Interior Department awards $31M contract for water infrastructure, with competition indicating potential value

Contract Overview

Contract Amount: $31,046,748 ($31.0M)

Contractor: Pate Construction CO., Inc.

Awarding Agency: Department of the Interior

Start Date: 2023-09-15

End Date: 2026-08-07

Contract Duration: 1,057 days

Daily Burn Rate: $29.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Construction

Official Description: AVC BOONE REACH 2

Place of Performance

Location: PUEBLO, PUEBLO County, COLORADO, 81007

State: Colorado Government Spending

Plain-Language Summary

Department of the Interior obligated $31.0 million to PATE CONSTRUCTION CO., INC. for work described as: AVC BOONE REACH 2 Key points: 1. Contract awarded to PATE CONSTRUCTION CO., INC. for water and sewer line construction. 2. Competition level suggests a potentially competitive pricing environment. 3. Contract duration of 1057 days indicates a significant, long-term project. 4. Fixed Price with Economic Price Adjustment (FP-EPA) contract type introduces some cost fluctuation risk. 5. Project located in Colorado, impacting regional water infrastructure. 6. The Bureau of Reclamation is the specific agency overseeing this project.

Value Assessment

Rating: good

The contract value of $31,046,747.83 for water and sewer line construction appears reasonable given the project's scope and duration. Benchmarking against similar large-scale infrastructure projects managed by the Bureau of Reclamation would provide a more precise value-for-money assessment. The fixed-price nature with economic price adjustment suggests an effort to balance cost certainty with market volatility.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, with four bids received. This level of competition is generally positive, suggesting that multiple contractors had the opportunity to bid, which can drive down prices and encourage efficiency. The presence of four bidders indicates a healthy interest in this type of federal work.

Taxpayer Impact: Full and open competition typically benefits taxpayers by fostering a competitive environment that can lead to more cost-effective solutions and better pricing for government projects.

Public Impact

Benefits residents and businesses in Colorado through improved water and sewer infrastructure. Delivers essential construction services for critical public utilities. Geographic impact is concentrated within Colorado. Supports construction industry jobs and related supply chains.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Economic price adjustment clause introduces potential for cost overruns if material prices increase significantly.
Long contract duration (1057 days) increases exposure to unforeseen project challenges or changes in requirements.

Positive Signals

Awarded under full and open competition, suggesting competitive pricing.
Contractor has experience in construction, indicated by NAICS code 237110.
Project addresses critical infrastructure needs, aligning with public service goals.

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 substantial, driven by ongoing needs for repair, replacement, and expansion of aging utility systems across the nation. The Bureau of Reclamation, as a major federal agency involved in water management, frequently procures services in this domain.

Small Business Impact

The contract was awarded under full and open competition and does not indicate a specific small business set-aside. While PATE CONSTRUCTION CO., INC. is listed as the awardee, further analysis would be needed to determine if they are a small business or if subcontracting opportunities will be made available to small businesses. The absence of explicit set-aside language suggests that large businesses were likely eligible and potentially awarded the prime contract.

Oversight & Accountability

Oversight for this contract will likely be managed by the Bureau of Reclamation's contracting officers and project managers. Accountability measures are inherent in the fixed-price contract structure, with performance milestones and quality standards to be met. Transparency is generally maintained through federal procurement databases like SAM.gov, where contract awards are published. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Bureau of Reclamation Water Infrastructure Projects
Federal Utility Construction Contracts
Department of the Interior Construction Spending
Water and Sewer System Modernization Programs

Risk Flags

Potential cost escalation due to FP-EPA clause
Long contract duration may increase risk exposure

Frequently Asked Questions

What is this federal contract paying for?

Department of the Interior awarded $31.0 million to PATE CONSTRUCTION CO., INC.. AVC BOONE REACH 2

Who is the contractor on this award?

The obligated recipient is PATE CONSTRUCTION CO., 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 $31.0 million.

What is the period of performance?

Start: 2023-09-15. End: 2026-08-07.

What is the track record of PATE CONSTRUCTION CO., INC. with federal contracts, particularly with the Department of the Interior or Bureau of Reclamation?

A review of federal procurement data would be necessary to fully assess PATE CONSTRUCTION CO., INC.'s track record. This would involve examining past contract awards, performance evaluations (if available), and any history of disputes or corrective actions. Understanding their experience with similar-sized projects, specific types of water infrastructure, and their performance history with the Bureau of Reclamation is crucial for evaluating their capability and reliability on this $31 million contract. Without specific historical data, it's difficult to definitively assess their past performance, but the award itself suggests they met the minimum requirements for this competition.

How does the awarded amount of $31,046,747.83 compare to similar water and sewer line construction contracts awarded by the Bureau of Reclamation or other federal agencies?

Benchmarking this contract's value requires comparing it to similar projects in terms of scope, complexity, location, and duration. For instance, if the Bureau of Reclamation has recently awarded contracts for similar lengths of water and sewer lines in comparable geographic areas, analyzing those award amounts can provide context. A value of $31 million for over 1000 days of work on critical infrastructure suggests a significant undertaking. If comparable projects of similar scale were awarded for substantially less, it might indicate a less competitive outcome or higher costs for this specific contract. Conversely, if similar projects cost more, this award could represent good value.

What are the primary risks associated with a Fixed Price with Economic Price Adjustment (FP-EPA) contract for this type of construction project?

The primary risks with an FP-EPA contract for water and sewer line construction revolve around cost escalation. While the fixed price provides a baseline, the economic price adjustment clause allows for modifications based on fluctuations in the cost of labor and materials (e.g., asphalt, concrete, steel, fuel). If the costs of these inputs rise significantly over the 1057-day duration, the total contract cost could exceed initial projections, impacting the government's budget. The contractor bears some risk, but the government is exposed to potential cost increases, making careful monitoring of economic indicators and contract clauses essential.

How effective is the 'full and open competition' approach likely to be in ensuring cost savings for this $31 million infrastructure project?

Full and open competition is generally considered the most effective method for achieving cost savings in federal contracting. By allowing all responsible sources to submit bids, it maximizes the pool of potential offerors, thereby increasing the likelihood of receiving competitive pricing. With four bids received for this contract, the agency had options to compare. The effectiveness in ensuring savings depends on the number and competitiveness of the bidders, the clarity of the solicitation requirements, and the agency's negotiation strategy. A robust competition typically drives down prices as contractors vie for the award.

What is the historical spending pattern for water and sewer line construction by the Department of the Interior or Bureau of Reclamation over the past five years?

Analyzing historical spending patterns for water and sewer line construction by the Department of the Interior and the Bureau of Reclamation over the past five years would reveal trends in contract values, frequency of awards, and types of projects undertaken. This data can help contextualize the $31 million award, indicating whether it is an outlier, typical, or indicative of increased investment in such infrastructure. Understanding past spending can also highlight any shifts in procurement strategies, such as a move towards more full and open competitions or specific contract types. Such analysis provides a baseline for evaluating current spending levels and future needs.

What are the potential implications of the 1057-day contract duration on project oversight and contractor performance?

A contract duration of 1057 days (approximately 2.9 years) for water and sewer line construction necessitates sustained and rigorous oversight. Project managers must ensure consistent monitoring of progress against milestones, quality control, and adherence to specifications throughout the extended period. For the contractor, a long duration presents challenges in resource management, maintaining workforce morale, and adapting to potential changes in regulations or site conditions. It also increases the risk of unforeseen issues arising, such as environmental concerns or discovery of unexpected subsurface conditions, which could lead to delays or cost adjustments. Effective communication and proactive problem-solving are critical for successful completion.

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: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 140R6023R0011

Offers Received: 4

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

Evaluated Preference: NONE

Contractor Details

Address: 87 N MISSION DR, PUEBLO, CO, 81007

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

Financial Breakdown

Contract Ceiling: $31,046,748

Exercised Options: $31,046,748

Current Obligation: $31,046,748

Actual Outlays: $29,349,715

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline