State Department awards $816M contract for design services to BL Harbert International LLC

Contract Overview

Contract Amount: $815,936,267 ($815.9M)

Contractor: BL Harbert International LLC

Awarding Agency: Department of State

Start Date: 2022-01-14

End Date: 2029-11-30

Contract Duration: 2,877 days

Daily Burn Rate: $283.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: BASE AWARD FOR CONSTRUCTION MANAGER AS CONSTRUCTOR CLIN-001 FOR DESIGN-PHASE SERVICES FOR HANOI NEC.

Plain-Language Summary

Department of State obligated $815.9 million to BL HARBERT INTERNATIONAL LLC for work described as: BASE AWARD FOR CONSTRUCTION MANAGER AS CONSTRUCTOR CLIN-001 FOR DESIGN-PHASE SERVICES FOR HANOI NEC. Key points: 1. Contract awarded for design-phase services, indicating a focus on early project stages. 2. The contract's duration of nearly 8 years suggests a long-term commitment to the project. 3. A firm-fixed-price contract type aims to provide cost certainty for the government. 4. The award was not competed, raising questions about potential cost efficiencies and market engagement. 5. The significant value of the contract warrants close scrutiny of its execution and outcomes. 6. Services are categorized under Architectural Services, aligning with the project's design focus.

Value Assessment

Rating: questionable

The base award of $815,936,267 for design-phase services is substantial. Without comparable contracts for similar large-scale diplomatic facility design projects, it is difficult to benchmark the value. The firm-fixed-price structure is intended to control costs, but the lack of competition means there's no direct market comparison to assess if this price represents optimal value for the taxpayer. Further analysis would require understanding the scope of services and the complexity of the Hanoi NEC project.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. The specific justification for this approach is not provided in the data. Sole-source awards can sometimes be necessary for specialized services or when a specific contractor has unique qualifications. However, the absence of competition typically limits price discovery and may result in higher costs compared to a fully competed procurement.

Taxpayer Impact: The lack of competition means taxpayers may not be benefiting from the most cost-effective pricing that could have been achieved through a competitive bidding process.

Public Impact

The primary beneficiary is the Department of State, which will receive design services for the Hanoi New Embassy Compound (NEC). The services delivered will be architectural and design-related, crucial for the planning and development of a major diplomatic facility. The geographic impact is focused on Hanoi, Vietnam, where the new embassy compound will be constructed. Workforce implications may include employment opportunities for architects, engineers, and support staff within BL Harbert International and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition for a contract of this magnitude raises concerns about potential overpricing and reduced value for taxpayer funds.
The long contract duration (nearly 8 years) increases the risk of scope creep or unforeseen cost increases if not managed meticulously.
Absence of specific details on the 'design-phase services' makes it challenging to fully assess the scope and potential risks.
The sole-source nature of the award necessitates robust oversight to ensure accountability and prevent potential abuses.

Positive Signals

The firm-fixed-price contract type provides a degree of cost certainty for the government, assuming the scope is well-defined.
BL Harbert International LLC is a known entity in construction and project management, suggesting some level of established capability.
The contract is for design services, which is a critical upfront phase that can mitigate later construction risks if executed well.

Sector Analysis

The architectural services sector is a critical component of the construction and infrastructure industry. This contract falls within the broader professional, scientific, and technical services category. The market for large-scale diplomatic facility design is specialized, often involving significant security and logistical considerations. Comparable spending benchmarks would typically be found within government agencies undertaking similar embassy or consulate construction projects globally, though such data is not readily available in this context.

Small Business Impact

The data indicates that small business participation (ss and sb) is false for this contract. This suggests that the contract was not set aside for small businesses, nor does it appear to have explicit subcontracting requirements for small businesses mandated within the provided data. Consequently, the direct impact on the small business ecosystem from this specific award is likely minimal, unless BL Harbert International voluntarily engages small businesses as subcontractors.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of State's Bureau of Overseas Buildings Operations (OBO) or a designated project management office. Accountability measures would be defined by the contract's terms and conditions, including performance milestones and payment schedules. Transparency could be enhanced by public reporting on project progress and any modifications. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse related to the contract.

Related Government Programs

Department of State Embassy Construction Projects
Overseas Buildings Operations (OBO) Contracts
Architectural and Engineering Services Procurement
Large-Scale Government Facility Design Contracts

Risk Flags

Sole-source award
Long contract duration
High contract value
Lack of small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $815.9 million to BL HARBERT INTERNATIONAL LLC. BASE AWARD FOR CONSTRUCTION MANAGER AS CONSTRUCTOR CLIN-001 FOR DESIGN-PHASE SERVICES FOR HANOI NEC.

Who is the contractor on this award?

The obligated recipient is BL HARBERT INTERNATIONAL LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $815.9 million.

What is the period of performance?

Start: 2022-01-14. End: 2029-11-30.

What is the specific scope of 'design-phase services' covered under this contract?

The provided data does not detail the specific scope of 'design-phase services.' Typically, this would encompass preliminary design, schematic design, design development, and construction documents. For a project like the Hanoi New Embassy Compound (NEC), this could include architectural plans, structural engineering, mechanical, electrical, and plumbing (MEP) systems design, site planning, security integration, and potentially interior design elements. The exact deliverables and phases would be outlined in the contract's statement of work (SOW). Without the SOW, a precise understanding of the services is limited, making it difficult to fully assess the value proposition or potential risks associated with the $816 million award.

What is the justification for awarding this significant contract on a sole-source basis?

The provided data indicates the contract was 'NOT COMPETED,' signifying a sole-source award. However, the specific justification for this determination is not included. Government agencies typically sole-source contracts when only one responsible source can provide the required supplies or services, such as when there is a unique capability, a critical need for compatibility with existing systems, or in emergency situations. For a project of this scale and nature (design for a new embassy compound), the justification might relate to specific security requirements, proprietary design methodologies, or a pre-existing relationship and demonstrated expertise with the specific site or project context. A formal justification document (e.g., a Justification and Approval for Other Than Full and Open Competition) would normally be required and publicly accessible.

How does the $816 million award compare to similar embassy design projects undertaken by the State Department or other agencies?

Benchmarking this $816 million award for design-phase services against similar projects is challenging without access to a comprehensive database of comparable State Department or other federal agency embassy construction and design contracts. Factors influencing cost include the size and complexity of the facility, geopolitical considerations, security requirements, local labor and material costs in Hanoi, and the specific scope of design services included. Large-scale diplomatic facilities can cost hundreds of millions to over a billion dollars for construction alone. The design phase typically represents a smaller fraction of the total project cost, but for a compound of significant scale, an $816 million design award, while substantial, might be within a plausible range if it encompasses extensive planning, multiple design iterations, and complex security integration over a long period. Further analysis would require detailed project scope comparisons.

What are the potential risks associated with a nearly 8-year contract duration for design services?

A contract duration of nearly 8 years (January 2022 to November 2029) for design-phase services presents several potential risks. Firstly, the extended timeline increases the likelihood of design changes or scope creep as project requirements evolve or unforeseen issues arise, potentially leading to cost overruns if not managed strictly. Secondly, market conditions, material costs, and technological advancements could change significantly over this period, impacting the long-term viability or cost-effectiveness of the initial designs. Thirdly, maintaining consistent project oversight and contractor performance over such a long duration can be challenging. Finally, if the design phase extends significantly into the construction phase, coordination issues between the design team and the construction team (even if the same entity) could arise, potentially delaying the project.

What performance metrics or oversight mechanisms are in place to ensure BL Harbert International delivers value?

The provided data does not specify the performance metrics or detailed oversight mechanisms for this contract. However, standard government contracting practices would typically involve a contract officer's representative (COR) or contracting officer's technical representative (COTR) responsible for monitoring performance, ensuring compliance with the statement of work, and approving deliverables. Performance would likely be evaluated against milestones, quality standards for design documents, adherence to budget (if applicable beyond the base award), and timeliness. The firm-fixed-price nature implies the contractor is responsible for delivering the defined scope within the agreed price, but oversight is still crucial to ensure the quality and completeness of the design work, especially given the contract's value and duration.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Architectural Services

Product/Service Code: ARCHITECT/ENGINEER SERVICES › ARCH-ENG SVCS - CONSTRUCTION

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 19AQMM21R0073

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 820 SHADES CREEK PKWY STE 3000, BIRMINGHAM, AL, 35209

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $815,936,267

Exercised Options: $815,936,267

Current Obligation: $815,936,267

Subaward Activity

Number of Subawards: 6

Total Subaward Amount: $8,505,132

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline