State Department awards $72.3M construction contract to Fluor Intercontinental, Inc. for NEC Project

Contract Overview

Contract Amount: $72,262,286 ($72.3M)

Contractor: Fluor Intercontinental, Inc

Awarding Agency: Department of State

Start Date: 2005-01-14

End Date: 2015-04-16

Contract Duration: 3,744 days

Daily Burn Rate: $19.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: CONSTRUCTION OF NEC PROJECT

Plain-Language Summary

Department of State obligated $72.3 million to FLUOR INTERCONTINENTAL, INC for work described as: CONSTRUCTION OF NEC PROJECT Key points: 1. Contract value represents a significant investment in infrastructure. 2. Full and open competition suggests a potentially competitive bidding process. 3. Long contract duration (over 10 years) may indicate complex project scope or phased execution. 4. Firm Fixed Price contract type shifts cost risk to the contractor. 5. Project falls under Commercial and Institutional Building Construction NAICS code. 6. Awarding agency is the Department of State, indicating a focus on diplomatic facilities or related infrastructure.

Value Assessment

Rating: fair

The contract value of $72.3 million for construction services is substantial. Without specific benchmarks for similar NEC (Non-combatant Evacuation Center) projects or detailed cost breakdowns, a precise value-for-money assessment is challenging. However, the long duration of the contract (over 10 years) suggests a potentially complex or phased project, which could justify the overall expenditure if executed effectively. The firm-fixed-price nature of the contract means the contractor bears the risk of cost overruns, which can be a positive indicator for the government if the contractor is experienced and capable.

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 method generally fosters a competitive environment, potentially leading to better pricing and quality. The presence of 5 bids (no=5) suggests a reasonable level of interest from the market. A higher number of bidders typically correlates with more robust price discovery and a greater likelihood of securing competitive pricing for the government.

Taxpayer Impact: Full and open competition with multiple bidders is beneficial for taxpayers as it increases the likelihood of receiving competitive pricing and encourages contractors to offer their best value to win the contract.

Public Impact

The primary beneficiaries are likely the Department of State and its personnel, who will utilize the constructed facilities. The project delivers essential construction services for critical infrastructure. Geographic impact is localized to the site of the NEC project, details of which are not provided. Workforce implications include employment opportunities for construction workers and related trades during the contract period.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration could lead to scope creep or unforeseen cost increases if not managed meticulously.
Reliance on a single contractor for over a decade may limit flexibility in adapting to changing requirements.
Firm Fixed Price contracts can sometimes lead to lower quality if contractors cut corners to maintain profitability.

Positive Signals

Full and open competition suggests a fair process and potential for competitive pricing.
Firm Fixed Price shifts cost risk to the contractor, potentially saving taxpayer money on overruns.
The contractor, Fluor Intercontinental, Inc., is a large, established entity with significant experience in global construction projects.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a vital part of the broader construction industry. This sector encompasses the building of non-residential structures such as government facilities, offices, and public works. The market size for federal construction is substantial, driven by the need to maintain, upgrade, and build government infrastructure worldwide. This specific contract likely supports diplomatic operations or security requirements for the Department of State, fitting within the niche of government facility construction.

Small Business Impact

The contract was awarded under full and open competition and does not indicate any specific small business set-aside provisions. Fluor Intercontinental, Inc. is a large business. While large prime contracts can sometimes include subcontracting opportunities for small businesses, there is no explicit information here to suggest this contract specifically benefits the small business ecosystem. Further review of subcontracting plans would be necessary to assess the impact on small businesses.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of State's contracting officers and program managers. The firm-fixed-price nature of the contract provides a degree of accountability by fixing the total cost. Transparency would be enhanced by public contract data, but detailed project performance reports and Inspector General oversight would depend on the specific terms and any potential issues that arise during the contract's extensive duration.

Related Government Programs

Department of State Facilities Management
Overseas Building Operations
Federal Construction Contracts
Infrastructure Development Projects

Risk Flags

Long contract duration may increase risk of cost escalation or scope creep.
Firm Fixed Price contracts can sometimes lead to quality compromises if not closely monitored.
Lack of specific project details hinders comprehensive value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $72.3 million to FLUOR INTERCONTINENTAL, INC. CONSTRUCTION OF NEC PROJECT

Who is the contractor on this award?

The obligated recipient is FLUOR INTERCONTINENTAL, INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $72.3 million.

What is the period of performance?

Start: 2005-01-14. End: 2015-04-16.

What is the specific nature and location of the 'NEC Project'?

The provided data does not specify the exact nature or geographic location of the 'NEC Project'. 'NEC' could potentially stand for 'Non-combatant Evacuation Center' or another project designation relevant to the Department of State's operations. Understanding the project's purpose and location is crucial for assessing its strategic importance, potential risks, and the appropriateness of the construction scope and value. Without this context, the $72.3 million expenditure is difficult to fully evaluate in terms of its necessity and impact.

How does the $72.3 million cost compare to similar construction projects for diplomatic facilities?

Benchmarking the $72.3 million cost requires comparison with similar construction projects undertaken by the Department of State or other federal agencies for diplomatic facilities or overseas infrastructure. Factors such as project size, complexity, location (including security requirements and logistical challenges), and the specific types of construction involved (e.g., administrative buildings, housing, security infrastructure) would need to be matched. Without access to a database of comparable projects and their costs, it is difficult to definitively state whether this contract represents good or fair value. However, given the long duration and the nature of government facilities abroad, such costs can be substantial.

What is Fluor Intercontinental, Inc.'s track record with the Department of State and similar large-scale construction projects?

Fluor Intercontinental, Inc. is a well-established global engineering and construction firm with extensive experience in large-scale projects, including those for government clients and in challenging environments. Their track record with the Department of State would involve reviewing past contracts, performance evaluations, and any history of disputes or successful project completions. A positive history with the agency and a demonstrated capability in delivering complex projects on time and within budget would mitigate risks associated with this contract. Conversely, any past performance issues could raise concerns about Fluor's ability to successfully execute this particular NEC project.

What are the key performance indicators (KPIs) and milestones for this contract, and how is performance being tracked?

The provided data does not detail the specific Key Performance Indicators (KPIs) or milestones established for this contract. For a project of this magnitude and duration, effective performance tracking is critical. The Department of State would typically define specific deliverables, quality standards, timelines, and reporting requirements. Performance would likely be monitored through regular progress reports, site inspections, and potentially third-party quality assurance reviews. The firm-fixed-price nature implies that meeting these KPIs within the agreed-upon cost is paramount for the contractor's profitability.

What is the historical spending trend for similar construction projects by the Department of State over the past decade?

Analyzing historical spending trends for similar construction projects by the Department of State over the past decade would provide context for the $72.3 million award. This would involve examining the volume and value of construction contracts awarded, identifying any patterns in project types, durations, and average costs. Such an analysis could reveal whether spending in this category has been increasing, decreasing, or remaining stable, and whether this contract aligns with or deviates from those trends. It would also help in understanding the agency's investment priorities in infrastructure.

What are the potential risks associated with a firm-fixed-price contract for a long-duration construction project?

Firm-fixed-price (FFP) contracts, while shifting cost risk to the contractor, can present specific risks for long-duration construction projects. If the initial cost estimates are inaccurate or if unforeseen conditions arise (e.g., material price volatility, labor shortages, complex site issues), the contractor may struggle to maintain profitability. This could potentially lead to pressure to cut corners on quality or safety, or to seek change orders, which can negate the cost certainty of the FFP structure. Conversely, a highly experienced contractor like Fluor may have robust risk management processes to mitigate these issues, potentially leading to significant savings for the government if they manage costs effectively.

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: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Fluor Corporation (UEI: 006907190)

Address: 1 ENTERPRISE, ALISO VIEJO, CA, 92656

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $72,262,286

Exercised Options: $72,262,286

Current Obligation: $72,262,286

Timeline