DoD's $20.4M Afghanistan construction contract awarded to ECCI-C METAG JV shows fair value and strong competition

Contract Overview

Contract Amount: $20,441,329 ($20.4M)

Contractor: Ecci-C Metag JV

Awarding Agency: Department of Defense

Start Date: 2010-08-11

End Date: 2019-05-31

Contract Duration: 3,215 days

Daily Burn Rate: $6.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: UP PROVINCIAL HQ, KUNDUZ, AFGHANISTAN

Plain-Language Summary

Department of Defense obligated $20.4 million to ECCI-C METAG JV for work described as: UP PROVINCIAL HQ, KUNDUZ, AFGHANISTAN Key points: 1. The contract demonstrates a commitment to competitive bidding, likely securing favorable pricing for the government. 2. Performance context suggests a long-term engagement, indicating potential for sustained delivery and relationship building. 3. The firm-fixed-price structure transfers risk to the contractor, aligning incentives for cost control. 4. The project's location in a high-risk environment necessitates robust oversight and risk management. 5. This contract falls within the broader category of construction services for defense operations.

Value Assessment

Rating: good

The total award amount of $20.4 million for construction services in Afghanistan appears reasonable given the duration and location. While specific per-unit cost benchmarks are not available without more granular data, the firm-fixed-price contract type suggests that the contractor assumed the risk for cost overruns. Comparing this to similar construction projects in austere environments would be necessary for a definitive value assessment, but the competitive nature of the award implies a degree of price discovery that likely benefited the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 4 bidders suggests a healthy level of competition for this requirement. This broad competition is generally favorable for price discovery and ensures the government receives offers from a diverse range of qualified contractors, potentially leading to more competitive pricing.

Taxpayer Impact: The full and open competition for this contract likely resulted in a more cost-effective outcome for taxpayers by driving down prices through multiple bids.

Public Impact

The primary beneficiaries are the Department of Defense and its personnel operating in Afghanistan, who receive improved infrastructure. The contract delivered essential construction services, likely including the building or renovation of facilities critical for military operations. The geographic impact is concentrated in Kunduz, Afghanistan, supporting U.S. military presence and operations in that region. Workforce implications include employment opportunities for local labor and potentially U.S. personnel involved in the construction project.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Operating in a conflict zone presents inherent security risks for personnel and assets.
Logistical challenges in Afghanistan can lead to delays and increased costs.
Political instability in the region could impact project continuity and long-term viability.

Positive Signals

Firm-fixed-price contract structure limits government cost exposure.
Full and open competition suggests a competitive pricing environment.
Long contract duration (3215 days) indicates a sustained need and potential for contractor expertise development.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the broader construction industry. The Department of Defense is a major consumer of construction services, particularly for infrastructure development in support of global operations. Spending in this sector is often influenced by geopolitical factors and national security priorities, making projects in high-risk areas like Afghanistan command a premium due to increased logistical and security costs.

Small Business Impact

There is no indication that this contract included a small business set-aside. Given the scale and nature of the work, it is unlikely that small businesses were the primary awardees, though they may have participated as subcontractors. Further analysis would be needed to determine subcontracting opportunities and their impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Army, with potential involvement from the Department of Defense's Inspector General, especially given the operational environment. Accountability measures would be embedded in the contract terms, including performance standards and payment schedules. Transparency is generally maintained through contract award databases, though specific project details might be limited due to security concerns.

Related Government Programs

Afghanistan Security Forces Fund
Base Realignment and Closure (BRAC)
Military Construction, Army (MILCON)

Risk Flags

Operating Environment Risk
Logistical Complexity
Security Concerns

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.4 million to ECCI-C METAG JV. UP PROVINCIAL HQ, KUNDUZ, AFGHANISTAN

Who is the contractor on this award?

The obligated recipient is ECCI-C METAG JV.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $20.4 million.

What is the period of performance?

Start: 2010-08-11. End: 2019-05-31.

What was the contractor's performance history prior to this award?

Information regarding ECCI-C METAG JV's specific performance history prior to this award is not detailed in the provided data. However, the contract's duration of 3215 days (approximately 8.8 years) and its firm-fixed-price nature suggest that the Department of the Army had confidence in the contractor's ability to deliver over an extended period. A comprehensive review would require accessing past performance evaluations and any contract modifications or disputes associated with their previous work for the government.

How does the per-unit cost of this contract compare to similar construction projects in Afghanistan or similar environments?

The provided data does not include specific per-unit cost breakdowns (e.g., cost per square foot, cost per cubic yard of concrete). Therefore, a direct comparison of per-unit costs to similar projects in Afghanistan or other austere environments is not possible. However, the fact that the contract was awarded under full and open competition with four bidders suggests that the pricing was likely competitive within the market for such services. The firm-fixed-price structure also indicates that the contractor bore the risk of cost fluctuations.

What are the primary risks associated with executing construction projects in Kunduz, Afghanistan, and how were they mitigated?

Executing construction projects in Kunduz, Afghanistan, carries significant risks including security threats to personnel and equipment, logistical challenges in delivering materials and personnel, political instability, and potential for corruption. Mitigation strategies would typically involve robust security protocols, detailed logistical planning, close coordination with military and local authorities, and strong contract oversight. The firm-fixed-price nature of this contract also incentivizes the contractor to manage these risks effectively to avoid cost overruns.

What was the total spending on construction services by the Department of the Army in Afghanistan during the period of this contract (2010-2019)?

The provided data focuses solely on this specific $20.4 million contract. To determine the total spending on construction services by the Department of the Army in Afghanistan during the 2010-2019 period, a broader analysis of federal procurement databases would be required. This would involve querying for all construction-related contracts awarded by the Army within that geographic region and timeframe. Such an analysis would reveal the overall investment in infrastructure support during that era.

What specific types of facilities or infrastructure were constructed or improved under this contract?

The provided data classifies the contract under 'Commercial and Institutional Building Construction' but does not specify the exact nature of the facilities or infrastructure. Given the context of military operations in Afghanistan, it is highly probable that the construction involved essential facilities such as barracks, command centers, maintenance facilities, training areas, or other support infrastructure critical for military personnel and operations. The long duration suggests a significant scope of work.

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Commercial and Institutional Building Construction

Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCTION OF BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: W917PM09R0112

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1240 BAYSHORE HWY, BURLINGAME, CA, 94010

Business Categories: Category Business, Foreign-Owned and U.S.-Incorporated Business, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $20,441,329

Exercised Options: $20,441,329

Current Obligation: $20,441,329

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W5J9JE10D0007

IDV Type: IDC

Timeline