State Department's $276.6M AIT Funding Task Order awarded to American Institute in Taiwan shows no competition

Contract Overview

Contract Amount: $276,618,534 ($276.6M)

Contractor: American Institute in Taiwan

Awarding Agency: Department of State

Start Date: 2017-10-01

End Date: 2025-08-07

Contract Duration: 2,867 days

Daily Burn Rate: $96.5K/day

Competition Type: NOT COMPETED

Pricing Type: TIME AND MATERIALS

Sector: Other

Official Description: AIT FUNDING TASK ORDER

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22201

State: Virginia Government Spending

Plain-Language Summary

Department of State obligated $276.6 million to AMERICAN INSTITUTE IN TAIWAN for work described as: AIT FUNDING TASK ORDER Key points: 1. The contract's value, exceeding $276 million, represents a significant investment in international affairs. 2. The absence of competition raises questions about potential overpricing and lack of market-driven cost efficiencies. 3. The contract's duration of nearly 8 years suggests a long-term commitment to the services provided. 4. The 'Time and Materials' pricing structure can increase cost uncertainty if not closely managed. 5. The award to the American Institute in Taiwan indicates a specialized relationship or unique capability. 6. The lack of small business involvement warrants further investigation into subcontracting opportunities.

Value Assessment

Rating: questionable

Benchmarking the value of this $276.6 million contract is challenging without comparable sole-source awards in the international affairs sector. The 'Time and Materials' pricing model, while flexible, carries inherent risks of cost escalation compared to fixed-price contracts. Without competitive bids, it's difficult to ascertain if the pricing reflects fair market value or if taxpayers are receiving optimal value for the funds expended. The long duration further amplifies the need for rigorous cost oversight.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. The specific reasons for this designation are not detailed in the provided data, but it typically implies that only one source was capable of fulfilling the requirement. The lack of competition means there was no opportunity for multiple vendors to bid, potentially limiting price discovery and innovation that could arise from a competitive bidding process.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to drive down prices. This lack of competition also reduces transparency in the procurement process.

Public Impact

The primary beneficiary is the American Institute in Taiwan, which will receive substantial funding. The services delivered are related to international affairs, likely supporting diplomatic or operational functions. The geographic impact is presumed to be international, given the nature of the awardee and the sector. Workforce implications could include the employment of personnel by the American Institute in Taiwan to fulfill the contract's objectives.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated costs for taxpayers.
The 'Time and Materials' contract type can result in cost overruns if not managed effectively.
Absence of small business participation needs further review for subcontracting potential.

Positive Signals

The award signifies a long-term commitment to a critical international function.
The substantial funding indicates the importance of the services being procured.

Sector Analysis

This contract falls within the broader 'International Affairs' sector, which encompasses a wide range of activities including diplomacy, foreign aid, and international development. The market for such services is often specialized, with a limited number of entities possessing the necessary expertise and security clearances. The American Institute in Taiwan's role suggests a unique, potentially government-affiliated entity is involved. Comparable spending benchmarks are difficult to establish due to the sole-source nature and specific mission.

Small Business Impact

The data indicates that small business participation was not a stated requirement or was not met (sb: false, ss: false). This sole-source award to the American Institute in Taiwan suggests no specific set-aside for small businesses was utilized. Further analysis would be needed to determine if subcontracting opportunities exist for small businesses within the scope of this large contract, which is often a key avenue for their involvement in federal procurements.

Oversight & Accountability

Oversight mechanisms for this contract are not detailed in the provided data. However, given its significant value and sole-source nature, robust oversight by the Department of State would be expected. This would likely involve contract performance monitoring, financial audits, and potentially reviews by the Inspector General to ensure accountability and prevent waste, fraud, and abuse.

Related Government Programs

Department of State Operations
International Relations Funding
Diplomatic Support Services
Foreign Affairs Budgets

Risk Flags

Sole-source award lacks competitive pricing.
Time and Materials contract type poses cost overrun risk.
Long contract duration may limit flexibility and increase long-term costs.
No indication of small business participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $276.6 million to AMERICAN INSTITUTE IN TAIWAN. AIT FUNDING TASK ORDER

Who is the contractor on this award?

The obligated recipient is AMERICAN INSTITUTE IN TAIWAN.

Which agency awarded this contract?

Awarding agency: Department of State (Department of State).

What is the total obligated amount?

The obligated amount is $276.6 million.

What is the period of performance?

Start: 2017-10-01. End: 2025-08-07.

What is the specific nature of the services provided under the AIT Funding Task Order?

The provided data indicates the contract is for 'AIT FUNDING TASK ORDER' and falls under the 'International Affairs' NAICS code. While the exact services are not detailed, the awardee, American Institute in Taiwan (AIT), suggests the funding is likely related to supporting AIT's operations, which typically involve promoting U.S. interests and managing U.S. relations in regions where formal diplomatic relations are not established. This could encompass a wide range of activities, including cultural exchange, trade promotion, consular services, and potentially support for U.S. government personnel and facilities.

Why was this contract awarded on a sole-source basis?

The data explicitly states the contract type as 'NOT COMPETED', indicating a sole-source award. Specific justifications for sole-sourcing are not provided in the dataset. Common reasons for sole-source awards include situations where only one responsible source is available, the agency must procure from a specific source due to unique capabilities or circumstances, or in cases of urgent and compelling need where competition is not feasible. Given the awardee is the American Institute in Taiwan, it's plausible that unique institutional ties or specific mandates necessitate this arrangement, though a formal justification would typically be documented by the agency.

How does the 'Time and Materials' pricing structure impact cost control for this contract?

The 'Time and Materials' (T&M) pricing structure means the government pays the contractor for the direct labor hours at specified hourly rates, plus the actual cost of materials. This structure offers flexibility, especially when the scope of work is not clearly defined at the outset. However, it shifts much of the cost risk to the government. Without stringent oversight, including detailed tracking of labor hours, material costs, and effective management of the overall effort, T&M contracts can lead to cost overruns. The government must actively manage the contractor's performance and the efficient use of resources to ensure value for money.

What is the historical spending pattern for this specific task order or similar contracts?

The provided data represents a single task order with a total award amount of $276,618,534.11 and a duration from October 1, 2017, to August 7, 2025. This suggests a significant, long-term funding commitment. Without access to historical contract databases or agency budget documents, it's impossible to determine the precise historical spending pattern for this specific task order prior to its award or for comparable sole-source international affairs contracts. However, the substantial value and duration indicate a consistent and significant allocation of resources over several fiscal years.

What are the potential risks associated with the long duration of this contract?

The contract's duration of 2,867 days (approximately 7.85 years) presents several risks. Firstly, the longer the contract, the greater the potential for cost increases due to inflation or unforeseen market changes, especially with a 'Time and Materials' pricing structure. Secondly, the government's ability to adapt to evolving needs or technological advancements may be constrained if the contract locks in specific approaches or services for an extended period. Thirdly, maintaining effective oversight and ensuring continued performance quality over such a long timeframe requires sustained effort and resources from the contracting agency. Finally, the longer the commitment, the greater the potential impact of any contractor performance issues.

Industry Classification

NAICS: Public Administration › National Security and International Affairs › International Affairs

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: 1700 N MOORE ST STE 1700, ARLINGTON, VA, 22209

Business Categories: Category Business, Corporate Entity Tax Exempt, Nonprofit Organization, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $280,256,931

Exercised Options: $280,256,931

Current Obligation: $276,618,534

Actual Outlays: $76,122,090

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SAQMMA17D0075

IDV Type: IDC

Timeline