Army's $756M Canal Closures Contract Faces Scrutiny Amidst Long Duration and Firm Fixed Price Structure
Contract Overview
Contract Amount: $756,158,498 ($756.2M)
Contractor: Pccp Constructors a Joint Venture
Awarding Agency: Department of Defense
Start Date: 2012-09-28
End Date: 2024-06-01
Contract Duration: 4,264 days
Daily Burn Rate: $177.3K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 7
Pricing Type: FIRM FIXED PRICE
Sector: Construction
Official Description: PERMANENT CANAL CLOSURES AND PUMPS
Place of Performance
Location: METAIRIE, JEFFERSON County, LOUISIANA, 70002
Plain-Language Summary
Department of Defense obligated $756.2 million to PCCP CONSTRUCTORS A JOINT VENTURE for work described as: PERMANENT CANAL CLOSURES AND PUMPS Key points: 1. The contract's large value and extended duration suggest significant taxpayer investment. 2. Full and open competition was utilized, indicating a potentially competitive bidding process. 3. The firm fixed price contract type may limit flexibility but offers cost certainty. 4. The project falls within the construction sector, specifically water and sewer infrastructure.
Value Assessment
Rating: fair
The contract value of $756M is substantial. Without specific benchmarks for similar large-scale water infrastructure projects, it's difficult to definitively assess pricing. The firm fixed price structure suggests an attempt at cost control, but the long duration could lead to cost overruns if not managed effectively.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
Full and open competition was employed, which typically fosters competitive pricing. However, the long duration and specialized nature of the work could influence the number and competitiveness of bidders.
Taxpayer Impact: The significant value of this contract represents a considerable allocation of taxpayer funds towards critical infrastructure.
Public Impact
Ensures critical water infrastructure resilience and operational continuity. Supports regional water management and flood control efforts in Louisiana. Long-term project may impact local employment and economic activity.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Extended contract duration (over 11 years) raises concerns about potential cost creep and evolving needs.
- Firm Fixed Price on a long-term, complex project could lead to contractor claims or scope disputes.
- Lack of small business participation noted (ss: false, sb: false).
Positive Signals
- Full and open competition utilized, promoting a competitive bidding environment.
- Project addresses essential infrastructure needs for water management and flood control.
Sector Analysis
This contract falls under the construction sector, specifically water and sewer line construction. Large infrastructure projects like this are common across federal agencies, with significant annual spending allocated to maintaining and upgrading national water systems.
Small Business Impact
The data indicates no specific set-aside for small businesses (ss: false, sb: false). This suggests that the contract was likely awarded to larger firms or joint ventures capable of handling the scale and complexity of the project.
Oversight & Accountability
The long duration of this contract necessitates robust oversight to ensure performance, cost control, and adherence to specifications. Regular reviews and audits would be crucial for accountability.
Related Government Programs
- Water and Sewer Line and Related Structures Construction
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Extended contract duration
- Firm Fixed Price on a long-term, complex project
- No noted small business participation
- High contract value
- Potential for scope creep over time
Tags
water-and-sewer-line-and-related-structu, department-of-defense, la, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $756.2 million to PCCP CONSTRUCTORS A JOINT VENTURE. PERMANENT CANAL CLOSURES AND PUMPS
Who is the contractor on this award?
The obligated recipient is PCCP CONSTRUCTORS A 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 $756.2 million.
What is the period of performance?
Start: 2012-09-28. End: 2024-06-01.
What specific performance metrics are in place to ensure the effectiveness of the permanent canal closures and pumps over the contract's long lifespan?
Effectiveness metrics would likely focus on the operational readiness and reliability of the installed systems. This could include response times to flood events, water level management capabilities, and the longevity of the infrastructure under various environmental conditions. Regular testing and maintenance schedules, coupled with performance-based payments, would be key indicators of ongoing effectiveness.
Given the firm fixed price and long duration, what mechanisms are in place to manage potential cost overruns or contractor claims?
While a firm fixed price aims to cap costs, long durations on complex projects inherently carry risk. Mechanisms likely include detailed contract clauses addressing scope changes, escalation clauses for specific materials if applicable, and a robust change order process. Strong government oversight and documentation of any deviations from the original scope are critical to mitigating contractor claims and controlling costs.
How does the $756M investment in this specific project compare to the overall federal spending on similar water infrastructure projects nationwide?
This contract represents a significant portion of federal spending on water infrastructure. Benchmarking against the total annual federal outlays for water and sewer construction, as well as similar large-scale projects like dams, levees, or flood control systems, would provide context. Understanding this relative scale helps assess if the investment is proportionate to national needs and other priorities.
Industry Classification
NAICS: Construction › Utility System Construction › Water and Sewer Line and Related Structures Construction
Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCTION OF BUILDINGS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 7
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 3850 CAUSEWAY BLVD STE 500, METAIRIE, LA, 70002
Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $756,158,498
Exercised Options: $756,158,498
Current Obligation: $756,158,498
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2012-09-28
Current End Date: 2024-06-01
Potential End Date: 2024-06-01 00:00:00
Last Modified: 2025-04-14
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