Army awards $14.7M construction contract to Granite Construction Company for St. Bernard Parish facilities

Contract Overview

Contract Amount: $14,708,319 ($14.7M)

Contractor: Granite Construction Company

Awarding Agency: Department of Defense

Start Date: 2005-10-19

End Date: 2008-03-07

Contract Duration: 870 days

Daily Burn Rate: $16.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: 200608!600899!96CE!W912P8!USA ENGINEER DIST NEW ORLEANS !W912P806C0007 !A!N! !N! ! !20051019!20060601!006914642!006914642!622826360!N!GRANITE CONSTRUCTION COMPANY !585 W BEACH ST !WATSONVILLE !CA!95076!66935!087!22!ST. BERNARD !ST. BERNARD !LOUISIANA !+000014375500!N!N!000014375500!Y299!ALL OTHER NON-BUILDING FACILITIES !C2 !CONSTRUCTION !ZBC !BRAC !237990!E! !3! ! ! ! ! !99990909!B! ! !A! !A!U!J!2!002!B! !Z!N!Z! ! !N!C!N! ! ! !C!D!A!A!000!A!C!Y! !N! ! !96CE!W912P8!0001! !

Place of Performance

Location: CHALMETTE, SAINT BERNARD County, LOUISIANA, 70043

State: Louisiana Government Spending

Plain-Language Summary

Department of Defense obligated $14.7 million to GRANITE CONSTRUCTION COMPANY for work described as: 200608!600899!96CE!W912P8!USA ENGINEER DIST NEW ORLEANS !W912P806C0007 !A!N! !N! ! !20051019!20060601!006914642!006914642!622826360!N!GRANITE CONSTRUCTION COMPANY !585 W BEACH ST !WATSONVILLE !CA!95076!66935!087!22!ST. BERNARD !ST. … Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract's value of $14.7 million falls within a moderate spending range for construction projects. 3. The project is categorized under 'Other Heavy and Civil Engineering Construction,' indicating infrastructure development. 4. The duration of 870 days suggests a significant construction undertaking. 5. The contract was awarded to a single vendor, Granite Construction Company, for the entirety of the work. 6. The project is linked to BRAC (Base Realignment and Closure), implying a connection to military base restructuring.

Value Assessment

Rating: good

The contract value of $14.7 million for heavy civil engineering construction appears reasonable given the project's scope and duration. Benchmarking against similar projects would provide a more precise value-for-money assessment. The firm fixed-price nature of the contract shifts risk to the contractor, which can be beneficial for the government if managed effectively. However, without detailed cost breakdowns or comparisons to industry standards for similar work in Louisiana, 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 all responsible sources were permitted to submit a bid. The presence of two bids suggests a moderate level of competition for this specific contract. While two bidders are better than one, a higher number of bids typically leads to more robust price discovery and potentially lower prices for the government. The specific details of the bidding process and the evaluation criteria used would further illuminate the effectiveness of the competition.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages multiple companies to bid, potentially driving down costs. However, with only two bids received, the cost savings may not have been maximized compared to a scenario with more active bidders.

Public Impact

The primary beneficiaries are likely the U.S. Army and potentially military personnel and their families who utilize the facilities being constructed or renovated. The services delivered involve heavy and civil engineering construction, likely focused on infrastructure improvements or new builds. The geographic impact is concentrated in St. Bernard Parish, Louisiana, contributing to local economic activity and potentially improving local infrastructure. Workforce implications include job creation for construction workers and related trades in the region during the contract period.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen issues arise during the extensive construction period.
Dependence on a single contractor for the full scope of work could pose risks if performance issues emerge.
The 'BRAC' designation might imply a complex regulatory environment or specific project constraints.

Positive Signals

Awarded through full and open competition, indicating a fair and accessible bidding process.
Firm fixed-price contract type generally provides cost certainty for the government.
The contractor, Granite Construction Company, is a large, established entity with experience in heavy construction.

Sector Analysis

This contract falls within the 'Other Heavy and Civil Engineering Construction' sector (NAICS 237990), which encompasses a wide range of infrastructure projects such as highways, streets, bridges, tunnels, and utility lines. The U.S. Army Corps of Engineers, as the awarding agency, frequently procures services in this sector for military installations and civil works. The total federal spending in this sector is substantial, with significant portions allocated to infrastructure modernization and maintenance. This specific contract's value of $14.7 million is moderate within the broader context of large-scale civil engineering projects.

Small Business Impact

The contract data indicates that small business participation was not a specific set-aside for this particular award, as 'sb' is false. There is no explicit mention of subcontracting goals for small businesses within the provided data. Therefore, the direct impact on the small business ecosystem from this specific contract is likely limited unless Granite Construction Company voluntarily engages small businesses as subcontractors. Further investigation into subcontracting plans would be needed for a comprehensive analysis.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army, likely managed by the U.S. Army Corps of Engineers. Accountability measures are inherent in the firm fixed-price contract type, which obligates the contractor to complete the work for a set price. Transparency is facilitated by the public nature of federal contract awards, though detailed project progress reports and specific oversight activities are not publicly detailed in this data. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Army Corps of Engineers Civil Works Projects
Military Construction Projects
Base Realignment and Closure (BRAC) Initiatives
Heavy and Civil Engineering Construction Contracts
Federal Infrastructure Spending

Risk Flags

Potential for cost escalation due to long project duration.
Risk of contractor performance issues impacting project timeline or quality.
Limited competition may have resulted in a higher-than-optimal price.
Dependence on a single contractor for the full scope of work.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.7 million to GRANITE CONSTRUCTION COMPANY. 200608!600899!96CE!W912P8!USA ENGINEER DIST NEW ORLEANS !W912P806C0007 !A!N! !N! ! !20051019!20060601!006914642!006914642!622826360!N!GRANITE CONSTRUCTION COMPANY !585 W BEACH ST !WATSONVILLE !CA!95076!66935!087!22!ST. BERNARD !ST. BERNARD !LOUISIANA !+000014375500!N!N!000014375500!Y299!ALL OTHER NON-BUILDING FACILITIES !C2 !CONSTRUCTION !ZBC !BRAC !237990!E! !3! ! ! ! ! !999

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 $14.7 million.

What is the period of performance?

Start: 2005-10-19. End: 2008-03-07.

What is the track record of Granite Construction Company with federal contracts, particularly with the Department of Defense?

Granite Construction Company has a significant history of federal contracting, including numerous awards from the Department of Defense and the Army Corps of Engineers. Their experience spans a wide range of construction projects, from infrastructure development to facility construction and renovation. Analyzing their past performance on similar-sized and scoped projects, particularly those involving heavy civil engineering and military installations, would provide insight into their reliability and capability. Reviewing past performance evaluations and any documented disputes or contract terminations would offer a more complete picture of their federal track record. Their extensive experience suggests a capacity to handle complex projects, but a detailed review of specific past projects is crucial for a thorough assessment.

How does the $14.7 million award compare to other similar heavy civil engineering construction contracts awarded by the Army Corps of Engineers in Louisiana?

The $14.7 million award for heavy civil engineering construction in St. Bernard Parish, Louisiana, appears to be within a moderate range for projects of this nature undertaken by the Army Corps of Engineers. However, without specific data on comparable projects in the region, a precise benchmark is difficult. Projects can vary significantly in scope, complexity, and duration, influencing their total cost. For instance, a contract for bridge construction might differ substantially in cost from one for utility system upgrades. To provide a more accurate comparison, one would need to analyze contracts awarded within a similar timeframe, for similar types of civil engineering work, and in the same geographic vicinity, considering factors like material costs and labor rates prevalent in Louisiana.

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

The primary risk with a firm fixed-price (FFP) contract for a multi-year construction project lies with the contractor. If costs escalate beyond what was anticipated during the bidding phase due to unforeseen site conditions, material price increases, or labor shortages, the contractor absorbs those losses. Conversely, the government's risk is that the contractor may cut corners on quality or safety to protect their profit margin, or that the initial price may have been inflated to account for the contractor's perceived risk. For the government, ensuring robust oversight and clear specifications is crucial to mitigate quality risks. The long duration also increases the possibility of external factors impacting the project, such as regulatory changes or environmental concerns, which could lead to change orders and cost adjustments, albeit typically managed within the FFP framework.

What is the significance of this contract being linked to BRAC (Base Realignment and Closure)?

The link to BRAC (Base Realignment and Closure) signifies that this construction project is part of a larger Department of Defense initiative to reorganize military installations. BRAC actions often involve consolidating functions, closing underutilized bases, and realigning forces, which frequently necessitates new construction, renovation, or demolition of facilities. Contracts awarded under BRAC are typically driven by strategic decisions to optimize military infrastructure and operational efficiency. This context suggests the project is not just a routine infrastructure upgrade but is tied to a specific, government-mandated strategic realignment, potentially involving complex planning and coordination with other BRAC-related activities.

How might the limited competition (two bidders) have impacted the final price paid by the government?

A limited competition, such as the two bids received for this contract, generally presents a higher risk of the government paying a non-optimal price compared to a scenario with numerous bidders. With fewer competitors, there is less pressure on each bidder to offer their most aggressive pricing. Each bidder may have a clearer understanding of their main competitor's potential bid, potentially leading to bids that are closer to each other and less reflective of the lowest possible cost. While 'full and open competition' was advertised, the actual number of interested and capable bidders may have been constrained by the project's specific requirements, location, or complexity. Therefore, the price paid might be higher than if, for example, five or more bids had been submitted.

What are the potential long-term implications for the St. Bernard Parish community resulting from this federal construction contract?

This federal construction contract can have several positive long-term implications for the St. Bernard Parish community. Economically, it provides direct employment opportunities for local construction workers and indirectly supports local businesses through the purchase of materials and services. The completion of the project could lead to improved infrastructure, which might enhance the operational capabilities of any military presence in the area or contribute to the overall resilience and development of the parish. Furthermore, successful execution of such projects can enhance the reputation of the region as capable of handling significant federal investments, potentially attracting future development. However, potential negative impacts could include temporary disruptions during construction, such as increased traffic or noise.

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

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Granite Construction Incorporated (UEI: 622826360)

Address: 585 W 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