Army awards $350M+ for Lake Pontchartrain civil engineering, with 6 bidders vying for fixed-price incentive contract

Contract Overview

Contract Amount: $350,063,327 ($350.1M)

Contractor: Archer Western / Alberici Joint Venture

Awarding Agency: Department of Defense

Start Date: 2009-06-29

End Date: 2011-06-23

Contract Duration: 724 days

Daily Burn Rate: $483.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIXED PRICE INCENTIVE

Sector: Construction

Official Description: PRECONSTRUCTION SERVICES W/ CONSTRUCTION OPTIONS - LAKE PONTCHARTRAIN&VICINITY, REACH 111.01, 111.02, AND 111.03, ORLEANS PARISH, LA

Place of Performance

Location: NEW ORLEANS, ORLEANS County, LOUISIANA, 70112

State: Louisiana Government Spending

Plain-Language Summary

Department of Defense obligated $350.1 million to ARCHER WESTERN / ALBERICI JOINT VENTURE for work described as: PRECONSTRUCTION SERVICES W/ CONSTRUCTION OPTIONS - LAKE PONTCHARTRAIN&VICINITY, REACH 111.01, 111.02, AND 111.03, ORLEANS PARISH, LA Key points: 1. Contract awarded to Archer Western / Alberici Joint Venture for preconstruction services and construction options. 2. The contract covers significant civil engineering work in Orleans Parish, Louisiana. 3. Fixed-price incentive contract type suggests shared risk between government and contractor. 4. The definitive contract has a duration of 724 days. 5. The base award amount is over $4.8 million, with potential for much larger construction costs. 6. This contract falls under the 'Other Heavy and Civil Engineering Construction' NAICS code.

Value Assessment

Rating: fair

The base award of $4.8 million for preconstruction services appears reasonable given the scale of the overall project, which has a total potential value exceeding $350 million. However, a full value-for-money assessment requires detailed analysis of the construction options and the incentive structure. Benchmarking against similar large-scale civil engineering projects would be necessary to definitively assess pricing and value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through full and open competition, with six bidders submitting proposals. This level of competition is generally positive for price discovery and ensuring a competitive market. The presence of multiple bidders suggests that the requirement was well-defined and accessible to a range of qualified contractors.

Taxpayer Impact: Full and open competition with six bidders indicates that taxpayers likely benefited from a competitive bidding process, potentially leading to more favorable pricing and a wider selection of qualified contractors.

Public Impact

The primary beneficiaries are the residents and infrastructure of Orleans Parish, Louisiana, through improved civil engineering and flood protection. Services delivered include preconstruction planning and potential construction for critical infrastructure projects. The geographic impact is concentrated in Orleans Parish, Louisiana, specifically around Lake Pontchartrain. The contract supports the heavy and civil engineering construction workforce in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if construction options are exercised and incentive clauses are not managed effectively.
The long-term effectiveness and resilience of the constructed infrastructure will require ongoing monitoring.
Dependence on a single joint venture for both preconstruction and potential construction phases could limit future flexibility.

Positive Signals

Awarded through full and open competition, indicating a robust bidding process.
The fixed-price incentive contract type aligns government and contractor interests towards cost control.
The project addresses critical civil engineering needs in a vulnerable region.

Sector Analysis

This contract falls within the heavy and civil engineering construction sector, a critical component of national infrastructure. The market for such large-scale projects is often dominated by a few large, specialized firms. The spending benchmark for similar Army Corps of Engineers projects in coastal protection and infrastructure development can range from tens of millions to billions of dollars, depending on scope and complexity.

Small Business Impact

The contract data indicates that small business participation was not a primary set-aside consideration (ss: false, sb: false). While the prime contractor is a joint venture, the implications for small business subcontracting would depend on the specific subcontracting plan negotiated. Without this information, it's difficult to assess the direct impact on the small business ecosystem, though large prime contracts often involve a tiered subcontracting structure.

Oversight & Accountability

Oversight will likely be managed by the U.S. Army Corps of Engineers, responsible for civil works projects. Accountability measures are embedded in the fixed-price incentive contract type, which links contractor profit to performance and cost targets. Transparency is typically facilitated through contract award announcements and public reporting, though detailed project execution and oversight reports may be less accessible.

Related Government Programs

Army Corps of Engineers Civil Works Programs
Hurricane and Coastal Protection Projects
Infrastructure Development and Repair
Louisiana Coastal Master Plan Projects

Risk Flags

Potential for cost growth due to construction options
Complexity of fixed-price incentive contract management
Need for detailed review of contractor's past performance on similar projects

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $350.1 million to ARCHER WESTERN / ALBERICI JOINT VENTURE. PRECONSTRUCTION SERVICES W/ CONSTRUCTION OPTIONS - LAKE PONTCHARTRAIN&VICINITY, REACH 111.01, 111.02, AND 111.03, ORLEANS PARISH, LA

Who is the contractor on this award?

The obligated recipient is ARCHER WESTERN / ALBERICI JOINT VENTURE.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $350.1 million.

What is the period of performance?

Start: 2009-06-29. End: 2011-06-23.

What is the historical spending pattern for similar civil engineering projects managed by the Army Corps of Engineers in the Lake Pontchartrain region?

Historical spending for similar Army Corps of Engineers projects in the Lake Pontchartrain region, particularly those focused on hurricane and coastal protection, has been substantial. For instance, post-Katrina recovery efforts saw significant investment in levee improvements and infrastructure resilience. While specific dollar amounts vary greatly by project scope, complexity, and the specific threat being addressed (e.g., storm surge, erosion), these projects often represent multi-million to billion-dollar investments over several years. Analyzing past contracts for similar civil works in Louisiana can provide benchmarks for cost per mile of levee, cost per acre of wetland restoration, or cost per cubic yard of material moved. This contract's $350M+ potential aligns with the scale of major regional infrastructure undertakings.

How does the fixed-price incentive (FPI) contract type typically perform in terms of cost control compared to other contract types for large civil engineering projects?

Fixed-price incentive (FPI) contracts aim to balance cost control with performance by sharing cost savings or overruns between the government and the contractor. In FPI contracts, a target cost, target profit, and a price ceiling are established. If the final cost is below the target, both parties share the savings according to a predetermined formula. Conversely, if the cost exceeds the target, the contractor bears a larger portion of the overrun up to the price ceiling. This structure incentivizes the contractor to manage costs effectively to maximize profit. Compared to firm-fixed-price (FFP) contracts, FPI offers more flexibility for the government if costs escalate unexpectedly, while still providing cost control incentives. However, FPI contracts can be more complex to administer than FFP and require careful negotiation of the sharing ratio and price ceiling to ensure optimal value for the government.

What are the key performance indicators (KPIs) likely to be used to assess the success of this preconstruction and construction contract?

For this preconstruction and construction contract, key performance indicators (KPIs) would likely focus on schedule adherence, cost performance, quality of work, and safety. Schedule adherence would involve meeting milestones for design, permitting, and construction phases. Cost performance would be measured against the target cost, with incentives tied to staying within budget or achieving cost savings. Quality of work would be assessed through inspections, adherence to specifications, and material testing. Safety KPIs would include tracking incident rates (e.g., lost-time injuries) and ensuring compliance with all safety regulations. For preconstruction services, KPIs might also include the thoroughness and accuracy of cost estimates, constructability reviews, and the development of a comprehensive construction plan. For the construction phase, successful completion of the defined civil engineering tasks to the required standards would be paramount.

What is the track record of Archer Western / Alberici Joint Venture on similar large-scale civil engineering projects for the Department of Defense or Army Corps of Engineers?

Archer Western Contractors and Alberici Constructors are both established firms with significant experience in heavy civil construction. Archer Western has a history of working on large infrastructure projects, including bridges, highways, and water infrastructure, often as part of joint ventures. Alberici also has extensive experience in industrial and infrastructure projects, including marine construction and transportation. When operating as a joint venture, their combined capabilities are leveraged for complex projects. A detailed review of their past performance on similar Department of Defense or Army Corps of Engineers contracts would be necessary to fully assess their track record. This would involve examining project completion records, any past performance evaluations, and instances of disputes or contract modifications on comparable projects to gauge their reliability and expertise in executing large-scale civil engineering endeavors.

How does the $350M+ total potential value compare to the typical scale of civil engineering contracts awarded by the Army Corps of Engineers for coastal resilience projects?

The $350M+ total potential value of this contract is substantial and falls within the upper range for significant civil engineering projects undertaken by the Army Corps of Engineers, particularly those focused on coastal resilience. Major coastal protection and restoration initiatives, such as large-scale levee construction, barrier island restoration, or complex water management systems, frequently command budgets in the hundreds of millions to over a billion dollars. For example, projects aimed at mitigating storm surge impacts in vulnerable coastal areas often require extensive dredging, earthwork, and structural components, driving up costs. This contract's value suggests it addresses a critical and large-scale need for infrastructure improvement and protection in the Lake Pontchartrain vicinity, aligning with the typical scope and investment required for major federal coastal resilience efforts.

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: W912P809R0029

Offers Received: 6

Pricing Type: FIXED PRICE INCENTIVE (L)

Evaluated Preference: NONE

Contractor Details

Address: 929 W ADAMS ST, CHICAGO, IL, 60607

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

Financial Breakdown

Contract Ceiling: $350,063,327

Exercised Options: $350,063,327

Current Obligation: $350,063,327

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline