State Department Awards $615M for Juba Embassy Construction, Facing Potential Cost Overruns

Contract Overview

Contract Amount: $614,652,572 ($614.7M)

Contractor: Caddell Construction CO. (DE), LLC

Awarding Agency: Department of State

Start Date: 2022-11-01

End Date: 2028-08-19

Contract Duration: 2,118 days

Daily Burn Rate: $290.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: DESIGN AND CONSTRUCTION OF THE NEW EMBASSY COMPOUND LOCATED IN JUBA, SOUTH SUDAN.

Plain-Language Summary

Department of State obligated $614.7 million to CADDELL CONSTRUCTION CO. (DE), LLC for work described as: DESIGN AND CONSTRUCTION OF THE NEW EMBASSY COMPOUND LOCATED IN JUBA, SOUTH SUDAN. Key points: 1. Significant investment in diplomatic infrastructure, with potential for long-term value. 2. Sole awardee, Caddell Construction, raises questions about competitive pricing. 3. Extended project duration (2028) and fixed-price contract introduce risk. 4. Construction sector, particularly international projects, can be volatile.

Value Assessment

Rating: questionable

The $614.65 million contract is a firm fixed price, which typically aims to control costs. However, the significant budget and long duration, coupled with a lack of competitive bidding data, make it difficult to assess if this price is optimal compared to similar international construction projects.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting an initial effort to solicit multiple bids. However, the data indicates only one awardee, Caddell Construction Co. (DE), LLC. This raises concerns about whether the competition effectively drove down prices or if other factors limited participation.

Taxpayer Impact: The substantial cost of this project represents a significant taxpayer investment in diplomatic facilities. Ensuring competitive pricing and efficient execution is crucial to maximize the value of this expenditure.

Public Impact

Enhances U.S. diplomatic presence and security in South Sudan. Potential for job creation both domestically and internationally. Embassy construction projects can face unforeseen challenges in developing regions. Long-term asset for U.S. foreign policy operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of transparency on competitive bids received.
Extended project timeline increases risk of cost escalation.
Potential for unforeseen geopolitical or logistical challenges in South Sudan.

Positive Signals

Firm fixed-price contract aims to cap costs.
Investment in critical diplomatic infrastructure.
Experienced contractor likely involved.

Sector Analysis

The construction sector, particularly for large-scale international projects like embassies, is subject to global supply chain dynamics, labor costs, and geopolitical stability. Benchmarks for similar projects are difficult to ascertain without more specific data on location and scope.

Small Business Impact

The data indicates the awardee is Caddell Construction Co. (DE), LLC, which is not explicitly identified as a small business. There is no indication of subcontracting goals for small businesses within this contract, suggesting limited direct impact on the small business sector.

Oversight & Accountability

The Department of State is responsible for overseeing this contract. Given the project's scale and duration, robust oversight mechanisms are essential to monitor progress, manage risks, and ensure adherence to the contract terms and budget.

Related Government Programs

Commercial and Institutional Building Construction
Department of State Contracting
Department of State Programs

Risk Flags

Potential for cost overruns despite fixed-price contract due to long duration.
Limited visibility into the competitive bidding process.
Geopolitical and logistical risks associated with the Juba, South Sudan location.
Lack of explicit small business subcontracting requirements.

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $614.7 million to CADDELL CONSTRUCTION CO. (DE), LLC. DESIGN AND CONSTRUCTION OF THE NEW EMBASSY COMPOUND LOCATED IN JUBA, SOUTH SUDAN.

Who is the contractor on this award?

The obligated recipient is CADDELL CONSTRUCTION CO. (DE), LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $614.7 million.

What is the period of performance?

Start: 2022-11-01. End: 2028-08-19.

What was the range of bids received during the full and open competition, and how does the awarded price compare to the average bid?

The provided data does not specify the number of bids received or their values, only that the contract was awarded under full and open competition. To assess value effectively, understanding the competitive landscape, including the number of bidders and the spread of their proposed prices, is crucial. Without this, it's difficult to determine if the $614.65 million represents a competitive price.

What specific risk mitigation strategies are in place to address potential cost overruns or delays given the project's long duration and location?

The contract is firm fixed price, which inherently shifts cost overrun risk to the contractor. However, the extended timeline (nearly 6 years) and the location in Juba, South Sudan, present significant risks. Detailed risk mitigation plans, contingency budgets, and robust project management oversight by the Department of State are critical to address potential geopolitical instability, logistical challenges, and unforeseen site conditions.

How will the effectiveness of the new embassy compound be measured post-construction, beyond its physical completion?

Effectiveness will likely be measured by its ability to support diplomatic operations, enhance security for personnel and assets, and facilitate the U.S. mission's goals in South Sudan. Key performance indicators could include operational uptime, security incident rates, and the compound's capacity to host diplomatic events and personnel efficiently. Post-occupancy evaluations would be essential.

Industry Classification

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

Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCTION OF BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 19AQMM22R0054

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Caddell Construction CO., Inc.

Address: 445 DEXTER AVE STE 11000, MONTGOMERY, AL, 36104

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

Financial Breakdown

Contract Ceiling: $614,652,572

Exercised Options: $614,652,572

Current Obligation: $614,652,572

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline