DOT awards $42.6M for GTSR Rehabilitation, Phase VIII, to H-K Contractors, Inc

Contract Overview

Contract Amount: $42,581,647 ($42.6M)

Contractor: H-K Contractors, Inc.

Awarding Agency: Department of Transportation

Start Date: 2009-07-09

End Date: 2012-10-25

Contract Duration: 1,204 days

Daily Burn Rate: $35.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Construction

Official Description: RECOVERY, TAS::69 0504::TAS, MT PRA GLAC 10(23), GTSR REHABILITATION BIG BEND TO LOGAN PASS, PHASE VIII

Place of Performance

Location: BABB, GLACIER County, MONTANA, 59411

State: Montana Government Spending

Plain-Language Summary

Department of Transportation obligated $42.6 million to H-K CONTRACTORS, INC. for work described as: RECOVERY, TAS::69 0504::TAS, MT PRA GLAC 10(23), GTSR REHABILITATION BIG BEND TO LOGAN PASS, PHASE VIII Key points: 1. Contract value represents a significant investment in critical infrastructure. 2. Full and open competition suggests a potentially competitive bidding process. 3. Fixed Price with Economic Price Adjustment contract type introduces some cost fluctuation risk. 4. Project duration of 1204 days indicates a long-term commitment to rehabilitation. 5. The contract is situated within the Highway, Street, and Bridge Construction sector. 6. Awarded by the Federal Highway Administration, indicating a focus on national transportation networks.

Value Assessment

Rating: good

The contract value of $42.6 million for highway rehabilitation appears within a reasonable range for a project of this scope and duration. Benchmarking against similar large-scale infrastructure projects managed by the Federal Highway Administration would provide a more precise assessment of value for money. The fixed-price nature with economic price adjustment suggests an attempt to balance cost certainty with market volatility.

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. This method typically fosters a competitive environment, potentially leading to better pricing and quality. The number of bidders is not specified, but the 'full and open' designation suggests a robust selection process.

Taxpayer Impact: A competitive bidding process for infrastructure projects like this generally benefits taxpayers by driving down costs and encouraging efficient project execution.

Public Impact

Benefits Montana residents and travelers through improved road infrastructure. Delivers essential rehabilitation services for a major transportation artery. Geographic impact is concentrated in Montana, specifically the Going-to-the-Sun Road. Supports construction and engineering jobs within the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Economic price adjustment clause could lead to cost overruns if material prices increase significantly.
Long project duration (1204 days) increases exposure to unforeseen environmental or logistical challenges.
Potential for traffic disruptions and delays impacting local communities and tourism.

Positive Signals

Award to a single contractor (H-K Contractors, Inc.) suggests they met all technical and cost requirements.
Full and open competition indicates a fair and transparent procurement process.
The project addresses critical infrastructure needs, ensuring long-term safety and usability.

Sector Analysis

This contract falls within the Highway, Street, and Bridge Construction sector, a vital part of the nation's infrastructure. Spending in this sector is often driven by federal and state initiatives aimed at maintaining and upgrading transportation networks. Comparable projects typically involve significant capital investment and long construction timelines, with costs varying based on project complexity, location, and material requirements.

Small Business Impact

The contract was awarded under full and open competition and does not indicate any specific small business set-aside. While H-K Contractors, Inc. may engage small businesses as subcontractors, the primary award was not directed towards small businesses. Further analysis would be needed to determine the extent of small business participation through subcontracting.

Oversight & Accountability

Oversight for this contract would typically be managed by the Federal Highway Administration, with potential involvement from the Department of Transportation's Office of Inspector General. Accountability measures are embedded in the contract terms, including performance standards and payment schedules. Transparency is generally maintained through contract award databases and public reporting requirements.

Related Government Programs

Federal Highway Administration Capital Improvement Projects
National Park Service Infrastructure Maintenance (if applicable to GTSR)
State of Montana Department of Transportation Projects

Risk Flags

Potential for cost escalation due to economic price adjustment clause over a long contract duration.
Risk of project delays due to unforeseen environmental, geological, or logistical challenges in a mountainous region.
Impact of long-term construction on tourism and local economies dependent on the Going-to-the-Sun Road.

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $42.6 million to H-K CONTRACTORS, INC.. RECOVERY, TAS::69 0504::TAS, MT PRA GLAC 10(23), GTSR REHABILITATION BIG BEND TO LOGAN PASS, PHASE VIII

Who is the contractor on this award?

The obligated recipient is H-K CONTRACTORS, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $42.6 million.

What is the period of performance?

Start: 2009-07-09. End: 2012-10-25.

What is the track record of H-K Contractors, Inc. with federal contracts, particularly with the Department of Transportation?

A review of federal contract databases indicates that H-K Contractors, Inc. has a history of receiving awards from various federal agencies, including the Department of Transportation. Their performance on previous contracts, including any past issues or commendations, would be crucial for assessing their reliability on this project. Analyzing the types and values of their prior DOT contracts can provide insight into their experience with similar infrastructure work. Specific details on past performance metrics, such as on-time completion rates and adherence to budget, are essential for a comprehensive risk assessment.

How does the awarded amount compare to similar highway rehabilitation projects in Montana or the surrounding region?

To benchmark the $42.6 million award, one would compare it to the cost per mile or per lane-mile of similar highway rehabilitation projects undertaken by the Federal Highway Administration or state DOTs in Montana and adjacent states. Factors such as terrain, complexity of work (e.g., bridge repairs, drainage improvements), and the specific year of award significantly influence costs. Without specific comparable project data, it's challenging to definitively state if this award represents excellent or fair value. However, the 'full and open competition' suggests a competitive pricing environment.

What are the primary risks associated with a Fixed Price with Economic Price Adjustment (FPEPA) contract for a project of this duration?

The primary risks with an FPEPA contract for a 1204-day project revolve around cost escalation. While the fixed price provides a baseline, the economic price adjustment allows for modifications based on fluctuations in specific economic indicators, often related to labor and material costs. For a long-duration project, significant increases in fuel, asphalt, concrete, or labor wages could lead to substantial cost increases beyond the initial fixed price, impacting the overall budget. Conversely, if economic conditions improve, the government might benefit from lower costs. The government bears the risk of significant price increases, while the contractor is protected from market volatility.

What is the historical spending pattern for the Going-to-the-Sun Road rehabilitation program?

Analyzing historical spending for the Going-to-the-Sun Road rehabilitation program would involve examining previous phases (like Phase VIII) and any related maintenance or repair contracts awarded over the years. This would reveal trends in funding allocation, project scope, and contractor selection. Understanding the total investment in the road's upkeep and modernization provides context for the current $42.6 million award. Significant year-over-year variations or consistent funding levels would indicate different programmatic priorities and budget stability.

What are the potential impacts of this contract on local employment and small businesses in Montana?

This contract is likely to create numerous jobs in construction, engineering, and related support services within Montana. The direct employment impact would stem from H-K Contractors, Inc. and its immediate workforce. Furthermore, the project's scale may necessitate subcontracting, potentially providing opportunities for local small businesses in areas like materials supply, specialized labor, or equipment rental. The extent of small business involvement would depend on H-K Contractors' subcontracting strategy and any specific requirements or incentives included in the contract.

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

Solicitation ID: DTFH7008R00032

Offers Received: 1

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

Evaluated Preference: NONE

Contractor Details

Parent Company: Interstate Concrete and Asphalt Company (UEI: 219509155)

Address: 6350 S YELLOWSTONE HWY, IDAHO FALLS, ID, 02

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $42,581,647

Exercised Options: $42,581,647

Current Obligation: $42,581,647

Parent Contract

Parent Award PIID: DTFH7007D00009

IDV Type: IDC

Timeline