USAID's $198.5M Iraqi economic growth program awarded to Louis Berger Group, Inc. for business development and financial services

Contract Overview

Contract Amount: $198,494,649 ($198.5M)

Contractor: THE Louis Berger Group, Inc

Awarding Agency: Agency for International Development

Start Date: 2008-01-22

End Date: 2013-03-31

Contract Duration: 1,895 days

Daily Burn Rate: $104.7K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 7

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: TIJARA - PROVINCIAL ECONOMIC GROWTH (PEG) PROGRAM. TO PROVIDE BUSINESS DEVELOPMENT AND FINANCIAL SERVICES TO IRAQI BENEFICIARIES IN STRATEGIC LOCATIONS THROUGHOUT THE COUNTRY TO PROMOTE ECONOMIC DIVERSIFICATION AND EMPLOYMENT, WITH AN EMPHASIS ON THE GROWTH OF THE MANUFACTURING AND SERVICE SECTORS IN ALL PROVINCES. THERE ARE TWO COMPONENTS COVERED UNDER THIS CONTRACT. COMPONENT ONE WILL PROVIDE BUSINESS DEVELOPMENT SERVICES WITH A FOCUS ON SECTOR COMPETITIVENESS, AND COMPONENT TWO WILL EXPAND COMMERCIAL LENDING THROUGH MICROFINANCE INSTITUTIONS AND BANKS.

Plain-Language Summary

Agency for International Development obligated $198.5 million to THE LOUIS BERGER GROUP, INC for work described as: TIJARA - PROVINCIAL ECONOMIC GROWTH (PEG) PROGRAM. TO PROVIDE BUSINESS DEVELOPMENT AND FINANCIAL SERVICES TO IRAQI BENEFICIARIES IN STRATEGIC LOCATIONS THROUGHOUT THE COUNTRY TO PROMOTE ECONOMIC DIVERSIFICATION AND EMPLOYMENT, WITH AN EMPHASIS ON THE GROWTH OF THE MANUFACTURING A… Key points: 1. Contract aims to foster economic diversification and employment in Iraq through business development and financial services. 2. Focus on manufacturing and service sectors across all provinces, with two distinct components: business development and commercial lending expansion. 3. The contract's duration of 1895 days (over 5 years) indicates a significant, long-term commitment to rebuilding Iraq's economy. 4. The award was made under full and open competition, suggesting a robust market for these services. 5. The contract type is Cost Plus Fixed Fee, which can incentivize cost control while ensuring contractor effort. 6. The North American Industry Classification System (NAICS) code 561499 covers a broad range of business support services.

Value Assessment

Rating: fair

The total award of $198.5 million over approximately five years for business development and financial services in Iraq represents a substantial investment. Benchmarking this against similar international development contracts is challenging due to the unique geopolitical context and specific objectives. However, the Cost Plus Fixed Fee (CPFF) contract type suggests that costs are reimbursed, plus a fixed fee for profit, which can lead to higher overall costs compared to fixed-price contracts if not managed carefully. The value proposition hinges on the successful implementation of both business development and microfinance components to achieve the stated goals of economic diversification and employment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'full and open competition after exclusion of sources,' indicating that the solicitation was broadly advertised and multiple bids were likely considered. The presence of 7 bids suggests a competitive marketplace for these specialized services in post-conflict reconstruction. A competitive process is generally expected to yield better pricing and service quality for the government.

Taxpayer Impact: The full and open competition is beneficial for taxpayers as it increases the likelihood of receiving competitive pricing and innovative solutions, maximizing the impact of federal dollars.

Public Impact

Iraqi beneficiaries in strategic locations across all provinces are the primary recipients of business development and financial services. The program aims to promote economic diversification and employment, particularly in the manufacturing and service sectors. Geographic impact is nationwide, covering all provinces within Iraq. Workforce implications include potential job creation through supported businesses and direct employment within the program's implementation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can sometimes lead to cost overruns if not closely monitored.
The success of the program is heavily dependent on the stability and economic conditions within Iraq.
Measuring the direct impact of business development services on economic growth and job creation can be complex.

Positive Signals

The contract addresses critical needs for economic recovery and development in a post-conflict environment.
The two-component structure allows for a comprehensive approach to economic growth, covering both business support and financial access.
The long contract duration suggests a sustained commitment to achieving program objectives.

Sector Analysis

This contract falls within the broader sector of international development and economic assistance, specifically focused on post-conflict reconstruction and private sector development. The market for such services involves specialized firms with expertise in business consulting, financial services, and program management in challenging environments. Comparable spending benchmarks are difficult to establish precisely due to the unique nature of reconstruction efforts, but significant investments are typically made in countries undergoing stabilization and economic rebuilding. The contract's focus on manufacturing and services aligns with common strategies for diversifying economies away from resource dependence.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions or subcontracting goals for this contract. As a large contract awarded through full and open competition, the primary contractor, The Louis Berger Group, Inc., would typically manage subcontracting opportunities. Analysis of their subcontracting performance would be necessary to determine the extent of small business participation.

Oversight & Accountability

Oversight for this contract would primarily reside with the U.S. Agency for International Development (USAID), likely through its Inspector General's office and program monitoring units. USAID is responsible for ensuring that funds are used effectively and for achieving the stated development objectives. Transparency would be facilitated through regular reporting requirements from the contractor and potentially public-facing program updates from USAID.

Related Government Programs

USAID Economic Support Fund
USAID Business Development Programs
International Reconstruction Assistance
Middle East Economic Development Initiatives

Risk Flags

Potential for cost overruns due to CPFF structure.
Security and political instability in Iraq impacting program delivery.
Challenges in measuring direct economic impact and attribution.
Risk of corruption affecting fund utilization.
Sustainability of supported businesses post-program.

Frequently Asked Questions

What is this federal contract paying for?

Agency for International Development awarded $198.5 million to THE LOUIS BERGER GROUP, INC. TIJARA - PROVINCIAL ECONOMIC GROWTH (PEG) PROGRAM. TO PROVIDE BUSINESS DEVELOPMENT AND FINANCIAL SERVICES TO IRAQI BENEFICIARIES IN STRATEGIC LOCATIONS THROUGHOUT THE COUNTRY TO PROMOTE ECONOMIC DIVERSIFICATION AND EMPLOYMENT, WITH AN EMPHASIS ON THE GROWTH OF THE MANUFACTURING AND SERVICE SECTORS IN ALL PROVINCES. THERE ARE TWO COMPONENTS COVERED UNDER THIS CONTRACT. COMPONENT ONE WILL PROVIDE BUSINESS DEVELOPMENT SERVICES WITH A FOCUS ON SECTOR COMPETITIVENESS, AND COMPONENT TWO WILL EXPAND CO

Who is the contractor on this award?

The obligated recipient is THE LOUIS BERGER GROUP, INC.

Which agency awarded this contract?

Awarding agency: Agency for International Development (Agency for International Development).

What is the total obligated amount?

The obligated amount is $198.5 million.

What is the period of performance?

Start: 2008-01-22. End: 2013-03-31.

What is the track record of The Louis Berger Group, Inc. in managing large-scale international development contracts, particularly in post-conflict regions?

The Louis Berger Group, Inc. has a long history of involvement in international development and infrastructure projects globally, including significant work in reconstruction and stabilization efforts. They have managed numerous contracts for USAID and other government agencies in complex environments. While specific performance details for this particular contract are not detailed here, their general experience suggests a capacity to handle large, multifaceted programs. However, like many large contractors, they have faced scrutiny and challenges on various projects regarding cost management, performance, and compliance. A thorough review would require examining specific project evaluations, audit reports, and any past performance information available through federal procurement databases.

How does the Cost Plus Fixed Fee (CPFF) contract structure compare to other contract types in terms of cost efficiency for this type of service?

The Cost Plus Fixed Fee (CPFF) structure reimburses the contractor for allowable costs incurred plus a predetermined fixed fee representing profit. This structure is often used when the scope of work is not precisely defined or when significant uncertainties exist, as is common in development programs. While it incentivizes the contractor to perform the work, it can be less cost-efficient for the government compared to fixed-price contracts if costs escalate significantly, as the government bears the risk of cost overruns. However, the fixed fee provides some cost certainty regarding profit. For services like business development and financial services in a challenging environment like Iraq, CPFF might be deemed appropriate to ensure contractor engagement and flexibility, but it necessitates robust oversight to manage costs effectively.

What are the key performance indicators (KPIs) used to measure the success of this economic growth program?

While specific KPIs are not detailed in the provided data, typical performance indicators for such economic growth and business development programs include metrics related to job creation (number of jobs created or sustained), increase in revenue or sales for supported businesses, number of new businesses established, amount of commercial lending disbursed, improvement in business management practices, and overall contribution to local or national GDP. USAID programs generally require detailed monitoring and evaluation plans with clearly defined, measurable, achievable, relevant, and time-bound (SMART) indicators to track progress towards objectives and assess impact.

What is the historical spending trend for similar economic development programs managed by USAID in the Middle East region?

USAID has historically allocated substantial funding towards economic development and stabilization programs in the Middle East, particularly in countries like Iraq, Afghanistan, and Jordan. Spending trends vary significantly year-to-year and are influenced by geopolitical events, U.S. foreign policy objectives, and the specific needs of recipient countries. These programs often encompass a wide range of activities, including private sector development, infrastructure, governance, and humanitarian assistance. While precise figures for 'similar' programs require detailed categorization, USAID's overall budget for the Middle East region reflects a consistent, albeit fluctuating, commitment to fostering economic growth and stability.

What are the potential risks associated with implementing a large-scale economic development program in Iraq, and how might they be mitigated?

Implementing a large-scale economic development program in Iraq presents several significant risks, including political instability, security concerns, corruption, bureaucratic hurdles, and potential challenges in market absorption and sustainability of businesses. Security risks can disrupt program activities and endanger personnel. Political instability can lead to policy changes affecting economic reforms. Corruption can divert resources and undermine program effectiveness. Mitigation strategies typically involve close coordination with local and national government authorities, robust security protocols, stringent financial controls and anti-corruption measures, capacity building for local partners, and adaptive program management to respond to changing conditions. Building strong relationships with local communities and businesses is also crucial for long-term success.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Business Support Services › All Other Business Support Services

Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 7

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: WSP Global Inc

Address: 2445 M ST NW, WASHINGTON, DC, 20037

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $1,743,879,912

Exercised Options: $1,160,923,990

Current Obligation: $198,494,649

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Timeline