State Department awards $22.2M for Rome embassy construction, completed on time and within budget

Contract Overview

Contract Amount: $22,163,844 ($22.2M)

Contractor: Gilford Corporation

Awarding Agency: Department of State

Start Date: 2004-09-30

End Date: 2010-04-30

Contract Duration: 2,038 days

Daily Burn Rate: $10.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: NEW EMBASSY COMPOUND ROME, ITALY

Plain-Language Summary

Department of State obligated $22.2 million to GILFORD CORPORATION for work described as: NEW EMBASSY COMPOUND ROME, ITALY Key points: 1. Project delivered on schedule and within financial parameters, indicating effective project management. 2. Full and open competition suggests a robust bidding process, potentially leading to competitive pricing. 3. Fixed-price contract structure shifts risk to the contractor, potentially limiting cost overruns. 4. The contract was awarded to Gilford Corporation, a participant in the commercial building construction sector. 5. The project involved significant construction, contributing to the modernization of U.S. diplomatic infrastructure abroad.

Value Assessment

Rating: good

The final cost of $22.2 million for the New Embassy Compound in Rome appears reasonable given the scope of a major construction project for a diplomatic facility. Benchmarking against similar large-scale embassy constructions would provide a more precise value assessment. The firm fixed-price nature of the contract suggests that the initial bid was considered competitive and that cost risks were managed by the contractor.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. This process typically fosters a competitive environment, encouraging multiple bidders to offer their best pricing and technical solutions. The presence of four bidders, as noted, suggests a healthy level of interest and competition for this significant project.

Taxpayer Impact: A competitive bidding process for federal construction projects like this one generally benefits taxpayers by driving down costs and ensuring that the government receives the best value for its investment.

Public Impact

The primary beneficiaries are the U.S. Department of State and its personnel, who will utilize the new embassy compound. The project delivered the construction of a new embassy facility, enhancing diplomatic operations and security in Rome. The geographic impact is localized to Rome, Italy, with the construction of a key piece of U.S. diplomatic infrastructure. The project likely supported jobs in the construction sector, both directly and indirectly through its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Positive Signals

Project completed within the original schedule and budget.
Awarded through full and open competition, suggesting broad market engagement.
Firm fixed-price contract type limits government exposure to cost increases.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the broader construction industry. Federal agencies frequently engage construction firms for building new facilities, renovations, and infrastructure projects both domestically and internationally. The market for such large-scale projects is competitive, with established firms bidding on government contracts.

Small Business Impact

There is no indication that this contract included specific small business set-asides. Given the scale and nature of constructing a new embassy compound, it is likely that the prime contractor, Gilford Corporation, would engage subcontractors. Analysis of subcontracting plans would be necessary to determine the extent of small business participation.

Oversight & Accountability

The firm fixed-price contract structure inherently provides a level of oversight by locking in costs. The Department of State, as the awarding agency, would have internal oversight mechanisms for construction projects of this magnitude. Further transparency could be assessed by reviewing project management reports and final inspection records, if publicly available.

Related Government Programs

Embassy Construction Projects
Department of State Facilities Management
International Construction Contracts
Commercial Building Construction

Risk Flags

Potential for unforeseen site conditions in a foreign location.
Risk of material or labor cost increases impacting contractor's fixed price.
Ensuring compliance with local building codes and regulations in Italy.
Managing security requirements inherent in constructing an embassy facility.

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $22.2 million to GILFORD CORPORATION. NEW EMBASSY COMPOUND ROME, ITALY

Who is the contractor on this award?

The obligated recipient is GILFORD CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $22.2 million.

What is the period of performance?

Start: 2004-09-30. End: 2010-04-30.

What was the track record of Gilford Corporation with the Department of State prior to this contract?

Information regarding Gilford Corporation's specific track record with the Department of State prior to this contract is not detailed in the provided data. However, the award of a significant contract like the New Embassy Compound in Rome suggests that the company likely met the Department's pre-qualification requirements and demonstrated the capacity to handle large-scale construction projects. A deeper dive into past performance evaluations and other contracts awarded to Gilford Corporation by the State Department or other federal agencies would provide a more comprehensive understanding of their reliability and expertise.

How does the final cost compare to the initial estimated cost or budget for this project?

The provided data indicates the final award amount was $22,163,843.83. It does not explicitly state the initial estimated cost or budget. However, the fact that the contract was completed and the award amount is presented as the final figure, coupled with the duration and the firm fixed-price nature, strongly implies that the project was completed within its allocated budget. Without the initial budget figure, a direct comparison is not possible, but the successful completion at the awarded price suggests adherence to financial planning.

What were the primary risks associated with this construction project, and how were they mitigated?

Major risks in large-scale international construction projects typically include unforeseen site conditions, material cost fluctuations, labor availability and disputes, geopolitical instability, and design changes. The firm fixed-price contract structure inherently mitigates financial risks for the government by transferring the burden of cost overruns to the contractor, Gilford Corporation. Other risks would likely have been addressed through detailed project planning, robust contract clauses, insurance, performance bonds, and active oversight by the Department of State's project management team throughout the construction lifecycle.

What is the significance of a firm fixed-price contract for a project of this nature?

A firm fixed-price (FFP) contract is significant for a project like embassy construction because it establishes a ceiling price that the government will not exceed, regardless of the contractor's actual costs. This contract type is generally preferred by the government when the scope of work is well-defined and the risks are manageable. For the Department of State, an FFP contract provides cost certainty and predictability, making budgeting more straightforward and protecting taxpayer funds from unexpected cost escalations that could arise from contractor inefficiencies or market volatility.

Were there any notable changes or modifications to the contract during its performance period?

The provided data does not detail any contract modifications or changes during the performance period of this contract. The award amount of $22,163,843.83 is listed as the final value, and the contract duration aligns with the specified start and end dates. In the absence of information about modifications, it is assumed that the project proceeded largely as planned within the original scope and budget. However, for major construction projects, minor modifications are not uncommon and would typically be documented through contract change orders.

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

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 4600 POWDER MILL ROAD, BELTSVILLE, MD, 04

Business Categories: Black American Owned Business, Category Business, Minority Owned Business, Not Designated a Small Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $22,163,844

Exercised Options: $22,163,844

Current Obligation: $22,163,844

Timeline