DoD awards $1.07B for highway construction in AZ and CA, with 5 bidders competing

Contract Overview

Contract Amount: $1,069,388,598 ($1.1B)

Contractor: Bfbc LLC

Awarding Agency: Department of Defense

Start Date: 2019-05-15

End Date: 2025-03-06

Contract Duration: 2,122 days

Daily Burn Rate: $504.0K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: UNDEFINITIZED CONTRACT ACTION FOR EL CENTRO (15 MILE) IN CALIFORNIA AND YUMA (5 MILE) IN ARIZONA.

Place of Performance

Location: YUMA, YUMA County, ARIZONA, 85365

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $1.07 billion to BFBC LLC for work described as: UNDEFINITIZED CONTRACT ACTION FOR EL CENTRO (15 MILE) IN CALIFORNIA AND YUMA (5 MILE) IN ARIZONA. Key points: 1. Contract value represents a significant investment in critical infrastructure. 2. Competition level suggests a healthy market for highway construction services. 3. Potential for cost efficiencies due to firm fixed-price contract type. 4. Long performance period indicates a substantial, multi-year project. 5. Geographic focus on Arizona and California highlights regional infrastructure needs. 6. Contractor BFBC LLC is a key player in this sector.

Value Assessment

Rating: good

The contract value of over $1 billion is substantial, reflecting the scale of the infrastructure project. Benchmarking against similar large-scale highway construction contracts would be necessary for a precise value-for-money assessment. However, the firm fixed-price nature of the contract, combined with competition, suggests a reasonable expectation of cost control. The contractor's experience and the competitive bidding process are positive indicators for value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition after exclusion of sources, indicating a broad solicitation process. With five bidders participating, there was a reasonable level of competition, which typically helps in achieving competitive pricing and ensuring a fair market value. The exclusion of sources clause might warrant further investigation to understand its specific implications on the competitive landscape.

Taxpayer Impact: The competitive bidding process with multiple bidders is beneficial for taxpayers, as it drives down prices and encourages efficiency from contractors seeking to win the award.

Public Impact

Benefits residents and businesses in Arizona and California through improved transportation infrastructure. Facilitates the movement of goods and people, potentially boosting economic activity. Supports the construction workforce in the specified regions. Enhances the durability and safety of key highway segments.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 5 years) could lead to scope creep or cost overruns if not managed effectively.
Firm Fixed Price contracts can be risky for the government if unforeseen issues arise that significantly increase contractor costs.
The 'exclusion of sources' clause in the competition type needs clarification to ensure no potential bidders were unfairly excluded.

Positive Signals

Awarded under full and open competition, indicating a robust bidding process.
Multiple bidders (5) suggest a competitive environment that can lead to better pricing.
Firm Fixed Price contract type provides cost certainty for the government.
Contractor BFBC LLC has a significant contract award, implying capability and experience.

Sector Analysis

This contract falls within the Highway, Street, and Bridge Construction sector, a critical component of the broader construction industry. The market for large-scale infrastructure projects is often characterized by significant capital investment and specialized expertise. This award represents a substantial portion of federal spending in this specific sub-sector, likely contributing to the overall economic activity and employment within the construction industry in Arizona and California.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Therefore, the primary impact on small businesses would be through potential subcontracting opportunities. BFBC LLC, as the prime contractor, may engage small businesses for specialized services or materials, contributing to the small business ecosystem. However, without specific subcontracting plans, the direct benefit to small businesses remains to be seen.

Oversight & Accountability

Oversight for this contract would likely be managed by the Department of the Army, a component of the Department of Defense. Mechanisms would include contract performance monitoring, quality assurance checks, and financial audits. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Federal Highway Administration Programs
Department of Transportation Infrastructure Projects
Army Corps of Engineers Construction Contracts
State Department of Transportation Capital Improvement Projects

Risk Flags

Potential for cost overruns due to long contract duration.
Risk of quality compromise if contractor faces financial pressure.
Justification for 'exclusion of sources' needs review.
Limited visibility into specific subcontracting opportunities for small businesses.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $1.07 billion to BFBC LLC. UNDEFINITIZED CONTRACT ACTION FOR EL CENTRO (15 MILE) IN CALIFORNIA AND YUMA (5 MILE) IN ARIZONA.

Who is the contractor on this award?

The obligated recipient is BFBC LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $1.07 billion.

What is the period of performance?

Start: 2019-05-15. End: 2025-03-06.

What is the historical spending pattern for BFBC LLC with the Department of Defense?

Analyzing BFBC LLC's historical spending with the Department of Defense requires access to comprehensive federal procurement data. Typically, a contractor's track record involves examining the number of contracts awarded, their total value, the types of services or goods provided, and performance ratings. For BFBC LLC, a review of past awards would reveal if this $1.07 billion contract represents a significant increase in their business with DoD, or if they are a frequent recipient of large-scale construction contracts. Understanding their past performance, including any issues or successes on previous projects, provides context for assessing the risk and potential success of this current award. Without specific historical data readily available in this summary, further investigation into federal procurement databases like FPDS or SAM.gov would be necessary to detail their specific spending history and performance.

How does the per-mile cost of this contract compare to similar highway construction projects?

To compare the per-mile cost, we first need to estimate the total miles covered. The description mentions 'EL CENTRO (15 MILE)' and 'YUMA (5 MILE)', suggesting a total of 20 miles. With a contract value of approximately $1.07 billion, the per-mile cost would be around $53.5 million ($1,070,000,000 / 20 miles). Benchmarking this figure against similar large-scale highway construction projects requires data on projects of comparable complexity, terrain, and location. Factors such as the type of highway (interstate, rural, urban), the need for extensive earthwork, bridges, or tunnels, and prevailing labor and material costs in the specific regions significantly influence per-mile expenses. Generally, costs can range widely, from tens of millions to over a hundred million dollars per mile for highly complex projects. Therefore, $53.5 million per mile might be within a reasonable range, but a definitive assessment requires a detailed comparison with projects having similar characteristics.

What are the primary risks associated with a firm fixed-price contract of this magnitude?

A Firm Fixed-Price (FFP) contract of this magnitude ($1.07 billion) offers cost certainty to the government, as the price is set regardless of the contractor's actual costs. However, the primary risk lies with the contractor. If BFBC LLC underestimates costs, encounters unforeseen difficulties (e.g., unexpected geological conditions, material price spikes, labor shortages), or experiences inefficiencies, their profit margins could be significantly eroded, potentially leading to financial distress or even project abandonment. For the government, the risk is that the contractor might cut corners on quality or scope to protect their profit, necessitating stringent oversight. Additionally, if the initial price was set too high due to inadequate competition or flawed cost estimation by the government, taxpayers may overpay. The long duration (2122 days) amplifies these risks, increasing the likelihood of encountering unforeseen circumstances.

What does the 'full and open competition after exclusion of sources' clause imply for this contract?

The 'full and open competition after exclusion of sources' clause indicates that the solicitation was initially intended for broad competition, but certain potential sources were excluded from consideration. This exclusion must be justified by specific criteria outlined in federal acquisition regulations, such as national security concerns, unique capabilities, or prior successful performance that makes other sources impractical. While the contract was ultimately awarded through a competitive process involving five bidders, the exclusion of other potential sources raises questions about whether the most competitive price was achieved. It suggests that the government had a specific reason to limit the pool of bidders, which could potentially reduce the overall competitive pressure compared to a truly unrestricted full and open competition. Further analysis would be needed to understand the justification for the source exclusion and its impact on the final award price.

What is the expected impact of this contract on the construction workforce in Arizona and California?

A contract of this scale, valued at over $1 billion for highway construction over approximately five years, is expected to have a significant positive impact on the construction workforce in Arizona and California. It will likely lead to the creation of numerous direct jobs for skilled laborers, equipment operators, engineers, project managers, and administrative staff. Furthermore, it will generate indirect employment opportunities in related industries such as material supply (concrete, asphalt, steel), equipment manufacturing and rental, transportation, and support services. The sustained nature of the project over several years provides job security and stability for the employed workforce. The specific geographic distribution of jobs will depend on the project's phasing and the location of work sites within the two states.

Industry Classification

NAICS: Construction › Highway, Street, and Bridge Construction › Highway, Street, and Bridge Construction

Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCTION OF BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: TWO STEP

Solicitation ID: W912PL19R0061

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 701 GOLD AVE, BOZEMAN, MT, 59715

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

Financial Breakdown

Contract Ceiling: $1,073,623,598

Exercised Options: $1,069,388,598

Current Obligation: $1,069,388,598

Actual Outlays: $285,006,412

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline