DOI awards $71.5M contract for NGWSP Block 4A & 4B construction in New Mexico

Contract Overview

Contract Amount: $71,532,939 ($71.5M)

Contractor: S.J. Louis Construction, Inc

Awarding Agency: Department of the Interior

Start Date: 2023-03-22

End Date: 2026-01-30

Contract Duration: 1,045 days

Daily Burn Rate: $68.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Construction

Official Description: NGWSP BLOCK 4A & 4B

Place of Performance

Location: SHIPROCK, SAN JUAN County, NEW MEXICO, 87420

State: New Mexico Government Spending

Plain-Language Summary

Department of the Interior obligated $71.5 million to S.J. LOUIS CONSTRUCTION, INC for work described as: NGWSP BLOCK 4A & 4B Key points: 1. Contract awarded to S.J. LOUIS CONSTRUCTION, INC for water and sewer line construction. 2. The contract has a fixed price with economic price adjustment, indicating potential for cost fluctuations. 3. The duration of the contract is 1045 days, suggesting a significant construction project. 4. Awarded under full and open competition, implying a competitive bidding process. 5. The contract is for construction services in New Mexico, with a specific focus on water and sewer infrastructure. 6. The contract value is substantial, reflecting the scale of the project.

Value Assessment

Rating: fair

Benchmarking the value of this contract requires more detailed cost breakdowns and comparisons to similar large-scale water and sewer infrastructure projects. The fixed-price with economic price adjustment clause introduces uncertainty in the final cost. Without specific performance metrics or historical data for S.J. LOUIS CONSTRUCTION, INC on comparable projects, a definitive value assessment is challenging. However, the scale of the project suggests a significant investment in critical infrastructure.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely considered. This competitive process is generally expected to drive better pricing and value for the government. The number of bidders (4) suggests a reasonable level of interest, though further analysis would be needed to determine if it represents robust competition for a project of this magnitude.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically leads to more competitive pricing and a wider selection of qualified contractors, maximizing the use of public funds.

Public Impact

The primary beneficiaries are residents and businesses in the service area of the NGWSP project, who will receive improved water and sewer services. The contract delivers essential construction services for water and sewer line infrastructure. The geographic impact is focused on New Mexico, specifically the area covered by the NGWSP. The project will likely create temporary construction jobs in New Mexico, supporting the local workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns due to the 'economic price adjustment' clause.
The long duration of the contract (1045 days) increases the risk of unforeseen issues and delays.
Limited public information on the contractor's specific track record for projects of this scale and complexity.

Positive Signals

Awarded through full and open competition, suggesting a competitive bidding process.
The contract addresses critical infrastructure needs for water and sewer systems.
The project is located in New Mexico, potentially bringing economic benefits to the state.

Sector Analysis

This contract falls within the construction sector, specifically focusing on heavy civil construction related to water and sewer infrastructure. The market for such projects is often characterized by a mix of large, established firms and specialized smaller contractors. Government spending in this area is driven by the need to maintain and upgrade aging infrastructure, as well as support new development. Comparable spending benchmarks would typically be found in other federal, state, and local government contracts for similar utility construction.

Small Business Impact

The contract was awarded under full and open competition and does not indicate a specific small business set-aside. Therefore, the direct impact on small businesses is likely through subcontracting opportunities, if S.J. LOUIS CONSTRUCTION, INC chooses to engage them. The absence of a set-aside means larger firms were eligible and likely competed, potentially limiting direct awards to small businesses for the prime contract.

Oversight & Accountability

Oversight for this contract will likely be managed by the Bureau of Reclamation, a division of the Department of the Interior. Accountability measures would typically include contract milestones, performance reviews, and adherence to construction standards. Transparency is generally maintained through contract award databases and public reporting, though detailed project-specific oversight information may be internal.

Related Government Programs

National Water and Wastewater Treatment Plant Construction
Federal Water Infrastructure Projects
Bureau of Reclamation Construction Contracts
Department of the Interior Public Works

Risk Flags

Potential for cost escalation due to economic price adjustment.
Long contract duration increases risk of delays and cost overruns.
Need for detailed performance monitoring due to project complexity.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Interior awarded $71.5 million to S.J. LOUIS CONSTRUCTION, INC. NGWSP BLOCK 4A & 4B

Who is the contractor on this award?

The obligated recipient is S.J. LOUIS CONSTRUCTION, 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 $71.5 million.

What is the period of performance?

Start: 2023-03-22. End: 2026-01-30.

What is the historical performance of S.J. LOUIS CONSTRUCTION, INC on federal contracts?

A review of federal contract databases indicates that S.J. LOUIS CONSTRUCTION, INC has been awarded multiple federal contracts, primarily within the construction domain. While specific performance ratings for past contracts are not always publicly detailed, the company's continued awards suggest a satisfactory track record. Further investigation into contract close-out reports or any documented disputes or awards for S.J. LOUIS CONSTRUCTION, INC would provide a more comprehensive understanding of their performance history. It is important to note that contract performance can vary significantly based on project scope, complexity, and duration.

How does the awarded amount compare to similar water and sewer line construction projects?

Comparing the $71.5 million award for the NGWSP Block 4A & 4B construction requires identifying projects with similar scope, scale, and geographic location. Large-scale water and sewer infrastructure projects can vary widely in cost due to factors like terrain, material costs, labor rates, and specific technical requirements. Without a direct comparison to recently awarded federal or state contracts for comparable utility construction in New Mexico or similar arid regions, it is difficult to definitively benchmark this award. However, projects of this magnitude typically represent significant investments in essential public services.

What are the primary risks associated with this fixed-price contract with economic price adjustment?

The primary risk associated with a fixed-price contract with economic price adjustment (FP-EPA) is the potential for cost escalation beyond the initial fixed price. While the EPA clause is intended to protect contractors from significant fluctuations in material and labor costs, it can lead to higher final costs for the government if market prices rise substantially. For taxpayers, this means the final expenditure could exceed the initially advertised $71.5 million. Effective oversight and clear definitions within the EPA clause are crucial to mitigate this risk and ensure fair pricing.

What is the expected impact of this contract on the local New Mexico economy?

This $71.5 million contract is expected to have a positive impact on the local New Mexico economy through job creation and increased business activity. The construction phase will require a workforce, potentially leading to employment opportunities for local laborers, engineers, and project managers. Furthermore, S.J. LOUIS CONSTRUCTION, INC may procure materials and services from local suppliers, boosting regional businesses. The long-term impact will be the delivery of improved water and sewer infrastructure, which is vital for community development and public health, potentially attracting further investment and economic growth.

How does the competition level (4 bidders) influence the value for money in this contract?

Having four bidders for this contract suggests a moderate level of competition. While more bidders generally lead to better price discovery and potentially lower costs for the government, four offers can still provide sufficient competition to achieve reasonable value for money, especially if the bidders were highly qualified and submitted competitive proposals. The effectiveness of this competition in securing value depends on the specific bids received and the evaluation criteria used by the Department of the Interior. A thorough analysis of the bid proposals would be necessary to confirm the extent to which competition drove down costs.

What are the implications of the contract duration (1045 days) for project management and cost control?

A contract duration of 1045 days (approximately 2.8 years) for the NGWSP Block 4A & 4B construction presents significant project management and cost control challenges. Extended project timelines increase the risk of unforeseen issues, such as changes in regulations, environmental conditions, or material availability. Cost control becomes more complex due to the potential for inflation over such a long period, even with an economic price adjustment clause. Robust project management, including detailed scheduling, regular progress monitoring, and proactive risk mitigation strategies, will be essential to ensure the project stays on track and within budget.

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: 140R4022B0001

Offers Received: 4

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

Evaluated Preference: NONE

Contractor Details

Address: 1351 BROADWAY ST W, COLD SPRING, MN, 56320

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

Financial Breakdown

Contract Ceiling: $71,532,939

Exercised Options: $71,532,939

Current Obligation: $71,532,939

Actual Outlays: $70,585,769

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline