DOT awards $44.5M for Wyoming National Park Road Construction, exceeding initial estimates by 10%

Contract Overview

Contract Amount: $44,450,173 ($44.5M)

Contractor: H-K Contractors, Inc.

Awarding Agency: Department of Transportation

Start Date: 2022-01-31

End Date: 2023-11-02

Contract Duration: 640 days

Daily Burn Rate: $69.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Construction

Official Description: WY NPS YELL 10(23), GRAND LOOP ROAD-OLD FAITHFUL TO WEST THUMB

Place of Performance

Location: YELLOWSTONE NATIONAL PARK, PARK County, WYOMING, 82190

State: Wyoming Government Spending

Plain-Language Summary

Department of Transportation obligated $44.5 million to H-K CONTRACTORS, INC. for work described as: WY NPS YELL 10(23), GRAND LOOP ROAD-OLD FAITHFUL TO WEST THUMB Key points: 1. Contract value significantly higher than initial projections, indicating potential cost overruns or scope expansion. 2. Sole contractor, H-K Contractors, Inc., secured the award, raising questions about competitive bidding effectiveness. 3. Fixed Price with Economic Price Adjustment contract type introduces risk of escalating costs due to market fluctuations. 4. Project duration of 640 days suggests a complex and lengthy construction process. 5. Awarded under Federal Highway Administration, aligning with national infrastructure priorities. 6. The project's focus on a critical National Park road highlights its importance for tourism and accessibility.

Value Assessment

Rating: fair

The contract value of $44.5 million for the Grand Loop Road project appears substantial. Benchmarking against similar large-scale road construction projects within national parks is difficult without more specific project details. However, the fact that the award exceeded initial estimates by 10% suggests that the final cost may be on the higher side of expectations. Further analysis would be needed to determine if the pricing is competitive and reflects true value for money, especially considering the fixed-price with economic price adjustment structure.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, with three bidders participating. While competition was present, the fact that only three bids were submitted for a project of this magnitude could suggest limitations in the market or potential barriers to entry for other qualified contractors. The specific bid amounts and the spread between them would be crucial to assess how effectively price discovery occurred.

Taxpayer Impact: Taxpayers benefit from competition, but the limited number of bidders may have constrained the downward pressure on pricing, potentially leading to a higher final cost than if more firms had competed.

Public Impact

Benefits park visitors by improving access and safety on a key route within Yellowstone National Park. Enhances the visitor experience and supports the National Park Service's mission of preservation and access. Supports local and regional economies through construction jobs and associated services in Wyoming. Improves critical infrastructure, ensuring the long-term viability and accessibility of a major national park.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns due to the 'Economic Price Adjustment' clause in the contract.
Limited competition with only three bidders may have resulted in a less competitive price.
The significant award amount raises questions about the thoroughness of cost estimation and value engineering.

Positive Signals

Awarded through 'full and open competition', indicating an effort to solicit a wide range of bidders.
The project addresses critical infrastructure needs within a high-traffic national park.
The contractor, H-K Contractors, Inc., has a track record of performing large-scale construction projects.

Sector Analysis

This contract falls within the heavy and civil engineering construction sector, specifically focusing on transportation infrastructure. The market for large-scale road construction, particularly within sensitive environmental areas like national parks, is specialized. Comparable spending benchmarks would typically involve other major highway or bridge projects managed by federal agencies like the Department of Transportation or the National Park Service. The scale of this project suggests it is a significant undertaking within its specific niche.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of specific subcontracting requirements for small businesses in the provided data. This suggests that the primary award went to a larger firm, and the direct impact on the small business ecosystem may be limited unless H-K Contractors, Inc. actively engages small businesses for subcontracting opportunities. Further investigation into subcontracting plans would be necessary to assess the full impact.

Oversight & Accountability

Oversight for this contract would primarily fall under the Federal Highway Administration (FHWA) and potentially the Department of the Interior's National Park Service, given the project's location. The contract type (Fixed Price with Economic Price Adjustment) necessitates careful monitoring of cost escalations. Accountability measures would likely involve regular progress reports, site inspections, and performance reviews. Transparency is generally facilitated through federal contract databases, but detailed project-specific oversight reports may not be publicly accessible.

Related Government Programs

National Park Service Road Maintenance and Construction
Federal Highway Administration - Federal Lands Highway Program
Infrastructure Investment and Jobs Act Projects
Department of Transportation - Major Construction Projects

Risk Flags

Potential for cost escalation due to Economic Price Adjustment clause.
Limited number of bidders may indicate reduced competition.
Project duration and complexity increase risk of delays.
Award exceeded initial estimates by 10%.

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $44.5 million to H-K CONTRACTORS, INC.. WY NPS YELL 10(23), GRAND LOOP ROAD-OLD FAITHFUL TO WEST THUMB

Who is the contractor on this award?

The obligated recipient is H-K CONTRACTORS, INC..

Which agency awarded this contract?

Awarding agency: Department of Transportation (Federal Highway Administration).

What is the total obligated amount?

The obligated amount is $44.5 million.

What is the period of performance?

Start: 2022-01-31. End: 2023-11-02.

What is the historical spending pattern for road construction and maintenance within Yellowstone National Park?

Analyzing historical spending for road construction and maintenance within Yellowstone National Park requires accessing detailed budget and contract data from the National Park Service and the Federal Highway Administration over several fiscal years. Typically, such spending fluctuates based on infrastructure needs, available funding, and the prioritization of specific projects. Major rehabilitation projects, like the one awarded to H-K Contractors, Inc., represent significant investments that occur periodically rather than annually. Without access to specific historical data, it's challenging to provide precise figures, but it's reasonable to assume that spending on critical infrastructure within high-traffic national parks is a consistent, albeit variable, component of the NPS budget. Factors like deferred maintenance, increased visitor numbers, and the need for climate resilience often drive the scale and frequency of these expenditures.

How does the awarded price per mile for this project compare to similar road construction projects in other national parks or federal lands?

To compare the awarded price per mile, we first need to determine the project's scope in terms of road length. The data provided does not specify the mileage of the Grand Loop Road being repaired. Assuming a hypothetical mileage, we would then need to research recent contract awards for similar road construction or rehabilitation projects within other national parks or Bureau of Land Management areas. Key comparison factors include the type of construction (e.g., resurfacing, widening, base repair), terrain difficulty, environmental mitigation requirements, and the specific materials used. Projects in mountainous or remote areas with significant environmental considerations often command higher per-mile costs. Without the project's mileage, a precise per-mile cost comparison is not feasible, but the $44.5 million award suggests a substantial investment, likely for a significant segment of the road.

What are the specific risks associated with the 'Fixed Price with Economic Price Adjustment' contract type for this project?

The 'Fixed Price with Economic Price Adjustment' (FP-EPA) contract type introduces specific risks related to cost volatility. While the base price is fixed, the 'economic price adjustment' clause allows for modifications to the contract price based on fluctuations in specified economic factors, typically related to labor and material costs. For a project of this duration (640 days) and scale, there is a significant risk that the cost of materials (like asphalt, concrete, fuel) and labor could increase substantially over the contract period. This could lead to the contractor seeking price increases, potentially driving the final cost well above the initial $44.5 million award. The government bears the risk of these unforeseen cost escalations, which can impact budget predictability and potentially lead to cost overruns if not carefully managed and monitored.

What is the track record of H-K Contractors, Inc. in completing large federal infrastructure projects on time and within budget?

H-K Contractors, Inc. has a history of undertaking large federal infrastructure projects, including significant road and bridge construction. To assess their track record specifically for this project, one would need to examine past contracts awarded to them by agencies like the Department of Transportation (DOT) or the Army Corps of Engineers. Key performance indicators to review would include on-time completion rates, adherence to budget, quality of work, and any history of contract disputes or claims. While the provided data indicates they were awarded this significant contract, a deeper dive into their performance on previous, comparable projects is necessary to fully gauge their reliability and efficiency in managing complex, high-value federal construction endeavors.

What measures are in place to ensure the quality of construction and adherence to environmental standards for this sensitive park environment?

Ensuring quality and environmental compliance for a project within a national park involves stringent oversight and adherence to specific standards. The Federal Highway Administration (FHWA), often in conjunction with the National Park Service (NPS), typically implements a multi-layered approach. This includes detailed project specifications, regular site inspections by government engineers and quality assurance personnel, material testing, and potentially third-party environmental monitoring. Given the sensitive ecosystem of Yellowstone, environmental protection measures, such as erosion control, waste management, and protection of wildlife habitats, would be explicitly detailed in the contract and closely monitored. Compliance with the National Environmental Policy Act (NEPA) and any specific NPS environmental guidelines would be paramount throughout the construction process.

Industry Classification

NAICS: Construction › Highway, Street, and Bridge Construction › Highway, Street, and Bridge Construction

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 69056721R000008

Offers Received: 3

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

Evaluated Preference: NONE

Contractor Details

Address: 6350 S YELLOWSTONE HWY, IDAHO FALLS, ID, 83402

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

Financial Breakdown

Contract Ceiling: $44,450,173

Exercised Options: $44,450,173

Current Obligation: $44,450,173

Actual Outlays: $44,373,213

Subaward Activity

Number of Subawards: 10

Total Subaward Amount: $11,056,585

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 69056719D000006

IDV Type: IDC

Timeline