Department of the Interior awards $11.7M contract to Diversified Contractors, Inc. for heavy civil engineering construction

Contract Overview

Contract Amount: $11,678,925 ($11.7M)

Contractor: Diversified Contractors, Inc.

Awarding Agency: Department of the Interior

Start Date: 2023-08-10

End Date: 2026-12-31

Contract Duration: 1,239 days

Daily Burn Rate: $9.4K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: ATTACHED FOR PUBLIC POSTING IS A COPY OF THE BID ABSTRACT AND BID ABSTRACT CONTINUATION SHEET (2 PGS TOTAL) FOR SOLICITATION NUMBER 140FC323B0002.

Place of Performance

Location: KLAMATH FALLS, KLAMATH County, OREGON, 97601

State: Oregon Government Spending

Plain-Language Summary

Department of the Interior obligated $11.7 million to DIVERSIFIED CONTRACTORS, INC. for work described as: ATTACHED FOR PUBLIC POSTING IS A COPY OF THE BID ABSTRACT AND BID ABSTRACT CONTINUATION SHEET (2 PGS TOTAL) FOR SOLICITATION NUMBER 140FC323B0002. Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract duration of 1239 days indicates a significant, long-term project. 3. The firm-fixed-price structure aims to control costs for the government. 4. The project is located in Oregon, potentially impacting the local construction workforce. 5. The nature of heavy and civil engineering construction implies infrastructure development or maintenance. 6. The award to a single contractor, Diversified Contractors, Inc., warrants monitoring for performance.

Value Assessment

Rating: good

The contract value of $11.7 million for heavy and civil engineering construction appears reasonable given the project's scope and duration. Without specific benchmarks for similar projects in Oregon, a direct comparison is difficult. However, the firm-fixed-price contract type suggests that the government has negotiated a set price, which can be advantageous for cost control. The number of bids received (3) provides some indication of market interest, but further analysis would be needed to determine if this represents optimal 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,' which is a complex designation. It implies that while the competition was generally open, certain sources may have been excluded for specific reasons. Three bids were received, indicating some level of competition. However, the exclusion of sources might limit the full spectrum of competitive pricing and innovation that could have been achieved in a completely unrestricted open competition.

Taxpayer Impact: The competition level suggests that while efforts were made to ensure openness, the exclusion of certain sources could potentially lead to less aggressive pricing than a truly unrestricted competition might yield. Taxpayers benefit from the competition that did occur, but the exclusion aspect warrants further scrutiny to ensure maximum value.

Public Impact

The U.S. Fish and Wildlife Service will benefit from the completed heavy and civil engineering construction, likely improving or maintaining critical infrastructure. Services delivered include heavy and civil engineering construction, essential for environmental conservation and operational needs. The geographic impact is concentrated in Oregon, potentially creating local employment opportunities. The project may have implications for the local construction workforce, providing jobs and business for skilled laborers and equipment operators.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'exclusion of sources' in the full and open competition designation raises questions about whether the most competitive bids were considered.
The contract is a definitive contract, which can sometimes be less flexible than other contract types if project requirements change significantly.

Positive Signals

The award was made under a full and open competition framework, indicating an attempt to solicit a broad range of bidders.
The firm-fixed-price contract type provides cost certainty for the government over the life of the contract.
The project duration suggests a substantial and important undertaking for the U.S. Fish and Wildlife Service.

Sector Analysis

The heavy and civil engineering construction sector is a critical component of national infrastructure development and maintenance. This contract falls within the broader construction industry, specifically focusing on large-scale projects such as dams, bridges, roads, and other public works. The market for such services is often characterized by large, specialized firms capable of undertaking complex projects. Government contracts are a significant source of business for this sector, with spending often driven by infrastructure needs and conservation efforts.

Small Business Impact

The provided data indicates that small business participation (sb) is false and there is no indication of a small business set-aside (ss). This suggests that the contract was not specifically targeted towards small businesses. Consequently, the primary contractor, Diversified Contractors, Inc., will likely be responsible for managing subcontracting opportunities. The extent to which small businesses will be involved will depend on the subcontracting plan and execution by the prime contractor, which could have implications for the broader small business ecosystem in the construction sector.

Oversight & Accountability

Oversight for this contract will likely be managed by the U.S. Fish and Wildlife Service, a division of the Department of the Interior. Accountability measures would typically include performance reviews, milestone tracking, and adherence to the firm-fixed-price agreement. Transparency is facilitated by the public posting of contract information, including the bid abstract. The Inspector General for the Department of the Interior may have jurisdiction for audits and investigations if any irregularities or fraud are suspected.

Related Government Programs

Department of the Interior Infrastructure Projects
U.S. Fish and Wildlife Service Facility Management
Heavy and Civil Engineering Construction Contracts
Federal Public Works Projects

Risk Flags

Potential for cost overruns due to long contract duration.
Risk associated with 'exclusion of sources' in competition.
Contractor performance risk over an extended period.
Unforeseen site conditions in heavy civil engineering.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Interior awarded $11.7 million to DIVERSIFIED CONTRACTORS, INC.. ATTACHED FOR PUBLIC POSTING IS A COPY OF THE BID ABSTRACT AND BID ABSTRACT CONTINUATION SHEET (2 PGS TOTAL) FOR SOLICITATION NUMBER 140FC323B0002.

Who is the contractor on this award?

The obligated recipient is DIVERSIFIED CONTRACTORS, INC..

Which agency awarded this contract?

Awarding agency: Department of the Interior (U.S. Fish and Wildlife Service).

What is the total obligated amount?

The obligated amount is $11.7 million.

What is the period of performance?

Start: 2023-08-10. End: 2026-12-31.

What is the specific nature of the heavy and civil engineering construction to be performed under this contract?

The provided data indicates the contract is for 'Other Heavy and Civil Engineering Construction' (NAICS code 237990) awarded to Diversified Contractors, Inc. by the U.S. Fish and Wildlife Service. While the bid abstract itself is not fully detailed in the provided snippet, this NAICS code typically encompasses the construction of projects such as waterways, dams, bridges, tunnels, highways, streets, and pipelines. Given the agency, it is likely related to conservation efforts, wildlife management facilities, or infrastructure supporting these missions, such as water control structures, access roads, or habitat restoration projects. Further details would be found in the full bid abstract and any associated statements of work.

How does the awarded amount of $11.7 million compare to similar heavy civil engineering contracts awarded by the Department of the Interior?

Comparing the $11.7 million award to similar contracts requires access to a broader database of federal procurement data. However, for a project spanning over three years (August 2023 to December 2026), this value is within a reasonable range for significant civil engineering undertakings. The Department of the Interior frequently awards contracts for infrastructure improvements, land management facilities, and environmental restoration projects. The specific nature of the work (e.g., dam construction vs. road repair) would heavily influence cost. Without more specific project details or comparable contract data, it's challenging to definitively benchmark this value, but it suggests a substantial project.

What are the potential risks associated with a firm-fixed-price contract for heavy civil engineering construction?

Firm-fixed-price (FFP) contracts are designed to provide cost certainty for the government. However, for complex projects like heavy civil engineering, risks can arise. If the contractor underestimates costs or encounters unforeseen site conditions (e.g., geological issues, environmental hazards), they bear the financial burden, which could lead to financial distress for the contractor or pressure to cut corners on quality. Conversely, if the contractor significantly overestimates costs, the government may end up paying more than necessary. Effective project scope definition and contingency planning are crucial to mitigate these risks.

What is the track record of Diversified Contractors, Inc. in performing similar federal contracts?

Information regarding the specific track record of Diversified Contractors, Inc. for federal contracts is not provided in the data snippet. A comprehensive assessment would require reviewing their past performance on similar projects, including contract history, past performance evaluations, and any history of disputes or contract terminations. Federal procurement databases (like SAM.gov or FPDS) would typically contain this information, allowing for an analysis of their experience in heavy and civil engineering construction, their ability to meet deadlines, and their adherence to budget and quality standards on previous government engagements.

How does the 'full and open competition after exclusion of sources' designation impact price discovery and taxpayer value?

The designation 'full and open competition after exclusion of sources' is somewhat contradictory. 'Full and open competition' implies the widest possible solicitation. However, 'exclusion of sources' means that certain potential bidders were deliberately not considered. This exclusion could stem from specific technical requirements, past performance issues with certain companies, or other pre-determined criteria. While it aims to ensure qualified bidders, it inherently limits the pool of competition. This limitation can potentially reduce price discovery compared to a truly unrestricted competition, meaning taxpayers might not benefit from the lowest possible price if excluded sources could have offered a more competitive bid.

What are the implications of the contract duration (1239 days) on project management and potential cost overruns?

A contract duration of 1239 days (approximately 3.4 years) for heavy civil engineering construction signifies a large-scale, complex project. Such extended timelines increase the potential for various risks, including inflation affecting material and labor costs, changes in regulatory requirements, unforeseen site conditions, and potential contractor performance issues over time. Effective project management, including robust scheduling, regular progress monitoring, and proactive risk mitigation strategies, is essential to keep the project on track and within budget. The firm-fixed-price nature means the contractor assumes much of this risk, but significant delays or issues could still impact the project's ultimate success and value.

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: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SEALED BID

Solicitation ID: 140FC323B0002

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Diversified Contractors Inc.

Address: 3001 LAKEPORT BLVD, KLAMATH FALLS, OR, 97601

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

Financial Breakdown

Contract Ceiling: $11,678,925

Exercised Options: $11,678,925

Current Obligation: $11,678,925

Actual Outlays: $4,823,060

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline