DOI Awards $86.6M for School Replacement in New Mexico, Awarded to Cherokee CRC LLC

Contract Overview

Contract Amount: $86,556,216 ($86.6M)

Contractor: Cherokee CRC LLC

Awarding Agency: Department of the Interior

Start Date: 2023-05-17

End Date: 2027-05-11

Contract Duration: 1,455 days

Daily Burn Rate: $59.5K/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: CHI CHIL TAH SCHOOL REPLACEMENT

Place of Performance

Location: GALLUP, MCKINLEY County, NEW MEXICO, 87305

State: New Mexico Government Spending

Plain-Language Summary

Department of the Interior obligated $86.6 million to CHEROKEE CRC LLC for work described as: CHI CHIL TAH SCHOOL REPLACEMENT Key points: 1. Significant contract value for a single school replacement project. 2. Competition method indicates a deliberate exclusion of sources, potentially impacting price discovery. 3. Risk of cost overruns or schedule delays exists given the multi-year duration. 4. Construction sector spending is generally robust, but specific project needs are key.

Value Assessment

Rating: fair

The contract value of $86.6 million for a school replacement is substantial. Benchmarking against similar large-scale educational construction projects is necessary to assess if this price is competitive, especially considering the firm fixed-price nature which should limit cost escalation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES'. This suggests that while some competition occurred, it was not entirely open, which could limit the range of bids received and potentially affect the final price achieved.

Taxpayer Impact: The firm fixed-price contract aims to control costs, but the limited competition raises questions about whether taxpayers received the best possible price for this significant investment.

Public Impact

Improved educational facilities for students in New Mexico. Potential for job creation during the construction phase. Long-term impact on the local community through a new school building.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may have inflated costs.
Project duration of nearly four years presents schedule risks.
No small business participation noted.

Positive Signals

Firm fixed-price contract provides cost certainty.
Project addresses critical infrastructure needs.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector. Spending in this sector can fluctuate based on economic conditions and government infrastructure priorities. The value is high for a single project, suggesting a complex or large-scale replacement.

Small Business Impact

The data indicates that small businesses were not involved in this contract, as 'sb' is false. This represents a missed opportunity to support small business participation in federal contracting for this significant construction project.

Oversight & Accountability

The 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' method warrants further scrutiny to ensure the exclusion criteria were justified and did not unduly restrict competition. Oversight will be crucial to monitor project progress and adherence to the firm fixed-price terms.

Related Government Programs

Commercial and Institutional Building Construction
Department of the Interior Contracting
Bureau of Indian Affairs and Bureau of Indian Education Programs

Risk Flags

Limited competition
Long project duration
No small business participation
Potential for unforeseen site conditions

Frequently Asked Questions

What is this federal contract paying for?

Department of the Interior awarded $86.6 million to CHEROKEE CRC LLC. CHI CHIL TAH SCHOOL REPLACEMENT

Who is the contractor on this award?

The obligated recipient is CHEROKEE CRC LLC.

Which agency awarded this contract?

Awarding agency: Department of the Interior (Bureau of Indian Affairs and Bureau of Indian Education).

What is the total obligated amount?

The obligated amount is $86.6 million.

What is the period of performance?

Start: 2023-05-17. End: 2027-05-11.

What was the justification for excluding sources in the full and open competition?

The justification for excluding sources needs to be thoroughly reviewed. Typically, such exclusions are based on specific technical requirements, past performance, or unique capabilities that only a limited number of contractors possess. Understanding this rationale is key to assessing whether the competition was appropriately structured or if it unnecessarily limited the bidding pool, potentially impacting value for money.

What are the primary risks associated with a nearly four-year construction project?

A project spanning 1455 days (nearly four years) carries significant risks including potential material cost escalation beyond initial estimates, labor shortages or increased wage demands, unforeseen site conditions requiring design changes, weather delays, and potential contractor performance issues over an extended period. Effective risk mitigation strategies and vigilant oversight are essential.

How does the firm fixed-price contract impact the effectiveness of this award?

The firm fixed-price (FFP) contract is intended to enhance effectiveness by shifting cost overrun risk to the contractor, providing budget certainty for the government. This structure incentivizes the contractor to manage costs efficiently. However, the effectiveness can be undermined if the initial price was too high due to limited competition or if scope creep occurs without proper change order management.

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Commercial and Institutional Building 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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Cherokee Nation RED Wing, L.L.C.

Address: 2 W. 2ND ST., TULSA, OK, 74103

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Tribally Owned Firm, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $86,556,216

Exercised Options: $86,556,216

Current Obligation: $86,556,216

Actual Outlays: $34,845,915

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 140A1623D0022

IDV Type: IDC

Timeline