DoD's $39M Hurricane Harvey Repairs Contract Awarded to URS Group, Inc. Faces Scrutiny

Contract Overview

Contract Amount: $38,960,694 ($39.0M)

Contractor: URS Group, Inc.

Awarding Agency: Department of Defense

Start Date: 2018-07-31

End Date: 2023-07-17

Contract Duration: 1,812 days

Daily Burn Rate: $21.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF X011 18G-HURRICANE HARVEY REPAIRS, NAS CORPUS CHRIST

Place of Performance

Location: CORPUS CHRISTI, NUECES County, TEXAS, 78419

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $39.0 million to URS GROUP, INC. for work described as: IGF::OT::IGF X011 18G-HURRICANE HARVEY REPAIRS, NAS CORPUS CHRIST Key points: 1. The contract awarded to URS Group, Inc. for hurricane repairs is a significant expenditure. 2. Competition was full and open, suggesting a potentially competitive bidding process. 3. The duration of the contract (1812 days) and its fixed-price nature warrant a review of cost controls. 4. The sector is Commercial and Institutional Building Construction, a critical area for infrastructure resilience.

Value Assessment

Rating: questionable

The contract's value of $38.96 million for repairs is substantial. Benchmarking against similar large-scale construction contracts is difficult without more specific project details, but the extended duration raises questions about initial cost estimations and potential for cost overruns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which typically promotes competitive pricing. However, the long duration and fixed-price nature could obscure the true cost discovery process if the scope evolved significantly or if initial bids were not fully reflective of the eventual work.

Taxpayer Impact: While competition was intended to ensure fair pricing, the extended timeline and fixed price for a large repair project may have led to taxpayers bearing costs that could have been reduced with more agile oversight or a different contract structure.

Public Impact

Taxpayers funded nearly $39 million for post-hurricane repairs in Texas. The contract duration spanned over five years, impacting long-term budget planning. The Department of the Navy managed this significant infrastructure repair project.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration
Fixed-price contract for extensive repairs
Lack of small business participation noted

Positive Signals

Full and open competition utilized
Clear project type (building construction)

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, which is vital for rebuilding and maintaining critical infrastructure. Spending benchmarks for large-scale, multi-year repair projects can vary widely based on scope, location, and material costs.

Small Business Impact

The data indicates that small businesses were not involved in this contract (ss: false, sb: false). This suggests a missed opportunity for economic inclusion and potentially higher costs if larger firms do not offer competitive pricing or subcontracting opportunities.

Oversight & Accountability

The long duration of this contract necessitates robust oversight to ensure adherence to the original scope, prevent scope creep, and manage costs effectively. Accountability for the final cost and quality of repairs rests with the Department of the Navy and URS Group, Inc.

Related Government Programs

Commercial and Institutional Building Construction
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Long contract duration (over 5 years)
Fixed-price contract for extensive repairs
No small business participation
Potential for cost escalation over extended period
Lack of specific performance metrics in provided data

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $39.0 million to URS GROUP, INC.. IGF::OT::IGF X011 18G-HURRICANE HARVEY REPAIRS, NAS CORPUS CHRIST

Who is the contractor on this award?

The obligated recipient is URS GROUP, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $39.0 million.

What is the period of performance?

Start: 2018-07-31. End: 2023-07-17.

What was the primary driver for the 5-year duration of these hurricane repair services, and how did it impact the final cost compared to a shorter-term contract?

The extended 5-year duration likely reflects the complexity and scale of Hurricane Harvey's damage, potentially involving multiple phases of assessment, repair, and validation across various facilities. This prolonged timeline could increase overall costs due to sustained overhead, labor, and material price fluctuations, even under a fixed-price agreement, compared to a more rapidly executed project.

Given the full and open competition, what factors might have led to the absence of small business participation in this nearly $39 million contract?

The absence of small business participation could stem from several factors, including the large contract size requiring significant bonding capacity and resources typically held by larger firms, the specialized nature of the construction services needed post-disaster, or a lack of targeted outreach to small businesses for this specific opportunity. This may indicate a potential gap in leveraging the small business industrial base for disaster recovery efforts.

How does the fixed-price contract type mitigate or exacerbate risks associated with a 5-year repair project in a disaster-affected region?

A fixed-price contract aims to cap costs for the government, transferring some cost overrun risk to the contractor (URS Group, Inc.). However, for a 5-year project in a disaster zone, this structure could exacerbate risks if unforeseen conditions, material cost escalations, or scope changes occur, potentially leading to contractor claims, disputes, or reduced quality if the contractor seeks to maintain profitability.

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Commercial and Institutional Building Construction

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: AECOM

Address: 1600 PERIMETER PARK DR STE 400, MORRISVILLE, NC, 27560

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

Financial Breakdown

Contract Ceiling: $43,598,167

Exercised Options: $43,598,167

Current Obligation: $38,960,694

Actual Outlays: $3,962,312

Subaward Activity

Number of Subawards: 84

Total Subaward Amount: $28,120,607

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N6247013D6022

IDV Type: IDC

Timeline