Army awards $525.6M contract for Hurricane Katrina recovery construction in Louisiana

Contract Overview

Contract Amount: $52,563,370 ($52.6M)

Contractor: Kiewit Infrastructure South CO

Awarding Agency: Department of Defense

Start Date: 2006-02-03

End Date: 2007-05-29

Contract Duration: 480 days

Daily Burn Rate: $109.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIXED PRICE

Sector: Construction

Official Description: 200606!600928!96CE!W912P8!USA ENGINEER DIST NEW ORLEANS !W912P806C0097 !A!N! !N! ! !20060203!20060515!055076616!154549877!070729517!N!KIEWIT SOUTHERN CO !3555 FARNAM ST STE 1000 !OMAHA !NE!68131!27000!439!48!FORT WORTH !TARRANT !TEXAS !+000031454922!N!N!000031454922!Y299!ALL OTHER NON-BUILDING FACILITIES !C2 !CONSTRUCTION !ZHK !HURRICANE KATRINA !237990!E! !3! ! ! ! ! !99990909!B! ! !A! !A!U!J!2!003!B! !D!N!Z! ! !N!C!N! ! ! !C!C!A!A!000!A!C!Y! !N! ! ! ! !0001! !

Place of Performance

Location: NEW ORLEANS, ORLEANS County, LOUISIANA, 70124

State: Louisiana Government Spending

Plain-Language Summary

Department of Defense obligated $52.6 million to KIEWIT INFRASTRUCTURE SOUTH CO for work described as: 200606!600928!96CE!W912P8!USA ENGINEER DIST NEW ORLEANS !W912P806C0097 !A!N! !N! ! !20060203!20060515!055076616!154549877!070729517!N!KIEWIT SOUTHERN CO !3555 FARNAM ST STE 1000 !OMAHA !NE!68131!27000!439!48!FORT WORTH !TARR… Key points: 1. Contract awarded for critical infrastructure repair following a major natural disaster. 2. Significant investment directed towards rebuilding essential facilities and services. 3. Fixed-price contract type suggests a defined scope and cost control measures. 4. Long duration of 480 days indicates a complex and extensive recovery effort. 5. Geographic focus on Louisiana highlights the impact of Hurricane Katrina. 6. Contractor has a substantial federal contract history, suggesting experience with large-scale projects.

Value Assessment

Rating: good

The contract value of $525.6 million for heavy civil engineering construction is substantial, reflecting the scale of Hurricane Katrina recovery efforts. While a direct comparison to similar disaster recovery contracts is difficult due to unique circumstances, the fixed-price nature of the award suggests an attempt to control costs. The awarded amount appears to be within a reasonable range for a project of this magnitude and complexity, especially considering the urgency and scope of rebuilding critical infrastructure in a disaster-stricken area. The contractor's experience with large federal projects further supports the assessment of value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. The fact that it was competed suggests a robust process to solicit the best value for the government. The number of bidders is not explicitly stated in the provided data, but full and open competition generally leads to more competitive pricing and a wider range of solutions.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it encourages a competitive bidding environment, which typically drives down prices and ensures the government receives the best possible value for its investment in disaster recovery.

Public Impact

Residents and businesses in Louisiana benefit from the restoration of essential infrastructure. Services delivered include heavy and civil engineering construction, crucial for rebuilding. Geographic impact is concentrated in Louisiana, specifically areas affected by Hurricane Katrina. Workforce implications include job creation for construction workers and related trades in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen issues arise during extensive reconstruction.
Logistical challenges in a disaster zone could impact project timelines and costs.
Ensuring equitable distribution of recovery benefits across affected communities.

Positive Signals

Awarded under full and open competition, suggesting competitive pricing.
Fixed-price contract type provides cost certainty for the government.
Contractor has a history of performing large federal construction projects.
Focus on critical infrastructure repair addresses immediate post-disaster needs.

Sector Analysis

This contract falls within the Heavy and Civil Engineering Construction sector, a critical component of the nation's infrastructure. The market for such services is substantial, particularly in the aftermath of natural disasters where significant rebuilding is required. This award represents a major investment in post-Katrina recovery, addressing the urgent need to restore damaged facilities and infrastructure. Comparable spending benchmarks would typically be found in other large-scale federal construction projects, especially those related to disaster relief or military base construction.

Small Business Impact

The data indicates this was a full and open competition and does not specify any small business set-asides or subcontracting goals. Therefore, the direct impact on small businesses through this specific award is unclear. However, large prime contractors like Kiewit often engage small businesses as subcontractors for specialized tasks or to meet broader subcontracting goals on federal projects. Further investigation into Kiewit's subcontracting plan would be needed to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Army, likely through the U.S. Army Corps of Engineers, given the nature of the work and the agency involved. Accountability measures would be embedded in the contract terms, including performance standards, reporting requirements, and payment schedules tied to milestones. Transparency is generally facilitated through contract award databases and public reporting, though specific project details and oversight activities might vary.

Related Government Programs

Hurricane Katrina Disaster Relief Efforts
US Army Corps of Engineers Construction Contracts
Federal Infrastructure Rebuilding Programs
Post-Disaster Recovery Funding

Risk Flags

Potential for cost overruns due to unforeseen disaster-related conditions.
Logistical challenges in a disaster zone impacting project timelines.
Ensuring quality control and adherence to specifications in a high-pressure environment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $52.6 million to KIEWIT INFRASTRUCTURE SOUTH CO. 200606!600928!96CE!W912P8!USA ENGINEER DIST NEW ORLEANS !W912P806C0097 !A!N! !N! ! !20060203!20060515!055076616!154549877!070729517!N!KIEWIT SOUTHERN CO !3555 FARNAM ST STE 1000 !OMAHA !NE!68131!27000!439!48!FORT WORTH !TARRANT !TEXAS !+000031454922!N!N!000031454922!Y299!ALL OTHER NON-BUILDING FACILITIES !C2 !CONSTRUCTION !ZHK !HURRICANE KATRINA !237990!E! !3! ! ! ! ! !999

Who is the contractor on this award?

The obligated recipient is KIEWIT INFRASTRUCTURE SOUTH 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 $52.6 million.

What is the period of performance?

Start: 2006-02-03. End: 2007-05-29.

What is the track record of Kiewit Infrastructure South Co. with large federal construction contracts, particularly in disaster recovery?

Kiewit Infrastructure South Co., and its parent Kiewit Corporation, have a significant track record with large federal construction contracts. They are a major player in heavy civil engineering, infrastructure, and building construction. Their experience often includes large-scale projects for various federal agencies, including the Department of Defense and the Department of Transportation. While specific disaster recovery contract details for this entity are not immediately available in this dataset, their general profile suggests they possess the capacity and experience to handle complex, large-value projects like the Hurricane Katrina recovery effort. Their history indicates a capability to manage significant budgets, complex logistics, and demanding timelines often associated with post-disaster reconstruction.

How does the awarded amount of $525.6 million compare to other major federal construction contracts for disaster recovery?

The $525.6 million award is a substantial sum, reflecting the immense scale and urgency of Hurricane Katrina recovery. Comparing it directly to other disaster recovery contracts requires careful consideration of the specific disaster, the scope of work, and the time period. For instance, recovery efforts following other major hurricanes or natural disasters have also resulted in multi-hundred-million-dollar federal contracts. The U.S. Army Corps of Engineers, as the contracting agency, has managed numerous large-scale recovery projects. While this figure is significant, it is not unprecedented for major federal disaster response and rebuilding initiatives, which often involve extensive infrastructure repair, housing reconstruction, and environmental remediation.

What are the primary risks associated with a large, fixed-price construction contract in a disaster-affected area?

Large, fixed-price construction contracts in disaster-affected areas carry several inherent risks. For the contractor, the primary risk is underestimating the full scope of work or encountering unforeseen conditions (e.g., hazardous materials, unstable soil, hidden damage) that increase costs beyond the fixed price, potentially leading to financial losses. For the government, the risk is that the fixed price might be inflated to account for contractor risk, or that the contractor may cut corners on quality or scope to maintain profitability if unforeseen issues arise. Logistical challenges in a disaster zone, such as damaged transportation routes, limited access to materials, and a strained local workforce, can also introduce risks of delays and cost increases, even within a fixed-price framework. Effective oversight and contingency planning are crucial to mitigate these risks.

How effective are fixed-price contracts in controlling costs for large-scale, urgent reconstruction projects?

Fixed-price contracts are generally intended to provide cost certainty for the buyer by shifting the risk of cost overruns to the seller. For large-scale, urgent reconstruction projects, they can be effective if the scope of work is well-defined and understood from the outset. However, in disaster recovery scenarios, the scope can be highly uncertain due to the unpredictable nature of damage. If unforeseen conditions arise, the fixed price can become a point of contention, potentially leading to change orders, disputes, or the contractor absorbing significant losses. While offering a ceiling on costs, the effectiveness in controlling them hinges on the accuracy of the initial estimates and the ability to manage scope creep and unforeseen circumstances through contract modifications or robust oversight.

What is the historical spending pattern for heavy and civil engineering construction contracts by the Department of the Army?

The Department of the Army, primarily through the U.S. Army Corps of Engineers (USACE), is a major issuer of heavy and civil engineering construction contracts. Historical spending patterns show significant investment in military construction, infrastructure maintenance, and, notably, civil works projects including flood control, navigation, and disaster response. Annual spending can fluctuate based on military readiness needs, infrastructure modernization priorities, and the occurrence of natural disasters requiring federal response. USACE consistently ranks among the largest federal contracting entities for construction, with billions obligated annually across a wide range of projects, including those similar in nature to this Hurricane Katrina recovery contract.

Industry Classification

NAICS: Construction › Other Heavy and Civil Engineering Construction › Other Heavy and Civil Engineering Construction

Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCT NONBUILDING FACILITIES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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

Address: 3555 FARNAM ST STE 1000, OMAHA, NE, 68131

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline