Interior Department awards $64.7M contract for water infrastructure, highlighting construction needs in New Mexico

Contract Overview

Contract Amount: $64,748,499 ($64.7M)

Contractor: Oscar Renda Contracting Inc

Awarding Agency: Department of the Interior

Start Date: 2017-09-15

End Date: 2020-12-18

Contract Duration: 1,190 days

Daily Burn Rate: $54.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF NGWSP BLOCK 9 THROUGH 11

Place of Performance

Location: FARMINGTON, SAN JUAN County, NEW MEXICO, 87401

State: New Mexico Government Spending

Plain-Language Summary

Department of the Interior obligated $64.7 million to OSCAR RENDA CONTRACTING INC for work described as: IGF::OT::IGF NGWSP BLOCK 9 THROUGH 11 Key points: 1. Contract value of $64.7 million indicates significant investment in essential infrastructure. 2. Full and open competition suggests a robust market for water and sewer construction services. 3. The contract's duration of 1190 days points to a complex, multi-phase project. 4. Fixed-price contract type aims to control costs and provide budget certainty. 5. Award to Oscar Renda Contracting Inc. suggests established capabilities in large-scale construction. 6. Focus on water and sewer lines addresses critical public utility needs.

Value Assessment

Rating: good

The contract value of $64.7 million for water and sewer line construction appears reasonable given the project's scope and duration. Benchmarking against similar large-scale infrastructure projects managed by the Bureau of Reclamation would provide a more precise value-for-money assessment. The firm fixed-price structure suggests an effort to manage costs effectively, though the final cost will depend on execution.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple qualified contractors had the opportunity to bid. This competitive process is expected to drive fair pricing and ensure the government receives the best value. The presence of three bidders, as indicated by the 'no' field, suggests a healthy level of interest and competition for this type of work.

Taxpayer Impact: Full and open competition benefits taxpayers by fostering a competitive environment that can lead to lower prices and higher quality services, ensuring federal funds are used efficiently.

Public Impact

Residents and businesses in New Mexico will benefit from improved water and sewer infrastructure, ensuring reliable access to essential services. The contract delivers critical construction services for water and sewer lines, vital for public health and environmental protection. The geographic impact is concentrated in New Mexico, addressing specific regional infrastructure needs. The project will likely create or sustain jobs in the construction sector within New Mexico.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions arise during construction.
Dependence on timely material procurement and labor availability could impact project schedule.
Coordination with local utilities and stakeholders is crucial for seamless execution.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Award to an established contractor suggests a lower risk of performance issues.
Full and open competition indicates a competitive bidding process likely yielding fair pricing.

Sector Analysis

This contract falls within the construction sector, specifically focusing on heavy civil infrastructure related to water and sewer systems. The market for such services is substantial, driven by ongoing needs for repair, replacement, and expansion of aging municipal and federal water infrastructure across the United States. Comparable spending benchmarks would involve analyzing other large-scale water infrastructure projects awarded by federal agencies like the Army Corps of Engineers or the Environmental Protection Agency.

Small Business Impact

While this contract was awarded under full and open competition and does not explicitly mention a small business set-aside, the prime contractor may engage small businesses for subcontracting opportunities. Analysis of subcontracting plans would be necessary to determine the extent of small business participation and its impact on the local small business ecosystem. The absence of specific small business set-aside flags suggests it was not a primary objective for this particular award.

Oversight & Accountability

Oversight for this contract would typically be managed by the Bureau of Reclamation, a division of the Department of the Interior. Mechanisms likely include regular progress reports, site inspections, and adherence to contract milestones. Accountability is ensured through the firm fixed-price structure and performance clauses. Transparency is generally maintained through contract award databases, though detailed project-specific oversight reports may not always be publicly accessible.

Related Government Programs

Bureau of Reclamation Water Infrastructure Projects
Army Corps of Engineers Civil Works Programs
EPA Water Infrastructure Finance and Innovation Act (WIFIA)
Rural Development Water and Waste Disposal Loans & Grants

Risk Flags

Potential for unforeseen site conditions impacting schedule and cost.
Risk of weather-related delays affecting construction timeline.
Need for effective coordination with multiple stakeholders and local authorities.
Long project duration increases exposure to market fluctuations (materials, labor).

Frequently Asked Questions

What is this federal contract paying for?

Department of the Interior awarded $64.7 million to OSCAR RENDA CONTRACTING INC. IGF::OT::IGF NGWSP BLOCK 9 THROUGH 11

Who is the contractor on this award?

The obligated recipient is OSCAR RENDA CONTRACTING INC.

Which agency awarded this contract?

Awarding agency: Department of the Interior (Bureau of Reclamation).

What is the total obligated amount?

The obligated amount is $64.7 million.

What is the period of performance?

Start: 2017-09-15. End: 2020-12-18.

What is the track record of Oscar Renda Contracting Inc. on similar federal projects?

Oscar Renda Contracting Inc. has a history of performing large-scale civil engineering and construction projects for federal agencies. While specific details on past performance for the Bureau of Reclamation or similar water infrastructure projects would require a deeper dive into contract databases like FPDS, their ability to win a $64.7 million firm-fixed-price contract under full and open competition suggests a demonstrated capacity and a generally positive performance history. Agencies typically evaluate past performance as a key factor in award decisions. Further investigation into their contract history, including any past performance reviews or disputes, would provide a more comprehensive understanding of their reliability and expertise in executing complex infrastructure projects.

How does the awarded amount compare to the estimated cost or budget for this project?

The awarded amount of $64,748,499.18 represents the final negotiated price for the water and sewer line construction. Without access to the government's initial cost estimates or budget allocations for this specific project, a direct comparison is not possible. However, the fact that the contract was awarded under full and open competition with three bidders suggests that the awarded price is likely competitive and reflects market rates. Agencies often have internal cost estimates, and a significant deviation between the estimate and the winning bid could trigger further review. The firm fixed-price nature of the contract implies that the government has secured this price upfront, aiming to avoid cost increases during performance.

What are the primary risks associated with a project of this scale and type?

Projects involving extensive underground utility construction, such as water and sewer lines, carry inherent risks. These include unforeseen subsurface conditions (e.g., rock, contaminated soil, existing utilities not previously identified), which can lead to delays and increased costs, even under a fixed-price contract if scope changes are required. Weather delays are also a significant risk, particularly in regions with extreme conditions. Furthermore, managing multiple subcontractors, ensuring quality control, and coordinating with various stakeholders (e.g., local municipalities, environmental agencies) present logistical and performance risks. The long duration of the contract (1190 days) also increases the potential for material price fluctuations and labor availability issues.

How effective is the firm fixed-price contract type in managing costs for this type of infrastructure project?

The firm fixed-price (FFP) contract type is generally considered effective for managing costs in infrastructure projects when the scope of work is well-defined and risks are understood. For this water and sewer line construction project, the FFP structure provides the government with cost certainty, as the contractor assumes the risk of cost overruns. This incentivizes the contractor to manage resources efficiently and control expenses. However, if significant unforeseen conditions arise that necessitate a change in scope, the contract may need to be modified, potentially leading to adjustments in price. The success of the FFP in cost control heavily relies on the thoroughness of the initial project planning, design, and risk assessment.

What is the historical spending pattern for water and sewer infrastructure by the Bureau of Reclamation?

The Bureau of Reclamation, as a key agency responsible for water management and infrastructure in the western United States, has a long history of investing in water infrastructure. Spending on water and sewer lines, while perhaps not their primary focus compared to dams and irrigation systems, is a critical component of ensuring water delivery and treatment capabilities. Historical spending patterns would likely show consistent investment in maintaining and upgrading existing systems, as well as developing new infrastructure to support growing populations and evolving water quality standards. Analyzing annual reports and budget allocations over the past decade would reveal trends in the scale and types of water infrastructure projects undertaken, including the frequency and value of contracts for pipeline construction.

What are the implications of the contract's duration (1190 days) on project management and oversight?

A contract duration of 1190 days (approximately 3.25 years) signifies a substantial and complex undertaking. This extended timeline necessitates robust project management and sustained oversight from the Bureau of Reclamation. Key implications include the need for detailed long-term planning, phased execution, and continuous monitoring of progress against milestones. The agency must ensure consistent resource allocation for oversight throughout the project's life. Furthermore, a longer duration increases the potential for scope creep, changes in regulatory requirements, and the need to adapt to evolving technologies or environmental considerations. Effective communication and collaboration between the contractor and the agency are paramount to navigate the challenges of such a lengthy project and ensure successful completion.

Industry Classification

NAICS: Construction › Utility System Construction › Water and Sewer Line and Related Structures Construction

Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCTION OF BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: R17PS00812

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Southland Holdings LLC (UEI: 014034465)

Address: 608 HENRIETTA CREEK, ROANOKE, TX, 76262

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

Financial Breakdown

Contract Ceiling: $64,748,499

Exercised Options: $64,748,499

Current Obligation: $64,748,499

Actual Outlays: $2,347,873

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline