Department of Defense awards $44M for Afghanistan construction, highlighting significant infrastructure investment in a complex operational environment

Contract Overview

Contract Amount: $44,070,650 ($44.1M)

Contractor: Gilbane Federal

Awarding Agency: Department of Defense

Start Date: 2011-01-10

End Date: 2014-05-09

Contract Duration: 1,215 days

Daily Burn Rate: $36.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 30

Pricing Type: COST PLUS FIXED FEE

Sector: Construction

Official Description: CONSTRUCTION OF ANCOP HQ AT MARJAH AND BORDER PATROL HQ AT LASHKAR GAH, AFGANISTAN

Plain-Language Summary

Department of Defense obligated $44.1 million to GILBANE FEDERAL for work described as: CONSTRUCTION OF ANCOP HQ AT MARJAH AND BORDER PATROL HQ AT LASHKAR GAH, AFGANISTAN Key points: 1. The contract value represents a substantial investment in critical infrastructure for border security and headquarters facilities. 2. Full and open competition was utilized, suggesting a broad market engagement for this significant project. 3. The project duration of 1215 days indicates a long-term commitment to construction and development. 4. The Cost Plus Fixed Fee contract type may introduce cost escalation risks if not managed diligently. 5. The geographic location in Afghanistan presents unique logistical and security challenges impacting project execution and cost. 6. The project's focus on Ancop HQ and Border Patrol HQ underscores a strategic effort to bolster security infrastructure.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging due to its specific geographic location and the unique nature of construction in a conflict zone. The $44 million award for two significant headquarters facilities and associated construction in Afghanistan reflects the high costs associated with operating in such environments. Without comparable projects in similar theaters, a precise value-for-money assessment is difficult. However, the scale of the project suggests a significant need for the facilities being built.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that the Department of Defense sought bids from all responsible sources. This approach generally promotes a competitive environment, potentially leading to better pricing and innovation. The number of bids received (30) suggests a healthy level of interest from contractors capable of undertaking such a complex project in a challenging location.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it maximizes the pool of potential bidders, increasing the likelihood of receiving competitive offers and preventing potential price gouging.

Public Impact

The primary beneficiaries are the Department of Defense and its personnel, who will utilize the new headquarters facilities. The services delivered include the construction of critical infrastructure, specifically Ancop HQ and Border Patrol HQ. The geographic impact is concentrated in Marjah and Lashkar Gah, Afghanistan, supporting regional security operations. The project likely involved a significant workforce, including local labor and specialized construction personnel, contributing to employment in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can lead to cost overruns if not closely monitored.
Construction in Afghanistan presents inherent security and logistical risks that can impact timelines and budgets.
The long project duration increases exposure to changing geopolitical conditions and economic fluctuations.

Positive Signals

Awarded under full and open competition, suggesting a robust bidding process.
The project addresses critical infrastructure needs for border security and operational command.
A significant number of bids (30) indicates contractor interest and capability in challenging environments.

Sector Analysis

This contract falls within the construction sector, specifically focusing on institutional and commercial building construction. The market for such projects in Afghanistan is heavily influenced by government spending, particularly defense and reconstruction efforts. Comparable spending benchmarks are difficult to establish due to the unique operational context and security requirements inherent in military construction projects in active zones. The scale of this award is significant for infrastructure development in the specified region.

Small Business Impact

There is no indication that this contract included small business set-asides. Given the scale and complexity of constructing headquarters facilities in Afghanistan, it is likely that the prime contractor, Gilbane Federal, would subcontract portions of the work. The extent to which small businesses, particularly those local to the region or with experience in such environments, would be involved as subcontractors is not specified but is a potential area for small business participation.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and inspection mechanisms. Given the location, oversight would likely involve on-site quality assurance representatives and potentially Inspector General (IG) investigations to ensure compliance with contract terms, cost controls, and construction standards. Transparency would be managed through contract reporting requirements and public contract databases.

Related Government Programs

Afghanistan Security Forces Fund (ASFF)
US Army Corps of Engineers Construction Projects
Department of State Overseas Buildings Operations

Risk Flags

High-risk geographic location
Cost Plus Fixed Fee contract type
Long project duration
Potential for cost escalation
Logistical complexity

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $44.1 million to GILBANE FEDERAL. CONSTRUCTION OF ANCOP HQ AT MARJAH AND BORDER PATROL HQ AT LASHKAR GAH, AFGANISTAN

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 $44.1 million.

What is the period of performance?

Start: 2011-01-10. End: 2014-05-09.

What is the track record of Gilbane Federal in executing large-scale construction projects in complex international environments?

Gilbane Federal has a substantial track record of executing large-scale construction and facilities management projects for the U.S. government, both domestically and internationally. They have significant experience in challenging environments, including military bases and overseas operations. Their portfolio often includes complex projects such as headquarters, barracks, and operational facilities. While specific details on projects in Afghanistan would require deeper research, Gilbane's general reputation suggests a capacity to manage the logistical, security, and technical demands of such undertakings. Their past performance data, available through federal procurement databases, would offer more granular insights into their success rates, cost performance, and adherence to schedules on similar contracts.

How does the Cost Plus Fixed Fee (CPFF) contract type potentially impact the final cost compared to other contract types for this project?

The Cost Plus Fixed Fee (CPFF) contract type, used for this project, allows the contractor to recover all allowable costs incurred plus a predetermined fixed fee representing profit. This structure is often employed when the scope of work is not precisely defined or when unforeseen difficulties are anticipated, as is common in construction projects in complex environments like Afghanistan. While it provides flexibility, it also shifts some of the cost risk to the government. If costs escalate beyond initial estimates, the government pays the increased costs, plus the fixed fee. This contrasts with fixed-price contracts, where the contractor bears the risk of cost overruns. Effective oversight and cost controls by the government are crucial to mitigate potential cost increases under a CPFF arrangement.

What were the primary risks identified by the Department of Defense during the solicitation and award process for this construction project?

Given the project's location in Afghanistan, the primary risks likely identified by the Department of Defense would include security threats to personnel and assets, logistical challenges in transporting materials and equipment, political and economic instability in the region, potential for corruption, and the inherent difficulties in managing construction quality and timelines in a non-permissive or semi-permissive environment. Additionally, risks associated with the CPFF contract type, such as potential cost escalation and the need for robust government oversight to manage contractor performance and expenditures, would have been a significant consideration. The large number of bidders (30) suggests that while risks were present, the potential rewards or the perceived manageability of these risks attracted significant contractor interest.

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

Historical spending by the Department of the Air Force (and the broader Department of Defense) in Afghanistan for construction projects has been substantial, particularly during periods of active military engagement and nation-building efforts. Projects have ranged from airbase infrastructure upgrades and forward operating base construction to administrative facilities and living quarters. Spending patterns have often been characterized by high unit costs due to the logistical complexities, security premiums, and the use of specialized contracting mechanisms suited for contingency operations. While specific figures for comparable projects require detailed database queries, the overall trend indicates significant investment in establishing and maintaining operational and support infrastructure in the region over many years, often involving multi-year, high-value contracts.

How does the $44 million award compare to the average cost of similar construction projects awarded by the DoD in overseas contingency operations?

The $44 million award for the construction of two headquarters facilities in Afghanistan is substantial but falls within the range of significant infrastructure projects undertaken by the Department of Defense in overseas contingency operations. Projects in such environments are inherently more expensive than comparable domestic construction due to factors like transportation costs, security requirements, specialized labor, and the need for robust logistical support. While average costs can vary widely based on project scope, location, and threat level, multi-million dollar awards for major facilities are common. This specific award reflects the high cost associated with building critical infrastructure in a challenging operational theater like Afghanistan, where security and logistical premiums significantly inflate project expenses compared to CONUS (Continental United States) projects.

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: 30

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: $44,070,650

Exercised Options: $44,070,650

Current Obligation: $44,070,650

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA890306D8513

IDV Type: IDC

Timeline