Transportation contract for scenic trail construction awarded to Joseph J. Albanese, Inc. for over $32.6 million

Contract Overview

Contract Amount: $32,686,559 ($32.7M)

Contractor: Joseph J. Albanese, Inc.

Awarding Agency: Department of Transportation

Start Date: 2024-04-25

End Date: 2026-05-04

Contract Duration: 739 days

Daily Burn Rate: $44.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: CA FLAP SCR T5(1) MONTEREY BAY SANCTUARY SCENIC TRAIL CONSTRUCTION CONTRACT

Place of Performance

Location: DAVENPORT, SANTA CRUZ County, CALIFORNIA, 95017

State: California Government Spending

Plain-Language Summary

Department of Transportation obligated $32.7 million to JOSEPH J. ALBANESE, INC. for work described as: CA FLAP SCR T5(1) MONTEREY BAY SANCTUARY SCENIC TRAIL CONSTRUCTION CONTRACT Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The fixed-price contract type aims to control costs, but potential for cost overruns exists. 3. The duration of 739 days indicates a significant project timeline. 4. The contract is for highway, street, and bridge construction, a common category for federal spending. 5. The award amount of over $32.6 million places this contract in the mid-to-large size category. 6. The project is located in California, a state with substantial infrastructure needs.

Value Assessment

Rating: fair

The award amount of $32.6 million for a 739-day construction project needs further benchmarking against similar scenic trail or highway construction contracts. Without specific details on the scope of work, it's difficult to definitively assess value for money. The firm fixed-price contract type provides cost certainty, but the final cost will depend on the contractor's efficiency and management of unforeseen issues. The benchmarked bid of $4.4 million suggests a significant difference between the winning bid and the lowest bid received, warranting further investigation into the reasons for this discrepancy.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with six bids received. This indicates a healthy level of interest from potential contractors. The presence of multiple bidders generally promotes price discovery and can lead to more competitive pricing for the government. The spread between the lowest bid ($4.4 million) and the awarded amount ($32.6 million) is substantial, suggesting that either the lowest bid was not fully compliant with requirements, or there were significant differences in proposed approaches and costs among the bidders.

Taxpayer Impact: A competitive bidding process like this is generally favorable for taxpayers, as it encourages multiple firms to offer their best prices. However, the wide variance in bids warrants scrutiny to ensure the selected bid represents the best overall value and that taxpayer funds are not being unnecessarily expended.

Public Impact

The primary beneficiaries are likely users of the Monterey Bay Sanctuary Scenic Trail, including tourists and local residents, who will gain access to improved recreational facilities. The project will deliver construction services for a scenic trail, enhancing public access and potentially boosting local tourism. The geographic impact is concentrated in California, specifically within the Monterey Bay area. The contract will likely create or sustain jobs in the construction sector within California, including skilled labor and project management roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns despite fixed-price contract if scope changes or unforeseen issues arise.
The significant difference between the lowest bid and the awarded amount requires explanation to ensure optimal value.
Long project duration could lead to delays and potential cost increases due to inflation or material price fluctuations.

Positive Signals

Awarded through full and open competition, indicating a robust bidding process.
Firm fixed-price contract type offers cost certainty for the government.
Project aims to improve public infrastructure and recreational access.

Sector Analysis

The construction sector, particularly highway, street, and bridge construction, is a significant area of federal spending. This contract falls within the broader infrastructure development domain, which often sees substantial investment to maintain and improve public assets. Comparable projects might include other segments of trail construction, road improvements, or bridge repairs. Federal spending in this sector is influenced by infrastructure bills, economic stimulus packages, and the ongoing need for maintenance and upgrades.

Small Business Impact

The contract data indicates that small business participation was not a specific set-aside (ss: false, sb: false). This suggests the contract was not specifically targeted towards small businesses. Therefore, the primary impact on the small business ecosystem would be through potential subcontracting opportunities if Joseph J. Albanese, Inc. engages smaller firms for specialized tasks. Without explicit subcontracting plans or goals, the direct benefit to small businesses remains uncertain.

Oversight & Accountability

Oversight for this contract will likely be managed by the Federal Highway Administration (FHWA), a division of the Department of Transportation. Mechanisms would include regular progress reports from the contractor, site inspections, and adherence to contract milestones. Accountability is ensured through the firm fixed-price terms and the potential for penalties or withholding of payment for non-performance or delays. Transparency is typically maintained through contract award databases and public reporting, though detailed project oversight specifics are often internal.

Related Government Programs

Federal Highway Administration Construction Projects
National Scenic Trails Program
Department of Transportation Infrastructure Grants
California State Transportation Projects

Risk Flags

Significant bid spread requires justification.
Long project duration increases risk of cost escalation.
Potential for scope creep or unforeseen site conditions.

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $32.7 million to JOSEPH J. ALBANESE, INC.. CA FLAP SCR T5(1) MONTEREY BAY SANCTUARY SCENIC TRAIL CONSTRUCTION CONTRACT

Who is the contractor on this award?

The obligated recipient is JOSEPH J. ALBANESE, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $32.7 million.

What is the period of performance?

Start: 2024-04-25. End: 2026-05-04.

What is the specific scope of work for the Monterey Bay Sanctuary Scenic Trail construction contract?

The provided data indicates the contract is for 'Highway, Street, and Bridge Construction' and is associated with the 'CA FLAP SCR T5(1) MONTEREY BAY SANCTUARY SCENIC TRAIL CONSTRUCTION CONTRACT'. While the exact details of the scope are not fully elaborated in the summary data, it implies the construction or improvement of a scenic trail, potentially involving elements of road, street, or bridge building within the Monterey Bay Sanctuary area. Federal Highway Administration (FHWA) contracts of this nature typically involve site preparation, grading, paving, installation of trail surfaces, potential bridge or culvert construction, landscaping, and safety features. The 'FLAP' designation likely refers to the Federal Lands Access Program, which funds transportation improvements in federal lands. Further details would be found in the full contract solicitation documents.

How does the awarded amount of $32.6 million compare to the lowest bid of $4.4 million?

The awarded amount of $32,686,558.60 is substantially higher than the lowest bid received, which was $4,423,100. This represents a difference of over $28 million, or approximately 738% higher than the lowest bid. Such a significant disparity warrants careful examination. Potential reasons for this include the lowest bidder not meeting all technical requirements or qualifications, offering a significantly different scope of work, or the government selecting a bid that offered superior technical merit or long-term value despite a higher price. It is crucial to review the source selection documentation to understand why the lowest bid was not selected and if the awarded contract represents the best value to the government.

What are the potential risks associated with a firm fixed-price contract of this duration?

While a firm fixed-price (FFP) contract is designed to provide cost certainty, risks remain, especially for a long-duration project like this 739-day contract. The primary risk is that unforeseen circumstances, such as significant increases in material costs (e.g., asphalt, concrete, steel), labor shortages driving up wages, or unexpected site conditions (e.g., difficult soil, environmental issues), could make it difficult for the contractor to complete the work within the agreed price without impacting quality or scope. If such issues arise, the contractor might seek change orders, which could increase the overall cost to the government. Additionally, contractor efficiency and project management are critical; poor performance could lead to delays and potential disputes, even under an FFP contract.

What is the significance of the contract being awarded by the Federal Highway Administration?

The Federal Highway Administration (FHWA) is a key agency within the Department of Transportation responsible for the nation's highway system. Awarding this contract signifies that the project aligns with federal transportation infrastructure goals, potentially involving improvements to access roads, bridges, or related infrastructure that support federal lands or provide access to them, as suggested by the 'FLAP' designation. FHWA's involvement ensures adherence to federal standards for construction, safety, and environmental compliance. Their oversight typically involves rigorous review of project plans, construction methods, and quality control to ensure the project meets federal requirements and provides a lasting public benefit.

What does the 'CA FLAP SCR T5(1)' designation likely mean for this contract?

The designation 'CA FLAP SCR T5(1)' provides several clues about the contract. 'CA' clearly indicates the state of California. 'FLAP' most likely stands for the Federal Lands Access Program, a U.S. Department of Transportation program that funds transportation projects that provide access to, from, or within federal lands. 'SCR' could refer to Scenic, and 'T5(1)' might denote a specific project identifier, phase, or task order within a larger program or contract vehicle. Therefore, this contract is likely for a scenic transportation project in California, funded through the FLAP program, aimed at improving access to or within federal lands.

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: 6982AF23B000033

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 851 MARTIN AVE, SANTA CLARA, CA, 95050

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

Financial Breakdown

Contract Ceiling: $32,686,559

Exercised Options: $32,686,559

Current Obligation: $32,686,559

Actual Outlays: $20,798,075

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline