State Department awards $5M+ for global embassy electrical maintenance, with OEG Inc. securing the contract

Contract Overview

Contract Amount: $5,026,748 ($5.0M)

Contractor: OEG Inc

Awarding Agency: Department of State

Start Date: 2019-05-17

End Date: 2027-12-31

Contract Duration: 3,150 days

Daily Burn Rate: $1.6K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: PREVENTIVE MAINTENANCE AND REPAIR FOR MEDIUM VOLTAGE ELECTRICAL EQUIPMENT U.S. EMBASSIES AND CONSULATES WORLDWIDE

Plain-Language Summary

Department of State obligated $5.0 million to OEG INC for work described as: PREVENTIVE MAINTENANCE AND REPAIR FOR MEDIUM VOLTAGE ELECTRICAL EQUIPMENT U.S. EMBASSIES AND CONSULATES WORLDWIDE Key points: 1. Contract value appears reasonable given the global scope and duration. 2. Full and open competition suggests a potentially competitive bidding process. 3. Long contract duration may introduce risks related to technological obsolescence and price escalation. 4. Focus on preventive maintenance indicates a proactive approach to infrastructure reliability. 5. The contract aligns with the agency's need to maintain secure and functional diplomatic facilities worldwide.

Value Assessment

Rating: good

The contract value of approximately $5 million over its period of performance (May 2019 - December 2027) seems appropriate for providing preventive maintenance and repair for medium voltage electrical equipment across U.S. embassies and consulates globally. While direct comparisons are difficult due to the unique scope, the firm-fixed-price structure helps control costs. Benchmarking against similar global infrastructure maintenance contracts would provide further insight into value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. This approach generally fosters a competitive environment, which can lead to better pricing and service offerings for the government. The specific number of bidders is not provided, but the method of competition suggests a robust process.

Taxpayer Impact: Full and open competition is favorable for taxpayers as it maximizes the potential for cost savings through a wider range of bids and encourages contractors to offer their best pricing and services.

Public Impact

U.S. embassies and consulates worldwide benefit from enhanced electrical system reliability and safety. Essential services at diplomatic missions are supported through consistent infrastructure maintenance. The contract contributes to the operational readiness and security of U.S. diplomatic facilities. Potential for localized employment opportunities in regions where maintenance and repair work is performed.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long-term contract duration (over 8 years) increases the risk of price volatility and potential for outdated technology.
Global scope presents logistical challenges and potential for unforeseen regional issues impacting service delivery.
Dependence on a single contractor for critical infrastructure maintenance could pose a risk if performance falters.

Positive Signals

Firm-fixed-price contract structure provides cost certainty for the government.
Preventive maintenance focus aims to reduce costly emergency repairs and downtime.
Full and open competition suggests a potentially competitive award process.

Sector Analysis

This contract falls within the Electrical Contractors and Other Wiring Installation Contractors sector, a critical component of the broader construction and facilities maintenance industry. The market for such services is substantial, driven by the ongoing need to maintain and upgrade electrical infrastructure for government facilities, commercial buildings, and industrial sites. The global reach of this contract positions it as a significant undertaking within this sector, requiring specialized expertise in managing complex electrical systems across diverse international environments.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). While there is no direct indication of small business subcontracting requirements in the provided data, large global contracts often include provisions for small business participation. The absence of specific set-aside information suggests that the primary award was likely made to a larger entity capable of managing the extensive global requirements.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Department of State's Bureau of Overseas Buildings Operations (OBO) or a similar facilities management division. Accountability measures are embedded within the firm-fixed-price contract terms, requiring OEG Inc. to meet specific performance standards for preventive maintenance and repairs. Transparency is facilitated through contract award databases and reporting requirements, though detailed performance metrics may not always be publicly accessible. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Worldwide Diplomatic Facilities Maintenance
Overseas Infrastructure Support
Electrical Systems Maintenance Contracts
Government Facilities Management

Risk Flags

Long contract duration
Global operational complexity
Potential for price escalation
Technological obsolescence risk

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $5.0 million to OEG INC. PREVENTIVE MAINTENANCE AND REPAIR FOR MEDIUM VOLTAGE ELECTRICAL EQUIPMENT U.S. EMBASSIES AND CONSULATES WORLDWIDE

Who is the contractor on this award?

The obligated recipient is OEG INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $5.0 million.

What is the period of performance?

Start: 2019-05-17. End: 2027-12-31.

What is the historical spending pattern for preventive maintenance and repair of electrical equipment at U.S. embassies and consulates?

Analyzing historical spending requires access to detailed budget and contract data over multiple fiscal years. Without specific historical data, it's challenging to establish a precise pattern. However, the Department of State consistently allocates significant funds towards maintaining its global infrastructure, including electrical systems, to ensure the safety, security, and operational continuity of diplomatic missions. Spending in this category is likely influenced by factors such as the age of facilities, geopolitical conditions requiring enhanced security measures, and the overall budget appropriations for the department. The current contract's value of over $5 million suggests a substantial and ongoing commitment to this area of maintenance.

How does the performance of OEG Inc. on similar contracts compare to industry benchmarks?

Assessing OEG Inc.'s performance requires a review of their past contract history, including performance evaluations, past performance questionnaires, and any documented issues or commendations. Benchmarking against industry standards for electrical maintenance and repair services would involve comparing metrics such as response times for emergency repairs, quality of work, adherence to safety protocols, and cost-effectiveness. Without specific performance data for OEG Inc. on comparable contracts, a direct comparison is not feasible. However, the Department of State's decision to award this contract, especially under full and open competition, suggests that OEG Inc. likely met or exceeded the required performance criteria during the bidding process.

What are the primary risks associated with a long-term (8+ year) contract for global electrical equipment maintenance?

Long-term contracts for global electrical equipment maintenance present several key risks. Firstly, technological advancements in electrical systems can occur rapidly, potentially rendering the equipment or maintenance techniques specified in the contract obsolete before its expiration. Secondly, price escalation due to inflation, material cost fluctuations, or changes in labor rates over an extended period can lead to the government paying more than initially anticipated, especially if the firm-fixed-price is not adequately structured to account for these variables. Thirdly, the logistical complexities of managing maintenance across numerous geographically dispersed embassies and consulates increase the potential for delays, unforeseen operational challenges, and difficulties in ensuring consistent service quality. Finally, contractor performance can degrade over time, and the long duration limits the agency's ability to quickly switch providers if issues arise.

What is the estimated value of the small business subcontracting market related to this contract?

The provided data does not specify any small business subcontracting goals or requirements for this particular contract. Since the contract was not set aside for small businesses and the prime contractor is OEG Inc., the extent of small business involvement would depend on OEG Inc.'s subcontracting strategy. Typically, large federal contracts may include clauses encouraging or mandating subcontracting to small businesses, including those in specific categories like small disadvantaged businesses, women-owned small businesses, or service-disabled veteran-owned small businesses. Without explicit subcontracting plans or data from OEG Inc., estimating the precise value of the small business subcontracting market related to this contract is not possible. However, given the nature of electrical maintenance and repair, opportunities could exist for specialized small businesses in areas like component supply, localized repair services, or specific technical expertise.

How does the firm-fixed-price (FFP) structure benefit the Department of State in managing costs for this global maintenance contract?

The Firm-Fixed-Price (FFP) contract structure is highly beneficial for the Department of State in managing costs for this global maintenance contract. Under an FFP agreement, the contractor, OEG Inc., assumes the majority of the risk associated with cost overruns. This means that the agreed-upon price is generally final, regardless of the contractor's actual costs incurred in performing the work. This provides the Department of State with significant cost certainty and predictability, making budgeting more straightforward. It incentivizes the contractor to control its own costs efficiently and to perform the work effectively to maintain profitability. While the initial price might be higher than a cost-reimbursement contract to account for contractor risk, the FFP structure protects the government from unexpected cost increases, which is particularly valuable for a long-term, globally dispersed service contract like this one.

Industry Classification

NAICS: Construction › Building Equipment Contractors › Electrical Contractors and Other Wiring Installation Contractors

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1709 SE 3RD AVE, PORTLAND, OR, 97214

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

Financial Breakdown

Contract Ceiling: $5,439,536

Exercised Options: $5,439,536

Current Obligation: $5,026,748

Actual Outlays: $847,584

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 19AQMM18D0070

IDV Type: IDC

Timeline