State Department awards $13M contract for Taiwan affairs support, raising questions about competition

Contract Overview

Contract Amount: $13,000,000 ($13.0M)

Contractor: American Institute in Taiwan

Awarding Agency: Department of State

Start Date: 2022-09-25

End Date: 2027-09-24

Contract Duration: 1,825 days

Daily Burn Rate: $7.1K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: AIT GCTF TO

Plain-Language Summary

Department of State obligated $13.0 million to AMERICAN INSTITUTE IN TAIWAN for work described as: AIT GCTF TO Key points: 1. Contract awarded via sole-source justification, limiting price discovery and potentially increasing costs. 2. Long duration of 5 years suggests a need for stable, ongoing support. 3. Firm Fixed Price contract type offers cost certainty but may not incentivize efficiency. 4. No small business set-aside indicates potential missed opportunities for smaller firms. 5. Contract value is moderate, but the lack of competition warrants scrutiny. 6. Performance period aligns with potential geopolitical shifts in the region.

Value Assessment

Rating: questionable

The contract's value of $13 million over five years is difficult to benchmark due to the sole-source nature of the award. Without competitive bids, it's challenging to assess if the pricing is fair market value. The firm fixed-price structure provides cost predictability for the government, but it may not reflect the most economical outcome achievable through a competitive process. Further analysis of the specific services rendered and their necessity would be required to fully evaluate value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor was solicited. The justification for this approach is not detailed in the provided data. Typically, sole-source awards occur when only one responsible source can provide the required supplies or services. This lack of competition means the government did not benefit from multiple offers, which could have led to lower prices and a wider range of innovative solutions.

Taxpayer Impact: The absence of competition for this $13 million contract means taxpayers may have paid a premium compared to what could have been achieved through a competitive bidding process. It also limits the government's ability to explore alternative solutions or providers.

Public Impact

The primary beneficiary is the American Institute in Taiwan (AIT), which will receive support services. Services likely include program management, administrative support, and potentially policy-related assistance for U.S.-Taiwan relations. The geographic impact is focused on U.S.-Taiwan diplomatic and economic engagement. Workforce implications may involve specialized personnel with expertise in international affairs and East Asian relations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially leading to higher costs.
Lack of small business participation may exclude valuable niche providers.
Long contract duration could lead to vendor lock-in if not managed carefully.

Positive Signals

Firm Fixed Price contract provides budget certainty.
Contract supports critical U.S. foreign policy objectives in a key region.
Experienced contractor likely to provide stable, reliable services.

Sector Analysis

This contract falls within the International Affairs sector, specifically supporting diplomatic and programmatic activities related to Taiwan. The market for such specialized services is often limited to firms with deep expertise in geopolitical affairs, regional studies, and government contracting. Comparable spending benchmarks are difficult to establish without more specific service details, but contracts supporting diplomatic missions and international engagement can range significantly in value.

Small Business Impact

The data indicates this contract was not set aside for small businesses, nor does it appear to involve significant subcontracting opportunities for them based on the provided fields. This suggests that the primary contractor, AMERICAN INSTITUTE IN TAIWAN, is likely a larger entity capable of performing the services directly or through its own established network. The absence of a small business set-aside means that opportunities for smaller firms to contribute to this specific contract were likely limited from the outset.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of State's contracting and program management offices. As it supports the American Institute in Taiwan, specific program oversight may also involve AIT leadership. Transparency is limited due to the sole-source nature and lack of publicly detailed performance metrics. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse related to the contract.

Related Government Programs

Department of State - Bureau of East Asian and Pacific Affairs
American Institute in Taiwan - Operations and Support
International Security Assistance Programs
Foreign Military Financing Programs

Risk Flags

Sole-source award lacks competition.
Potential for uncompetitive pricing.
Limited transparency on service details and oversight.
No small business participation noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $13.0 million to AMERICAN INSTITUTE IN TAIWAN. AIT GCTF TO

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 $13.0 million.

What is the period of performance?

Start: 2022-09-25. End: 2027-09-24.

What specific services are being procured under this contract, and how do they align with the mission of the American Institute in Taiwan?

The provided data does not detail the specific services procured under contract 928120. However, given the awardee (AMERICAN INSTITUTE IN TAIWAN) and the agency (Department of State), the services likely encompass a range of support functions critical to U.S. engagement with Taiwan. This could include program management, logistical support, administrative assistance, policy analysis, event coordination, and potentially public diplomacy initiatives. These services are essential for facilitating unofficial relations, promoting U.S. interests, and supporting Taiwan's economic and democratic development, aligning directly with AIT's mandate to foster closer unofficial relations between the people of the United States and the people on Taiwan.

What is the justification for awarding this contract on a sole-source basis, and what are the implications for cost-effectiveness?

The justification for this sole-source award is not provided in the data. Typically, sole-source contracts are justified when only one responsible source is available to meet the government's needs, often due to unique capabilities, specialized knowledge, or urgent requirements. The implication for cost-effectiveness is generally negative; without competition, the government foregoes the opportunity to solicit multiple bids, which usually drives down prices and encourages innovation. This can lead to higher costs for taxpayers and may not result in the most efficient service delivery compared to a competitively procured contract.

How does the $13 million contract value compare to historical spending on similar support services for the American Institute in Taiwan or similar entities?

Without specific details on the services rendered and historical contract data for AIT or comparable organizations, a direct comparison of the $13 million value is challenging. However, $13 million over five years ($2.6 million annually) represents a significant investment in support services. If the services are primarily administrative and programmatic, this annual figure might be within a reasonable range for a complex diplomatic or quasi-diplomatic entity operating in a sensitive region. A thorough analysis would require benchmarking against contracts for similar functions at other U.S. embassies or representative offices, adjusted for regional cost differences and scope of work.

What are the potential risks associated with a five-year firm-fixed-price contract for international affairs support?

A five-year firm-fixed-price contract for international affairs support carries several potential risks. Firstly, the fixed price may not adequately account for unforeseen changes in the geopolitical landscape or operational requirements over such a long period, potentially leading to scope creep or the need for costly contract modifications. Secondly, while the firm-fixed-price structure offers budget certainty, it can disincentivize the contractor from seeking efficiencies or cost savings, as they are guaranteed their profit margin regardless. Lastly, the long duration could lead to vendor complacency or a lack of responsiveness if performance management is not rigorous, and it limits the government's flexibility to adapt to evolving needs or switch to potentially better-performing vendors.

Are there any performance metrics or oversight mechanisms in place to ensure the effectiveness and value of the services provided under this contract?

The provided data does not specify the performance metrics or detailed oversight mechanisms for this contract. However, standard government contracting practice dictates that contracts, especially those with a significant value and duration like this one, should include performance standards, quality assurance surveillance plans (QASPs), and regular performance reviews. The Department of State and AIT would be responsible for monitoring the contractor's performance against the terms of the contract. The effectiveness and value would be assessed through these ongoing reviews and the successful delivery of the contracted services. The lack of public detail on these mechanisms, however, limits transparency.

Industry Classification

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

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

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: $13,000,000

Exercised Options: $13,000,000

Current Obligation: $13,000,000

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