Interior Department awards $16.3M contract for Alaska test well, highlighting construction and energy sector activity

Contract Overview

Contract Amount: $16,283,983 ($16.3M)

Contractor: Marsh Creek, LLC

Awarding Agency: Department of the Interior

Start Date: 2009-09-22

End Date: 2010-12-31

Contract Duration: 465 days

Daily Burn Rate: $35.0K/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: RECOVERY DREW POINT TEST WELL #1 TAS::14 1112::TAS

Place of Performance

Location: PRUDHOE BAY, NORTH SLOPE County, ALASKA, 99734

State: Alaska Government Spending

Plain-Language Summary

Department of the Interior obligated $16.3 million to MARSH CREEK, LLC for work described as: RECOVERY DREW POINT TEST WELL #1 TAS::14 1112::TAS Key points: 1. Contract value of $16.3M represents a significant investment in specialized construction services. 2. Full and open competition suggests a potentially competitive bidding environment for this project. 3. The contract duration of 465 days indicates a substantial, multi-phase construction effort. 4. Awarded to Marsh Creek, LLC, this contract provides insight into key players in the energy infrastructure sector. 5. The project's location in Alaska points to the unique logistical and environmental considerations for federal projects in remote regions. 6. Fixed-price contract type aims to control costs for the government, shifting some risk to the contractor.

Value Assessment

Rating: fair

The contract value of $16.3 million for a test well project in Alaska appears substantial. Without specific benchmarks for similar deep-drilling or specialized construction projects in remote Arctic environments, a precise value-for-money assessment is challenging. However, the fixed-price nature of the contract suggests an attempt to cap government expenditure. Further analysis would require comparing this cost against similar projects in comparable geological and logistical settings.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition after exclusion of sources,' indicating that the agency sought bids from all responsible sources after initially excluding some. The presence of 3 bidders suggests a moderate level of competition for this specialized service. While not a wide-open competition, it likely provided sufficient price discovery to ensure a reasonable outcome for the government.

Taxpayer Impact: The competitive bidding process, even with initial exclusions, likely resulted in a more favorable price for taxpayers compared to a sole-source award. This approach helps ensure that government funds are used efficiently.

Public Impact

The primary beneficiaries are the Department of the Interior and potentially the energy sector through the acquisition of critical geological data. The service delivered is the construction and operation of a test well, likely for resource exploration or environmental assessment. The geographic impact is concentrated in Alaska, specifically in the remote region where the test well is located. Workforce implications include employment opportunities for skilled construction labor, engineers, and support staff in Alaska.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen geological challenges arise, despite the fixed-price structure.
Logistical complexities in remote Alaska could lead to delays and increased operational costs.
Environmental risks associated with drilling operations in a sensitive Arctic ecosystem.

Positive Signals

The use of full and open competition suggests a commitment to achieving best value.
The fixed-price contract type provides cost certainty for the government.
Awarding to a specific contractor indicates a selection based on qualifications and proposed approach.

Sector Analysis

This contract falls within the broader construction and energy services sector, specifically focusing on resource exploration or assessment infrastructure. The market for specialized drilling and heavy civil engineering in remote locations like Alaska is niche, often dominated by a few experienced firms capable of handling the unique logistical and environmental challenges. Comparable spending benchmarks would likely be found in other federal or state-level projects involving resource extraction infrastructure or environmental monitoring in similar challenging terrains.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). The prime contractor, Marsh Creek, LLC, is not explicitly identified as a small business in the provided data. Therefore, this award does not directly benefit small businesses through a set-aside. However, the prime contractor may engage small businesses as subcontractors, which would be a secondary impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily reside with the Bureau of Land Management (BLM), a sub-agency of the Department of the Interior. The BLM is responsible for ensuring the contractor meets the terms and conditions of the fixed-price contract, including performance standards, timelines, and reporting requirements. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Bureau of Land Management Oil and Gas Leasing
Department of Energy - Energy Infrastructure Projects
Army Corps of Engineers - Civil Works Construction
Geological Survey - Resource Assessment Programs

Risk Flags

Potential for cost overruns due to remote location and specialized nature of work.
Environmental risks associated with drilling in an Arctic ecosystem.
Logistical challenges impacting project timeline and operational efficiency.
Dependence on contractor's specialized expertise and equipment.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Interior awarded $16.3 million to MARSH CREEK, LLC. RECOVERY DREW POINT TEST WELL #1 TAS::14 1112::TAS

Who is the contractor on this award?

The obligated recipient is MARSH CREEK, LLC.

Which agency awarded this contract?

Awarding agency: Department of the Interior (Bureau of Land Management).

What is the total obligated amount?

The obligated amount is $16.3 million.

What is the period of performance?

Start: 2009-09-22. End: 2010-12-31.

What is the track record of Marsh Creek, LLC in performing similar heavy civil engineering and construction contracts for the federal government?

Assessing the track record of Marsh Creek, LLC requires a deeper dive into federal procurement databases beyond the provided data. While this contract indicates they were awarded a $16.3 million firm-fixed-price contract for a test well in Alaska, their past performance on similar projects is crucial for evaluating future reliability and value. Information such as past performance ratings, any history of contract disputes, timely completion rates, and experience with remote or environmentally sensitive projects would be key. Without this detailed history, it's difficult to definitively gauge their expertise and dependability for complex federal undertakings.

How does the $16.3 million contract value compare to the typical costs of similar test well projects in remote Arctic regions?

The $16.3 million cost for this test well project in Alaska is substantial, reflecting the inherent complexities and high operational expenses associated with working in remote Arctic environments. Factors such as extreme weather, limited infrastructure, specialized equipment requirements, and stringent environmental regulations significantly drive up costs compared to projects in more accessible locations. To benchmark this value effectively, one would need to compare it against similar deep-drilling or geological assessment projects undertaken by other federal agencies, state governments, or even private industry in comparable regions. Without such comparative data, it's challenging to ascertain if this represents excellent, fair, or potentially inflated pricing.

What are the primary risks associated with this specific contract, and how are they being mitigated?

The primary risks associated with this contract likely stem from the remote Alaskan location and the nature of drilling operations. These include significant logistical challenges (transportation of personnel and equipment), potential for extreme weather delays, unforeseen geological conditions impacting drilling depth or stability, and environmental risks associated with potential spills or habitat disruption. Mitigation strategies, inherent in the contract structure, include the firm-fixed-price award, which shifts cost overrun risk to the contractor, and the 'full and open competition' process, which ideally selects a contractor with proven capabilities to manage these risks. Specific performance clauses and environmental protection plans mandated by the Bureau of Land Management would further address these concerns.

What is the expected effectiveness of the test well in achieving the Department of the Interior's objectives?

The effectiveness of the test well hinges entirely on the specific objectives set by the Department of the Interior, which are not detailed in the provided data. Typically, such wells are drilled for geological resource assessment (e.g., oil, gas, minerals), scientific research, or environmental baseline studies. If the objective is to gather specific subsurface data, its effectiveness will be measured by the quality, quantity, and relevance of the samples and readings obtained. Success also depends on the contractor's ability to complete the drilling to the specified depth and within the planned timeframe, adhering to all technical and environmental protocols established by the Bureau of Land Management.

How does historical spending on similar 'Other Heavy and Civil Engineering Construction' contracts by the Department of the Interior compare to this award?

Analyzing historical spending requires access to comprehensive federal procurement data. This $16.3 million award for a test well in Alaska falls under the 'Other Heavy and Civil Engineering Construction' (ND: Other Heavy and Civil Engineering Construction) category. To understand its context, one would examine the frequency and value of similar contracts awarded by the Department of the Interior (and its sub-agencies like the Bureau of Land Management) over the past several fiscal years. This analysis would reveal trends in spending for specialized construction in challenging environments, average contract values, and the typical competitive landscape for such services, helping to determine if this award is an outlier or part of a consistent pattern.

What are the implications of the 'full and open competition after exclusion of sources' award type for government cost savings?

The 'full and open competition after exclusion of sources' (CT: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES) award type suggests a deliberate process to ensure competitive pricing while potentially addressing specific pre-qualification needs. By excluding certain sources initially (perhaps based on specialized capabilities or past performance issues), the agency aimed to refine the pool of bidders. Subsequently opening it to all responsible sources likely fostered competition among the remaining qualified entities. This approach aims to balance the benefits of broad competition with the need for technically capable contractors, potentially leading to cost savings compared to a sole-source award, while possibly yielding slightly less aggressive pricing than a completely unrestricted open competition if the initial exclusions were significant.

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 RESTOR ACVIVS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: INL09PS01074

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2000 E 88TH AVE, ANCHORAGE, AK, 00

Business Categories: 8(a) Program Participant, Alaskan Native Corporation Owned Firm, Category Business, Limited Liability Corporation, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $16,283,983

Exercised Options: $16,283,983

Current Obligation: $16,283,983

Timeline