$1.3B Border Wall Contract Controversy Is Just the Latest for Fisher Sand & Gravel
A year ago, North Dakota contractor Fisher Sand & Gravel Co. was resorting to personal pitches to President Donald Trump, tours of its privately funded border wall projects, and the federal courts, to gain entry to the massive federal wall construction program along the U.S.-Mexico border.
The combined effort propelled the firm headlong into the federal arena, with a $400-million wall construction award last December from the U.S. Army Corps of Engineers, for 31 miles of border barrier in Arizona, as one of 11 contractors pre-approved to bid for up to $5 billion of budgeted work segments.
It was a coup for a company that pushed its way into the program, even with a heavy construction track record on state and local public works and a web site that touts its past project feats and a fondness for the "tough jobs," including border barriers the firm built on private land to showcase its capabiiities.
Assistance from political supporters such as South Dakota Senate Republican Kevin Cramer, a reported beneficiary of company political donations, helped raise its profile to gain attention from the White House, which is accelerating efforts to deliver on a key Trump campaign promise to finish about 400 miles of wall by year end.
Legal action also has been a tool to gain a competitive edge in the federal arena, and on previous work.
|Tommy Fisher, CEO of Fisher Sand & Gravel, appeared frequently on Fox News channels to tout his company's wall-building capabilities. Image: Partial screenshot from Fox Business broadcast|
Fisher Sand & Gravel first made the federal wall building shortlist in 2017 to offer a border wall prototype, which ultimately did not meet Corps or Dept. of Homeland Security specs.
The firm then relied on litigation and a federal bid protest when it failed to be considered to bid on two projects. While the legal actions were dismissed, the firm was late accepted into the group of pre-approved task order bidders last spring.
With no official detail on those developments, media can only speculate on the catalysts, with a December 2019 report in Slate contending that it was then-Homeland Security chief Kirstjen Nielsen who allowed Fisher Sand & Gravel to vie for the $400-million task order it ultimately was awarded, with strong White House pressure.
A DOD document says the firm is set to receive $270 million by Dec. 30 under that award, with the rest of the $400 million gained if options are exercised.
Private Border Wall
Tommy Fisher, CEO of the family-owned company, had touted its wall design and construction abilities on TV news outlets known to be favored by President Trump. He has also invited Corps and federal border protection officials to view its smaller privately funded border walls on private land, including what is said to be property Fisher himself purchased, in Mission, Texas and Sunland Park, N.M.
But neither Fisher nor other company executives have responded to ENR or other media on its federal and private wall building issues.
New controversy erupted last week over a second Corps award to Fisher Sand & Gravel—a nearly $1.3-billion "task order" for 42 miles of wall in another Arizona segment that is the agency's largest single wall building contract to date. It was made amid ongoing scrutiny of the first wall contract, under investigation since early December by the U.S. Defense Dept. Inspector General, after a House committee request.
Neither task order win is noted on websites of Fisher Sand & Gravel or its parent, Fisher Industries.
House Homeland Security Committee Chairman Rep. Bennie Thompson, (D-Miss) questioned the latest award, while the IG probe is ongoing and may not finish until at least June, a government source told ENR.
“The fact remains that the DOD inspector general has yet to determine if the December contract was properly awarded,” Thompson said in a May 20 statement. “Given the coronavirus pandemic and the ongoing investigation ... the administration should pause construction and contracting decisions until the investigation has concluded favorably and it is safe to resume non-essential construction projects.”
Corps of Engineers Task Order
The Corps confirmed the larger new award to Fisher Sand & Gravel was on May 6, although it was not announced at the time on the Defense Dept.’s contract award website.
An agency spokesman said the disclosure was not required because the award was a competitive task order made under the Corps Western Multiple Award Task Order Contract, the $5-billion firm-fixed-price contract vehicle being used for work to design and build border structures.
The pre-approved firms compete for task orders awarded under it.
The estimated $30-million per mile cost for the contract—known as Tucson Package 3—was estimated in some news reports as $10 million per mile higher than average wall building cost.
Corps spokesman Jay Field told the Arizona Star that “each project cost is contingent upon its unique characteristics, such as geotechnical, topographical, hydrological and hydraulic, underground utilities, final real estate access and the cost of materials and labor."
The Fisher award is “a series of projects within a geographical area with more complex terrain,” Corps spokeswoman Raini Brunson told ENR, adding that the task order was competed and awarded to the firm with the lowest-price technically acceptable offer. The project start and completion dates have not yet been determined, she said.
In comments to media, Sen. Cramer confirmed the new contract cost, noting it was through “really tough terrain in the mountains” in Arizona.
The 42.5-mile border stretch south of Tucson also includes water crossings such as the Santa Cruz River basin, which floods during summer storms and will require storm gates, Corps and other border officials told The Washington Post.
Extra Cost To Paint Border Wall
Also adding to cost was a design change reportedly pushed by Trump, to paint the barrier black to absorb solar heat and further thwart would-be border crossers, which would add about $1.2 million per mile, said The Post. It cited government contracting estimates obtained and engineering assessments from unidentified experts, who said the coating will increase long-term maintenance costs and boost by less than 10% the steel-bar topped bollard barrier's ability to retain heat.
Fisher told media last December that there would be “nothing to find” in an audit of its first contract, and that the firm was told it was "the lowest price and the best value."
Fisher Sand & Gravel is a unit of Fisher Industries—whose website promotes that it “likes the tough jobs”—which has morphed from an aggregate mining operation in the early 1950s to a multi-dimensional materials and equipment manufacturing, demolition and heavy construction firm with eight divisions.
According to its website, the firm has 1,200 employees in nine southwestern, northern plains and west coast states.
Company revenue is not disclosed, and the firm has not participated in ENR annual contractor rankings.
But Fisher said in federal court testimony in January that company revenue was about $700 million, according to Texas Monthly
According to a calendar year 2018 Dun & Bradstreet financial report for the firm obtained by ENR, its parent company is 100% owned by Tommy Fisher and has total assets of $353.4 million and current liabilities of $45.6 million, with an 8.8% margin.
Fisher Sand & Gravel has worked on public sector projects, including roads, bridges, levees and dams. “Fisher's real strength is moving dirt, that’s where they excel,” says one public works agency official who declined to be identified. “Tommy’s a real salesman.”
Fisher's Prior Projects
The firm gained some attention in finishing construction in 2012 of the complex Galena Creek bridge in Nevada when the previous contractor was terminated, leaving at 60% complete what was then the world's largest cathedral tied arch span.
The state DOT awarded Fisher Sand & Gravel in late 2006 a $393.3-million contract to complete the structure and related road and bridge construction on the I-580 Freeway project—then the single largest award in state agency history—although the bid was 19.1% higher than the engineer's estimate and forced cuts in other agency projects, according to media reports and industry sources.
The project “found its footing” under Fisher, said ENR at the time, with the firm changing the construction approach.
Fisher Sand & Gravel has worked steadily for Nevada DOT since then, completing in 2018 the first section of I-11, a new interstate and awarded in January a $99-million interchange project in north Las Vegas.
“The firm is attracted to large multiyear projects,” says one industry executive. "But it's been known to pull equipment and manpower from job to job.”
According to information obtained by ENR, Fisher Sand & Gravel has faced liquidated damages on Nevada DOT projects totaling more than $107 million since 2016.
In a statement, the agency said that “although the department has previously levied contractual liquidated damages against Fisher Sand & Gravel, as recently as last year – primarily for time and material related delays – it’s still the exception rather than the norm. Fisher is a proven and valued contracting partner."
But court convictions of now former Fisher Industries family executives on federal income tax evasion and other charges dating back more than a decade cost the firm large awards on which it was low bidder in Clark County, Nev. and in Wyoming. The firm gained a multi-million-dollan settlement in the county procurement following two lawsuits it filed, one contending bias against hiring a nonunion firm.
Fisher also settled in 2017 with Maricopa County, Ariz., related to years of alleged air-quality violations from its asphalt plant, agreeing to pay $1 million, and has also paid more than $2.1 million in federal tax and environmental penalties, says Texas Monthly.
Prior Wall Building
In its new wall building push, Fisher Sand & Gravel promotes its recent private wall projects in Texas and New Mexico, although both have opposition. The three-mile Texas wall, located about 35 ft from the Rio Grande River edge, faces state and federal lawsuits, including one from the U.S. Justice Dept. that charges international border treaty violations in building in the river floodplain without proper permissions, and ls expected to require some design and construction changes.
Related to its first site in Sunland Park, N.M. near El Paso that was completed last June, the firm contends in its website promotion and accompanying video, that its "vertical integration business model allowed ... total control over all major aspects of this border wall construction project including design, steel procurement, fence fabrication, heavy-haul transportation, grading/excavation, fence installment, and all concrete work. Upon completion, Fisher is now able to show that we are capable of constructing in any terrain along the border. We feel that our schedule and price are both unmatched."
Even so, rising construction costs for the federal border wall program appear to have prompted a top Corps official to disclose on May 20 that the agency has cancelled a section of contracted border wall construction in Arizona “due to difficult terrain” and "higher than expected" contractor pricing, and made scope changes on five other projects funded in fiscal 2020.
Brig. Gen. Glenn Goddard, Corps deputy director for military programs, revealed the cost reductions but did not disclose amounts, in a document submitted in a federal district court lawsuit challenging Administration diversion of billions in funding from DOD military construction and other programs to border wall work without congressional approval.
Numerous state attorneys general and environmental and advocacy groups have sued the Administration over the diversions.
Corps spokeswoman Brunson declined to elaborate on a reason for the cancelled Yuma A segment 1 project—a seven-mile barrier along the Colorado River just before it reaches the border—although it is believed to involve issues in land acquisition.
She added that portions of other projects totaling about 15 miles along the border "were not awarded due to high proposal costs." But Brunson told ENR on May 29 that "cost savings realized from competitive acquisitions" now will enable award of three other section contracts.
Meanwhile, ongoing litigation also challenges federal waivers of dozens of environmental and public health laws to fast-track wall construction in California, Arizona, New Mexico and Texas.
The Trump administration on May 21 asked the U.S. Supreme Court to dismiss a request by one environmental group to consider whether the U.S. Dept. of Homeland Security chief's waiver of the laws violates the Constitution’s separation of powers.