Hoover Dam Bypass Bridge Construction Awarded for $114M, Highlighting Major Infrastructure Investment

Contract Overview

Contract Amount: $114,117,541 ($114.1M)

Contractor: Obayashi Corporation

Awarding Agency: Department of Transportation

Start Date: 2004-10-22

End Date: 2010-08-31

Contract Duration: 2,139 days

Daily Burn Rate: $53.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: CONSTRUCTION OF HOOVER DAM BYPASS BRIDGE ACROSS THE COLORADO RIVER.

Place of Performance

Location: BOULDER CITY, CLARK County, NEVADA, 89006

State: Nevada Government Spending

Plain-Language Summary

Department of Transportation obligated $114.1 million to OBAYASHI CORPORATION for work described as: CONSTRUCTION OF HOOVER DAM BYPASS BRIDGE ACROSS THE COLORADO RIVER. Key points: 1. Significant federal investment in critical transportation infrastructure. 2. Full and open competition suggests a potentially competitive bidding process. 3. Firm fixed-price contract offers cost certainty for the government. 4. Long duration of the contract indicates a complex and extensive project. 5. Project located in Nevada, impacting regional transportation networks. 6. Awarded by the Department of Transportation, Federal Highway Administration.

Value Assessment

Rating: good

The $114 million contract for the Hoover Dam Bypass Bridge represents a substantial investment in national infrastructure. While direct comparisons for such a unique and large-scale project are difficult, the firm fixed-price structure suggests a negotiated price based on expected costs. The scale of the project and the competitive bidding process likely contributed to achieving a reasonable value for the taxpayer, though a detailed cost breakdown and comparison to similar bridge projects would be needed for a more precise assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. With four bidders participating, the competition level appears moderate for a project of this magnitude. This suggests that the government likely received multiple proposals, allowing for price discovery and potentially driving down costs compared to a sole-source or limited competition scenario.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to more favorable pricing and innovative solutions, ensuring federal funds are used efficiently.

Public Impact

Benefits travelers by providing a new, safer route across the Colorado River, alleviating congestion on the existing bridge. Enhances regional transportation and commerce by improving connectivity between Nevada and Arizona. Supports the construction workforce through job creation during the project's multi-year duration. The completed bridge serves as a vital piece of national infrastructure, facilitating economic activity.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns on large, complex infrastructure projects despite fixed-price contracts.
Delays in construction timelines can impact project completion and associated costs.
Ensuring quality and safety standards are met throughout the extended construction period.

Positive Signals

Firm fixed-price contract provides budget certainty.
Full and open competition suggests a robust bidding process.
The project addresses a critical transportation need, indicating strong program justification.

Sector Analysis

This contract falls within the heavy and civil engineering construction sector, specifically focusing on bridge construction. The market for large-scale infrastructure projects is often characterized by a few large, specialized firms capable of undertaking such complex endeavors. The $114 million award is significant, placing it among major federal construction projects. Comparable spending benchmarks would typically involve other large bridge or highway projects funded by federal agencies like the Department of Transportation.

Small Business Impact

The data indicates this contract was not set aside for small businesses, and there is no explicit mention of subcontracting requirements for small businesses. Given the scale and specialized nature of constructing a major bridge, it is likely that the prime contractor is a large firm. Further investigation would be needed to determine if small businesses were involved as subcontractors.

Oversight & Accountability

Oversight for this project would typically be managed by the Federal Highway Administration, a division of the Department of Transportation. Mechanisms likely include regular progress reports, site inspections, and adherence to contract specifications. Transparency is generally maintained through public contract databases and project updates. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Federal Highway System
National Bridge Inventory
Transportation Infrastructure Investment Act

Risk Flags

Potential for cost overruns due to project scale and duration.
Risk of construction delays impacting schedule and budget.
Ensuring long-term structural integrity and safety.

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $114.1 million to OBAYASHI CORPORATION. CONSTRUCTION OF HOOVER DAM BYPASS BRIDGE ACROSS THE COLORADO RIVER.

Who is the contractor on this award?

The obligated recipient is OBAYASHI CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $114.1 million.

What is the period of performance?

Start: 2004-10-22. End: 2010-08-31.

What is the track record of Obayashi Corporation in completing large-scale federal infrastructure projects?

Obayashi Corporation is a major global construction company with a significant history of undertaking large-scale infrastructure projects worldwide, including bridges, tunnels, and dams. While specific details on their track record with the U.S. federal government for similar projects would require a deeper dive into federal contract databases, their international experience suggests a capacity for complex engineering and construction. It would be prudent to examine past performance reviews and any documented issues or successes on comparable U.S. federal projects to fully assess their suitability and reliability for this Hoover Dam bypass bridge contract.

How does the $114 million cost compare to similar large bridge construction projects in the U.S.?

Benchmarking the $114 million cost requires comparing it to other large-scale bridge construction projects funded by federal or state governments in the U.S. Factors such as project complexity, geological conditions, material costs, labor rates, and the specific year of construction significantly influence total cost. For instance, major suspension or cable-stayed bridges often cost hundreds of millions, sometimes exceeding a billion dollars. The Hoover Dam Bypass Bridge, while substantial, is a concrete arch bridge, which can have different cost profiles. A detailed analysis would involve normalizing costs for inflation, length, width, and structural complexity against a portfolio of similar bridge projects to determine if the $114 million represents a competitive and reasonable expenditure.

What are the primary risks associated with a firm fixed-price contract for a project of this duration and scale?

While firm fixed-price contracts offer cost certainty to the government, they shift significant risk to the contractor. For a project as large and long-term as the Hoover Dam Bypass Bridge (over 5 years), risks for the contractor include unforeseen increases in material costs, labor shortages or wage inflation, unexpected site conditions (e.g., geological challenges), and potential design changes or scope creep. If these risks materialize and are not adequately managed by Obayashi Corporation, it could lead to contractor financial distress, project delays, or potentially disputes over change orders. The government's risk is primarily that the contractor may cut corners on quality or safety to maintain profitability, or that the initial fixed price was set too high due to the contractor's risk-averse pricing.

How effective is full and open competition in ensuring value for money on large federal construction contracts?

Full and open competition is generally considered the most effective method for ensuring value for money on large federal construction contracts. By allowing all responsible sources to bid, the government maximizes the pool of potential contractors, increasing the likelihood of receiving competitive pricing and innovative solutions. The presence of multiple bidders, such as the four identified in this case, creates pressure on each firm to offer their best price and technical approach. This competitive dynamic helps prevent price gouging and encourages efficiency. However, the effectiveness also depends on the clarity of the solicitation, the evaluation criteria, and the government's ability to accurately assess the proposals to select the best overall value, not just the lowest price.

What is the historical spending pattern for highway, street, and bridge construction by the Department of Transportation?

The Department of Transportation, primarily through the Federal Highway Administration (FHWA), consistently allocates substantial funding towards highway, street, and bridge construction and maintenance. Annual federal obligations for these categories typically run into the tens of billions of dollars, driven by programs like the National Highway System and various grant initiatives aimed at improving transportation infrastructure. Spending levels can fluctuate based on congressional appropriations, economic conditions, and national infrastructure priorities. The Hoover Dam Bypass Bridge contract represents a significant single award within this broader spending context, reflecting the ongoing federal commitment to modernizing and expanding the nation's transportation network.

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: SEALED BID

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 5000 SHORELINE DRIVE, SUITE 201, SOUTH SAN FRANCISCO, CA, 90

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

Financial Breakdown

Contract Ceiling: $114,117,541

Exercised Options: $114,117,541

Current Obligation: $114,117,541

Contract Characteristics

Multi-Year Contract: Yes

Timeline