bids. 3. The project's long duration (over 3 years) introduces potential risks related to cost escalation and scope creep. 4. Performance will be critical to achieving the environmental goals of the restoration plan. 5. This contract falls within the heavy civil engineering construction sector, focusing on water management infrastructure. 6. The fixed-price nature of the contract shifts some cost risk to the contractor.

Value Assessment

Rating: good

The contract value of $194.9 million for the C-23/C-24 North Reservoir project appears to be within a reasonable range for large-scale civil engineering and environmental restoration projects of this complexity. Benchmarking against similar Army Corps of Engineers projects for reservoir construction and Everglades restoration would provide a more precise value-for-money assessment. The firm fixed-price contract type suggests that the government has secured a defined cost, though the contractor bears the risk of cost overruns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with three bidders submitting proposals. The presence of multiple bidders indicates a healthy level of interest and competition for this significant infrastructure project. This competitive environment is generally expected to drive more favorable pricing and encourage contractors to offer their best value propositions to secure the award.

Taxpayer Impact: The full and open competition ensures that taxpayer dollars are likely being used efficiently, as multiple firms vied for the contract, potentially leading to a lower overall cost than a sole-source or limited competition award.

Public Impact

The primary beneficiaries are the ecosystems within the Everglades and Indian River Lagoon, aiming for improved water quality and flow. The project will deliver critical infrastructure for water storage and management, contributing to flood control and water supply. The geographic impact is concentrated in St. Lucie County, Florida, with broader implications for the South Florida region's environmental health. This project is expected to create numerous jobs in the construction sector, including skilled labor and engineering roles in Florida.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long project duration increases risk of unforeseen environmental conditions or regulatory changes impacting cost and schedule.
Potential for contractor performance issues on a project of this scale and complexity.
Reliance on a single prime contractor for execution of a major infrastructure component.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Full and open competition suggests a competitive bidding process likely resulted in a fair market price.
Award to a known infrastructure contractor (Kiewit) may indicate a level of confidence in their ability to execute.

Sector Analysis

This contract falls within the heavy and civil engineering construction sector, specifically focusing on water infrastructure and environmental restoration. The market for such projects is driven by government funding for public works, environmental compliance, and infrastructure upgrades. Comparable spending benchmarks would include other large-scale Army Corps of Engineers projects, state-level water management district initiatives, and major public utility infrastructure developments. The scale of this project places it among significant federal investments in environmental remediation and water resource management.

Small Business Impact

The contract data indicates that small business participation was not a primary set-aside criterion for this award (ss: false, sb: false). While Kiewit Infrastructure Co. is the prime contractor, there may be opportunities for small businesses to participate as subcontractors. The extent of small business subcontracting will be a key factor in assessing the broader economic impact on the small business ecosystem within the construction sector for this project.

Oversight & Accountability

Oversight for this project will likely be managed by the Department of the Army, potentially through the Army Corps of Engineers district responsible for the Everglades restoration. Accountability measures will be embedded in the contract terms, including performance milestones, quality control requirements, and reporting obligations. Transparency will be facilitated through public reporting on project progress and environmental outcomes, as is common for major federal infrastructure investments. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse.

Related Government Programs

Comprehensive Everglades Restoration Plan (CERP)
Indian River Lagoon Restoration Projects
Army Corps of Engineers Civil Works Projects
Water Infrastructure Improvement Act Projects

Risk Flags

Potential for cost overruns due to long duration and unforeseen conditions.
Risk of contractor performance issues on a complex, multi-year project.
Environmental compliance and permitting risks over the project lifecycle.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $194.9 million to KIEWIT INFRASTRUCTURE CO.. COMPREHENSIVE EVERGLADES RESTORATION PLAN, INDIAN RIVER LAGOON SOUTH, C-23/C-24 NORTH RESERVOIR, S-426, CONTRACT 4A PROJECT, ST. LUCIE COUNTY, FLORIDA.

Who is the contractor on this award?

The obligated recipient is KIEWIT INFRASTRUCTURE 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 $194.9 million.

What is the period of performance?

Start: 2024-10-15. End: 2028-05-10.

What is Kiewit Infrastructure Co.'s track record with similar large-scale civil engineering and environmental restoration projects?

Kiewit Infrastructure Co. has a substantial track record in executing large-scale civil engineering and infrastructure projects, including significant work in water management, dam construction, and environmental remediation. They have been involved in numerous projects for the Army Corps of Engineers and other federal and state agencies. Their experience often includes complex projects with challenging environmental considerations and tight deadlines. A detailed review of their past performance on projects of similar scope, budget, and technical complexity would be necessary to fully assess their suitability and mitigate potential risks for the C-23/C-24 North Reservoir project. Past performance evaluations and project close-out reports for comparable contracts would provide valuable insights into their ability to manage costs, adhere to schedules, and meet quality standards.

How does the awarded value of $194.9 million compare to the estimated cost or benchmark for similar reservoir construction and Everglades restoration components?

The awarded value of $194.9 million for the C-23/C-24 North Reservoir project needs to be benchmarked against the original cost estimates, independent cost reviews, and similar projects within the Comprehensive Everglades Restoration Plan (CERP) and other large-scale water management initiatives. Without access to the government's pre-award cost estimates or detailed breakdowns of the project's scope, a precise value-for-money assessment is challenging. However, for major civil works projects involving significant earthmoving, concrete structures, and environmental mitigation, costs can range from hundreds of millions to billions of dollars. The number of bidders (3) in a full and open competition suggests that the price achieved is likely competitive, but a comparison to the Engineer's Cost Estimate (ECE) and the contractor's proposed cost would be the most direct way to assess if the government received good value.

What are the primary risks associated with the long contract duration (over 3 years) for this project?

The contract duration of approximately 3.5 years (from October 2024 to May 2028) for the C-23/C-24 North Reservoir project introduces several key risks. Firstly, there is an increased likelihood of encountering unforeseen site conditions, such as unexpected geological formations or environmental contaminants, which could lead to scope changes and cost increases. Secondly, regulatory environments can evolve over this timeframe, potentially requiring modifications to project plans or compliance measures. Thirdly, material and labor costs are subject to market fluctuations, and a fixed-price contract may not fully insulate the government from significant price escalations if not structured with appropriate escalation clauses or if the contractor's initial estimates were too low. Finally, extended project timelines can increase the risk of contractor performance degradation or key personnel turnover, impacting overall project success.

How effective are the oversight mechanisms for ensuring the successful completion and environmental impact of this Everglades restoration component?

Oversight for this contract will primarily be conducted by the awarding agency, likely the Department of the Army through the Army Corps of Engineers. Effective oversight typically involves rigorous project management, regular site inspections, performance monitoring against contract milestones, and quality assurance processes. For environmental restoration projects like this, oversight also extends to ensuring compliance with environmental regulations and achieving the intended ecological benefits. The presence of a firm fixed-price contract shifts some execution risk to the contractor, but the government retains oversight responsibility to ensure the work is performed to specification and delivers the desired environmental outcomes. Transparency through public reporting and potential reviews by oversight bodies like the Government Accountability Office (GAO) or the agency's Inspector General would further enhance accountability.

What does the competition level (3 bidders) imply about the market for large-scale civil engineering construction in Florida?

The fact that three bidders competed for this $194.9 million contract suggests a moderately competitive market for large-scale civil engineering and heavy construction projects in Florida, particularly those related to water management and environmental restoration. While three bidders indicate some level of competition, it is not as robust as a situation with five or more bidders, which might be expected for a project of this magnitude and importance. This level of competition is generally sufficient to ensure reasonable price discovery and encourage contractors to submit competitive bids. However, it also suggests that the pool of qualified contractors capable of undertaking such complex projects may be somewhat limited, potentially concentrating market power among a few key players.

What are the historical spending patterns for the Comprehensive Everglades Restoration Plan (CERP) and similar water infrastructure projects?

Historical spending on the Comprehensive Everglades Everglades Restoration Plan (CERP) has been substantial, spanning multiple decades and involving significant federal and state investments. Annual federal appropriations for CERP have varied considerably year to year, influenced by congressional priorities, budget cycles, and the pace of project execution. Overall, CERP is one of the largest ecosystem restoration efforts in the world, with total project costs estimated in the tens of billions of dollars over its multi-decade lifespan. Spending on individual components, like reservoirs and water conveyance structures, can easily reach hundreds of millions of dollars per project. Similar large-scale water infrastructure projects, such as dam constructions, levee systems, or major water treatment facilities, also typically involve budgets in the high tens to hundreds of millions, reflecting the capital-intensive nature of such undertakings.

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: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W912EP24R0016

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Kiewit-Turner a Joint Venture

Address: 470 CHESTNUT RIDGE RD 2ND FLOOR, WOODCLIFF LAKE, NJ, 07677

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

Financial Breakdown

Contract Ceiling: $194,856,888

Exercised Options: $194,856,888

Current Obligation: $194,856,888

Actual Outlays: $11,019,017

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline