Army Corps of Engineers awards $48M contract for water supply facilities to Granite Construction Company

Contract Overview

Contract Amount: $20,183,155 ($20.2M)

Contractor: Granite Construction Company

Awarding Agency: Department of Defense

Start Date: 2005-03-04

End Date: 2010-12-31

Contract Duration: 2,128 days

Daily Burn Rate: $9.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: 200507!500284!96CE!W912EQ!USA ENGINEER DISTRICT MEMPHIS !W912EQ05C0003 !A!N! !N! ! !20050304!20081231!006914642!006914642!622826360!N!GRANITE CONSTRUCTION COMPANY !585 WEST BEACH ST !WATSONVILLE !CA!95076!48000!157!47!MEMPHIS !SHELBY !TENNESSEE !+000001500000!N!N!000034850000!Y245!WATER SUPPLY FACILITIES !C2 !CONSTRUCTION !000 !* !237110!E! !3! ! ! ! ! !20200930!B! ! !A! !A!U!J!2!004!B! !D!N!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!Y! !N! ! ! ! !0001! !

Place of Performance

Location: DE VALLS BLUFF, PRAIRIE County, ARKANSAS, 72041

State: Arkansas Government Spending

Plain-Language Summary

Department of Defense obligated $20.2 million to GRANITE CONSTRUCTION COMPANY for work described as: 200507!500284!96CE!W912EQ!USA ENGINEER DISTRICT MEMPHIS !W912EQ05C0003 !A!N! !N! ! !20050304!20081231!006914642!006914642!622826360!N!GRANITE CONSTRUCTION COMPANY !585 WEST BEACH ST !WATSONVILLE !CA!95076!48000!157!47!MEMPHIS !SHEL… Key points: 1. Contract awarded for water and sewer line construction, indicating significant infrastructure investment. 2. The contract was secured through full and open competition, suggesting a competitive bidding process. 3. A duration of over 5 years points to a substantial, long-term project. 4. The firm fixed-price contract type suggests cost certainty for the government. 5. The contractor, Granite Construction Company, has a track record in large-scale construction projects. 6. The project is located in Arkansas, potentially impacting local water infrastructure and workforce.

Value Assessment

Rating: good

The contract value of $48 million for water and sewer line construction appears reasonable given the project's scope and duration. Benchmarking against similar Army Corps of Engineers projects for water infrastructure would provide a more precise value-for-money assessment. The firm fixed-price structure helps manage cost overruns, but the final cost will depend on the contractor's efficiency. Without detailed cost breakdowns, a definitive assessment of pricing efficiency is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely invited to submit proposals. The presence of four bids suggests a healthy level of competition for this significant infrastructure project. A competitive bidding process generally leads to better price discovery and potentially lower costs for the government compared to sole-source or limited competition scenarios.

Taxpayer Impact: Taxpayers benefit from full and open competition as it drives down prices through market forces, ensuring that the government secures the best possible value for its investment in critical water infrastructure.

Public Impact

The primary beneficiaries are communities in Arkansas relying on improved water supply facilities. The contract delivers essential construction services for water and sewer lines, enhancing public health and safety. Geographic impact is concentrated in Arkansas, specifically within the Memphis Engineer District's operational area. Workforce implications include job creation for construction laborers, engineers, and project managers in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if project scope expands beyond initial estimates.
Dependence on a single contractor for a critical infrastructure project.
Risk of delays due to unforeseen site conditions or environmental factors.
Ensuring compliance with all federal regulations and environmental standards throughout the project lifecycle.

Positive Signals

Awarded through full and open competition, indicating a robust bidding process.
Firm fixed-price contract provides cost certainty for the government.
Contractor has experience in large-scale construction projects.
Project addresses critical water infrastructure needs, ensuring long-term public benefit.

Sector Analysis

This contract falls within the construction sector, specifically focusing on heavy civil construction related to water and sewer infrastructure. The North American Industry Classification System (NAICS) code 237110, 'Water and Sewer Line and Related Structures Construction,' represents a significant segment of the construction market. Spending in this area is often driven by government initiatives to upgrade aging infrastructure and meet growing population demands. Comparable spending benchmarks would involve analyzing other federal, state, and local contracts for similar water infrastructure projects.

Small Business Impact

There is no explicit indication of small business set-asides for this contract, as it was awarded under full and open competition. However, the prime contractor, Granite Construction Company, may engage small businesses as subcontractors to fulfill portions of the work. The extent of subcontracting to small businesses will be a key factor in assessing the contract's impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the U.S. Army Corps of Engineers, Memphis District. Accountability measures would include regular progress reports, site inspections, and adherence to contract specifications. Transparency is generally maintained through contract award databases and public reporting, though detailed project-specific information may be limited. The Inspector General's office could investigate any allegations of fraud, waste, or abuse related to the contract.

Related Government Programs

Army Corps of Engineers Civil Works Programs
Federal Infrastructure Investment Initiatives
Water and Wastewater System Construction Contracts
Department of Defense Construction Projects

Risk Flags

Potential for cost escalation if market prices for materials increase significantly over the contract duration.
Risk of project delays due to unforeseen environmental or geological conditions.
Need for robust oversight to ensure quality and compliance throughout the extended project timeline.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.2 million to GRANITE CONSTRUCTION COMPANY. 200507!500284!96CE!W912EQ!USA ENGINEER DISTRICT MEMPHIS !W912EQ05C0003 !A!N! !N! ! !20050304!20081231!006914642!006914642!622826360!N!GRANITE CONSTRUCTION COMPANY !585 WEST BEACH ST !WATSONVILLE !CA!95076!48000!157!47!MEMPHIS !SHELBY !TENNESSEE !+000001500000!N!N!000034850000!Y245!WATER SUPPLY FACILITIES !C2 !CONSTRUCTION !000 !* !237110!E! !3! ! ! ! ! !202

Who is the contractor on this award?

The obligated recipient is GRANITE CONSTRUCTION COMPANY.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $20.2 million.

What is the period of performance?

Start: 2005-03-04. End: 2010-12-31.

What is the track record of Granite Construction Company with the Department of Defense and Army Corps of Engineers?

Granite Construction Company has a history of working with the Department of Defense and the Army Corps of Engineers on various construction projects. While this specific contract is for water supply facilities, their broader experience likely includes infrastructure development, military construction, and other civil engineering endeavors. A detailed review of their past performance on similar government contracts would reveal their ability to meet deadlines, manage budgets, and adhere to quality standards. Analyzing past contract awards and performance evaluations would provide further insight into their reliability and expertise in executing large-scale federal projects.

How does the awarded amount of $48 million compare to similar water infrastructure projects managed by the Army Corps of Engineers?

The $48 million award for water and sewer line construction is a substantial sum, indicative of a significant infrastructure undertaking. To benchmark this value, one would need to compare it against the total contract values of other Army Corps of Engineers projects with similar scopes, such as the construction or rehabilitation of water treatment plants, distribution systems, or large-diameter pipelines. Factors like geographic location, specific technical requirements, and prevailing market conditions at the time of award would influence these comparisons. Without access to a comprehensive database of comparable projects and their costs, a precise value-for-money assessment relative to peers is difficult, but the amount suggests a project of considerable scale and importance.

What are the primary risks associated with a firm fixed-price contract for a multi-year construction project?

While firm fixed-price (FFP) contracts offer cost certainty to the government, they carry inherent risks for the contractor. For a multi-year construction project like this, the primary risk for Granite Construction Company is underestimating costs or encountering unforeseen challenges that increase expenses beyond the fixed price. This could lead to reduced profit margins or even losses if not managed effectively. Risks include fluctuating material costs, labor shortages, unexpected site conditions (e.g., soil instability, environmental contamination), design changes, or delays caused by external factors like weather or regulatory hurdles. The government's risk is primarily that the contractor may cut corners on quality to maintain profitability if cost pressures become too high, though contract oversight aims to mitigate this.

What is the expected impact of this contract on local employment and the regional economy in Arkansas?

This $48 million contract is expected to have a positive impact on local employment and the regional economy in Arkansas. The construction of water and sewer lines requires a significant workforce, including skilled laborers, equipment operators, engineers, project managers, and administrative staff. Granite Construction Company will likely hire locally or draw from the regional labor pool to staff the project. Furthermore, the project will stimulate economic activity through the procurement of materials, equipment, and services from local suppliers and businesses. This injection of capital and job creation can lead to increased consumer spending and broader economic benefits within the affected communities.

How does the duration of this contract (over 5 years) influence the assessment of its value and risk?

The contract's duration of over five years (from March 2005 to December 2010, totaling approximately 5.75 years) indicates a large-scale, complex project requiring sustained effort and management. From a value perspective, a longer duration can sometimes allow for more efficient phasing of work and potentially better utilization of resources, but it also increases the exposure to market fluctuations (e.g., material costs) and the risk of scope creep or design evolution. For risk assessment, a longer timeline amplifies the potential for unforeseen issues to arise, such as changes in environmental regulations, geological surprises, or shifts in project priorities. The government's oversight must remain vigilant throughout this extended period to ensure continued adherence to objectives and quality standards.

What are the implications of the contract being awarded to a single entity (Granite Construction Company) for the long-term maintenance or future upgrades of these facilities?

Awarding the construction of these water supply facilities to a single entity, Granite Construction Company, streamlines the initial build process and establishes a clear point of accountability for the construction phase. However, it does not automatically imply that Granite Construction Company will be involved in the long-term maintenance or future upgrades. Typically, maintenance responsibilities fall to the end-user agency (e.g., a local water authority or the Army Corps of Engineers itself), and future upgrades would be subject to separate procurement processes. While Granite's intimate knowledge of the initial construction could be beneficial if they are considered for future work, it does not guarantee them future contracts, which would likely be competed separately to ensure best value.

Industry Classification

NAICS: Construction › Utility System Construction › Water and Sewer Line and Related Structures Construction

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Granite Construction Incorporated (UEI: 622826360)

Address: 585 WEST BEACH ST, WATSONVILLE, CA, 95076

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

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline