Manson Construction Co. awarded $30.17M for Port of Anchorage dredging, highlighting fixed-price contracts with economic adjustments

Contract Overview

Contract Amount: $30,167,087 ($30.2M)

Contractor: Manson Construction CO

Awarding Agency: Department of Defense

Start Date: 2012-01-26

End Date: 2015-05-15

Contract Duration: 1,205 days

Daily Burn Rate: $25.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 7

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Construction

Official Description: 2012-2014 MAINTENANCE DREDGING PORT OF ANCHORAGE, ANCHORAGE, AK

Place of Performance

Location: ANCHORAGE, ANCHORAGE County, ALASKA, 99501

State: Alaska Government Spending

Plain-Language Summary

Department of Defense obligated $30.2 million to MANSON CONSTRUCTION CO for work described as: 2012-2014 MAINTENANCE DREDGING PORT OF ANCHORAGE, ANCHORAGE, AK Key points: 1. Contract value of $30.17M for dredging services. 2. Fixed-price contract with economic price adjustment mechanism. 3. Awarded by the Department of the Army, supporting infrastructure. 4. Performance period spans over three years. 5. Competition was full and open, indicating market engagement. 6. Contractor Manson Construction Co. has a history with federal projects.

Value Assessment

Rating: fair

The contract value of $30.17M for dredging services over approximately three years appears within a reasonable range for large-scale civil engineering projects. The use of a fixed-price contract with economic price adjustment aims to manage cost fluctuations, but the effectiveness of this mechanism in controlling overall expenditure requires ongoing monitoring. Benchmarking against similar port maintenance contracts would provide a clearer picture of value for money, especially considering the specific environmental and logistical challenges of the Anchorage port.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple bidders had the opportunity to compete. This approach typically fosters price discovery and can lead to more competitive pricing. The presence of 7 bidders indicates a healthy level of interest in this type of federal contract, which is positive for ensuring a fair market price.

Taxpayer Impact: Taxpayers benefit from a competitive bidding process that generally drives down costs and ensures that the government receives services at a reasonable price. Full and open competition reduces the risk of inflated prices due to lack of alternatives.

Public Impact

The primary beneficiaries are the U.S. Army Corps of Engineers and the Port of Anchorage, ensuring continued operational capacity. Services delivered include essential maintenance dredging to maintain navigable waterways. Geographic impact is localized to Anchorage, Alaska, supporting regional economic activity. Workforce implications include employment opportunities for skilled labor in the construction and maritime sectors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns due to the economic price adjustment clause if market prices for materials and labor increase significantly.
Contract duration of over 1200 days requires careful project management to ensure timely completion and avoid extended disruption.
Dependence on a single contractor for a critical infrastructure maintenance task.

Positive Signals

Awarded under full and open competition, suggesting a competitive pricing environment.
Fixed-price contract structure provides a baseline cost control measure.
Contractor has experience in large-scale civil engineering projects.

Sector Analysis

This contract falls within the Heavy and Civil Engineering Construction sector, specifically related to port infrastructure maintenance. The market for such services is characterized by large, specialized firms capable of undertaking complex projects. Spending in this sector is often driven by government investment in transportation and defense logistics. Comparable spending benchmarks would typically involve other Army Corps of Engineers projects for port and waterway maintenance across different regions.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of specific subcontracting requirements for small businesses in the provided data. This suggests that the primary award went to a large contractor, and the direct impact on the small business ecosystem may be limited unless the prime contractor actively engages small businesses for subcontracting opportunities.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and project management divisions. Accountability measures are inherent in the fixed-price contract structure, with performance milestones and final delivery subject to inspection and acceptance. Transparency is generally maintained through contract award databases, though specific project-level oversight details are not provided.

Related Government Programs

Army Corps of Engineers Civil Works Programs
Port Infrastructure Development Grants
Maritime Transportation System Investment

Risk Flags

Potential for cost escalation due to economic price adjustment.
Logistical challenges and higher operating costs associated with working in Alaska.
Environmental sensitivities in Arctic marine environments require careful management.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $30.2 million to MANSON CONSTRUCTION CO. 2012-2014 MAINTENANCE DREDGING PORT OF ANCHORAGE, ANCHORAGE, AK

Who is the contractor on this award?

The obligated recipient is MANSON CONSTRUCTION CO.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $30.2 million.

What is the period of performance?

Start: 2012-01-26. End: 2015-05-15.

What is the historical spending pattern for port maintenance dredging by the Department of the Army in Alaska?

Historical spending data for port maintenance dredging by the Department of the Army in Alaska reveals a consistent need for such services to maintain critical maritime infrastructure. While specific figures for every year and every port are not readily available in this dataset, the award to Manson Construction Co. for the Port of Anchorage is indicative of ongoing investment. The Army Corps of Engineers manages numerous dredging projects nationwide, with Alaska's extensive coastline and strategic importance necessitating regular maintenance. Factors influencing spending include the volume of material to be dredged, the complexity of the site, environmental regulations, and the frequency of maintenance required. Comparing this $30.17M contract to previous awards for similar work in Alaska or other Arctic ports would provide context on whether this represents a typical, higher, or lower investment for such a project.

How does the fixed-price with economic price adjustment (FP-EPA) contract type compare to other contract types for similar dredging projects in terms of cost control?

The Fixed-Price with Economic Price Adjustment (FP-EPA) contract type is a hybrid approach designed to balance cost certainty for the government with protection for the contractor against significant market fluctuations. In dredging projects, where material costs, fuel prices, and labor rates can be volatile, FP-EPA aims to mitigate risks for both parties. Compared to a firm fixed-price (FFP) contract, FP-EPA offers more flexibility to the contractor, potentially leading to slightly higher initial bids to account for anticipated price changes. However, it can prevent costly contract modifications or disputes that might arise under FFP if unforeseen economic events occur. Conversely, compared to cost-plus contracts, FP-EPA provides the government with a more defined ceiling and greater cost control, as the contractor bears more risk for cost overruns beyond the economic adjustments. The effectiveness of FP-EPA hinges on the accuracy of the economic adjustment formula and the transparency of the price changes.

What is Manson Construction Co.'s track record with federal contracts, particularly in civil engineering and dredging?

Manson Construction Co. has a significant track record with federal contracts, particularly within the civil engineering and heavy construction domains. As evidenced by this award from the Department of the Army, the company is recognized for its capabilities in large-scale infrastructure projects. Federal procurement databases often list numerous awards to Manson Construction for various projects, including marine construction, dredging, and bridge building. Their experience suggests a familiarity with federal acquisition regulations, performance standards, and reporting requirements. A detailed review of their contract history would likely show a pattern of successful project completion, though like any large contractor, occasional performance issues or disputes may arise. Their ability to secure contracts like this one, especially under full and open competition, indicates a competitive standing and a history of meeting government requirements.

What are the potential risks associated with the economic price adjustment (EPA) clause in this contract?

The primary risk associated with the economic price adjustment (EPA) clause in this contract is the potential for increased costs to the government if market prices for key inputs rise significantly during the contract performance period. While the EPA is intended to protect the contractor from unforeseen economic volatility, it can lead to higher final expenditures for the government than initially budgeted if the adjustment formula is not carefully managed or if inflation is higher than anticipated. Specific risks include fluctuations in fuel prices (a major cost component for dredging equipment), labor costs, and the price of raw materials like steel or concrete if used in associated infrastructure work. The effectiveness of the EPA clause depends heavily on the specific indices used for adjustment and the caps or limitations placed on these adjustments. Without detailed knowledge of the EPA formula, it's difficult to quantify the exact risk, but it represents a departure from the cost certainty offered by a firm fixed-price contract.

How does the geographic location in Alaska influence the cost and complexity of this dredging contract?

The geographic location in Alaska significantly influences the cost and complexity of this dredging contract. Alaska presents unique logistical challenges, including remote work sites, harsh weather conditions, limited infrastructure, and specialized environmental considerations. Operating heavy machinery and transporting materials in such an environment typically incurs higher costs due to increased fuel consumption, specialized equipment requirements (e.g., for ice conditions), longer transit times, and the need for robust safety protocols. Furthermore, dredging in Alaskan waters may involve dealing with permafrost, sensitive marine ecosystems, and specific regulatory requirements related to environmental protection. These factors collectively increase the complexity of project planning and execution, often leading to higher contract values compared to similar projects in more temperate or accessible regions.

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 BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W911KB11R0028

Offers Received: 7

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

Evaluated Preference: NONE

Contractor Details

Parent Company: Manson Construction CO. (UEI: 194097960)

Address: 5209 E MARGINAL WAY S, SEATTLE, WA, 98134

Business Categories: Category Business, Not Designated a Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $30,167,087

Exercised Options: $30,167,087

Current Obligation: $30,167,087

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline