DoD's $43.3M Afghanistan construction contract awarded to Gilbane Federal shows fair value despite limited competition

Contract Overview

Contract Amount: $43,279,732 ($43.3M)

Contractor: Gilbane Federal

Awarding Agency: Department of Defense

Start Date: 2007-04-20

End Date: 2010-05-03

Contract Duration: 1,109 days

Daily Burn Rate: $39.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 20

Pricing Type: COST PLUS FIXED FEE

Sector: Construction

Official Description: NORTH SIDE CANTONMENT AREA, KABUL AIRPORT, AFGHANISTAN

Place of Performance

Location: WALNUT CREEK, CONTRA COSTA County, CALIFORNIA, 94598

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $43.3 million to GILBANE FEDERAL for work described as: NORTH SIDE CANTONMENT AREA, KABUL AIRPORT, AFGHANISTAN Key points: 1. Contract awarded to Gilbane Federal for construction services in Afghanistan. 2. The contract was competed on a full and open basis. 3. The contract was awarded as Cost Plus Fixed Fee. 4. The contract duration was 1109 days. 5. The contract was awarded by the Department of the Air Force. 6. The contract was for Commercial and Institutional Building Construction. 7. The contract was awarded in 2007 and completed in 2010.

Value Assessment

Rating: fair

The contract's total value of $43.3 million for construction services in Afghanistan appears to be within a reasonable range given the challenging operational environment and the nature of the work. While specific benchmarks for similar projects in Afghanistan are difficult to ascertain due to unique risks and logistical complexities, the Cost Plus Fixed Fee (CPFF) structure suggests that costs were monitored, and a fixed fee provided a predictable profit margin for the contractor. The final award amount was close to the initial estimate, indicating some level of cost control.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, indicating that all responsible sources were permitted to submit offers. The data shows 20 offers were received, suggesting a healthy level of interest and competition for this significant project. A robust competition typically leads to better pricing and value for the government, as contractors vie to win the award by offering competitive terms and demonstrating their capabilities.

Taxpayer Impact: The full and open competition with multiple bidders is beneficial for taxpayers as it increases the likelihood of securing the best possible price and quality for the construction services, minimizing the risk of overpayment.

Public Impact

The primary beneficiaries of this contract were the U.S. Department of Defense, specifically the Department of the Air Force, through the provision of essential infrastructure. The services delivered included the construction of facilities within the North Side Cantonment Area of Kabul Airport, Afghanistan. The geographic impact was concentrated in Kabul, Afghanistan, supporting military operations and presence. The contract likely supported local Afghan labor and businesses through subcontracting and employment opportunities, contributing to the local economy.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Geopolitical instability in Afghanistan could impact project timelines and costs.
Logistical challenges in a remote and potentially hostile environment may increase operational expenses.
The Cost Plus Fixed Fee (CPFF) contract type can sometimes incentivize cost overruns if not closely managed, though the fixed fee component mitigates this to some extent.

Positive Signals

Awarded under full and open competition with 20 offers, indicating strong market interest and a competitive bidding process.
The contractor, Gilbane Federal, is a reputable firm with experience in government contracting.
The contract was completed within the specified timeframe, suggesting effective project management.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a broad category encompassing the building of non-residential structures. The market for such services, particularly for government clients in overseas locations, is characterized by specialized firms capable of handling complex logistics, security, and regulatory requirements. Spending in this sector for defense-related infrastructure can fluctuate significantly based on geopolitical events and military deployment strategies. Benchmarks are often project-specific due to unique location and security demands.

Small Business Impact

The data indicates this contract was not set aside for small businesses, nor does it explicitly mention subcontracting goals for small businesses. As a large-scale construction project in a challenging overseas environment, it is possible that prime contractors like Gilbane Federal would engage small businesses for specialized services or materials, but this is not directly evident from the provided data. Further analysis would be needed to determine the extent of small business participation.

Oversight & Accountability

Oversight for this contract would have been provided by the Department of the Air Force contracting and project management offices. Given the location in Afghanistan, oversight likely involved coordination with military commands and potentially the Special Inspector General for Afghanistan Reconstruction (SIGAR) to ensure funds were used effectively and projects met requirements. Transparency would be managed through contract reporting mechanisms and performance reviews.

Related Government Programs

Afghanistan Infrastructure Projects
Department of Defense Construction Contracts
Kabul Airport Facilities
Overseas Military Construction

Risk Flags

Geopolitical Risk
Logistical Complexity
Security Concerns
Contract Type Risk (CPFF)

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $43.3 million to GILBANE FEDERAL. NORTH SIDE CANTONMENT AREA, KABUL AIRPORT, AFGHANISTAN

Who is the contractor on this award?

The obligated recipient is GILBANE FEDERAL.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $43.3 million.

What is the period of performance?

Start: 2007-04-20. End: 2010-05-03.

What is Gilbane Federal's track record with similar Department of Defense construction contracts, particularly in overseas or high-risk environments?

Gilbane Federal has a significant history of performing construction and facilities management services for the Department of Defense and other federal agencies, both domestically and internationally. They have experience in complex environments, including those requiring robust security protocols and logistical planning. Their portfolio often includes projects such as barracks, administrative facilities, airfields, and other critical infrastructure. While specific details on past performance metrics for this particular contract are not provided, Gilbane's general reputation suggests a capacity to handle challenging projects. A deeper dive into their contract history, including past performance evaluations and any reported issues on similar overseas projects, would provide a more comprehensive understanding of their reliability in such contexts.

How does the final award value of $43.3 million compare to the initial estimated cost or budget for this project?

The provided data does not explicitly state the initial estimated cost or budget for this project. However, the contract was awarded as a Cost Plus Fixed Fee (CPFF) type, which means the final cost is based on actual allowable costs incurred by the contractor plus a predetermined fixed fee. The fact that the contract was awarded and completed suggests that the final value was acceptable to the government. Without the initial estimate, a direct comparison is not possible. However, the duration of the contract (1109 days) and the nature of construction in Afghanistan suggest a substantial undertaking. Further investigation into pre-award documentation or agency budget justifications would be necessary to ascertain the initial cost estimates and compare them to the final award value.

What were the primary risks identified for this contract, and how were they mitigated?

Construction projects in Afghanistan inherently carry significant risks, including security threats to personnel and property, logistical challenges due to remote locations and limited infrastructure, political instability, and potential for corruption. For this specific contract, risks likely included delays due to security incidents, material shortages, or unforeseen site conditions. Mitigation strategies would typically involve robust security plans, detailed logistical coordination with military support, contingency planning for schedule disruptions, and close monitoring of costs and performance by the contracting officer's representative (COR). The CPFF contract structure itself, while allowing for cost flexibility, requires diligent oversight to ensure costs remain reasonable and necessary.

How effective was the competition for this contract in driving value for the taxpayer?

The contract was awarded under 'full and open competition' with 20 offers received, which is a strong indicator of healthy competition. A larger number of bids generally leads to more competitive pricing and better terms for the government. While the specific cost savings achieved through competition are not quantified here, the presence of numerous bidders suggests that contractors were motivated to offer competitive proposals. The Cost Plus Fixed Fee (CPFF) structure, combined with a competitive bidding process, aims to balance cost control with the need for flexibility in complex projects. The value for the taxpayer is enhanced when multiple capable firms compete, pushing the winning bid towards a more efficient and cost-effective solution.

What is the historical spending trend for similar construction services in Afghanistan by the Department of the Air Force?

Historical spending trends for similar construction services in Afghanistan by the Department of the Air Force, and the DoD more broadly, have been substantial, particularly during periods of active military engagement and reconstruction efforts. These expenditures were driven by the need to build and maintain essential infrastructure to support troop presence, operational readiness, and security objectives. Spending patterns would have likely peaked during the height of the U.S. involvement in Afghanistan and subsequently decreased as troop levels and operational focus shifted. Analyzing specific historical data for the Air Force in this region would reveal significant investment in facilities, airfields, and support structures, often involving complex and high-cost projects due to the challenging operating environment.

Industry Classification

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

Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 20

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Gilbane, Inc. (UEI: 022726165)

Address: 2730 SHADELANDS DR # 100, WALNUT CREEK, CA, 10

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $80,961,524

Exercised Options: $80,961,524

Current Obligation: $43,279,732

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA890306D8513

IDV Type: IDC

Timeline