Department of the Navy awards $19.9M contract for electrical system upgrades in Bahrain, highlighting infrastructure investment

Contract Overview

Contract Amount: $19,888,256 ($19.9M)

Contractor: J/V P. & C. Development S.A. - Ergotem S.A.

Awarding Agency: Department of Defense

Start Date: 2020-09-29

End Date: 2026-03-03

Contract Duration: 1,981 days

Daily Burn Rate: $10.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: BAHRAIN: P993: UPGRADE ELECTRICAL DISTRIBUTION SYSTEM AT ISA

Plain-Language Summary

Department of Defense obligated $19.9 million to J/V P. & C. DEVELOPMENT S.A. - ERGOTEM S.A. for work described as: BAHRAIN: P993: UPGRADE ELECTRICAL DISTRIBUTION SYSTEM AT ISA Key points: 1. Contract awarded through full and open competition, suggesting a robust bidding process. 2. The firm fixed-price contract type aims to control costs and manage contractor risk. 3. Project duration of approximately 6 years indicates a significant infrastructure undertaking. 4. The contract is a delivery order under a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle, common for ongoing construction needs. 5. Focus on electrical distribution systems points to critical infrastructure maintenance and modernization.

Value Assessment

Rating: good

The contract value of $19.9 million for an electrical distribution system upgrade in Bahrain appears reasonable given the project's scope and multi-year duration. Benchmarking against similar international infrastructure projects managed by the Department of Defense is challenging due to unique location-specific costs and security considerations. However, the firm fixed-price structure suggests an effort to establish a clear cost ceiling, which is a positive indicator for value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified contractors had the opportunity to bid. The presence of three bidders (implied by 'no': 3) suggests a competitive environment, which typically drives better pricing and service offerings for the government. The specific details of the bidding process, such as the number of proposals received and the evaluation criteria, would provide further insight into the effectiveness of the competition.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a market where contractors are incentivized to offer competitive pricing to win awards. This process helps ensure that government funds are used efficiently and that the best value is obtained.

Public Impact

The primary beneficiaries are U.S. military personnel and operations stationed in Bahrain, who will receive a more reliable and secure electrical infrastructure. The contract delivers essential upgrades to the electrical distribution system, enhancing operational capabilities and safety. The geographic impact is localized to the U.S. naval facilities in Bahrain. The project will likely involve skilled construction labor, potentially creating temporary employment opportunities in the region, though specific workforce implications are not detailed.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions arise during the multi-year construction period.
Dependence on international supply chains for materials and specialized equipment could lead to delays.
Geopolitical instability in the region could impact project timelines and security.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Awarded under full and open competition, indicating a competitive bidding process.
Long-term duration allows for phased implementation and potentially better resource allocation.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, specifically focusing on electrical infrastructure. The Department of Defense is a significant investor in construction and facilities maintenance globally, particularly in support of overseas operations. Comparable spending benchmarks for similar electrical system upgrades at international bases can vary widely based on location, scale, and specific technical requirements. The market for such specialized construction services is often characterized by a mix of large, established firms and smaller, niche contractors.

Small Business Impact

The data indicates this contract was not set aside for small businesses ('sb': false). While there is no explicit mention of subcontracting requirements for small businesses, it is common practice for larger prime contractors on such projects to engage small businesses for specialized services or material supply. The absence of a small business set-aside suggests the primary competition was likely among larger, established construction firms capable of undertaking complex international projects.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer's representative (COR) and the relevant Department of the Navy contracting office. The firm fixed-price nature of the contract provides a degree of accountability for the contractor to deliver the specified work within the agreed-upon budget. Transparency is facilitated through contract award databases, though detailed project progress reports may not be publicly available. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Overseas Military Construction
Base Realignment and Closure (BRAC) related infrastructure
Naval Facilities Engineering Command (NAVFAC) projects
Department of Defense Energy Infrastructure Modernization

Risk Flags

Long project duration may increase risk of cost escalation or scope changes.
International location introduces logistical and geopolitical risks.
Dependence on specialized materials and international supply chains.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.9 million to J/V P. & C. DEVELOPMENT S.A. - ERGOTEM S.A.. BAHRAIN: P993: UPGRADE ELECTRICAL DISTRIBUTION SYSTEM AT ISA

Who is the contractor on this award?

The obligated recipient is J/V P. & C. DEVELOPMENT S.A. - ERGOTEM S.A..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $19.9 million.

What is the period of performance?

Start: 2020-09-29. End: 2026-03-03.

What is the historical spending pattern for electrical system upgrades by the Department of the Navy in the Middle East region?

Analyzing historical spending for electrical system upgrades by the Department of the Navy in the Middle East reveals a consistent need for infrastructure modernization and maintenance across various bases. While specific dollar amounts fluctuate annually based on budget allocations and identified needs, the trend indicates sustained investment in ensuring reliable power distribution, often driven by aging infrastructure, increased operational demands, and security requirements. For instance, prior years may show similar-sized contracts for upgrades at bases in Qatar, Kuwait, or other regional locations. These investments are crucial for supporting critical mission functions and ensuring the safety and efficiency of U.S. forces operating in the region. The average contract value for such projects can range from several million to tens of millions of dollars, depending on the complexity and scope of the upgrade, with firm fixed-price contracts being a common award type to manage costs.

How does the cost per square foot or per unit of electrical capacity for this Bahrain project compare to similar projects in other overseas locations?

Directly comparing the cost per square foot or per unit of electrical capacity for this Bahrain project to similar projects in other overseas locations is complex due to significant variables. Factors such as local labor rates, material availability, transportation costs, security requirements, and specific technical specifications heavily influence pricing. For example, projects in regions with higher security risks or limited local resources may incur higher costs. While a precise benchmark is difficult without detailed cost breakdowns, the $19.9 million award for upgrading an electrical distribution system over approximately six years suggests a substantial investment. Benchmarking would ideally involve comparing this contract to other Department of Defense electrical infrastructure projects of similar scope and complexity executed in comparable international environments, considering the prevailing economic and logistical conditions at the time of award.

What are the key performance indicators (KPIs) used to measure the success of this electrical distribution system upgrade?

Key performance indicators (KPIs) for this electrical distribution system upgrade would likely focus on reliability, efficiency, safety, and timely completion. Specific metrics could include the reduction in power outages or voltage fluctuations, the successful integration of new components with existing systems, adherence to safety standards during construction and operation, and the overall system's energy efficiency improvements. The contractor's performance would be evaluated against the contract's technical specifications, delivery schedules, and quality requirements. Successful completion would be marked by the system meeting or exceeding its designed capacity and reliability targets, ensuring uninterrupted power for critical operations at the Bahrain facility, and achieving this within the agreed-upon budget and timeframe.

What is the track record of the joint venture partners, J/V P. & C. DEVELOPMENT S.A. - ERGOTEM S.A., on similar Department of Defense construction contracts?

Information regarding the specific track record of the joint venture partners, J/V P. & C. DEVELOPMENT S.A. - ERGOTEM S.A., on similar Department of Defense construction contracts is not detailed in the provided data. A comprehensive assessment would require reviewing their past performance evaluations, contract history, and any reported issues or successes on previous government projects, particularly those involving overseas infrastructure or electrical systems. Federal procurement databases and contractor performance systems (like the Contractor Performance Assessment Reporting System - CPARS) would typically hold such information. Without access to these specific records, it's difficult to definitively assess their experience and reliability for this particular project, although their selection implies they met the necessary qualifications during the bidding process.

What are the potential risks associated with the long duration (approx. 6 years) of this contract, and how are they being mitigated?

The long duration of approximately six years for this electrical distribution system upgrade presents several potential risks. These include scope creep, where project requirements may evolve over time, leading to cost increases or delays; material price escalation, as the cost of raw materials can fluctuate significantly over extended periods; technological obsolescence, where newer, more efficient technologies might emerge during the project lifecycle; and contractor performance degradation, where motivation or capacity might wane over a long engagement. Mitigation strategies typically involve robust contract management, including regular progress reviews and change control processes to manage scope. The firm fixed-price contract structure helps mitigate cost escalation risks for the government, shifting that burden to the contractor. Furthermore, clear performance standards and phased delivery schedules can help maintain contractor focus and allow for adjustments as needed.

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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N6247018R4003

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 90 VASILISSIS SOFIAS AVENUE, ATHENS

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $20,188,884

Exercised Options: $20,188,884

Current Obligation: $19,888,256

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N6247019D5003

IDV Type: IDC

Timeline