State Dept. Awards $21M for Canal Repair, Facing Limited Competition Concerns

Contract Overview

Contract Amount: $21,012,658 ($21.0M)

Contractor: Meridian Engineering CO

Awarding Agency: Department of State

Start Date: 2016-12-14

End Date: 2020-12-31

Contract Duration: 1,478 days

Daily Burn Rate: $14.2K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF REPLACEMENT OF THE AMERICAN CANAL UPPER REACH

Place of Performance

Location: EL PASO, EL PASO County, TEXAS, 79922

State: Texas Government Spending

Plain-Language Summary

Department of State obligated $21.0 million to MERIDIAN ENGINEERING CO for work described as: IGF::OT::IGF REPLACEMENT OF THE AMERICAN CANAL UPPER REACH Key points: 1. Contract value of $21.01M for canal repair. 2. Competition was full and open after exclusion of sources, raising questions. 3. Risk of cost overruns due to fixed-price contract and potential for limited competition. 4. Construction sector spending benchmark analysis needed for fair comparison.

Value Assessment

Rating: fair

The $21.01M contract value appears reasonable for heavy civil engineering construction. However, without specific details on the scope of work and comparable projects, a precise pricing assessment is difficult. The firm fixed-price structure aims to control costs.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES.' This suggests that while competition was sought, specific sources may have been excluded, potentially limiting the competitive landscape and impacting price discovery.

Taxpayer Impact: Taxpayer funds are being used for critical infrastructure repair. The effectiveness of the competition method will directly influence the value for money achieved.

Public Impact

Ensures continued functionality of a vital binational waterway. Supports infrastructure development and maintenance in Texas. Potential for job creation within the construction sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Positive Signals

Sector Analysis

This contract falls within the heavy and civil engineering construction sector. Spending in this sector can vary significantly based on project complexity, location, and material costs. Benchmarking against similar canal repair or large-scale infrastructure projects is crucial.

Small Business Impact

The data does not indicate any specific provisions or set-asides for small businesses in this contract. Further analysis would be needed to determine if small businesses had an opportunity to participate or benefit from this award.

Oversight & Accountability

The International Boundary and Water Commission (IBWC) is responsible for this project. Oversight would involve monitoring project progress, quality, and adherence to contract terms to ensure efficient use of taxpayer funds.

Related Government Programs

Risk Flags

Tags

other-heavy-and-civil-engineering-constr, department-of-state, tx, definitive-contract, 10m-plus

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $21.0 million to MERIDIAN ENGINEERING CO. IGF::OT::IGF REPLACEMENT OF THE AMERICAN CANAL UPPER REACH

Who is the contractor on this award?

The obligated recipient is MERIDIAN ENGINEERING CO.

Which agency awarded this contract?

Awarding agency: Department of State (International Boundary and Water Commission: U.S.-Mexico).

What is the total obligated amount?

The obligated amount is $21.0 million.

What is the period of performance?

Start: 2016-12-14. End: 2020-12-31.

What specific factors led to the exclusion of certain sources in the competition process, and how did this impact the final price?

The exclusion of sources likely stemmed from specific technical requirements, past performance, or unique capabilities needed for the American Canal's upper reach replacement. This limitation could reduce competitive pressure, potentially leading to a higher price than if a broader range of bidders were involved. Understanding the justification for exclusion is key to assessing value for money.

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

The primary risks with a firm fixed-price contract for a long-duration, complex project include potential cost overruns if unforeseen issues arise (e.g., material price fluctuations, subsurface conditions) and the contractor may be incentivized to cut corners on quality to maintain profitability. Conversely, the government benefits from cost certainty, assuming the initial price is fair.

How effectively does this contract address the long-term maintenance and operational needs of the American Canal system?

This contract focuses on the replacement of the upper reach, addressing a specific infrastructure need. While crucial for immediate functionality, its effectiveness in addressing long-term maintenance and broader operational needs depends on the quality of the replacement work and integration with the rest of the canal system. It's a component of, not the entirety of, long-term system management.

Industry Classification

NAICS: ConstructionOther Heavy and Civil Engineering ConstructionOther Heavy and Civil Engineering Construction

Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIESCONSTRUCTION OF BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SEALED BID

Solicitation ID: IBM16B0003

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3223 LOS ARBOLES AVE NE, ALBUQUERQUE, NM, 87107

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $21,012,658

Exercised Options: $21,012,658

Current Obligation: $21,012,658

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline

Start Date: 2016-12-14

Current End Date: 2020-12-31

Potential End Date: 2020-12-31 00:00:00

Last Modified: 2025-10-03

More Contracts from Meridian Engineering CO

View all Meridian Engineering CO federal contracts →

Other Department of State Contracts

View all Department of State contracts →

Explore Related Government Spending