Department of Defense awards $36.2M for Argentine Pump Station Design and Construction to Michels Construction, Inc

Contract Overview

Contract Amount: $36,257,706 ($36.3M)

Contractor: Michels Construction, Inc.

Awarding Agency: Department of Defense

Start Date: 2019-09-25

End Date: 2024-02-16

Contract Duration: 1,605 days

Daily Burn Rate: $22.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: ARGENTINE PUMP STATION DESIGN AND CONSTR

Place of Performance

Location: KANSAS CITY, WYANDOTTE County, KANSAS, 66106

State: Kansas Government Spending

Plain-Language Summary

Department of Defense obligated $36.3 million to MICHELS CONSTRUCTION, INC. for work described as: ARGENTINE PUMP STATION DESIGN AND CONSTR Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract type is a firm-fixed-price definitive contract, providing cost certainty. 3. The project duration is 1605 days, indicating a significant, long-term undertaking. 4. The contractor, Michels Construction, Inc., has been awarded this contract. 5. The project is located in Kansas, with specific site details not provided. 6. The North American Industry Classification System (NAICS) code is 237990, for Other Heavy and Civil Engineering Construction.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific performance metrics or detailed cost breakdowns. The firm-fixed-price structure offers some cost control, but the total award amount of $36.2 million for a 1605-day project requires further analysis to determine if it represents good value for money. Comparisons to similar large-scale civil engineering projects would be necessary to assess pricing effectiveness.

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 a bid. The data shows 3 bids were received. A competitive process like this generally leads to better price discovery and potentially lower costs for the government compared to sole-source or limited competition scenarios.

Taxpayer Impact: Taxpayers benefit from a competitive bidding process that aims to secure the best possible price and quality for the services rendered, reducing the risk of overpayment.

Public Impact

The primary beneficiaries are likely military personnel and operations supported by the infrastructure improvements. The contract delivers design and construction services for a pump station, a critical piece of civil engineering infrastructure. The geographic impact is localized to Kansas, where the pump station will be constructed. The project will likely involve a significant construction workforce, contributing to local employment and the skilled trades sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions or scope creep occurs, despite the fixed-price nature.
Long project duration increases exposure to market fluctuations in material and labor costs.
Dependence on a single contractor for a critical infrastructure project over an extended period.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Awarded through full and open competition, suggesting a robust selection process.
The contractor, Michels Construction, Inc., has experience in heavy civil engineering projects.

Sector Analysis

This contract falls within the Heavy and Civil Engineering Construction sector, a significant part of the broader construction industry. This sector involves the construction of infrastructure projects such as highways, bridges, dams, and utility systems. The market size for such projects can be substantial, often driven by government investment in public works and military installations. The $36.2 million award is a considerable sum, indicative of a complex and large-scale project within this sector.

Small Business Impact

The data indicates that small business participation was not a specific set-aside for this contract (ss: false, sb: false). Therefore, the primary impact on small businesses would be through potential subcontracting opportunities if Michels Construction, Inc. chooses to engage them. Without specific subcontracting plans, it's difficult to assess the direct impact on the small business ecosystem, though large prime contractors often utilize small businesses for specialized services.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant Department of the Army personnel. Accountability measures are inherent in the firm-fixed-price contract type, which obligates the contractor to deliver the specified services within the agreed-upon price. Transparency is generally maintained through contract award databases, though detailed project-specific oversight reports may not always be publicly accessible. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Military Construction
Civil Engineering Projects
Infrastructure Development
Heavy Construction Contracts

Risk Flags

Long project duration may increase exposure to unforeseen risks.
Fixed-price contract requires careful contractor cost management to ensure quality.
Lack of specific performance metrics in award data hinders value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $36.3 million to MICHELS CONSTRUCTION, INC.. ARGENTINE PUMP STATION DESIGN AND CONSTR

Who is the contractor on this award?

The obligated recipient is MICHELS CONSTRUCTION, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $36.3 million.

What is the period of performance?

Start: 2019-09-25. End: 2024-02-16.

What is the track record of Michels Construction, Inc. with the Department of Defense or similar federal agencies?

Michels Construction, Inc. has a history of securing contracts with federal agencies, including the Department of Defense. While specific details on past performance for this exact type of project (pump station design and construction) are not provided in this data snippet, their involvement in large-scale civil engineering projects suggests they possess the necessary capabilities. A deeper dive into their contract history, past performance reviews, and any reported issues or successes on previous government projects would provide a more comprehensive understanding of their reliability and expertise for this specific undertaking.

How does the $36.2 million award compare to similar pump station design and construction projects?

Direct comparison of the $36.2 million award for this 1605-day project to similar pump station projects is difficult without more specific project details, such as the capacity of the pump station, the complexity of the design, the specific environmental conditions, and the geographic location's labor and material costs. However, for a project spanning over four years, $36.2 million represents a significant investment. Benchmarking against other large-scale civil engineering or utility infrastructure projects awarded by the Department of Defense or other federal agencies could provide context on whether the pricing is within expected ranges for projects of comparable scale and duration.

What are the primary risks associated with a firm-fixed-price contract for a project of this duration?

While firm-fixed-price contracts offer cost certainty, risks for a project spanning 1605 days (over 4 years) include potential contractor underestimation of costs, leading to financial strain or quality compromises if the contractor attempts to cut corners. Conversely, if the contractor significantly overestimates, the government may pay a premium. Unforeseen site conditions, regulatory changes, or significant market fluctuations in material and labor costs can also pose risks, potentially leading to change orders or disputes, even within a fixed-price framework. The long duration amplifies the impact of any such risks.

What is the expected effectiveness of the Argentine Pump Station once completed?

The effectiveness of the Argentine Pump Station will be measured by its ability to reliably perform its intended function, likely related to water management, drainage, or operational support for a military installation. Its success will depend on the quality of the design and construction, adherence to specifications, and its operational efficiency and maintenance requirements. Without knowing the specific purpose of the pump station (e.g., flood control, water supply, waste management), a precise assessment of its effectiveness is not possible. However, the Department of Defense's investment suggests it is critical for supporting its mission or infrastructure.

How has federal spending on 'Other Heavy and Civil Engineering Construction' (NAICS 237990) trended in recent years?

Federal spending on 'Other Heavy and Civil Engineering Construction' (NAICS 237990) can fluctuate based on infrastructure needs, military base development, and national priorities. Historically, this sector sees significant investment during periods of infrastructure renewal or expansion. Data from sources like the US Census Bureau or the Federal Procurement Data System (FPDS) would show trends in contract awards for this NAICS code. Generally, federal spending in this area is substantial, driven by the need to maintain and upgrade critical infrastructure, including military facilities, transportation networks, and environmental projects.

What are the implications of awarding a definitive contract versus other contract types for this project?

A definitive contract, in this context, likely refers to a contract that clearly outlines all terms, conditions, and specifications. Awarding a definitive contract, especially a firm-fixed-price one, provides the government with a high degree of certainty regarding the final cost and scope of work. This contrasts with other contract types like cost-plus contracts, which carry more financial risk for the government but offer flexibility. For a project with defined requirements like pump station construction, a definitive, fixed-price contract is often preferred to control costs and manage expectations over the long project lifecycle.

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: W912DQ19R1003

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 817 MAIN ST, BROWNSVILLE, WI, 53006

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

Financial Breakdown

Contract Ceiling: $36,257,706

Exercised Options: $36,257,706

Current Obligation: $36,257,706

Actual Outlays: $7,794,997

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline