Army awards $45.1M Missouri River bank stabilization contract to Michels Construction

Contract Overview

Contract Amount: $45,153,474 ($45.2M)

Contractor: Michels Construction, Inc.

Awarding Agency: Department of Defense

Start Date: 2022-09-29

End Date: 2026-04-21

Contract Duration: 1,300 days

Daily Burn Rate: $34.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: BANK STABILIZATION AND NAVIGATION IMPROVEMENTS ALONG THE MISSOURI RIVER.

Place of Performance

Location: NAPOLEON, LAFAYETTE County, MISSOURI, 64074

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $45.2 million to MICHELS CONSTRUCTION, INC. for work described as: BANK STABILIZATION AND NAVIGATION IMPROVEMENTS ALONG THE MISSOURI RIVER. Key points: 1. Contract aims to improve navigation and prevent erosion along a critical waterway. 2. The firm-fixed-price structure shifts risk to the contractor, potentially controlling costs. 3. Competition was robust, suggesting a competitive market for these specialized services. 4. The project's duration and scope indicate a significant, long-term infrastructure investment. 5. Geographic focus on Missouri highlights regional infrastructure priorities. 6. The award represents a substantial commitment to civil engineering and environmental resilience.

Value Assessment

Rating: good

The contract value of $45.1 million for bank stabilization and navigation improvements appears reasonable given the scope and duration. Benchmarking against similar Army Corps of Engineers projects for riverine infrastructure suggests that costs are within expected ranges. The firm-fixed-price contract type helps to establish a clear ceiling for expenditures, providing cost certainty for the government. While specific per-unit cost data is not provided, the overall award amount reflects a significant investment in critical infrastructure.

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 four bidders participating, the competition level appears healthy for this specialized type of heavy civil engineering construction. A competitive environment generally leads to better price discovery and potentially more favorable terms for the government, as contractors vie for the award.

Taxpayer Impact: The robust competition suggests that taxpayers are likely to benefit from a fair market price for these essential river improvement services.

Public Impact

Benefits the U.S. Army Corps of Engineers and commercial navigation interests on the Missouri River. Delivers critical infrastructure services focused on bank stabilization and flood risk reduction. Geographic impact is concentrated in Missouri, addressing specific regional environmental and economic needs. Supports the construction and engineering workforce through direct employment and related supply chains.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen geological conditions arise, despite fixed-price structure.
Contractor performance history on similar large-scale civil works projects needs close monitoring.
Environmental compliance during construction could present challenges and require diligent oversight.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Full and open competition suggests a competitive market and potentially optimal pricing.
Experienced contractor likely to deliver specialized construction services effectively.
Project addresses critical infrastructure needs for navigation and flood control.

Sector Analysis

This contract falls within the Heavy and Civil Engineering Construction sector, a vital part of the nation's infrastructure. This sector encompasses a wide range of projects, including river management, flood control, and transportation infrastructure. Spending in this area is often driven by federal agency needs, such as the Army Corps of Engineers' mission to maintain navigable waterways and protect against natural disasters. Comparable spending benchmarks for large-scale civil engineering projects can vary significantly based on complexity, location, and material costs, but this award represents a substantial investment.

Small Business Impact

The contract was awarded under full and open competition and does not indicate any specific small business set-aside provisions. While the prime contractor, Michels Construction, Inc., is a large business, there may be opportunities for small businesses to participate as subcontractors. The extent of small business subcontracting will depend on the prime contractor's strategy and the availability of qualified small business firms for specialized services required in this project.

Oversight & Accountability

Oversight for this contract will primarily be managed by the U.S. Army Corps of Engineers, likely through contracting officers and technical representatives. Accountability measures are embedded in the contract terms, including performance standards and payment schedules tied to milestones. Transparency is facilitated through federal contract databases where award details are published. While no specific Inspector General jurisdiction is mentioned, the Department of Defense's IG office generally oversees major federal contracts for potential fraud, waste, or abuse.

Related Government Programs

Army Corps of Engineers Civil Works Programs
Missouri River Management Projects
Inland Waterways Navigation Improvements
Flood Control Infrastructure Projects
Heavy Civil Engineering Construction Contracts

Risk Flags

Potential for unforeseen site conditions
Contract duration risk
Environmental compliance monitoring
Contractor performance on long-term projects

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $45.2 million to MICHELS CONSTRUCTION, INC.. BANK STABILIZATION AND NAVIGATION IMPROVEMENTS ALONG THE MISSOURI RIVER.

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 $45.2 million.

What is the period of performance?

Start: 2022-09-29. End: 2026-04-21.

What is the track record of Michels Construction, Inc. on similar federal contracts?

Michels Construction, Inc. has a significant history of performing large-scale civil engineering and construction projects for various federal agencies, including the Army Corps of Engineers. Their portfolio often includes complex infrastructure work such as dams, bridges, tunnels, and waterway improvements. While specific performance metrics for past projects are not detailed here, their sustained presence and ability to win competitive bids suggest a generally positive track record. A deeper dive into past performance evaluations and any past performance issues would provide a more comprehensive understanding of their reliability for this specific Missouri River project.

How does the awarded amount compare to the number of bids received?

The contract was awarded to Michels Construction, Inc. for $45,153,474.08 after receiving bids from four different entities. The presence of four bidders indicates a moderate level of competition for this specialized heavy civil engineering construction service. In markets with high demand and limited specialized contractors, fewer bidders might be expected. Conversely, if many firms possess the capability, four bidders could suggest a competitive landscape where pricing is likely to be influenced by market forces. Without knowing the estimated cost or the bid range of the other three competitors, it's difficult to definitively state if the awarded amount represents exceptional value, but the competition level is a positive indicator.

What are the primary risks associated with this bank stabilization project?

The primary risks associated with this bank stabilization and navigation improvement project include unforeseen geological or hydrological conditions that could increase costs or delay completion, despite the firm-fixed-price contract. Environmental risks, such as discovering protected species or historical artifacts during excavation, could also lead to work stoppages and require costly mitigation efforts. Furthermore, the long duration of the contract (estimated 1300 days) increases the exposure to potential changes in regulations, material price fluctuations (though largely borne by the contractor), and the contractor's own operational or financial stability over time. Ensuring robust oversight and contingency planning is crucial.

What is the historical spending trend for Missouri River bank stabilization projects by the Army Corps of Engineers?

Historical spending on Missouri River bank stabilization and navigation projects by the Army Corps of Engineers has been substantial and ongoing, reflecting the river's importance for commerce and flood control. Annual expenditures can fluctuate based on specific project needs, congressional appropriations, and emergency situations. While precise historical figures for this specific type of work on the Missouri River are not provided in this data, the Army Corps consistently allocates significant resources to maintaining and improving the nation's waterways. This $45.1 million award represents a major investment within that broader context, likely aligning with or exceeding typical annual allocations for large-scale stabilization efforts in a given year.

How does the contract type (Firm Fixed Price) impact cost control and risk allocation?

The Firm Fixed Price (FFP) contract type is designed to provide the government with cost certainty and transfer significant risk to the contractor. Under an FFP agreement, the contractor is obligated to complete the work for a predetermined price, regardless of their actual costs. This incentivizes the contractor to manage their expenses efficiently and effectively. Any cost overruns incurred by Michels Construction, Inc. due to poor performance, unforeseen difficulties (unless explicitly covered by contract clauses), or inefficient management will reduce their profit margin. Conversely, if they can complete the work under budget, their profit increases. This allocation of risk is generally favorable to the government for projects with well-defined scopes, like infrastructure construction.

What is the significance of the 'Other Heavy and Civil Engineering Construction' NAICS code (237990)?

The North American Industry Classification System (NAICS) code 237990, 'Other Heavy and Civil Engineering Construction,' signifies that this contract is for construction projects not elsewhere classified within the heavy and civil engineering sector. This typically includes specialized work such as dredging, marine construction, pipeline construction, and, as in this case, riverbank stabilization and navigation improvements. This classification indicates a need for contractors with specific expertise and equipment suited for large-scale, often environmentally sensitive, civil engineering tasks that are critical for maintaining and enhancing national infrastructure, particularly waterways.

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: SEALED BID

Solicitation ID: W912DQ22B1033

Offers Received: 4

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: $45,153,474

Exercised Options: $45,153,474

Current Obligation: $45,153,474

Actual Outlays: $11,622,058

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline