Army awards $246.6M for runway maintenance, Granite Construction Company wins contract

Contract Overview

Contract Amount: $24,665,944 ($24.7M)

Contractor: Granite Construction Company

Awarding Agency: Department of Defense

Start Date: 2006-02-10

End Date: 2008-12-31

Contract Duration: 1,055 days

Daily Burn Rate: $23.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: 200606!600469!2100!W91238!USA ENGINEER DIST SACRAMENTO !W9123806C0007 !A!N! !N! ! !20060210!20080229!006914642!006914642!622826360!N!GRANITE CONSTRUCTION COMPANY !585 W BEACH ST !WATSONVILLE !CA!95076!20560!045!49!DUGWAY PROVING GRD !TOOELE !UTAH !+000023305104!N!N!000023305104!Z124!MAINT/AIRPORT RUNWAYS !C2 !CONSTRUCTION !000 !NOT DISCERNABLE !237310!E! !3! ! ! ! ! !99990909!B! ! !A! !A!U!J!2!004!B! !D!N!Z! ! !N!C!N! ! ! !C!D!A!A!000!A!C!Y! !N! ! ! ! !0001! !

Place of Performance

Location: DUGWAY, TOOELE County, UTAH, 84022

State: Utah Government Spending

Plain-Language Summary

Department of Defense obligated $24.7 million to GRANITE CONSTRUCTION COMPANY for work described as: 200606!600469!2100!W91238!USA ENGINEER DIST SACRAMENTO !W9123806C0007 !A!N! !N! ! !20060210!20080229!006914642!006914642!622826360!N!GRANITE CONSTRUCTION COMPANY !585 W BEACH ST !WATSONVILLE !CA!95076!20560!045!49!DUGWAY PROVING GRD !TOOE… Key points: 1. Contract awarded for runway maintenance, indicating a need for infrastructure upkeep. 2. Full and open competition suggests a robust bidding process. 3. The contract duration of over 3 years implies a significant, long-term project. 4. The award value is substantial, requiring careful performance monitoring. 5. The project is located in Utah, potentially impacting local workforce and economy. 6. The North American Industry Classification System (NAICS) code 237310 points to highway, street, and bridge construction.

Value Assessment

Rating: good

The contract value of $246.6 million for runway maintenance over approximately 3 years appears reasonable given the scope of such infrastructure projects. Benchmarking against similar large-scale airfield construction and maintenance contracts would provide a more precise value-for-money assessment. The firm fixed-price nature of the contract shifts risk to the contractor, which can be beneficial for the government if the contractor manages costs effectively. However, without detailed cost breakdowns or comparisons to industry standards for specific maintenance tasks, a definitive assessment of pricing efficiency is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The data shows 4 bids were received, suggesting a healthy level of competition for this significant project. A competitive bidding process generally leads to better price discovery and can result in more favorable terms for the government. The presence of multiple bidders implies that the market has sufficient capacity and interest in undertaking large-scale construction and maintenance projects for the Department of the Army.

Taxpayer Impact: The full and open competition ensures that taxpayer dollars are likely being used efficiently by driving down prices through market forces. It provides assurance that the government is not overpaying due to a lack of viable alternatives.

Public Impact

The primary beneficiary is the Department of the Army, ensuring operational readiness through well-maintained airfields. Services delivered include essential runway maintenance and repair, crucial for aviation operations. The geographic impact is concentrated in Utah, specifically at Dugway Proving Ground, potentially creating local jobs and economic activity. Workforce implications include employment opportunities for construction workers, engineers, and support staff in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen issues arise during maintenance, despite the firm fixed-price structure.
Ensuring the quality of work meets stringent military aviation standards is critical.
Logistical challenges in remote locations like Dugway Proving Ground could impact project timelines and costs.
Dependency on a single large contractor for a critical infrastructure component.

Positive Signals

The firm fixed-price contract incentivizes the contractor to manage costs efficiently.
Full and open competition suggests a competitive market price was likely achieved.
The substantial contract value indicates a significant project with potential for high-quality execution.
The long duration allows for thorough planning and execution of complex maintenance tasks.

Sector Analysis

This contract falls within the Construction sector, specifically related to heavy and civil engineering construction. The North American Industry Classification System (NAICS) code 237310, 'Highway, Street, and Bridge Construction,' is often used for airfield pavement and infrastructure projects. The market for large-scale military construction and maintenance is dominated by a few major players capable of handling such complex and high-value contracts. Spending in this area is driven by the need to maintain critical infrastructure supporting national defense operations.

Small Business Impact

This contract was not set aside for small businesses and was awarded to Granite Construction Company, a large entity. There is no explicit indication of subcontracting plans for small businesses within the provided data. The focus on a large prime contractor for this scale of project means that direct opportunities for small businesses may be limited unless they are engaged as subcontractors by Granite Construction. Further investigation into subcontracting goals would be necessary to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this Department of the Army contract would typically be managed by the contracting officer and their representatives (CORs) within the relevant Army command, likely the U.S. Army Corps of Engineers given the nature of the work. Accountability measures are embedded in the firm fixed-price contract terms, with penalties for non-performance or delays. Transparency is generally provided through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Army Corps of Engineers Construction Contracts
Airfield Pavement Maintenance Programs
Department of Defense Infrastructure Modernization
Federal Highway Administration Construction Projects

Risk Flags

Potential for schedule delays due to weather or unforeseen site conditions.
Risk of quality issues if contractor's QC/QA processes are insufficient.
Dependency on contractor's financial stability for project completion.
Potential for scope creep if requirements are not clearly defined initially.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.7 million to GRANITE CONSTRUCTION COMPANY. 200606!600469!2100!W91238!USA ENGINEER DIST SACRAMENTO !W9123806C0007 !A!N! !N! ! !20060210!20080229!006914642!006914642!622826360!N!GRANITE CONSTRUCTION COMPANY !585 W BEACH ST !WATSONVILLE !CA!95076!20560!045!49!DUGWAY PROVING GRD !TOOELE !UTAH !+000023305104!N!N!000023305104!Z124!MAINT/AIRPORT RUNWAYS !C2 !CONSTRUCTION !000 !NOT DISCERNABLE !237310!E! !3! ! ! ! ! !999

Who is the contractor on this award?

The obligated recipient is GRANITE CONSTRUCTION COMPANY.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $24.7 million.

What is the period of performance?

Start: 2006-02-10. End: 2008-12-31.

What is the track record of Granite Construction Company with similar large-scale federal infrastructure projects, particularly for the Department of Defense?

Granite Construction Company has a significant history of undertaking large federal contracts, including extensive work for the Department of Defense and other agencies. They specialize in heavy civil construction, which encompasses projects like highways, bridges, and airfield infrastructure. Their portfolio often includes complex projects requiring substantial resources and adherence to strict government specifications. While this specific contract is for runway maintenance, Granite's broader experience in large-scale civil engineering suggests a capacity to manage such endeavors. A detailed review of their past performance on similar projects, including any past performance evaluations or disputes, would provide a more granular understanding of their reliability and execution capabilities for this particular award.

How does the awarded amount of $246.6 million compare to the estimated cost or budget for this runway maintenance project?

The provided data indicates an award amount of $246,659,440. However, the original estimated cost or the allocated budget for this specific runway maintenance project at Dugway Proving Ground is not detailed in the available information. Without knowing the government's initial cost estimate or budget ceiling, it is difficult to definitively assess whether the awarded price represents a significant saving, an overage, or is precisely in line with expectations. The fact that it was awarded under full and open competition with four bids suggests the price was competitive, but a direct comparison to an internal government estimate would be necessary for a complete value analysis.

What specific runway maintenance tasks are included in this contract, and what is the expected impact on airfield operations?

The contract description lists 'MAINT/AIRPORT RUNWAYS' as the service type. This broadly encompasses activities such as pavement repair (e.g., crack sealing, patching, resurfacing), grading, drainage improvements, lighting system maintenance, and potentially marking and signage updates. The specific scope of work would be detailed in the contract's Statement of Work (SOW). The expected impact on airfield operations would depend on the phasing and scheduling of the maintenance. While essential for long-term safety and functionality, such maintenance activities can necessitate temporary runway closures, reduced operating hours, or diversions, potentially impacting training schedules and flight operations at Dugway Proving Ground.

What are the key performance indicators (KPIs) or quality assurance measures associated with this contract?

While specific KPIs are not detailed in the summary data, federal construction contracts of this magnitude typically include robust quality assurance (QA) and quality control (QC) provisions. The Department of the Army, likely through the Army Corps of Engineers, would have established performance standards related to materials, workmanship, safety, and adherence to technical specifications. Key performance indicators would likely focus on schedule adherence, defect rates, safety compliance (e.g., incident rates), and the successful completion of specified maintenance tasks to meet aviation standards. The contracting officer's representative (COR) would be responsible for monitoring contractor performance against these metrics throughout the contract duration.

How does this $246.6 million contract compare to historical federal spending on runway maintenance at similar military installations?

Comparing this $246.6 million contract to historical spending requires access to broader datasets on federal infrastructure maintenance. However, as a general benchmark, major runway construction or rehabilitation projects at military bases can range from tens to hundreds of millions of dollars, depending on the size of the airfield, the extent of the work, and the specific technologies or materials used. This award appears to be a significant investment, suggesting either a comprehensive overhaul or extensive repairs are planned for the runways at Dugway Proving Ground. Historical spending patterns for runway maintenance vary widely based on the age of the facility, operational tempo, and budget allocations, making direct comparisons challenging without specific context for Dugway Proving Ground's infrastructure needs.

What is the potential for cost growth or change orders given the firm fixed-price contract type and the project duration?

Firm fixed-price (FFP) contracts are designed to provide cost certainty by placing the risk of cost overruns on the contractor. However, cost growth can still occur through change orders, which are modifications to the original contract scope. For a project of this duration (over 3 years) and complexity, the potential for unforeseen conditions (e.g., subsurface issues, environmental discoveries) or changes in requirements exists. If such events necessitate modifications to the work, change orders could be issued, potentially increasing the total contract value. Effective contract management, clear initial scope definition, and rigorous change order control processes are crucial to mitigating cost growth under an FFP contract.

Industry Classification

NAICS: Construction › Highway, Street, and Bridge Construction › Highway, Street, and Bridge 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

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Granite Construction Incorporated (UEI: 622826360)

Address: 585 W BEACH ST, WATSONVILLE, CA, 90

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline