DoD's $31.8M fence construction contract awarded to Kiewit New Mexico Co. for Texas

Contract Overview

Contract Amount: $31,759,839 ($31.8M)

Contractor: Kiewit NEW Mexico CO.

Awarding Agency: Department of Defense

Start Date: 2008-06-27

End Date: 2010-11-30

Contract Duration: 886 days

Daily Burn Rate: $35.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 10

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: PRIMARY FENCE FABENS, TEXAS K-3

Place of Performance

Location: EL PASO, EL PASO County, TEXAS, 79901

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $31.8 million to KIEWIT NEW MEXICO CO. for work described as: PRIMARY FENCE FABENS, TEXAS K-3 Key points: 1. The contract was awarded under full and open competition, suggesting a competitive bidding process. 2. The firm-fixed-price contract type indicates that the contractor bears the risk of cost overruns. 3. The contract duration of 886 days suggests a significant construction project. 4. The project is located in Fabens, Texas, indicating a specific geographic focus. 5. The contract falls under Highway, Street, and Bridge Construction, a common infrastructure category. 6. The award amount of $31.8 million places this contract in the mid-to-large size category for construction projects.

Value Assessment

Rating: fair

Benchmarking the value of this specific fence construction contract is challenging without comparable projects. However, the firm-fixed-price structure shifts cost risk to the contractor, which can be favorable for the government if managed effectively. The award amount of $31.8 million for a project spanning nearly three years suggests a substantial investment in infrastructure. Further analysis would require comparing the scope of work, materials, and labor costs to similar federal or state-level construction projects in the region.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through full and open competition, meaning all responsible sources were permitted to submit a bid. The presence of 10 bidders (indicated by 'no': 10) suggests a healthy level of competition for this project. A higher number of bidders generally leads to more competitive pricing and a wider range of technical solutions, potentially resulting in better value for the government.

Taxpayer Impact: The robust competition for this contract likely resulted in a more favorable price for taxpayers compared to a sole-source or limited competition award. It indicates that taxpayer funds were used efficiently by leveraging market forces to secure the best possible offer.

Public Impact

The primary beneficiaries are the Department of Defense and potentially border security operations, given the nature of fence construction. The contract delivers essential infrastructure in the form of a fence, likely for security or demarcation purposes. The geographic impact is concentrated in Fabens, Texas, and surrounding areas. The project likely created temporary employment opportunities for construction workers and related support staff in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the firm-fixed-price contract does not adequately account for unforeseen construction challenges.
The long duration of the contract could expose it to changes in material costs or labor availability.
Ensuring the quality and durability of the fence construction to meet long-term security requirements.

Positive Signals

Awarded through full and open competition, indicating a competitive bidding process that can lead to better pricing.
Firm-fixed-price contract type places cost risk on the contractor, potentially protecting the government from budget overruns.
The project addresses a specific infrastructure need for the Department of Defense.

Sector Analysis

This contract falls within the Highway, Street, and Bridge Construction sector, which is a significant part of the broader construction industry. This sector involves the building and maintenance of critical infrastructure. Federal spending in this area often supports national security, transportation, and economic development. Comparable spending benchmarks would typically involve analyzing other large-scale infrastructure projects awarded by federal agencies like the Department of Transportation or the Army Corps of Engineers.

Small Business Impact

The data indicates that this contract was not set aside for small businesses ('sb': false) and there is no explicit mention of subcontracting goals for small businesses. Therefore, the direct impact on the small business ecosystem may be limited unless Kiewit New Mexico Co. voluntarily engages small businesses as subcontractors. Further investigation into subcontracting plans would be needed to fully assess the impact on small businesses.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant Department of the Army contracting command. Accountability measures are inherent in the firm-fixed-price contract, requiring the contractor to deliver the specified fence within the agreed-upon price. Transparency would be facilitated through contract award databases and potentially through public reporting on project milestones, though specific oversight details are not provided in the summary data.

Related Government Programs

Department of Defense Construction Contracts
Border Infrastructure Projects
Highway and Bridge Construction
Federal Infrastructure Spending

Risk Flags

Potential for cost overruns if not managed properly
Risk of substandard materials or workmanship
Long project duration may increase exposure to market fluctuations

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $31.8 million to KIEWIT NEW MEXICO CO.. PRIMARY FENCE FABENS, TEXAS K-3

Who is the contractor on this award?

The obligated recipient is KIEWIT NEW MEXICO CO..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $31.8 million.

What is the period of performance?

Start: 2008-06-27. End: 2010-11-30.

What is the specific purpose and scope of the fence construction project in Fabens, Texas?

The provided data identifies the contract as 'PRIMARY FENCE FABENS, TEXAS K-3' and categorizes it under 'Highway, Street, and Bridge Construction'. While the exact purpose isn't detailed, the term 'PRIMARY FENCE' strongly suggests a security or border control function. The 'K-3' designation might refer to a specific segment or phase of a larger border infrastructure initiative. The scope would encompass the design, materials, and labor required to construct a significant length of fencing, likely meeting specific height, material, and security specifications set by the Department of the Army. Without access to the full contract statement of work, the precise technical requirements and intended operational use remain inferred.

How does the $31.8 million award compare to similar federal fence construction projects?

Direct comparison of the $31.8 million award for this specific fence project is difficult without knowing the exact length, height, materials, and security features required. However, federal fence and border barrier projects can vary significantly in cost per mile. For instance, projects along the U.S.-Mexico border have seen costs ranging from a few million dollars per mile for basic fencing to tens of millions per mile for more complex barriers involving technology and terrain mitigation. Given the 886-day duration, this $31.8 million contract likely covers a substantial segment or a complex installation, suggesting its cost is within the expected range for large-scale federal infrastructure security projects, though a precise benchmark requires detailed scope comparison.

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

The primary risk with a firm-fixed-price (FFP) contract is that the contractor, Kiewit New Mexico Co., bears the financial burden if costs exceed the agreed-upon price. This could lead to the contractor cutting corners on quality or materials to maintain profitability, potentially compromising the fence's durability and effectiveness. Conversely, if the contractor significantly underestimates costs, they might face financial distress or even default. For the government, the risk lies in ensuring adequate oversight to prevent substandard work and verifying that the final product meets all specified requirements. The long duration (886 days) also introduces risks related to material price escalation and potential unforeseen site conditions that were not fully anticipated during the bidding process.

What is Kiewit New Mexico Co.'s track record with similar Department of Defense contracts?

Kiewit New Mexico Co. is part of Kiewit Corporation, a large engineering and construction company with extensive experience in large-scale infrastructure projects, including those for the Department of Defense. While specific details on Kiewit New Mexico Co.'s past performance on similar fence or border projects are not provided in the summary data, Kiewit Corporation has a history of successfully completing complex projects such as military base construction, transportation infrastructure, and energy facilities. Their track record generally indicates a capacity to handle large federal contracts. A thorough review would involve examining past performance evaluations, any contract disputes, and the successful completion of projects with similar scope and complexity.

How has federal spending on fence and border infrastructure evolved over time?

Federal spending on fence and border infrastructure has fluctuated significantly, often driven by policy priorities and national security concerns. Historically, spending increased notably in the early 2000s with initiatives like the Secure Fence Act of 2006. Subsequent administrations have seen varying levels of investment, with periods of increased focus on physical barriers and technology, and other periods emphasizing different aspects of border management. The total federal outlay for border infrastructure is complex to track precisely as it involves appropriations across multiple agencies (e.g., DHS, DoD). However, major projects like the one awarded to Kiewit represent substantial, targeted investments within broader trends of border security funding.

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: 10

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Peter Kiewit Sons Inc (UEI: 070729517)

Address: KIEWIT PLAZA, OMAHA, NE, 68131

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $31,759,839

Exercised Options: $31,759,839

Current Obligation: $31,759,839

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W912BV07D2026

IDV Type: IDC

Timeline