DoD's $18M Arizona highway contract awarded to Granite Construction Company shows fair value

Contract Overview

Contract Amount: $18,073,700 ($18.1M)

Contractor: Granite Construction Company

Awarding Agency: Department of Defense

Start Date: 2008-09-29

End Date: 2009-10-02

Contract Duration: 368 days

Daily Burn Rate: $49.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 14

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: CQ02 FV-1B, DOUGLAS, COCHESE COUNTY, AZ

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85713

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $18.1 million to GRANITE CONSTRUCTION COMPANY for work described as: CQ02 FV-1B, DOUGLAS, COCHESE COUNTY, AZ Key points: 1. Contract value appears reasonable given the scope of highway construction. 2. Full and open competition suggests a competitive bidding environment. 3. Fixed-price contract type mitigates cost overrun risks for the government. 4. Project duration aligns with typical infrastructure development timelines. 5. Geographic location in Cochise County, AZ, indicates regional infrastructure focus.

Value Assessment

Rating: good

The contract's value of $18.07 million for highway construction in Arizona appears to be within a reasonable range for similar projects. While specific per-unit cost benchmarks are not provided, the fixed-price nature of the contract suggests that the government secured a defined cost for the work. Benchmarking against other Department of the Army highway projects of similar scale and complexity would provide further insight into its value-for-money.

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 14 bids suggests a robust competitive landscape for this highway construction project. A high number of bidders generally leads to more competitive pricing and better value for the government.

Taxpayer Impact: The extensive competition for this contract likely resulted in a more favorable price for taxpayers, as contractors vied to win the award.

Public Impact

Benefits residents and businesses in Cochise County, Arizona, through improved transportation infrastructure. Delivers essential highway and bridge construction services. Impacts the local economy through job creation and material sourcing. Enhances regional connectivity and transportation efficiency.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Positive Signals

Awarded under full and open competition, indicating a healthy market.
Firm fixed-price contract type limits government financial risk.
Project duration is clearly defined, allowing for effective planning.
Awarded to a single contractor, suggesting a clear line of responsibility.

Sector Analysis

This contract falls within the heavy and civil engineering construction sector, specifically focusing on highway, street, and bridge construction. This sector is critical for national infrastructure and is often characterized by large, complex projects requiring specialized equipment and expertise. Spending in this area by the Department of Defense is typically driven by base infrastructure needs or support for military operations.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract. Furthermore, there is no information on subcontracting plans. Without this data, it is difficult to assess the direct impact on the small business ecosystem for this particular award.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant Department of the Army contracting command. Quality assurance representatives would likely monitor the construction progress and adherence to specifications. Transparency is generally maintained through contract award databases, though detailed project-specific oversight reports are not always publicly available.

Related Government Programs

Military Base Infrastructure Projects
Federal Highway Administration Grants
Department of Transportation Construction Contracts

Risk Flags

Potential for cost overruns if unforeseen site conditions arise, though mitigated by fixed-price contract.
Quality control is crucial to ensure construction meets specifications under a fixed-price agreement.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.1 million to GRANITE CONSTRUCTION COMPANY. CQ02 FV-1B, DOUGLAS, COCHESE COUNTY, AZ

Who is the contractor on this award?

The obligated recipient is GRANITE CONSTRUCTION COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $18.1 million.

What is the period of performance?

Start: 2008-09-29. End: 2009-10-02.

What is the track record of Granite Construction Company with the Department of Defense?

Granite Construction Company has a significant history of working with various government agencies, including the Department of Defense. While this specific contract was awarded in 2008, the company's broader portfolio includes numerous infrastructure projects for federal, state, and local governments. Analyzing their past performance on similar large-scale construction projects, including any past issues or commendations, would provide a more comprehensive view of their reliability and capability. Their extensive experience suggests a strong understanding of government contracting requirements and project execution.

How does the $18.07 million contract value compare to similar highway construction projects by the DoD?

Benchmarking the $18.07 million contract value requires comparing it to similar highway construction projects undertaken by the Department of Defense in terms of scope, complexity, and geographic location. Factors such as the specific type of highway work (e.g., new construction, repair, widening), the terrain, material costs in the region, and the project duration all influence cost. Without access to a database of comparable DoD highway projects with detailed cost breakdowns, a precise value-for-money assessment is challenging. However, the number of bids received (14) suggests that the pricing was competitive within the market for such services.

What are the primary risks associated with this firm fixed-price contract?

The primary risk associated with a firm fixed-price (FFP) contract, from the government's perspective, is that the contractor may not be incentivized to control costs beyond what is necessary to meet the contract specifications. If the contractor encounters unforeseen difficulties or inefficiencies, they bear the cost, which could lead to a desire to cut corners on quality if not properly monitored. However, FFP contracts are generally favored for their cost certainty. For the contractor, the risk lies in underestimating the project's costs, leading to reduced profit margins or even a loss.

How effective is full and open competition in ensuring competitive pricing for construction contracts?

Full and open competition is widely considered the most effective method for ensuring competitive pricing in government contracting. By allowing all responsible sources to submit offers, the government maximizes the pool of potential bidders, thereby increasing the likelihood of receiving a wide range of proposals. This broad competition drives down prices as contractors strive to offer the most attractive bid to win the contract. The 14 bids received for this highway construction project exemplify the potential for robust price discovery under this procurement method.

What is the historical spending pattern for highway construction by the Department of the Army in Arizona?

Analyzing historical spending patterns for highway construction by the Department of the Army in Arizona would require access to historical contract data. This would involve querying databases for similar projects awarded over previous fiscal years within the state. Such an analysis could reveal trends in contract values, types of work performed, and the contractors most frequently awarded these projects. Understanding these patterns can help in assessing whether the $18.07 million award is consistent with past investments or represents an outlier, potentially indicating changes in project scope, market conditions, or strategic priorities.

Industry Classification

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

Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCT NONBUILDING FACILITIES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 14

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Granite Construction Incorporated (UEI: 622826360)

Address: 585 WEST BEACH ST, WATSONVILLE, CA, 95076

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $18,073,700

Exercised Options: $18,073,700

Current Obligation: $18,073,700

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W912BV07D2024

IDV Type: IDC

Timeline