Army awards $39.3M contract for Watsonville levee construction, aiming to bolster flood defenses

Contract Overview

Contract Amount: $39,330,400 ($39.3M)

Contractor: Granite Construction Company

Awarding Agency: Department of Defense

Start Date: 2025-09-12

End Date: 2027-11-12

Contract Duration: 791 days

Daily Burn Rate: $49.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 7

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: PROJECT DESCRIPTION: THIS PROJECT IS FOR THE REACH 6 LEVEE AND FLOODWALL CONSTRUCTION ALONG THE CORRALITOS CREEK, A TRIBUTARY OF THE PAJARO RIVER LEVEE SYSTEM IN THE CITY OF WATSONVILLE, COUNTY OF SANTA CRUZ.

Place of Performance

Location: WATSONVILLE, SANTA CRUZ County, CALIFORNIA, 95076

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $39.3 million to GRANITE CONSTRUCTION COMPANY for work described as: PROJECT DESCRIPTION: THIS PROJECT IS FOR THE REACH 6 LEVEE AND FLOODWALL CONSTRUCTION ALONG THE CORRALITOS CREEK, A TRIBUTARY OF THE PAJARO RIVER LEVEE SYSTEM IN THE CITY OF WATSONVILLE, COUNTY OF SANTA CRUZ. Key points: 1. The contract focuses on critical infrastructure, enhancing flood protection for the Pajaro River Levee System. 2. Granite Construction Company, the selected contractor, has a significant presence in heavy civil engineering projects. 3. The project's fixed-price nature provides cost certainty for the government, mitigating budget overruns. 4. The duration of the contract suggests a substantial scope of work, requiring careful project management. 5. The project is situated in a region prone to flooding, highlighting its importance for community safety. 6. The award is a definitive contract, indicating a clear scope and commitment from both parties.

Value Assessment

Rating: good

The contract value of $39.3 million for levee and floodwall construction appears reasonable given the scope of civil engineering work. Benchmarking against similar large-scale flood control projects would provide a more precise assessment, but the fixed-price nature suggests an effort to control costs. The bid-ask ratio, while not explicitly provided, would be a key indicator of value. Without more comparable data, it's assessed as good, assuming the contractor's bid reflects market conditions and efficient execution.

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 seven bids received, the level of competition suggests a healthy market for this type of heavy civil engineering construction. This competitive environment generally leads to more favorable pricing for the government and encourages contractors to offer their best value propositions.

Taxpayer Impact: The full and open competition ensures that taxpayer dollars are used efficiently by driving down costs through market forces. It provides assurance that the selected contractor offers the best combination of price and technical capability.

Public Impact

Residents and businesses in Watsonville and surrounding areas of Santa Cruz County will benefit from improved flood protection. The project will deliver essential flood control infrastructure, specifically levee and floodwall construction along Corallitos Creek. The geographic impact is concentrated in Watsonville, California, a critical area within the Pajaro River Levee System. The construction activities will likely create temporary employment opportunities in the local workforce for the duration of the project.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for construction delays impacting the timeline and final costs.
Environmental impacts during construction need careful management and mitigation.
Coordination with local authorities and stakeholders is crucial for successful project execution.

Positive Signals

Clear project scope defined by a definitive contract.
Fixed-price contract offers cost predictability.
Award to an established contractor with experience in heavy civil engineering.

Sector Analysis

This contract falls within the heavy and civil engineering construction sector, specifically focusing on flood control infrastructure. The market for such projects is driven by government investment in public safety and resilience against natural disasters. Comparable spending benchmarks would include other large-scale levee, dam, and floodwall construction projects undertaken by federal, state, and local agencies. The size of this contract is significant within its niche.

Small Business Impact

The contract was awarded under full and open competition and does not indicate any specific small business set-aside. While Granite Construction Company is a large entity, 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 within the project scope.

Oversight & Accountability

Oversight for this project will likely be managed by the Department of the Army, potentially through its engineering or contracting divisions. Accountability measures are inherent in the definitive contract structure, with defined deliverables and timelines. Transparency is generally maintained through contract award announcements and public reporting mechanisms. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Pajaro River Levee System
Flood Control Projects
Army Corps of Engineers Civil Works Projects
Infrastructure Investment and Jobs Act Projects

Risk Flags

Potential for cost overruns if unforeseen site conditions arise.
Risk of construction delays due to weather or environmental factors.
Ensuring adequate small business subcontracting participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $39.3 million to GRANITE CONSTRUCTION COMPANY. PROJECT DESCRIPTION: THIS PROJECT IS FOR THE REACH 6 LEVEE AND FLOODWALL CONSTRUCTION ALONG THE CORRALITOS CREEK, A TRIBUTARY OF THE PAJARO RIVER LEVEE SYSTEM IN THE CITY OF WATSONVILLE, COUNTY OF SANTA CRUZ.

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 $39.3 million.

What is the period of performance?

Start: 2025-09-12. End: 2027-11-12.

What is Granite Construction Company's track record with similar Army Corps of Engineers projects?

Granite Construction Company has a substantial history of undertaking large-scale civil engineering and infrastructure projects, including those for government agencies. While specific details on their past projects with the Army Corps of Engineers for levee construction are not provided in this data, their general experience in heavy construction, including earthmoving, concrete work, and structural engineering, suggests they are well-equipped for this task. A deeper dive into their project portfolio, client references, and past performance evaluations from federal databases like the Contractor Performance Assessment Reporting System (CPARS) would offer a more precise understanding of their suitability and past success rates on comparable federal contracts.

How does the $39.3 million cost compare to similar levee construction projects nationwide?

Benchmarking the $39.3 million cost requires comparing it to similar levee and floodwall construction projects of comparable scale and complexity across different regions. Factors such as terrain, material costs, labor rates, and specific engineering requirements (e.g., seismic considerations, environmental mitigation) significantly influence project costs. Without access to a database of recent, comparable federal or state flood control projects, a precise cost comparison is difficult. However, for a project involving significant earthmoving, concrete placement, and potentially specialized flood protection systems, $39.3 million represents a substantial investment, typical for major infrastructure undertakings aimed at long-term flood risk reduction.

What are the primary risks associated with this levee construction project?

The primary risks associated with this levee construction project include potential environmental challenges, such as unexpected soil conditions, groundwater issues, or the discovery of protected species, which could lead to delays and increased costs. Weather-related disruptions are also a significant risk, especially in California, where heavy rains can halt construction progress. Furthermore, managing the complex logistics of a large-scale civil engineering project, ensuring worker safety, and maintaining effective communication with local stakeholders and regulatory agencies are critical risk areas. The fixed-price contract structure shifts some cost overrun risk to the contractor, but significant delays could still impact the project's overall success.

How effective is the Army Corps of Engineers in managing large civil works projects like this one?

The Army Corps of Engineers has extensive experience and a well-established framework for managing large civil works projects, including flood control infrastructure. They employ rigorous planning, design, and oversight processes, often leveraging advanced engineering techniques and project management methodologies. Their track record includes numerous successful large-scale projects across the nation. However, like any major undertaking, challenges can arise, including budget constraints, environmental reviews, and coordination with multiple stakeholders. The success of this specific project will depend on the effective application of the Corps' established management practices and their ability to adapt to unforeseen circumstances.

What has been the historical spending trend for flood control infrastructure by the Department of Defense?

Historical spending by the Department of Defense (DoD) on flood control infrastructure, while not its primary mission, is often tied to its own facilities and installations, as well as support for national disaster response and resilience initiatives. The Army Corps of Engineers, under the DoD, is the primary federal agency responsible for civil works, including flood control, and its budget reflects significant, albeit fluctuating, investment in these areas over decades. Spending trends are influenced by federal appropriations, national infrastructure priorities, and the frequency and severity of natural disasters. While specific DoD spending solely on external flood control projects outside its direct installations may be less prominent than that of agencies like FEMA or the Department of the Interior, the Army Corps' overall civil works budget provides a broader context for such investments.

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: W912P725BA012

Offers Received: 7

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: $39,330,400

Exercised Options: $39,330,400

Current Obligation: $39,330,400

Subaward Activity

Number of Subawards: 4

Total Subaward Amount: $503,542

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline