Army awards $117.6M contract for Red River flood risk management, highlighting significant civil engineering investment

Contract Overview

Contract Amount: $117,556,153 ($117.6M)

Contractor: Ames Construction, Inc.

Awarding Agency: Department of Defense

Start Date: 2022-05-15

End Date: 2027-04-29

Contract Duration: 1,810 days

Daily Burn Rate: $64.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: CONSTRUCTION OF THE RED RIVER STRUCTURE OF THE FARGO MOORHEAD METROPOLITAN AREA FLOOD RISK MANAGEMENT PROJECT

Place of Performance

Location: FARGO, CASS County, NORTH DAKOTA, 58104

State: North Dakota Government Spending

Plain-Language Summary

Department of Defense obligated $117.6 million to AMES CONSTRUCTION, INC. for work described as: CONSTRUCTION OF THE RED RIVER STRUCTURE OF THE FARGO MOORHEAD METROPOLITAN AREA FLOOD RISK MANAGEMENT PROJECT Key points: 1. Contract value represents a substantial investment in critical infrastructure. 2. Competition dynamics suggest a potentially competitive bidding environment for large-scale civil works. 3. Project duration of 1810 days indicates a long-term commitment to flood risk mitigation. 4. Firm Fixed Price contract type offers cost certainty for the government. 5. The project falls within the 'Other Heavy and Civil Engineering Construction' NAICS code, indicating specialized construction services. 6. Geographic focus on North Dakota points to regional infrastructure priorities.

Value Assessment

Rating: good

The contract value of $117.6 million for the Red River structure is significant for a single construction project. Benchmarking against similar large-scale civil engineering projects would be necessary for a precise value-for-money assessment. However, the firm fixed-price nature of the contract provides a degree of cost control for the government, which is a positive indicator. The award to Ames Construction, Inc. suggests they were deemed to offer the best value among competitors.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition,' indicating that all responsible sources were permitted to submit bids. While the number of bidders is not explicitly stated, this procurement method generally fosters a competitive environment, which can lead to better pricing and innovation. The Army's decision to use full and open competition suggests confidence in the market's ability to meet the project's requirements.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it maximizes the pool of potential contractors, driving down costs through competitive bidding and ensuring the government receives the best possible value for its investment.

Public Impact

Residents and businesses in the Fargo-Moorhead metropolitan area will benefit from enhanced flood protection. The project will deliver critical civil engineering construction services to mitigate flood risks. The geographic impact is concentrated in North Dakota, specifically along the Red River. The construction activities will likely create temporary employment opportunities for skilled labor in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions arise, despite the fixed-price contract.
Risk of schedule delays due to weather, environmental factors, or supply chain disruptions common in large construction projects.
Ensuring long-term durability and effectiveness of the flood control structure requires rigorous quality assurance and maintenance planning.

Positive Signals

Firm Fixed Price contract provides cost certainty and limits the government's exposure to price fluctuations.
Awarding to a single contractor streamlines management and accountability for this large-scale project.
The project addresses a critical need for flood risk management, enhancing community safety and economic stability.

Sector Analysis

This contract falls within the heavy and civil engineering construction sector, which is characterized by large-scale infrastructure projects. The market for such projects is often dominated by a few large, specialized firms capable of undertaking complex undertakings. The $117.6 million award is substantial and indicative of a significant federal investment in critical infrastructure, aligning with broader government initiatives to improve resilience against natural disasters. Comparable spending benchmarks would typically involve other major flood control, dam, levee, or waterway projects undertaken by federal agencies.

Small Business Impact

The contract data indicates that small business participation was not a primary set-aside consideration for this specific award (sb: false). While Ames Construction, Inc. may engage small businesses as subcontractors, there is no explicit requirement for a small business set-aside. This suggests that the primary focus was on securing the most capable large contractor for this complex infrastructure project. Further analysis would be needed to determine the extent of small business subcontracting.

Oversight & Accountability

Oversight for this contract will likely be managed by the U.S. Army Corps of Engineers, given the agency (Department of the Army) and the nature of the project (flood risk management). Accountability measures are inherent in the firm fixed-price contract, which shifts much of the cost risk to the contractor. Transparency is generally maintained through contract award announcements and public reporting mechanisms. The Inspector General for the Department of Defense would have jurisdiction over potential fraud, waste, or abuse related to this contract.

Related Government Programs

Fargo-Moorhead Metropolitan Area Flood Risk Management Project
U.S. Army Corps of Engineers Civil Works Program
Infrastructure Investment and Jobs Act (IIJA) related projects
National Dam Safety Program

Risk Flags

Long project duration increases risk exposure.
Potential for unforeseen site conditions.
Reliance on contractor's financial stability for fixed-price contract.
Environmental compliance during construction.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $117.6 million to AMES CONSTRUCTION, INC.. CONSTRUCTION OF THE RED RIVER STRUCTURE OF THE FARGO MOORHEAD METROPOLITAN AREA FLOOD RISK MANAGEMENT PROJECT

Who is the contractor on this award?

The obligated recipient is AMES 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 $117.6 million.

What is the period of performance?

Start: 2022-05-15. End: 2027-04-29.

What is the track record of Ames Construction, Inc. on similar large-scale civil engineering projects?

Ames Construction, Inc. has a significant track record in heavy civil construction, including projects involving earthwork, concrete structures, and infrastructure development. While specific details on past flood control projects of this magnitude are not provided in the summary data, their experience in related areas suggests a capacity to undertake complex civil engineering tasks. A deeper dive into their project portfolio, client reviews, and past performance evaluations would be necessary to fully assess their suitability and historical success rate on projects comparable to the Red River structure. This would include examining their safety records, on-time completion rates, and adherence to budget on previous large federal or state infrastructure contracts.

How does the awarded amount compare to the estimated cost or budget for this phase of the Red River flood risk management project?

The provided data indicates an award amount of $117,556,153.43. Without access to the original cost estimates, budget allocations, or pre-award negotiation details for this specific phase of the Red River Flood Risk Management Project, it is impossible to definitively state how the awarded amount compares to the government's budget. However, the fact that it was awarded under 'Full and Open Competition' suggests that the bids received were considered competitive and likely within an acceptable range of the government's independent cost estimate. If the award was significantly lower than the estimate, it could indicate strong competition or efficient contractor proposals. Conversely, if it was close to or exceeded the estimate, further scrutiny of the bidding process and cost justification would be warranted.

What are the primary risk indicators associated with this specific construction contract?

Primary risk indicators for this construction contract include the inherent complexities of large-scale civil engineering projects, such as potential for unforeseen subsurface conditions (geotechnical risks), environmental compliance challenges, and the long duration (1810 days) which increases exposure to economic fluctuations and material price volatility. The firm fixed-price (FFP) contract type, while beneficial for cost control, shifts significant risk to the contractor; contractor financial stability and capacity to absorb unexpected costs are therefore critical. Schedule delays due to weather, particularly in a region prone to harsh conditions, are also a notable risk. Finally, ensuring the long-term structural integrity and effectiveness of the flood control measure requires robust quality assurance and oversight throughout the construction and post-construction phases.

What is the historical spending pattern for flood risk management projects by the Department of the Army or Army Corps of Engineers?

The Department of the Army, primarily through the U.S. Army Corps of Engineers (USACE), has a long and substantial history of investing in flood risk management projects across the United States. Historical spending patterns reveal consistent, significant federal funding allocated annually to civil works programs, which include flood control, hurricane protection, and riverine flood mitigation. These expenditures often fluctuate based on national priorities, disaster recovery needs, and the authorization of new projects through congressional acts. Major flood events often lead to increased appropriations for flood control infrastructure. The USACE budget typically includes billions of dollars dedicated to these types of infrastructure investments, making flood risk management a core and enduring component of their mission and spending.

How does the competition level (full and open) typically influence the final contract price for large infrastructure projects?

A 'Full and Open Competition' procurement strategy generally exerts downward pressure on contract prices for large infrastructure projects. By allowing all responsible sources to compete, the government maximizes the potential bidder pool, increasing the likelihood of receiving multiple competitive bids. This heightened competition encourages contractors to submit their most aggressive and cost-effective proposals to win the contract. In scenarios with numerous qualified bidders, the final awarded price is often driven closer to the contractors' actual costs plus a reasonable profit margin, rather than being inflated by limited competition or a lack of market alternatives. This process is designed to ensure the government achieves the best possible value for taxpayer dollars.

What are the potential implications of the 'Other Heavy and Civil Engineering Construction' NAICS code on contractor selection and project execution?

The North American Industry Classification System (NAICS) code '237990 - Other Heavy and Civil Engineering Construction' signifies that the project requires specialized expertise beyond standard building construction. This includes work on infrastructure like dams, levees, waterways, bridges, and other large-scale public works. For contractor selection, this code means the government will seek firms with demonstrated experience and capabilities in these specific types of projects, often requiring extensive bonding capacity, specialized equipment, and a proven safety record. Project execution under this NAICS code typically involves complex logistical planning, adherence to stringent environmental regulations, and coordination with multiple stakeholders, often over extended periods, demanding robust project management skills from the selected contractor.

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: W912ES22R0001

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2500 COUNTY ROAD 42 W, BURNSVILLE, MN, 55337

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: $117,556,153

Exercised Options: $117,556,153

Current Obligation: $117,556,153

Actual Outlays: $19,707,759

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline