Kiewit Infrastructure West awarded $38.9M for Hawaii road upgrades, highlighting infrastructure investment

Contract Overview

Contract Amount: $38,938,689 ($38.9M)

Contractor: Kiewit Infrastructure West CO

Awarding Agency: Department of Defense

Start Date: 2007-09-20

End Date: 2011-02-28

Contract Duration: 1,257 days

Daily Burn Rate: $31.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: FY06MCA PN58815 DRUM RD UPGR PH II, HMR

Place of Performance

Location: SCHOFIELD BARRACKS, HONOLULU County, HAWAII, 96857

State: Hawaii Government Spending

Plain-Language Summary

Department of Defense obligated $38.9 million to KIEWIT INFRASTRUCTURE WEST CO for work described as: FY06MCA PN58815 DRUM RD UPGR PH II, HMR Key points: 1. Contract value represents a significant investment in regional infrastructure. 2. Competition dynamics suggest a potentially competitive bidding process for this project. 3. Project duration indicates a long-term commitment to infrastructure development. 4. Fixed-price contract type offers cost certainty for the government. 5. The project falls within the broader category of highway, street, and bridge construction.

Value Assessment

Rating: good

The contract value of $38.9 million for highway upgrades appears reasonable given the scope of work, which includes significant road and bridge construction. Benchmarking against similar large-scale infrastructure projects in Hawaii or other Pacific regions would provide a more precise value-for-money assessment. The firm fixed-price structure suggests that the contractor assumed most of the cost risk, which can be beneficial for the government if managed effectively.

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. With three bidders participating, the competition level suggests a healthy market interest in this type of federal construction work. This level of competition is generally expected to drive competitive pricing and encourage efficiency from the winning contractor.

Taxpayer Impact: Full and open competition with multiple bidders typically leads to better pricing for taxpayers by fostering a competitive environment that incentivizes lower bids.

Public Impact

Residents and commuters in Hawaii will benefit from improved road infrastructure. The project delivers essential upgrades to highways, streets, and bridges. Geographic impact is concentrated in Hawaii, addressing local transportation needs. The construction work will likely create numerous jobs for skilled laborers and tradespeople in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions arise, despite fixed-price contract.
Delays in construction could impact local traffic and economic activity.
Ensuring quality of work over the extended project duration is crucial.

Positive Signals

Firm fixed-price contract provides budget certainty.
Full and open competition suggests a competitive bid process.
Award to a known infrastructure company like Kiewit indicates experience in large projects.

Sector Analysis

This contract falls within the construction sector, specifically focusing on heavy and civil engineering construction related to transportation infrastructure. The market for such projects is often characterized by large, specialized firms capable of handling complex, multi-year undertakings. Federal spending in this area is driven by the need to maintain and upgrade the nation's aging transportation networks, with significant investments allocated annually to address these critical infrastructure needs.

Small Business Impact

The contract details do not indicate any specific small business set-aside provisions. Given the scale and nature of the project, it is likely that Kiewit Infrastructure West, as the prime contractor, may engage small businesses as subcontractors for specialized services or material supply. However, without explicit subcontracting plans or goals, the direct impact on the small business ecosystem remains uncertain.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Army, likely through contracting officers and project managers responsible for monitoring progress, quality, and adherence to contract terms. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General involvement would be triggered by allegations of fraud, waste, or abuse.

Related Government Programs

Federal Highway Administration Programs
Military Construction Projects
Department of Transportation Infrastructure Grants

Risk Flags

Potential for schedule delays impacting public access and local economy.
Risk of unforeseen site conditions requiring contract modifications.
Ensuring long-term durability and quality of construction.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $38.9 million to KIEWIT INFRASTRUCTURE WEST CO. FY06MCA PN58815 DRUM RD UPGR PH II, HMR

Who is the contractor on this award?

The obligated recipient is KIEWIT INFRASTRUCTURE WEST 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 $38.9 million.

What is the period of performance?

Start: 2007-09-20. End: 2011-02-28.

What is Kiewit Infrastructure West's track record with similar federal highway construction contracts?

Kiewit Infrastructure West Co. has a substantial track record with the federal government, particularly within the Department of Defense and Department of Transportation, for large-scale civil engineering and construction projects. They have been involved in numerous highway, bridge, and infrastructure upgrades across the United States. Analyzing their past performance on similar firm-fixed-price contracts, especially those exceeding $10 million, would reveal their history of on-time delivery, budget adherence, and quality of work. Specific project data from sources like the Federal Procurement Data System (FPDS) can highlight their success rates and any past performance issues or disputes, providing a clearer picture of their reliability for this specific Hawaii project.

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

The awarded amount of $38,938,689 needs to be compared against the government's initial cost estimates or the range of bids received to fully assess value. If the award is significantly lower than estimates, it suggests strong competition or favorable market conditions. Conversely, if it's close to or exceeds estimates, further scrutiny of the bidding process and potential scope changes might be warranted. The number of bidders (3) provides some context; a higher number of bidders often correlates with bids closer to the government's estimate. Without access to the solicitation's estimated cost or the bid prices of the non-selected bidders, a definitive assessment of whether this represents optimal value is challenging, but the full and open competition suggests a competitive pricing environment.

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

The primary risks for a multi-year highway construction project like this include potential cost escalation due to unforeseen site conditions (e.g., geological issues, environmental discoveries), material price fluctuations (though mitigated by fixed-price contracts), and labor availability. Schedule delays are also a significant risk, stemming from weather, permitting issues, or contractor performance, which can lead to increased indirect costs and impact public use. Furthermore, the long duration increases the possibility of scope creep if project requirements evolve. The firm-fixed-price nature shifts much of the direct cost risk to the contractor, but the government still bears risks related to schedule, quality oversight, and potential claims arising from contract modifications or disputes.

What is the historical spending trend for similar highway and bridge construction contracts by the Department of the Army?

Historical spending by the Department of the Army on highway, street, and bridge construction (NAICS code 237310) fluctuates based on military readiness needs, base infrastructure modernization, and congressionally allocated funding for public works. Analyzing spending patterns over the last 5-10 fiscal years would reveal trends. For instance, periods of increased military deployment might see higher spending on base infrastructure, while broader infrastructure initiatives could drive up spending during specific economic stimulus periods. The average contract size and duration for similar projects within the Army can also provide context. This $38.9 million contract appears to be a substantial, but not unprecedented, investment within this category, reflecting ongoing commitments to maintaining and improving essential transportation infrastructure.

How does the firm-fixed-price contract type impact the government's exposure to cost overruns compared to other contract types?

A firm-fixed-price (FFP) contract is designed to provide the government with the greatest cost certainty. Under an FFP agreement, the contractor assumes the primary responsibility for all costs incurred and for achieving a specified level of performance within the agreed-upon price. Unlike cost-plus contracts, the government's liability is generally limited to the negotiated price, regardless of the contractor's actual costs. This shifts the risk of cost overruns to the contractor. However, the government still faces risks related to quality and schedule, and contractors may build higher profit margins or contingency into their FFP bids to account for the risks they assume. If significant changes or unforeseen issues arise, contract modifications can still impact the final cost, but the baseline risk of cost overrun is substantially lower for the government compared to cost-reimbursement contracts.

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 NONBUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Peter Kiewit Sons Inc (UEI: 070729517)

Address: 1001 KAMOKILA BLVD STE 305, KAPOLEI, HI, 90

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $38,938,689

Exercised Options: $38,938,689

Current Obligation: $38,938,689

Contract Characteristics

Cost or Pricing Data: NO

Timeline