DHS Spends $24.2M on Southwest Border Fencing Maintenance, Awarded to Cerrudo Services, LLC

Contract Overview

Contract Amount: $24,186,072 ($24.2M)

Contractor: Cerrudo Services, LLC

Awarding Agency: Department of Homeland Security

Start Date: 2012-02-03

End Date: 2015-01-31

Contract Duration: 1,093 days

Daily Burn Rate: $22.1K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 4

Pricing Type: COST PLUS FIXED FEE

Sector: Construction

Official Description: MAINTENANCE AND REPAIR OF THE SOUTHWEST BORDER FENCING

Place of Performance

Location: CHULA VISTA, SAN DIEGO County, CALIFORNIA, 91914

State: California Government Spending

Plain-Language Summary

Department of Homeland Security obligated $24.2 million to CERRUDO SERVICES, LLC for work described as: MAINTENANCE AND REPAIR OF THE SOUTHWEST BORDER FENCING Key points: 1. Contract value of $24.2 million for border fence maintenance. 2. Competition method was 'Full and Open Competition After Exclusion of Sources'. 3. Risk of potential cost overruns due to Cost Plus Fixed Fee contract type. 4. Sector is Construction, specifically heavy and civil engineering.

Value Assessment

Rating: fair

The contract value of $24.2 million for a 3-year period appears reasonable for large-scale infrastructure maintenance. However, the Cost Plus Fixed Fee structure warrants scrutiny for potential cost creep compared to fixed-price contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The competition was 'Full and Open Competition After Exclusion of Sources,' indicating some limitations on the pool of eligible bidders. This method can impact price discovery, potentially leading to higher costs than a truly open competition.

Taxpayer Impact: Taxpayers are impacted by the $24.2 million expenditure, with potential for increased costs due to the contract type and limited competition.

Public Impact

Ensures the physical integrity of the U.S. Southwest border. Supports border security operations by maintaining critical infrastructure. Funds allocated for maintenance and repair of existing fencing structures.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type
Limited competition method
Potential for cost overruns

Positive Signals

Maintenance of critical border infrastructure
Defined contract period

Sector Analysis

This contract falls within the Construction sector, specifically heavy and civil engineering. Spending benchmarks for border infrastructure maintenance can vary significantly based on the extent of the fencing and the complexity of repairs.

Small Business Impact

There is no indication that small businesses were involved in this contract, as it was awarded to Cerrudo Services, LLC. Further analysis would be needed to determine if subcontracting opportunities were available.

Oversight & Accountability

The contract was awarded by the Department of Homeland Security, U.S. Customs and Border Protection. Oversight would focus on ensuring the maintenance performed meets contract specifications and budget adherence.

Related Government Programs

Other Heavy and Civil Engineering Construction
Department of Homeland Security Contracting
U.S. Customs and Border Protection Programs

Risk Flags

Cost Plus Fixed Fee contract type
Limited competition
Potential for cost overruns
Lack of small business participation noted

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $24.2 million to CERRUDO SERVICES, LLC. MAINTENANCE AND REPAIR OF THE SOUTHWEST BORDER FENCING

Who is the contractor on this award?

The obligated recipient is CERRUDO SERVICES, LLC.

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (U.S. Customs and Border Protection).

What is the total obligated amount?

The obligated amount is $24.2 million.

What is the period of performance?

Start: 2012-02-03. End: 2015-01-31.

What was the specific justification for excluding certain sources in the 'Full and Open Competition After Exclusion of Sources' method?

The justification for excluding sources in this type of competition typically relates to specific technical requirements, unique capabilities, or proprietary information that only a limited number of contractors possess. Understanding this rationale is crucial for assessing whether the exclusion was necessary and if it unduly restricted competition, potentially impacting the final price paid by taxpayers.

How did the Cost Plus Fixed Fee structure impact the final cost compared to alternative contract types for this project?

The Cost Plus Fixed Fee (CPFF) structure allows the contractor to recover all allowable costs plus a predetermined fixed fee. While it can be useful for projects with uncertain costs, it shifts much of the cost risk to the government. If costs escalate beyond initial estimates, the government pays more. A fixed-price contract, conversely, would have placed more cost risk on the contractor, potentially leading to a lower final price if managed efficiently.

What is the long-term effectiveness and cost-efficiency of maintaining the existing border fencing versus alternative border security measures?

The long-term effectiveness and cost-efficiency of maintaining existing border fencing are subjects of ongoing debate. While fencing provides a physical barrier, its maintenance requires continuous investment. Alternative measures, such as technology (sensors, drones) or increased personnel, may offer different cost-benefit profiles. A comprehensive analysis would compare the total lifecycle costs and security outcomes of fencing maintenance against these alternatives.

Industry Classification

NAICS: Construction › Other Heavy and Civil Engineering Construction › Other Heavy and Civil Engineering Construction

Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR NONBUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: ALTERNATIVE SOURCES

Solicitation ID: HSBP1010R0018

Offers Received: 4

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 74 DIGITAL DR STE 1, NOVATO, CA, 94949

Business Categories: Category Business, DoT Certified Disadvantaged Business Enterprise, Economically Disadvantaged Women Owned Small Business, Emerging Small Business, Hispanic American Owned Business, HUBZone Firm, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Sole Proprietorship, Special Designations, U.S.-Owned Business, Woman Owned Business

Financial Breakdown

Contract Ceiling: $24,186,072

Exercised Options: $24,186,072

Current Obligation: $24,186,072

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline