The government has small business participation mandates and the contractors know how to meet and deal with them.
The Pre-Solicitation posted on Fed Biz Ops says they plan to award multiple awards and split it up.
The same info says that they will request pricing for additional wall segments to be added if desired by the government and I explain up thread why they do this.
In general the “Big Boys” you speak of all team up or pair up in Joint Ventures when they do these. Not because they like it but because of financial constraints on Surety Bonding. The treasury limits of the various surety companies won’t let them bond one company for the full contract even if it is only a 3 billion dollar segment. The Surety companies that write the bonds therefore push and the government supports risk limitation in seeing these large companies pair up.
For example I have seen Kiewitt, number five (ENR 400) pair up with Hensel Phelps, number nineteen. A company that does 10.4 billion per annum teamed with another strong company that does 2.5 billion. Most owners, and the Feds included, don’t like to see their project account for more than 15 to 30% of the contractor’s annual volume. If the job starts to go in-the-tank the contractor has no other cash flow to help him recover and complete the job.
In my pairing example, you have a pair of companies with an annual volume of 13 billion between them. 15% of that is about 2 billion — annualized that is 4 billion over two years of build-out.. Kiewit is extremely strong financially for its size so maybe the JV is rated to do 7 billion in the Government’s mind. That still is only about 40% of the wall based upon DHS’s budgetary opinions.
Maybe Tutor Perini will get it. Nancy Pelosi’s husband runs them and they are number 10. If it was awarded to them and they crashed for any other reason, what would Trump’s new DHS director look like for putting all the eggs in that basket.
I am sure we will see some big guys, but there are over sixty companies that do a billion per annum that paired up with some one their size could handle a billion dollar segment over a two year period.
See my Comment #111 for some of the drawbacks these concept papers will have to overcome. One thing, if you have any big projects of your own, get them done fast; the price of concrete will be going up, and cement mixers my be hard to come by for a while.