Kiewit Infrastructure Co. awarded $50.7M for Army construction, highlighting firm fixed-price contract efficiency

Contract Overview

Contract Amount: $50,685,566 ($50.7M)

Contractor: Kiewit Infrastructure CO.

Awarding Agency: Department of Defense

Start Date: 2015-08-13

End Date: 2017-12-31

Contract Duration: 871 days

Daily Burn Rate: $58.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF MCCOOK FINAL PREPARATION

Place of Performance

Location: WILLOW SPRINGS, COOK County, ILLINOIS, 60480

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $50.7 million to KIEWIT INFRASTRUCTURE CO. for work described as: IGF::OT::IGF MCCOOK FINAL PREPARATION Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The firm fixed-price contract type indicates predictable costs for the government. 3. A duration of 871 days suggests a significant, long-term construction project. 4. The contract falls under 'Other Heavy and Civil Engineering Construction,' a broad category. 5. Awarded by the Department of the Army, indicating a defense-related infrastructure need. 6. The contract was awarded in Illinois, specifying a geographic focus for the work.

Value Assessment

Rating: good

The contract's value of $50.7 million for heavy civil engineering construction appears reasonable given the project's scope and duration. As a firm fixed-price contract, it offers cost certainty to the government, mitigating the risk of cost overruns. Benchmarking against similar large-scale civil engineering projects would provide a more precise value assessment, but the absence of significant modifications or overruns (based on available data) suggests effective initial pricing and execution.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit bids. The presence of two bidders suggests a moderate level of competition for this significant construction project. A higher number of bidders might have potentially driven the price lower, but two bidders still provide a basis for price discovery and selection of the most advantageous offer.

Taxpayer Impact: The full and open competition, even with two bidders, likely resulted in a more competitive price for taxpayers compared to a sole-source or limited competition award. This process ensures that the government receives value by selecting from multiple qualified offers.

Public Impact

The primary beneficiaries are the Department of the Army and potentially military personnel or operations relying on the constructed infrastructure. The services delivered involve heavy and civil engineering construction, likely for military bases or related facilities. The geographic impact is concentrated in Illinois, where the construction work was performed. Workforce implications include employment opportunities for construction workers, engineers, and project managers in the Illinois region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions arise, though mitigated by fixed-price contract.
Risk of schedule delays due to weather, labor issues, or supply chain disruptions.
Ensuring compliance with environmental regulations during heavy construction activities.
Quality control and assurance to meet stringent military construction standards.

Positive Signals

Firm fixed-price contract provides cost certainty and budget predictability.
Awarded through full and open competition, suggesting a competitive and fair process.
Kiewit Infrastructure Co. is a large, experienced contractor likely capable of executing complex projects.
The contract duration of over two years indicates a substantial and important project.

Sector Analysis

This contract falls within the Heavy and Civil Engineering Construction sector, a significant part of the broader construction industry. This sector includes infrastructure projects like roads, bridges, dams, and military facilities. The market is characterized by large, capital-intensive projects often awarded through competitive bidding processes. Kiewit is a major player in this space, competing with other large engineering and construction firms for substantial government and private contracts.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a large prime contract awarded to Kiewit Infrastructure Co., there may be opportunities for small businesses to participate as subcontractors. However, the extent of small business subcontracting is not detailed in this data. Large prime contractors are often encouraged or required to meet subcontracting goals, which can benefit the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and project management personnel within the Department of the Army. The firm fixed-price nature of the contract simplifies some aspects of financial oversight. Accountability measures are inherent in the contract terms, with penalties for non-performance or deviations. Transparency is generally maintained through contract award databases, though specific project details and oversight reports may vary in public accessibility.

Related Government Programs

Military Construction Program
Army Corps of Engineers Civil Works Projects
Federal Highway Administration Construction Contracts
Department of Defense Infrastructure Modernization

Risk Flags

Potential for cost overruns if unforeseen conditions arise.
Risk of schedule delays impacting military readiness or operations.
Ensuring compliance with environmental and safety regulations.
Adequacy of competition level for optimal price discovery.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $50.7 million to KIEWIT INFRASTRUCTURE CO.. IGF::OT::IGF MCCOOK FINAL PREPARATION

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 $50.7 million.

What is the period of performance?

Start: 2015-08-13. End: 2017-12-31.

What is Kiewit Infrastructure Co.'s track record with similar large-scale civil engineering contracts for the Department of Defense?

Kiewit Infrastructure Co. has a substantial track record with large-scale civil engineering and construction projects, including numerous contracts with the Department of Defense and other federal agencies. They are known for undertaking complex projects such as airfields, port facilities, and infrastructure upgrades. While specific performance metrics for this particular $50.7 million contract are not detailed here, Kiewit's general reputation in the industry suggests a capacity for delivering projects of this magnitude. A deeper analysis would involve reviewing past performance evaluations, any contract disputes, and the successful completion rates of their prior defense-related infrastructure projects.

How does the $50.7 million award compare to the average cost of similar Army civil engineering projects?

The $50.7 million award for 'Other Heavy and Civil Engineering Construction' by the Department of the Army falls within a common range for significant infrastructure projects. Projects of this nature, such as base improvements, new facility construction, or major repairs, often range from tens to hundreds of millions of dollars. Without specific details on the project's scope (e.g., new construction vs. renovation, specific type of facility), a precise comparison is difficult. However, considering Kiewit's role as a major contractor and the firm fixed-price nature, the value appears aligned with typical large-scale civil engineering endeavors undertaken by the military.

What are the primary risks associated with a firm fixed-price contract for heavy civil engineering construction, and how are they managed?

The primary risk with a firm fixed-price (FFP) contract is that the contractor assumes most of the cost risk. If Kiewit encounters unforeseen site conditions, material cost increases, or labor shortages, their profit margin could be significantly reduced or they could incur a loss, unless the contract includes specific contingency clauses or escalation provisions. The government benefits from cost certainty. Risk management by the government involves thorough pre-bid site investigations, clear contract specifications, and robust oversight during execution to ensure quality and adherence to scope. The contractor manages risk through detailed planning, accurate estimating, and potentially securing materials and labor in advance.

How effective was the 'full and open competition' process in achieving a competitive price, given only two bidders?

The effectiveness of 'full and open competition' in achieving a competitive price is somewhat limited when only two bidders participate, as indicated in this award. While it's superior to sole-source or limited competition, a larger pool of bidders typically fosters more aggressive pricing strategies. The fact that two bidders submitted offers suggests there was sufficient interest and capability in the market for this type of project. The government likely selected the bid that represented the best value, considering both price and technical factors. To fully assess competitiveness, one would need to know the bid prices relative to the government's estimate and the historical pricing for similar work.

What is the historical spending trend for 'Other Heavy and Civil Engineering Construction' by the Department of the Army?

Historical spending trends for 'Other Heavy and Civil Engineering Construction' by the Department of the Army are generally substantial, reflecting the ongoing need to maintain, upgrade, and expand military infrastructure. This category encompasses a wide array of projects, from airfield pavements and utility systems to barracks and training facilities. Spending in this area can fluctuate based on military readiness requirements, modernization initiatives, and congressional appropriations. Over the past decade, the Army has consistently invested billions annually in construction and engineering, with significant portions allocated to infrastructure supporting global operations and domestic installations. This $50.7 million contract represents one component of that larger, sustained investment.

Are there specific performance benchmarks or Key Performance Indicators (KPIs) typically associated with Army construction contracts of this scale?

Yes, Army construction contracts of this scale typically have defined performance benchmarks and Key Performance Indicators (KPIs) to ensure project success. These often include adherence to schedule (e.g., milestone completion dates, final completion date), quality of workmanship (meeting specifications, minimizing defects), safety performance (incident rates, compliance with safety protocols), and budget management (avoiding cost overruns, efficient use of funds). For a firm fixed-price contract, schedule and quality are paramount. Performance is usually monitored through regular progress meetings, site inspections, and formal reporting requirements. Contractor performance evaluations (e.g., CPARS) are critical for assessing success and informing future awards.

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: W912P615R0007

Offers Received: 2

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: $50,685,566

Exercised Options: $50,685,566

Current Obligation: $50,685,566

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline