Kiewit Infrastructure Co. awarded $1.41 billion for McCook Main Tunnel System, a significant civil engineering project

Contract Overview

Contract Amount: $140,718,050 ($140.7M)

Contractor: Kiewit Infrastructure CO.

Awarding Agency: Department of Defense

Start Date: 2011-09-30

End Date: 2017-12-31

Contract Duration: 2,284 days

Daily Burn Rate: $61.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: MCCOOK MAIN TUNNEL SYSTEN

Place of Performance

Location: HODGKINS, COOK County, ILLINOIS, 60525

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $140.7 million to KIEWIT INFRASTRUCTURE CO. for work described as: MCCOOK MAIN TUNNEL SYSTEN Key points: 1. The contract represents a substantial investment in critical infrastructure, indicating a high level of need and complexity. 2. The firm fixed-price contract type suggests a defined scope and budget, potentially mitigating cost overruns if managed effectively. 3. With a duration of over 2200 days, the project's long-term nature requires sustained oversight and performance monitoring. 4. The project's location in Illinois points to regional economic and environmental implications. 5. The absence of small business set-asides warrants examination of subcontracting opportunities for smaller firms.

Value Assessment

Rating: good

The contract value of $1.41 billion for the McCook Main Tunnel System is substantial, reflecting the scale and complexity of major civil engineering projects. Benchmarking against similar large-scale tunnel and infrastructure projects would be necessary for a precise value-for-money assessment. However, the firm fixed-price nature of the award, coupled with a competitive bidding process, suggests an effort to secure a defined cost for the services rendered. The duration of the contract also implies a significant commitment of resources.

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 bidders, as suggested by the 'no' field, points to a healthy level of competition for this significant infrastructure project. This competitive environment is generally favorable for price discovery and can lead to more cost-effective solutions for the government.

Taxpayer Impact: A competitive bidding process for a project of this magnitude helps ensure that taxpayer dollars are used efficiently by driving down costs through market forces.

Public Impact

The primary beneficiaries are residents and businesses in Illinois who will gain improved wastewater management and reduced environmental impact. The project delivers essential civil engineering services, specifically the construction of a major tunnel system for wastewater management. The geographic impact is concentrated in Illinois, likely within the greater Chicago metropolitan area. The project will create numerous jobs in the construction sector, benefiting skilled laborers, engineers, and project managers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long project duration increases the risk of scope creep or unforeseen challenges impacting final costs.
The sheer scale of the project may present complex logistical and management challenges.
Dependence on a single large contractor for such a critical piece of infrastructure could pose risks if performance falters.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Full and open competition suggests a robust selection process and potential for competitive pricing.
The project addresses a critical public need for improved infrastructure.

Sector Analysis

This contract falls within the Heavy and Civil Engineering Construction sector, a segment characterized by large-scale, complex projects often involving significant public investment. The market size for such infrastructure projects is substantial, driven by the need to maintain and upgrade aging public works and address environmental concerns. This specific contract for a tunnel system is a prime example of the type of work undertaken by major construction firms in this sector, often competing for multi-year, high-value government and municipal contracts.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, nor does it explicitly mention subcontracting goals for small businesses. This suggests that the primary award went to a large prime contractor, Kiewit Infrastructure Co. While large projects often involve subcontracting, the absence of specific set-aside information means that the direct impact on small businesses may be limited unless they are engaged as subcontractors. Further investigation into subcontracting plans would be needed to assess the full impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting agency (Department of the Army, through the Department of Defense) and potentially involve program managers, quality assurance representatives, and contract specialists. Transparency is usually facilitated through contract award databases and public reporting mechanisms. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected during the contract's lifecycle. The firm fixed-price nature also implies a degree of accountability on the contractor to deliver within the agreed-upon scope and cost.

Related Government Programs

Wastewater Infrastructure Projects
Large-Scale Civil Engineering Contracts
Department of Defense Construction Contracts
Army Corps of Engineers Projects

Risk Flags

Long project duration
High contract value
Potential for unforeseen site conditions
Complexity of large-scale infrastructure

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $140.7 million to KIEWIT INFRASTRUCTURE CO.. MCCOOK MAIN TUNNEL SYSTEN

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 $140.7 million.

What is the period of performance?

Start: 2011-09-30. End: 2017-12-31.

What is the historical spending pattern for the McCook Main Tunnel System project, and how does this award compare?

The provided data represents a single, large award of $1.41 billion for the McCook Main Tunnel System, with a start date of September 30, 2011, and an end date of December 31, 2017. This suggests that this award likely encompasses the majority, if not the entirety, of the project's funding and execution. Without additional data points for this specific project, it's difficult to establish a historical spending pattern. However, the magnitude of this single award indicates a significant, long-term investment in a critical infrastructure component. Comparing it to other large-scale tunnel or civil engineering projects would place it among the substantial federal investments in infrastructure.

How does Kiewit Infrastructure Co.'s performance on similar large-scale civil engineering projects compare to the terms of this contract?

Assessing Kiewit Infrastructure Co.'s performance on similar projects requires access to historical contract data, including performance reviews, cost variances, and schedule adherence for their past large-scale civil engineering endeavors. This specific contract, valued at $1.41 billion and awarded under full and open competition with a firm fixed-price structure, suggests a project requiring robust project management and execution capabilities. Kiewit is a major player in the heavy civil construction industry, known for undertaking complex projects. A detailed analysis would involve comparing their track record on projects of comparable size, complexity, and contract type to gauge their suitability and historical success rates in delivering such critical infrastructure.

What are the key risk indicators associated with a project of this scale and duration?

Projects of this scale ($1.41 billion) and duration (over 2200 days) inherently carry significant risks. Key indicators include potential for scope creep, where project requirements expand beyond the initial agreement, leading to cost overruns and schedule delays. Geotechnical and environmental uncertainties are also critical risks in tunnel construction, as unforeseen ground conditions or environmental impacts can necessitate costly design changes or mitigation efforts. Furthermore, the long timeline increases exposure to economic fluctuations, material price volatility, and potential labor shortages. Effective risk management by the contractor and diligent oversight by the government are crucial to mitigate these factors.

How does the firm fixed-price contract type influence the government's financial risk compared to other contract types?

A firm fixed-price (FFP) contract, like the one awarded for the McCook Main Tunnel System, places the majority of the financial risk on the contractor. The contractor agrees to a set price for the defined scope of work, and any cost overruns are generally their responsibility. This contrasts with cost-reimbursement contracts, where the government bears more of the financial risk. For the government, an FFP contract offers greater cost certainty and predictability, making budgeting easier. However, it can also incentivize contractors to cut corners on quality or safety if not properly monitored, and it may lead to higher initial bid prices to account for the contractor's risk premium.

What is the typical competition level for large federal civil engineering contracts, and how does this contract's competition compare?

Large federal civil engineering contracts, particularly those valued in the hundreds of millions or billions of dollars, typically attract significant competition, often falling under the 'full and open' category. This ensures a broad range of qualified contractors can bid, fostering price discovery and innovation. The data indicates four bidders for the McCook Main Tunnel System, which is a reasonable number for a project of this magnitude. While more bidders could theoretically drive prices lower, four participants suggest a competitive landscape where multiple major firms vied for the contract, likely resulting in a fair market price. The level of competition is generally considered adequate for such substantial infrastructure investments.

Industry Classification

NAICS: Construction › Other Heavy and Civil Engineering Construction › Other Heavy and Civil Engineering Construction

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W912P611R0010

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Peter Kiewit Sons Inc (UEI: 070729517)

Address: KIEWIT PLAZA, OMAHA, NE, 68131

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

Financial Breakdown

Contract Ceiling: $144,239,861

Exercised Options: $140,739,861

Current Obligation: $140,718,050

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline