Department of Defense awards $601.8M contract for El Paso Sector Wall Replacement, with 6 bidders

Contract Overview

Contract Amount: $601,796,833 ($601.8M)

Contractor: Slsco, Ltd.

Awarding Agency: Department of Defense

Start Date: 2019-04-09

End Date: 2021-09-02

Contract Duration: 877 days

Daily Burn Rate: $686.2K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: EL PASO SECTOR WALL REPLACEMENT, EL PASO SECTOR, NM

Place of Performance

Location: SANTA TERESA, DONA ANA County, NEW MEXICO, 88008

State: New Mexico Government Spending

Plain-Language Summary

Department of Defense obligated $601.8 million to SLSCO, LTD. for work described as: EL PASO SECTOR WALL REPLACEMENT, EL PASO SECTOR, NM Key points: 1. Contract value represents a significant investment in border infrastructure. 2. Competition involved 6 bidders, suggesting a moderately competitive market. 3. Contract type is Firm Fixed Price, which shifts cost risk to the contractor. 4. Performance period spans over two years, indicating a substantial project. 5. The awardee, SLSCO, LTD., is a key player in this specialized construction sector. 6. Geographic focus on El Paso Sector, New Mexico, highlights regional security priorities.

Value Assessment

Rating: fair

The total contract value of $601.8 million for wall replacement is substantial. Benchmarking this against similar large-scale construction projects is challenging due to the unique nature of border infrastructure. However, the firm-fixed-price structure aims to control costs, but the final value will depend on the contractor's execution and any potential change orders. The contract's duration and scope suggest a significant undertaking where value for money will be realized through effective project completion and long-term durability of the constructed elements.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that while competition was sought, certain sources were excluded. With 6 bidders, the competition level appears moderate. This suggests that the market for such specialized border infrastructure projects may have a limited number of qualified contractors. Moderate competition can lead to a balance between price discovery and ensuring the availability of specialized expertise, but it might not achieve the lowest possible prices compared to broader, unrestricted competitions.

Taxpayer Impact: A moderate level of competition means taxpayers likely did not receive the absolute lowest price achievable, but it did ensure multiple firms vied for the contract, preventing a sole-source situation and providing some price discipline.

Public Impact

The primary beneficiaries are the Department of Homeland Security and the U.S. Border Patrol, who will utilize the enhanced infrastructure for border security operations. The contract delivers physical infrastructure improvements, specifically wall replacement, aimed at strengthening border control in the El Paso Sector. The geographic impact is concentrated in New Mexico, along the U.S.-Mexico border. Workforce implications include job creation for construction workers, engineers, and project managers involved in the execution of the contract.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions arise during construction.
Risk of delays due to environmental reviews or land acquisition issues.
Dependence on a single contractor (SLSCO, LTD.) for a large-scale, critical infrastructure project.
Ensuring long-term maintenance and effectiveness of the new wall sections.

Positive Signals

Firm-fixed-price contract structure transfers cost risk to the contractor.
Awarded after a competitive process, indicating some level of market vetting.
The project addresses a stated national security priority.
The contractor has a defined performance period, allowing for accountability.

Sector Analysis

This contract falls within the Specialty Trade Contractors sector, specifically focusing on construction and infrastructure development. The market for border security infrastructure is specialized, often involving significant government contracts. While precise market size data for 'border wall construction' is not readily available, it represents a niche within the broader construction industry. Comparable spending benchmarks would likely be found in other large-scale federal infrastructure projects, though the unique security requirements of this contract differentiate it.

Small Business Impact

This contract was not set aside for small businesses, and the data indicates no explicit subcontracting requirements for small businesses were mandated. The award to SLSCO, LTD., a larger entity, suggests that the primary focus was on securing the necessary capacity and expertise for this significant infrastructure project. This approach may limit direct opportunities for small businesses to participate in the prime contract, though they might find opportunities through lower-tier subcontracts if the prime contractor opts to engage them.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Army and potentially the Department of Homeland Security, given the nature of the project. Accountability measures are embedded in the contract's firm-fixed-price structure and defined performance period. Transparency would be facilitated through contract award databases and potentially public reporting on project milestones, though specific details on oversight mechanisms and Inspector General jurisdiction require further investigation into the contract's specific clauses.

Related Government Programs

Border Security Infrastructure Projects
Department of Homeland Security Contracts
Army Corps of Engineers Construction Contracts
Federal Infrastructure Spending
Specialty Trade Contractor Awards

Risk Flags

Potential for cost overruns
Risk of project delays
Quality control concerns
Environmental impact assessment needed
Limited competition may affect price

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $601.8 million to SLSCO, LTD.. EL PASO SECTOR WALL REPLACEMENT, EL PASO SECTOR, NM

Who is the contractor on this award?

The obligated recipient is SLSCO, LTD..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $601.8 million.

What is the period of performance?

Start: 2019-04-09. End: 2021-09-02.

What is the track record of SLSCO, LTD. on similar large-scale federal construction projects?

SLSCO, LTD. has a history of performing significant federal construction contracts, particularly those involving infrastructure and specialized building. While specific details on their track record for border wall construction are limited in public databases, their past performance on large government projects suggests they possess the capacity and experience to manage complex undertakings. Analyzing their past contract awards, completion rates, and any reported performance issues would provide a clearer picture of their reliability and efficiency in executing projects of this magnitude. Their ability to secure a contract of this size from the Department of Defense indicates a level of vetting regarding their past performance and capabilities.

How does the per-mile cost of this wall replacement compare to other border barrier projects?

Calculating a precise per-mile cost requires detailed information on the length of the wall replaced under this contract, which is not explicitly provided in the summary data. The total award is $601.8 million. If we assume a hypothetical length, for instance, 10 miles, the cost would be approximately $60.18 million per mile. This figure needs to be contextualized by the specific terrain, the type of barrier being replaced or installed, and any associated infrastructure costs (e.g., access roads, lighting, sensors). Comparing this to other projects requires similar detailed breakdowns, as headline figures can be misleading without understanding the scope and complexity involved in each specific project.

What are the primary risks associated with the firm-fixed-price contract type for this project?

The primary risk associated with a firm-fixed-price (FFP) contract for a project of this scale and complexity is the potential for the contractor to cut corners on quality or scope to maintain profitability if unforeseen cost increases arise. While FFP shifts cost overrun risk to the contractor, significant challenges like unexpected geological conditions, material shortages, or labor disputes could strain the contractor's ability to deliver within the fixed price. This could lead to disputes, delays, or a final product that does not meet long-term durability expectations. Robust oversight and clear performance standards are crucial to mitigate these risks.

What is the historical spending trend for border infrastructure projects by the Department of Defense?

Historical spending by the Department of Defense (DoD) on border infrastructure projects has varied significantly over time, often influenced by national security priorities and administration policies. While the Department of Homeland Security (DHS) is the primary agency for border security, the DoD has been tasked with supporting roles, including construction, particularly during periods of heightened focus on border security. Analyzing past DoD budgets and specific allocations for border-related construction would reveal trends. This $601.8 million award represents a substantial single investment, suggesting a significant operational need or policy directive driving this expenditure within the DoD's broader mission set.

How many 'full and open competition after exclusion of sources' contracts has the Department of the Army awarded in the last five years?

Determining the exact number of 'full and open competition after exclusion of sources' contracts awarded by the Department of the Army in the last five years requires a deep dive into federal procurement databases like FPDS or SAM.gov, filtering by agency, contract type, and award date. This specific contract type suggests a scenario where a broad solicitation was issued, but certain potential offerors were deemed ineligible or excluded based on specific criteria, possibly related to security, capability, or prior performance. Without direct access to query these databases with such specific parameters, providing an exact count is not feasible from the provided data alone.

What are the key performance indicators (KPIs) used to measure the success of this wall replacement project?

Key performance indicators (KPIs) for a project like the El Paso Sector Wall Replacement would likely focus on several critical areas. These would include timely completion within the defined schedule (877 days duration), adherence to the firm-fixed-price budget, and meeting stringent quality and durability standards for the installed barrier. Technical performance metrics might involve the barrier's effectiveness against unauthorized crossings (though this is complex to measure solely by the barrier itself), structural integrity under various environmental conditions, and minimal need for repairs post-construction. Compliance with all environmental and safety regulations throughout the construction process would also be a crucial KPI.

Industry Classification

NAICS: Construction › Other Specialty Trade Contractors › All Other Specialty Trade Contractors

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: W912PP19R0027

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 6702 BROADWAY ST, GALVESTON, TX, 77554

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

Financial Breakdown

Contract Ceiling: $601,796,833

Exercised Options: $601,796,833

Current Obligation: $601,796,833

Actual Outlays: $28,752,434

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline