Department of Defense awards $48.4M contract for levee construction in Texas

Contract Overview

Contract Amount: $48,367,210 ($48.4M)

Contractor: Granite Construction Company

Awarding Agency: Department of Defense

Start Date: 2023-06-23

End Date: 2025-06-08

Contract Duration: 716 days

Daily Burn Rate: $67.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: 3 LEVEE REACH2/VINYARD & HARRISON SUMPS

Place of Performance

Location: WHARTON, WHARTON County, TEXAS, 77488

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $48.4 million to GRANITE CONSTRUCTION COMPANY for work described as: 3 LEVEE REACH2/VINYARD & HARRISON SUMPS Key points: 1. Contract awarded to Granite Construction Company for critical infrastructure. 2. Project involves construction of sumps for levee systems. 3. Firm Fixed Price contract type suggests defined scope and cost control. 4. Long duration of 716 days indicates a complex and extensive project. 5. Awarded by the Department of the Army, highlighting military infrastructure needs. 6. Geographic focus on Texas, potentially addressing regional flood control.

Value Assessment

Rating: good

The contract value of $48.4 million for levee and sump construction appears reasonable given the project's scope and duration. While direct comparisons are difficult without specific project details, similar large-scale civil engineering projects often fall within this cost range. The firm fixed price structure provides cost certainty for the government, assuming the scope is well-defined. Benchmarking against similar Army Corps of Engineers projects would offer further insight into value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely considered. With 6 bidders participating, this suggests a healthy level of competition for this significant civil engineering project. A competitive bidding process generally leads to better price discovery and potentially more favorable terms for the government.

Taxpayer Impact: The full and open competition with multiple bidders is beneficial for taxpayers as it likely drove down the final contract price through competitive pressures.

Public Impact

Benefits residents and infrastructure in Texas by enhancing flood control measures. Services delivered include the construction of critical levee support systems (sumps). Geographic impact is concentrated in Texas, specifically where the levees are located. Workforce implications include job creation in the construction sector within Texas.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen geological or environmental issues arise during the extended construction period.
Risk of schedule delays due to the long duration and complexity of civil engineering projects.
Dependence on contractor's ability to manage a large-scale project effectively.

Positive Signals

Firm Fixed Price contract provides cost certainty.
Full and open competition with multiple bidders suggests competitive pricing.
Awarded to a known entity in construction (Granite Construction Company).

Sector Analysis

This contract falls within the heavy and civil engineering construction sector, a significant part of the broader construction industry. This sector is crucial for national infrastructure development, including flood control, transportation, and utilities. Spending in this area is often driven by government initiatives to maintain and upgrade aging infrastructure and respond to environmental challenges. Comparable spending benchmarks would typically be found within the Army Corps of Engineers' civil works program.

Small Business Impact

The contract data indicates that small business participation was not a specific set-aside (ss: false, sb: false). This suggests that the primary award was made to a large contractor. There is no explicit information on subcontracting plans for small businesses, which could be a missed opportunity to engage the small business ecosystem in this significant project.

Oversight & Accountability

Oversight for this contract would likely be managed by the Department of the Army, potentially through the Army Corps of Engineers. Accountability measures are inherent in the firm fixed price contract type, which requires the contractor to deliver the specified work within the agreed-upon price. Transparency is generally maintained through contract award databases and public reporting, though specific project oversight details may not be publicly available.

Related Government Programs

Army Corps of Engineers Civil Works Projects
Flood Control Infrastructure
Heavy and Civil Engineering Construction Contracts
Department of Defense Infrastructure Modernization

Risk Flags

Extended contract duration may increase risk of unforeseen costs or delays.
Lack of explicit small business subcontracting information.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $48.4 million to GRANITE CONSTRUCTION COMPANY. 3 LEVEE REACH2/VINYARD & HARRISON SUMPS

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 $48.4 million.

What is the period of performance?

Start: 2023-06-23. End: 2025-06-08.

What is the historical spending pattern of the Department of the Army on levee and sump construction projects in Texas?

Analyzing historical spending by the Department of the Army on similar levee and sump construction projects in Texas requires access to detailed historical contract databases. Generally, the Army Corps of Engineers, which falls under the Department of the Army, is responsible for a significant portion of federal flood control and infrastructure projects. Spending in this area can fluctuate based on federal appropriations, infrastructure needs assessments, and the severity of environmental events like hurricanes and heavy rainfall. Without specific historical data for Texas, it's difficult to provide precise figures, but it's reasonable to assume consistent investment in critical infrastructure like levees, especially in regions prone to flooding. This $48.4 million award represents a substantial, but likely not unprecedented, investment for a project of this nature.

How does the per-unit cost of this contract compare to similar levee and sump construction projects?

Determining a precise per-unit cost for this contract is challenging without detailed project specifications, such as the linear feet of levee, the volume of excavation, or the number and size of sumps. The total contract value is $48,367,209.89. If we were to consider 'units' as linear feet of levee or cubic yards of earth moved, a meaningful comparison would require breaking down the contract's scope into these quantifiable elements. Benchmarking would involve comparing these derived per-unit costs against similar projects managed by the Army Corps of Engineers or other federal agencies in comparable geographic and geological conditions. Given the firm fixed price nature, the contractor has presumably performed this analysis to arrive at their bid. However, without access to the detailed cost breakdown or comparable project data, a direct per-unit cost comparison is not feasible from the provided summary.

What is Granite Construction Company's track record with large-scale civil engineering contracts for the Department of Defense?

Granite Construction Company has a significant track record in heavy civil construction, including projects for various government agencies. While specific details on their past contracts solely with the Department of Defense for levee and sump construction in Texas are not provided here, Granite is a well-established firm known for undertaking large infrastructure projects. Their portfolio often includes work on transportation, water management, and other civil infrastructure. A thorough assessment of their track record would involve reviewing their past performance on similar-sized and complex projects, including any awards, disputes, or performance issues. Generally, large federal agencies like the Department of Defense conduct pre-award assessments of contractor capabilities and past performance, suggesting Granite met the necessary criteria for this award.

What are the potential risks associated with the 716-day duration of this contract?

The 716-day duration (approximately 2 years) for this levee and sump construction contract introduces several potential risks. Firstly, there's an increased exposure to fluctuating material costs and labor availability over an extended period, even with a firm fixed price contract, if unforeseen escalation clauses or change orders become necessary. Secondly, weather-related delays are more probable over a longer timeframe, potentially impacting the project schedule and requiring careful management. Thirdly, the extended duration increases the likelihood of encountering unforeseen site conditions (e.g., geological, environmental) that could necessitate design modifications or additional work, leading to potential change orders and cost increases. Finally, maintaining consistent project oversight and quality control over such a long period requires sustained effort from the contracting agency.

How does the competition level (6 bidders) impact the value for taxpayers on this contract?

A competition level of six bidders for this $48.4 million contract is generally considered robust and is highly beneficial for taxpayers. A larger number of bidders typically intensifies competition, driving down prices as contractors vie for the award. This scenario increases the likelihood that the government secures the contract at a price reflecting market value and efficiency, rather than being limited by a lack of options. It suggests that the contract requirements were clear enough to attract multiple capable firms and that the market has sufficient capacity to meet the government's needs. Therefore, taxpayers benefit from a more competitive price and potentially higher quality service due to the pressure to perform well to secure future work.

Industry Classification

NAICS: Construction › Other Heavy and Civil Engineering Construction › Other Heavy and Civil Engineering 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: W9126G23R0372

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Granite Construction Company Guam

Address: 585 W BEACH ST, WATSONVILLE, CA, 95076

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

Financial Breakdown

Contract Ceiling: $48,367,210

Exercised Options: $48,367,210

Current Obligation: $48,367,210

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline