DoD Awards $31.1M Tunnel Construction Contract to Burgos Group, LLC in New Mexico
Contract Overview
Contract Amount: $31,145,045 ($31.1M)
Contractor: Burgos Group, LLC
Awarding Agency: Department of Defense
Start Date: 2021-05-17
End Date: 2025-08-13
Contract Duration: 1,549 days
Daily Burn Rate: $20.1K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 2
Pricing Type: TIME AND MATERIALS
Sector: Construction
Official Description: TUNNEL CONSTRUCTION
Place of Performance
Location: WHITE SANDS MISSILE RANGE, DONA ANA County, NEW MEXICO, 88002
Plain-Language Summary
Department of Defense obligated $31.1 million to BURGOS GROUP, LLC for work described as: TUNNEL CONSTRUCTION Key points: 1. Significant contract value of $31.1 million for tunnel construction. 2. Full and open competition after exclusion of sources indicates a specific procurement approach. 3. Potential risks associated with time and materials contract type and long duration. 4. Construction sector spending benchmark for heavy civil engineering is relevant.
Value Assessment
Rating: fair
The contract value of $31.1 million is substantial for tunnel construction. Benchmarking against similar heavy civil engineering projects is necessary to assess pricing effectiveness, especially given the time and materials nature of the award.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The procurement method 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' suggests a competitive process was initiated, but specific sources were initially excluded. This could impact price discovery if the exclusion was not fully justified.
Taxpayer Impact: Taxpayer funds are being utilized for a significant infrastructure project. The effectiveness of the competition and the management of the time and materials contract will determine the ultimate value for taxpayers.
Public Impact
Supports critical infrastructure development for the Department of Defense. Potential for job creation in New Mexico through construction activities. Ensures operational capabilities through necessary facility construction.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Time and Materials contract type can lead to cost overruns.
- Long contract duration (1549 days) increases risk exposure.
- Exclusion of sources in competition needs scrutiny.
Positive Signals
- Awarded to a small business (Burgos Group, LLC).
- Competition was conducted, suggesting some level of market engagement.
- Contract supports essential defense infrastructure.
Sector Analysis
This contract falls under heavy and civil engineering construction, a sector critical for infrastructure development. Spending benchmarks in this area are typically high due to material costs, labor, and specialized equipment requirements.
Small Business Impact
The award to Burgos Group, LLC, a small business, is a positive signal for small business participation in federal contracting. However, the contract's substantial value and time-and-materials nature warrant close monitoring to ensure the small business can effectively manage the scope and costs.
Oversight & Accountability
Oversight will be crucial given the time and materials contract type and the long duration. The Defense Contract Management Agency (DCMA) or the contracting officer's representative will need to ensure diligent monitoring of labor hours, material costs, and project progress to ensure accountability and prevent cost creep.
Related Government Programs
- Other Heavy and Civil Engineering Construction
- Department of Defense Contracting
- Defense Threat Reduction Agency Programs
Risk Flags
- Potential for cost overruns due to Time and Materials contract.
- Long contract duration increases exposure to unforeseen issues.
- Justification for 'exclusion of sources' needs verification.
- Complexity of tunnel construction projects.
- Geographical and logistical challenges in New Mexico.
Tags
other-heavy-and-civil-engineering-constr, department-of-defense, nm, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $31.1 million to BURGOS GROUP, LLC. TUNNEL CONSTRUCTION
Who is the contractor on this award?
The obligated recipient is BURGOS GROUP, LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Threat Reduction Agency).
What is the total obligated amount?
The obligated amount is $31.1 million.
What is the period of performance?
Start: 2021-05-17. End: 2025-08-13.
What was the justification for excluding specific sources in the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' process, and did this exclusion limit competitive pricing?
The justification for excluding sources needs to be thoroughly reviewed. If the exclusion was based on specific capabilities or past performance, it might be warranted. However, if it was arbitrary, it could have stifled competition, potentially leading to higher prices than a truly open market would yield. Understanding the rationale is key to assessing value.
What are the specific risks associated with the 'TIME AND MATERIALS' contract type for a project of this scale and duration, and how are they being mitigated?
Time and Materials (T&M) contracts carry inherent risks of cost escalation as they reimburse actual labor and material costs plus a fixed fee or hourly rate. For a large, long-duration project like this tunnel construction, the risk of cost overruns is significant. Mitigation strategies must include robust oversight, detailed cost tracking, defined labor categories, and potentially cost ceilings or incentives to manage expenditures effectively.
How does the awarded price compare to industry benchmarks for similar tunnel construction projects, considering the specific geological and logistical challenges in New Mexico?
A comprehensive comparison against industry benchmarks for tunnel construction is essential. This analysis should account for the project's specific scope, complexity, location (New Mexico's geological conditions), and the time and materials pricing structure. Without this benchmark, it's difficult to definitively assess whether the $31.1 million represents good value or if potential cost efficiencies were missed during the procurement or are being missed during execution.
Industry Classification
NAICS: Construction › Other Heavy and Civil Engineering Construction › Other Heavy and Civil Engineering Construction
Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCTION OF BUILDINGS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Solicitation ID: HDTRA214R0001
Offers Received: 2
Pricing Type: TIME AND MATERIALS (Y)
Evaluated Preference: NONE
Contractor Details
Address: 320 RANCHITOS RD NW, ALBUQUERQUE, NM, 87114
Business Categories: 8(a) Program Participant, Category Business, Corporate Entity Not Tax Exempt, DoT Certified Disadvantaged Business Enterprise, Hispanic American Owned Business, Limited Liability Corporation, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $32,768,757
Exercised Options: $32,768,757
Current Obligation: $31,145,045
Actual Outlays: $413,836
Subaward Activity
Number of Subawards: 1
Total Subaward Amount: $17,182,222
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: HDTRA214D0001
IDV Type: IDC
Timeline
Start Date: 2021-05-17
Current End Date: 2025-08-13
Potential End Date: 2025-08-13 00:00:00
Last Modified: 2025-09-22
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