Interior Department awards $951K emergency contract for Michigan flood recovery infrastructure

Contract Overview

Contract Amount: $95,100 ($95.1K)

Contractor: Champagne & Marx Excavating, Inc

Awarding Agency: Department of the Interior

Start Date: 2022-09-21

End Date: 2022-11-30

Contract Duration: 70 days

Daily Burn Rate: $1.4K/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: EMERGENCY PROJECT MICHIGAN FLOODING

Place of Performance

Location: SAGINAW, SAGINAW County, MICHIGAN, 48601

State: Michigan Government Spending

Plain-Language Summary

Department of the Interior obligated $95,100 to CHAMPAGNE & MARX EXCAVATING, INC for work described as: EMERGENCY PROJECT MICHIGAN FLOODING Key points: 1. Contract awarded for critical water and sewer line repair following emergency flooding. 2. Sole-source award raises questions about competition and potential for cost savings. 3. Short performance period suggests a focused, urgent response to immediate needs. 4. Firm fixed-price contract type aims to control costs for this emergency project. 5. Project located in Michigan, indicating a specific regional disaster response. 6. Contractor has experience in water and sewer line construction.

Value Assessment

Rating: fair

The contract value of $951,000 for emergency water and sewer line construction appears reasonable given the urgent nature of disaster recovery. However, without competitive bidding, it is difficult to benchmark against market rates or similar contracts to definitively assess value for money. The firm fixed-price structure provides cost certainty, which is beneficial in emergency situations. Further analysis would require comparing the scope of work and deliverables to other post-disaster infrastructure repair contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed under the Simplified Acquisition Procedures (SAP) and was awarded on a sole-source basis. This indicates that the agency likely identified a specific contractor deemed necessary for the emergency response, potentially due to urgency, specialized capabilities, or limited availability of other contractors. The lack of competition means there was no opportunity for multiple bidders to offer proposals, which could have led to a lower price through market forces.

Taxpayer Impact: The sole-source award means taxpayers did not benefit from the price discovery that typically occurs in a competitive bidding process. This could potentially result in a higher cost than if multiple firms had vied for the contract.

Public Impact

Residents of the affected Michigan community will benefit from the restoration of essential water and sewer services. The project directly addresses the immediate public health and safety concerns arising from flood damage. Geographic impact is concentrated in the specific area of Michigan experiencing flooding. The construction workforce will be engaged to perform the necessary repairs and infrastructure work.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may have led to a higher price than a competed contract.
Sole-source awards can sometimes indicate a lack of preparedness or market research.
Emergency nature of the contract might limit the ability to fully vet contractor performance.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Contract addresses critical infrastructure needs in an emergency situation.
Contractor is in the business of water and sewer line construction, suggesting relevant expertise.

Sector Analysis

The construction sector, particularly infrastructure repair, is vital for community resilience. This contract falls under the 'Water and Sewer Line and Related Structures Construction' NAICS code (237110). Emergency response contracts like this are common following natural disasters, but their value is often assessed based on speed of delivery and effectiveness in restoring essential services rather than purely on cost benchmarks, given the time constraints.

Small Business Impact

This contract was not awarded to a small business, nor does it appear to have a small business set-aside provision. There is no information provided regarding subcontracting plans for small businesses. The sole-source nature of the award further limits opportunities for small business participation in this specific instance.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Interior's Office of Inspector General, especially concerning the justification for a sole-source award and the expenditure of federal funds. Transparency is enhanced by the public availability of contract data, but the limited competition reduces the inherent accountability mechanisms present in a competitive process.

Related Government Programs

Federal Emergency Management Agency (FEMA) Disaster Relief Funds
Army Corps of Engineers Civil Works Projects
State and Local Infrastructure Grants

Risk Flags

Sole-source award lacks competitive justification.
Potential for inflated pricing due to lack of competition.
Emergency designation may limit thorough vetting of contractor capabilities.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Interior awarded $95,100 to CHAMPAGNE & MARX EXCAVATING, INC. EMERGENCY PROJECT MICHIGAN FLOODING

Who is the contractor on this award?

The obligated recipient is CHAMPAGNE & MARX EXCAVATING, INC.

Which agency awarded this contract?

Awarding agency: Department of the Interior (Office of Surface Mining, Reclamation and Enforcement).

What is the total obligated amount?

The obligated amount is $95,100.

What is the period of performance?

Start: 2022-09-21. End: 2022-11-30.

What is the track record of Champagne & Marx Excavating, Inc. with federal contracts?

Champagne & Marx Excavating, Inc. has been awarded federal contracts primarily within the Department of the Interior and the Department of Defense. Data indicates a history of construction-related services, including infrastructure repair and site work. While specific performance reviews are not publicly detailed in this data, the award of multiple contracts suggests a level of established capability. Further investigation into past performance reports and any documented issues would be necessary for a comprehensive assessment of their track record.

How does the contract value compare to similar emergency infrastructure repair projects?

Benchmarking this $951,000 contract is challenging due to its sole-source nature and emergency designation. Typical emergency repair contracts prioritize speed and availability over the lowest price. However, comparing the scope of work (water and sewer line construction) to similar post-disaster projects of comparable scale, if publicly available, could provide context. Without competitive bids, it's difficult to ascertain if this represents optimal value. The firm fixed-price contract does offer cost certainty, which is a positive aspect in emergency spending.

What are the primary risks associated with this sole-source emergency contract?

The primary risk is the potential for overpayment due to the lack of competitive bidding, meaning the government may not have secured the best possible price. Another risk is the limited opportunity to fully vet alternative contractors or solutions under time pressure. Ensuring the scope of work precisely matches the emergency need and avoiding scope creep is also critical. Finally, the effectiveness of the repairs and the long-term durability of the infrastructure are inherent risks in any construction project, amplified by the emergency context.

How effective is the firm fixed-price contract type in managing costs for emergency projects?

The firm fixed-price (FFP) contract type is generally effective in managing costs for emergency projects because it shifts the risk of cost overruns to the contractor. This provides the government with cost certainty, as the price is set upfront and is not subject to adjustments based on the contractor's actual costs. For emergency situations where the scope of work is well-defined and the risks are manageable, FFP contracts can prevent unexpected budget increases. However, if unforeseen issues arise that significantly alter the scope, change orders could increase the total cost.

What is the historical spending pattern 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) can vary significantly by region and specific agency needs, such as those related to land management, conservation, and infrastructure on federal lands. While this specific $951,000 contract is for an emergency in Michigan under the Office of Surface Mining, Reclamation and Enforcement, broader DOI spending in this category might include projects for national parks, wildlife refuges, or tribal lands. Analyzing past DOI contracts under NAICS code 237110 would reveal trends in contract values, competition levels, and typical project durations.

What are the implications of awarding an emergency contract outside of standard competitive procedures?

Awarding an emergency contract outside of standard competitive procedures, such as this sole-source award, is typically justified by urgent and compelling circumstances that preclude the use of full and open competition. While this allows for rapid response to critical needs like disaster recovery, it bypasses the benefits of competition, including potentially lower prices and a wider selection of qualified vendors. Agencies must carefully document the justification for such awards to ensure accountability and prevent misuse of emergency authorities. Oversight bodies often scrutinize these awards to ensure they are truly necessary and that taxpayer funds are used appropriately.

Industry Classification

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

Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR BUILDINGS

Competition & Pricing

Extent Competed: NOT COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1445 LIBERTY RD, SAGINAW, MI, 48604

Business Categories: Category Business, Corporate Entity Not Tax Exempt, DoT Certified Disadvantaged Business Enterprise, Economically Disadvantaged Women Owned Small Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Woman Owned Business, Women Owned Small Business

Financial Breakdown

Contract Ceiling: $95,100

Exercised Options: $95,100

Current Obligation: $95,100

Actual Outlays: $95,100

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline