DoD Awards $17.7M Railway Construction Contract to Norfolk Southern Corp in Louisiana

Contract Overview

Contract Amount: $17,740,000 ($17.7M)

Contractor: Norfolk Southern Corp

Awarding Agency: Department of Defense

Start Date: 2016-03-11

End Date: 2026-07-07

Contract Duration: 3,770 days

Daily Burn Rate: $4.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST NO FEE

Sector: Construction

Official Description: SELA 26 RAILWAY WORK IGF::OT::IGF

Place of Performance

Location: NEW ORLEANS, ORLEANS County, LOUISIANA, 70117

State: Louisiana Government Spending

Plain-Language Summary

Department of Defense obligated $17.7 million to NORFOLK SOUTHERN CORP for work described as: SELA 26 RAILWAY WORK IGF::OT::IGF Key points: 1. Contract awarded for railway construction services. 2. Norfolk Southern Corp is the sole contractor. 3. Significant duration of 3770 days. 4. Construction sector spending benchmark needs review.

Value Assessment

Rating: questionable

The contract type is 'COST NO FEE', which offers limited incentive for cost control. The total award amount is $17.7 million over a long period, making a per-unit cost benchmark difficult without more granular data.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers as competitive pressures are absent.

Taxpayer Impact: The lack of competition for a contract of this magnitude raises concerns about potential overspending and inefficient use of taxpayer funds.

Public Impact

Taxpayers may be paying more than necessary due to the sole-source nature of the contract. The long duration could indicate a critical, long-term infrastructure need. Lack of transparency in pricing due to no-bid award.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Cost-plus contract type
Long contract duration
Lack of competition

Positive Signals

Addresses a specific infrastructure need for the Department of the Army.

Sector Analysis

This contract falls under heavy and civil engineering construction, a sector often characterized by large, long-term projects. Benchmarking requires comparison with similar railway construction projects, considering location and scope.

Small Business Impact

The data indicates that small businesses were not involved in this specific contract award, as it was awarded to Norfolk Southern Corp. Further analysis would be needed to determine if subcontracting opportunities exist.

Oversight & Accountability

The sole-source nature of this contract warrants close oversight to ensure the government receives fair value and that the contractor meets all performance requirements within the agreed-upon cost structure.

Related Government Programs

Other Heavy and Civil Engineering Construction
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Lack of competition
Potential for cost overruns
Limited contractor incentive for efficiency
Long contract duration may mask inefficiencies

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.7 million to NORFOLK SOUTHERN CORP. SELA 26 RAILWAY WORK IGF::OT::IGF

Who is the contractor on this award?

The obligated recipient is NORFOLK SOUTHERN CORP.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $17.7 million.

What is the period of performance?

Start: 2016-03-11. End: 2026-07-07.

What is the justification for awarding this significant railway construction contract on a sole-source basis?

The justification for a sole-source award typically involves unique capabilities, urgent needs, or a lack of adequate competition. Without further documentation, it's difficult to ascertain the specific reasons. However, sole-source awards inherently reduce competitive pressure, potentially leading to higher costs and less innovation compared to competed contracts.

How does the 'COST NO FEE' contract type impact the government's risk and the contractor's incentive for efficiency?

A 'COST NO FEE' contract means the contractor is reimbursed for all allowable costs but receives no fee or profit. This significantly shifts the risk to the government, as the contractor has minimal financial incentive to control costs or complete the work efficiently. The government bears the full financial burden of any cost overruns.

What is the expected taxpayer impact given the $17.7 million award and the sole-source, cost-plus nature of the contract?

The taxpayer impact is potentially negative due to the lack of competition and the cost-reimbursable nature of the contract. Without competitive bidding, the price may not reflect the lowest possible cost. The 'COST NO FEE' structure further removes contractor incentives for cost efficiency, increasing the risk of overspending taxpayer funds.

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: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W912P816R0002

Offers Received: 1

Pricing Type: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Address: 3 COMMERCIAL PL, NORFOLK, VA, 23510

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

Financial Breakdown

Contract Ceiling: $17,740,000

Exercised Options: $17,740,000

Current Obligation: $17,740,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline