California road reconstruction contract awarded to Ghilotti Construction for over $45.7 million

Contract Overview

Contract Amount: $45,713,570 ($45.7M)

Contractor: Ghilotti Construction CO Inc

Awarding Agency: Department of Transportation

Start Date: 2020-02-13

End Date: 2023-06-15

Contract Duration: 1,218 days

Daily Burn Rate: $37.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: CA FLAP CR109(1) SIR FRANCIS DRAKE BOULEVARD AND CA FTNP PORE 10(4)200(1)201 LIMANTOUR LIGHTHOUSE CHIMNEY ROCK ROAD RECONSTRUCTION CONTRACT

Place of Performance

Location: POINT REYES STATION, MARIN County, CALIFORNIA, 94956

State: California Government Spending

Plain-Language Summary

Department of Transportation obligated $45.7 million to GHILOTTI CONSTRUCTION CO INC for work described as: CA FLAP CR109(1) SIR FRANCIS DRAKE BOULEVARD AND CA FTNP PORE 10(4)200(1)201 LIMANTOUR LIGHTHOUSE CHIMNEY ROCK ROAD RECONSTRUCTION CONTRACT Key points: 1. The contract's value appears reasonable given the scope of infrastructure work. 2. Full and open competition suggests a potentially competitive bidding process. 3. The firm fixed-price contract type offers cost certainty for the government. 4. Project duration of over three years indicates a significant infrastructure undertaking. 5. The contract is positioned within the highway, street, and bridge construction sector. 6. The award was made by the Federal Highway Administration, a key player in transportation infrastructure.

Value Assessment

Rating: good

The contract value of approximately $45.7 million for highway reconstruction in California seems aligned with the scale of such projects. Benchmarking against similar large-scale road construction contracts managed by the Federal Highway Administration would provide a more precise value-for-money assessment. The firm fixed-price structure helps mitigate cost overrun risks for the government, contributing to predictable spending.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of three bidders suggests a moderate level of competition for this significant infrastructure project. A higher number of bidders might typically lead to more aggressive pricing, but three bidders can still result in a competitive outcome, especially for specialized construction services.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a market that encourages competitive pricing and potentially higher quality services due to a wider pool of qualified contractors.

Public Impact

Residents and commuters in California will benefit from improved road infrastructure. The contract delivers essential services for highway, street, and bridge reconstruction. The geographic impact is concentrated in California, specifically related to the specified locations. The project likely supports local construction jobs and related industries in California.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for project delays impacting public access and transportation flow.
Risk of unforeseen site conditions requiring contract modifications and potential cost increases.
Ensuring adherence to environmental regulations during extensive construction activities.

Positive Signals

Firm fixed-price contract provides cost predictability.
Full and open competition suggests a robust bidding process.
Award to an established construction company with experience in the sector.

Sector Analysis

This contract falls within the Highway, Street, and Bridge Construction sector, a critical component of the nation's infrastructure. This sector is characterized by large-scale projects, significant capital investment, and a need for specialized engineering and construction expertise. Spending in this area is often driven by federal and state initiatives aimed at maintaining and upgrading transportation networks. Comparable spending benchmarks would involve looking at other major highway repair and construction contracts awarded by the Department of Transportation and its various agencies.

Small Business Impact

The contract was awarded under full and open competition and does not indicate any specific small business set-aside. While the prime contractor is Ghilotti Construction Co Inc, there is no explicit information on subcontracting plans for small businesses within the provided data. The impact on the small business ecosystem would depend on whether Ghilotti Construction actively seeks to engage small businesses for specialized services or materials.

Oversight & Accountability

Oversight for this contract would typically be managed by the Federal Highway Administration (FHWA) and potentially the Department of Transportation's Office of Inspector General. Mechanisms likely include regular progress reports, site inspections, and financial audits to ensure compliance with contract terms, quality standards, and budget. Transparency is generally maintained through contract award databases and public reporting of federal spending.

Related Government Programs

Federal Highway Administration Capital Investment Grants
National Highway System Program
Infrastructure Investment and Jobs Act Projects

Risk Flags

Potential for cost overruns due to unforeseen site conditions.
Risk of schedule delays impacting public transportation.
Ensuring compliance with environmental and safety regulations.
Contractor performance and quality of work.

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $45.7 million to GHILOTTI CONSTRUCTION CO INC. CA FLAP CR109(1) SIR FRANCIS DRAKE BOULEVARD AND CA FTNP PORE 10(4)200(1)201 LIMANTOUR LIGHTHOUSE CHIMNEY ROCK ROAD RECONSTRUCTION CONTRACT

Who is the contractor on this award?

The obligated recipient is GHILOTTI CONSTRUCTION CO INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $45.7 million.

What is the period of performance?

Start: 2020-02-13. End: 2023-06-15.

What is the track record of Ghilotti Construction Co Inc on similar federal contracts?

Ghilotti Construction Co Inc has a history of performing construction work, including significant infrastructure projects. While the provided data focuses on this specific contract, a deeper dive into their past performance on federal contracts, particularly those administered by the Federal Highway Administration or state Departments of Transportation, would reveal their reliability, quality of work, and adherence to schedules and budgets. Examining past contract awards, completion records, and any reported disputes or claims would offer a comprehensive view of their contractor performance. This analysis is crucial for assessing the risk associated with the current contract and ensuring successful project delivery.

How does the awarded amount compare to similar highway reconstruction projects in California?

The awarded amount of approximately $45.7 million for the CA FLAP CR109(1) SIR FRANCIS DRAKE BOULEVARD AND CA FTNP PORE 10(4)200(1)201 LIMANTOUR LIGHTHOUSE CHIMNEY ROCK ROAD RECONSTRUCTION CONTRACT needs to be benchmarked against similar projects in California. Factors such as project scope, complexity, specific location, and prevailing market rates for labor and materials significantly influence costs. A comparison with other Federal Highway Administration or Caltrans projects of similar scale and type, considering the year of award and contract type, would help determine if this contract represents good value. Analyzing cost per mile or cost per lane-mile for similar reconstruction efforts would provide a quantitative basis for this assessment.

What are the primary risks associated with a project of this magnitude and duration?

Projects of this magnitude and duration, such as the California road reconstruction contract, carry several inherent risks. These include potential cost overruns due to unforeseen site conditions (e.g., soil instability, underground utilities), material price fluctuations, and labor shortages. Schedule delays are also a significant risk, stemming from adverse weather, permitting issues, or contractor performance problems, which can lead to increased costs and public inconvenience. Furthermore, ensuring compliance with environmental regulations and safety standards throughout the extended construction period requires diligent oversight. The firm fixed-price nature of this contract shifts some cost risk to the contractor, but scope creep or significant unforeseen issues could still lead to change orders and disputes.

What is the expected impact of this contract on local employment and the construction industry in California?

This contract is expected to have a positive impact on local employment and the construction industry in California. The reconstruction of significant roadways requires a substantial workforce, including skilled laborers, equipment operators, engineers, and project managers. Ghilotti Construction Co Inc, as the prime contractor, will likely hire locally or utilize local subcontractors, thereby creating jobs and stimulating economic activity. The demand for construction materials and services will also benefit suppliers and related businesses within the region. Over the project's duration, this sustained activity can contribute to the overall health and capacity of the local construction sector.

How does the firm fixed-price contract type influence the government's financial exposure?

The firm fixed-price (FFP) contract type significantly influences the government's financial exposure by establishing a ceiling price for the work. Under an FFP contract, the contractor is obligated to complete the work for the agreed-upon price, regardless of their actual costs. This provides the government with a high degree of cost certainty and predictability, as it is protected from cost overruns unless there are changes to the contract scope. While the government may forgo potential savings if the contractor performs more efficiently than anticipated, the primary benefit is the mitigation of financial risk associated with fluctuating costs. This contract structure is generally preferred for projects with well-defined requirements where cost risks can be reasonably estimated.

What does the number of bidders (3) suggest about the competitiveness of the market for this type of work?

The fact that three bids were received for this contract suggests a moderately competitive market for this specific type of highway reconstruction work in California. While more bidders often indicate a more robust competition that could drive prices lower, three bidders can still lead to a competitive outcome, especially if the bidders are well-qualified and the project requirements are clearly defined. The level of competition can be influenced by factors such as the project's geographic location, its technical complexity, the availability of qualified contractors, and the overall workload in the construction sector at the time of bidding. A thorough analysis would consider the reputation and capacity of each bidder to assess the true competitive pressure.

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: SEALED BID

Solicitation ID: 6982AF19B000023

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 246 GHILOTTI AVE, SANTA ROSA, CA, 95407

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

Financial Breakdown

Contract Ceiling: $45,713,570

Exercised Options: $45,713,570

Current Obligation: $45,713,570

Actual Outlays: $45,713,570

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline