Department of the Army awards $30.5M fence replacement contract to Granite Construction Company

Contract Overview

Contract Amount: $30,504,077 ($30.5M)

Contractor: Granite Construction Company

Awarding Agency: Department of Defense

Start Date: 2016-11-17

End Date: 2017-07-17

Contract Duration: 242 days

Daily Burn Rate: $126.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF NACO AREA BORDER FENCE REPLACEMENT, NACO, ARIZONA

Place of Performance

Location: NACO, COCHISE County, ARIZONA, 85620

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $30.5 million to GRANITE CONSTRUCTION COMPANY for work described as: IGF::OT::IGF NACO AREA BORDER FENCE REPLACEMENT, NACO, ARIZONA Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract value of $30.5 million falls within a typical range for large-scale infrastructure projects. 3. Fixed-price contract type generally shifts risk to the contractor, potentially leading to cost certainty. 4. Project duration of 242 days indicates a focused, short-term construction effort. 5. Geographic focus on Arizona suggests localized economic impact and workforce needs. 6. The absence of small business set-aside flags indicates a focus on larger prime contractors.

Value Assessment

Rating: good

The contract value of $30.5 million for fence replacement appears reasonable for a project of this scale and duration. Benchmarking against similar Department of Defense construction projects would provide a more precise value-for-money assessment. The firm fixed-price nature of the contract suggests that the contractor bears the primary risk for cost overruns, which can be advantageous for the government in terms of budget predictability.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 5 bidders suggests a healthy level of competition for this project. A competitive environment generally leads to better pricing and service offerings for the government, as contractors strive to win the bid.

Taxpayer Impact: The full and open competition ensures that taxpayer dollars are likely being used efficiently, as multiple companies vied for the contract, driving down costs through competitive pricing.

Public Impact

The primary beneficiaries are the Department of the Army, receiving enhanced border security infrastructure. The project delivers critical fence replacement services in a specific geographic area. The geographic impact is concentrated in Naco, Arizona, potentially creating local employment opportunities. Workforce implications include demand for skilled construction labor in the Naco region during the contract period.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions arise, despite fixed-price contract.
Dependence on a single prime contractor could lead to performance issues if not managed effectively.
Limited visibility into subcontractor performance and adherence to labor standards.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Full and open competition suggests a robust selection process and potentially competitive pricing.
Clear project scope and defined delivery timeline.

Sector Analysis

This contract falls within the Highway, Street, and Bridge Construction sector (NAICS 237310), which is a significant part of the broader construction industry. Federal spending in this sector often supports national infrastructure, defense installations, and border security. The market size for construction services is substantial, with federal contracts forming a key segment, particularly for specialized projects like border infrastructure.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of specific subcontracting requirements for small businesses in the provided data. This suggests that the prime contractor, Granite Construction Company, is expected to manage the project with its own resources or through larger subcontractors. The impact on the small business ecosystem is likely minimal unless Granite actively engages small businesses as subcontractors.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant Department of the Army contracting command. Accountability measures are embedded in the firm fixed-price contract terms, with penalties for non-performance or delays. Transparency is generally maintained through contract award databases, though detailed performance reports may not be publicly accessible.

Related Government Programs

Border Security Infrastructure Projects
Department of Defense Construction Contracts
Army Corps of Engineers Projects
Federal Infrastructure Spending

Risk Flags

Potential for cost overruns due to unforeseen site conditions.
Risk of project delays due to weather or supply chain disruptions.
Contractor performance issues could impact project completion.
Limited visibility into subcontractor compliance and labor practices.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $30.5 million to GRANITE CONSTRUCTION COMPANY. IGF::OT::IGF NACO AREA BORDER FENCE REPLACEMENT, NACO, ARIZONA

Who is the contractor on this award?

The obligated recipient is GRANITE CONSTRUCTION COMPANY.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $30.5 million.

What is the period of performance?

Start: 2016-11-17. End: 2017-07-17.

What is Granite Construction Company's track record with similar Department of Defense contracts?

Granite Construction Company has a history of performing large-scale construction projects, including those for federal agencies. While specific details on past performance for similar fence replacement projects with the Department of Defense are not provided here, their extensive experience in heavy civil construction suggests a capacity to handle such work. A deeper dive into their contract history, including any past performance reviews or disputes with the DoD, would offer a more comprehensive understanding of their reliability for this specific type of project. Their financial stability and existing certifications relevant to government contracting are also key indicators.

How does the awarded price compare to market rates for similar fence construction projects?

Without specific details on the project's scope, materials, and labor requirements, a direct comparison of the $30.5 million award to market rates is challenging. However, the firm fixed-price nature of the contract and the competitive bidding process (5 bidders) suggest that the price was likely vetted against market conditions. To conduct a thorough benchmark, one would need to analyze comparable projects in Arizona or similar border regions, considering factors like linear footage, height, material type, and security features. Industry cost estimating guides and data from similar government contracts could provide a more quantitative comparison.

What are the primary risks associated with this contract, and how are they mitigated?

The primary risks include potential cost overruns due to unforeseen site conditions (e.g., difficult terrain, underground utilities), delays caused by weather or supply chain issues, and contractor performance deficiencies. The firm fixed-price contract mitigates cost overrun risk for the government by placing it on the contractor. Mitigation for delays and performance issues relies on robust contract management, including clear milestones, regular progress reviews, and defined remedies for non-compliance. The government's selection of an experienced contractor like Granite Construction Company also serves as a risk mitigation factor.

What is the expected effectiveness of the new fence in enhancing border security?

The effectiveness of the fence replacement in enhancing border security is contingent on several factors beyond the construction itself. This includes the fence's design specifications (e.g., height, material, depth), its integration with other border security technologies (sensors, cameras, patrol routes), and the operational strategies employed by border patrol agents. While a new, well-maintained fence can serve as a physical deterrent and channelize movement, its ultimate effectiveness is part of a broader security framework. The specific threat assessment for the Naco, Arizona sector would inform the expected impact.

How has federal spending on border infrastructure projects evolved over the past five years?

Federal spending on border infrastructure projects has seen fluctuations over the past five years, often influenced by national security priorities, administration policies, and congressional appropriations. While specific figures for fence replacement alone are difficult to isolate, overall spending on border security, which includes infrastructure, technology, and personnel, has generally been substantial. Trends indicate a continued focus on reinforcing border barriers, particularly in high-traffic areas, alongside investments in surveillance and interdiction technologies. Budgetary allocations can vary annually based on political and security landscapes.

What is the typical duration and cost range for similar border fence construction or replacement projects?

The typical duration and cost range for border fence projects can vary significantly based on the length of the fence, terrain complexity, materials used, and the level of security features required. Projects can range from a few months to several years, and costs can span from millions to hundreds of millions of dollars. The $30.5 million award for a 242-day project in Naco, Arizona, appears to be within a moderate range for a specific segment of border infrastructure. Larger, more complex projects involving extensive terrain modification or advanced technological integration would naturally incur higher costs and longer timelines.

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

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: W9126G16R0011

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Granite Construction Incorporated (UEI: 622826360)

Address: 585 W BEACH ST, WATSONVILLE, CA, 95076

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

Financial Breakdown

Contract Ceiling: $31,379,899

Exercised Options: $30,504,077

Current Obligation: $30,504,077

Contract Characteristics

Consolidated Contract: Yes

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W9126G17D0002

IDV Type: IDC

Timeline