Kentucky Lock Monoliths Contract Awarded for $405M to Thalle Construction, Facing Potential Cost Overruns
Contract Overview
Contract Amount: $405,005,599 ($405.0M)
Contractor: Thalle Construction CO Inc
Awarding Agency: Department of Defense
Start Date: 2021-10-11
End Date: 2027-08-09
Contract Duration: 2,128 days
Daily Burn Rate: $190.3K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: FIRM FIXED PRICE
Sector: Construction
Official Description: CONSTRUCTION OF DOWNSTREAM MONOLITHS FOR THE KENTUCKY LOCK, GRAND RIVERS, KENTUCKY
Place of Performance
Location: GRAND RIVERS, LIVINGSTON County, KENTUCKY, 42045
State: Kentucky Government Spending
Plain-Language Summary
Department of Defense obligated $405.0 million to THALLE CONSTRUCTION CO INC for work described as: CONSTRUCTION OF DOWNSTREAM MONOLITHS FOR THE KENTUCKY LOCK, GRAND RIVERS, KENTUCKY Key points: 1. Significant investment in critical infrastructure for the Kentucky Lock project. 2. Thalle Construction Co Inc secured the contract through full and open competition. 3. Potential for cost increases due to contract duration and fixed-price nature. 4. The project falls under the 'Other Heavy and Civil Engineering Construction' sector.
Value Assessment
Rating: fair
The contract value of $405M for heavy civil engineering construction appears substantial. Benchmarking against similar large-scale infrastructure projects is necessary to assess value, especially given the long duration and fixed-price nature which can lead to cost growth.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded using full and open competition, suggesting a robust price discovery process. However, the definitive contract type and long performance period could still present risks for cost containment.
Taxpayer Impact: Taxpayers are funding a major infrastructure upgrade. While competition aims for efficiency, the long-term nature of the project necessitates careful monitoring to ensure funds are used effectively and costs remain controlled.
Public Impact
Enhances navigation and flood control capabilities on the Ohio River. Supports regional economic development through improved transportation infrastructure. Long-term project with potential impacts on local employment and resources.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration (2128 days) increases risk of cost escalation.
- Fixed-price contract may not fully account for unforeseen construction challenges.
- Potential for scope creep or change orders over the project's lifespan.
Positive Signals
- Awarded through full and open competition, promoting market efficiency.
- Addresses critical infrastructure needs for the region.
- Contract awarded to a single entity, potentially streamlining project management.
Sector Analysis
This project falls within the 'Other Heavy and Civil Engineering Construction' sector, characterized by large-scale, complex projects. Spending in this sector is often driven by government infrastructure initiatives and can be subject to significant budget fluctuations and long lead times.
Small Business Impact
The contract was awarded to Thalle Construction Co Inc, a single entity. Analysis is needed to determine if subcontracting opportunities were maximized for small businesses, as the data indicates 'sb' is false, suggesting no specific small business set-aside was applied.
Oversight & Accountability
The long duration of this definitive contract requires robust oversight from the Department of the Army to manage performance, track progress, and control costs. Regular reviews and audits will be crucial to ensure accountability and taxpayer value.
Related Government Programs
- Other Heavy and Civil Engineering Construction
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Long contract duration increases risk of cost escalation.
- Fixed-price contract may not fully account for unforeseen construction challenges.
- Potential for scope creep or change orders over the project's lifespan.
- Lack of specific unit cost data makes value assessment difficult.
- Limited information on small business participation.
Tags
other-heavy-and-civil-engineering-constr, department-of-defense, ky, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $405.0 million to THALLE CONSTRUCTION CO INC. CONSTRUCTION OF DOWNSTREAM MONOLITHS FOR THE KENTUCKY LOCK, GRAND RIVERS, KENTUCKY
Who is the contractor on this award?
The obligated recipient is THALLE CONSTRUCTION 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 $405.0 million.
What is the period of performance?
Start: 2021-10-11. End: 2027-08-09.
What is the projected cost per unit of work or milestone completion, and how does it compare to industry benchmarks for similar civil engineering projects?
The provided data does not include specific unit costs or detailed work breakdown structures. A comprehensive cost-benefit analysis comparing the total contract value against established benchmarks for similar heavy civil engineering construction, considering factors like cubic yards of concrete poured or linear feet of structure built, is essential to evaluate the value for money.
What are the primary risk mitigation strategies in place to address potential cost overruns or delays given the fixed-price contract and extended timeline?
The fixed-price nature of the contract, coupled with a long duration, inherently carries risk. Mitigation strategies likely involve detailed contract clauses for change order management, performance incentives or penalties, and rigorous project management by the Army Corps of Engineers. Proactive identification and management of potential risks, such as material price volatility or unforeseen site conditions, are critical.
How effectively does this contract contribute to the long-term strategic goals of the Army Corps of Engineers regarding navigation and flood control infrastructure?
The construction of downstream monoliths for the Kentucky Lock directly addresses the strategic goals of enhancing navigation and flood control on the Ohio River. Successful completion of this project is vital for maintaining and improving the efficiency and safety of this key waterway, supporting regional commerce and reducing 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: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: W912P520R0004
Offers Received: 3
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Tully Construction CO - Thalle Construction CO LLC
Address: 900 NC HWY 86 N, HILLSBOROUGH, NC, 27278
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $405,005,599
Exercised Options: $405,005,599
Current Obligation: $405,005,599
Actual Outlays: $72,127,864
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2021-10-11
Current End Date: 2027-08-09
Potential End Date: 2027-08-09 00:00:00
Last Modified: 2026-01-08
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