Interior Department awards $96.7M water infrastructure contract to Oscar Renda Contracting Inc. in New Mexico

Contract Overview

Contract Amount: $96,728,814 ($96.7M)

Contractor: Oscar Renda Contracting Inc

Awarding Agency: Department of the Interior

Start Date: 2019-09-11

End Date: 2022-09-16

Contract Duration: 1,101 days

Daily Burn Rate: $87.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: NGWSP BLOCK 4C - 8

Place of Performance

Location: FARMINGTON, SAN JUAN County, NEW MEXICO, 87401

State: New Mexico Government Spending

Plain-Language Summary

Department of the Interior obligated $96.7 million to OSCAR RENDA CONTRACTING INC for work described as: NGWSP BLOCK 4C - 8 Key points: 1. Contract value of $96.7 million represents a significant investment in water infrastructure. 2. The contract was awarded through full and open competition, suggesting a competitive bidding process. 3. The firm fixed-price contract type aims to control costs and provide predictability. 4. The project duration of 1101 days indicates a substantial, long-term construction effort. 5. The North American Industry Classification System (NAICS) code 237110 points to specialized construction services. 6. The contract was awarded in New Mexico, potentially benefiting the local economy and workforce.

Value Assessment

Rating: good

The contract value of $96.7 million for water and sewer line construction appears reasonable given the project's scope and duration. Benchmarking against similar large-scale infrastructure projects would provide a more precise value-for-money assessment. The firm fixed-price structure suggests an effort to manage costs effectively, but the final cost will depend on the contractor's efficiency and any unforeseen circumstances.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through 'full and open competition,' indicating that all responsible sources were permitted to submit a bid. This suggests a robust bidding process where multiple contractors likely vied for the work. The presence of multiple bidders generally leads to more competitive pricing and a greater likelihood of selecting the best value proposal for the government.

Taxpayer Impact: A competitive bidding process helps ensure that taxpayer dollars are used efficiently by driving down costs and encouraging high-quality proposals.

Public Impact

The primary beneficiaries are communities in New Mexico that will receive improved water and sewer infrastructure. The contract will deliver essential construction services for water and sewer lines. The geographic impact is focused on New Mexico, supporting regional development. The project is expected to create or sustain jobs in the construction sector within New Mexico.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions arise during the extensive construction period.
Dependence on the contractor's ability to manage a complex, multi-year project effectively.
Risk of delays due to weather, permitting, or supply chain issues inherent in large construction projects.

Positive Signals

Awarded through full and open competition, indicating a competitive market for this service.
Firm fixed-price contract type provides cost certainty for the government.
The contractor, Oscar Renda Contracting Inc., has a track record in large-scale infrastructure projects.
The project addresses critical water infrastructure needs, which has long-term public benefit.

Sector Analysis

This contract falls within the heavy and civil engineering construction sector, specifically focusing on water and sewer infrastructure. The market for such projects is often characterized by a mix of large, established firms and specialized subcontractors. Government spending in this area is crucial for maintaining and upgrading aging public utilities, with significant annual outlays across federal, state, and local levels. Comparable projects often involve extensive planning, environmental reviews, and complex logistical management.

Small Business Impact

While the contract was awarded through full and open competition and does not explicitly mention a small business set-aside, large infrastructure projects often involve significant subcontracting opportunities. The prime contractor, Oscar Renda Contracting Inc., may engage small businesses for specialized tasks or material supply. The extent of small business participation will depend on the subcontracting plan, if any, and the availability of qualified small businesses in the region.

Oversight & Accountability

Oversight for this contract would typically be managed by the Bureau of Reclamation, a division of the Department of the Interior. Mechanisms likely include regular progress reports, site inspections, and adherence to contract milestones. Accountability is ensured through the firm fixed-price structure and performance clauses. Transparency is generally maintained through contract award databases and public reporting, though specific project details might be limited.

Related Government Programs

Federal Highway Administration - Infrastructure Grants
Environmental Protection Agency - Water Infrastructure Finance and Innovation Act (WIFIA)
Army Corps of Engineers - Civil Works Projects
Department of Agriculture - Rural Development Water and Waste Disposal Loans & Grants

Risk Flags

Potential for cost overruns due to fixed-price nature and long duration.
Ensuring quality control and adherence to specifications throughout the project lifecycle.
Managing potential environmental impacts during construction.
Assessing the long-term sustainability and resilience of the new infrastructure.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Interior awarded $96.7 million to OSCAR RENDA CONTRACTING INC. NGWSP BLOCK 4C - 8

Who is the contractor on this award?

The obligated recipient is OSCAR RENDA CONTRACTING INC.

Which agency awarded this contract?

Awarding agency: Department of the Interior (Bureau of Reclamation).

What is the total obligated amount?

The obligated amount is $96.7 million.

What is the period of performance?

Start: 2019-09-11. End: 2022-09-16.

What is Oscar Renda Contracting Inc.'s track record with federal infrastructure projects?

Oscar Renda Contracting Inc. has a history of securing and executing large-scale federal and state infrastructure contracts, particularly in civil engineering and construction. Their portfolio often includes projects involving roads, bridges, water systems, and utilities. While specific details on past performance metrics for this exact contract are not provided, their experience suggests a capacity to handle complex projects. Federal procurement data would show their past award history, payment performance, and any reported disputes or contract terminations, which are crucial for assessing their reliability on projects of this magnitude.

How does the $96.7 million contract value compare to similar water infrastructure projects?

The $96.7 million contract value for water and sewer line construction is substantial and aligns with the scale of major municipal or regional infrastructure upgrades. Comparable projects, such as large wastewater treatment plant expansions or extensive pipeline replacements in densely populated areas, can range from tens of millions to hundreds of millions of dollars. Factors influencing cost include project complexity, geographic location, labor rates, material costs, and regulatory requirements. Without specific details on the scope of work (e.g., miles of pipe, treatment capacity), a precise comparison is difficult, but the award appears consistent with significant infrastructure investments.

What are the primary risks associated with a firm fixed-price contract for a multi-year construction project?

The primary risk for the government in a firm fixed-price (FFP) contract is that the contractor may cut corners on quality or scope to maximize profit if costs exceed initial estimates. Conversely, the risk for the contractor is bearing the full brunt of cost overruns due to unforeseen circumstances, material price increases, or labor shortages. For a multi-year project like this, risks include inflation impacting material and labor costs beyond what the fixed price accounts for, and potential disputes if the scope of work needs to be adjusted. Effective government oversight is crucial to ensure quality and adherence to specifications despite the fixed price.

How effective is 'full and open competition' in ensuring value for taxpayer money in large construction contracts?

Full and open competition is generally considered the most effective method for ensuring value for taxpayer money in large construction contracts. By allowing all responsible bidders to participate, it fosters a competitive environment that drives down prices and encourages innovation. A larger pool of bidders increases the likelihood that the government will receive multiple high-quality proposals at competitive rates. This process allows for price discovery and selection of the offer that represents the best overall value, considering factors beyond just the lowest price, such as technical approach, past performance, and schedule.

What are the historical spending patterns for water and sewer line construction by the Department of the Interior?

Historical spending patterns for water and sewer line construction by the Department of the Interior (DOI) are often tied to its mission of managing natural resources and public lands, particularly in the Western United States where water infrastructure is critical. The Bureau of Reclamation, a key agency within DOI, frequently awards contracts for dams, canals, pipelines, and related facilities. Annual spending can fluctuate significantly based on congressional appropriations, the initiation of new large-scale projects, and the completion of existing ones. Examining past DOI budget allocations and contract awards for similar construction activities would reveal trends and the typical scale of such investments.

What are the potential workforce implications of this $96.7 million contract in New Mexico?

A contract of this magnitude, valued at $96.7 million for water and sewer line construction, is likely to have a significant positive impact on the local workforce in New Mexico. It will create numerous direct jobs for skilled laborers, equipment operators, engineers, project managers, and support staff. Additionally, indirect employment opportunities will arise in related sectors such as material supply, equipment rental, transportation, and local services. The duration of the project (over 1100 days) suggests sustained employment for a considerable period, contributing to economic stability and development within the region.

Industry Classification

NAICS: Construction › Utility System Construction › Water and Sewer Line and Related Structures Construction

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SEALED BID

Solicitation ID: 140R4019B0001

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Southland Holdings LLC

Address: 608 HENRIETTA CREEK, ROANOKE, TX, 76262

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

Financial Breakdown

Contract Ceiling: $96,728,814

Exercised Options: $96,728,814

Current Obligation: $96,728,814

Actual Outlays: $96,728,814

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline