State Department awards $97.7M construction contract to BL Harbert International LLC for facilities

Contract Overview

Contract Amount: $97,715,283 ($97.7M)

Contractor: BL Harbert International LLC

Awarding Agency: Department of State

Start Date: 2007-09-26

End Date: 2014-09-08

Contract Duration: 2,539 days

Daily Burn Rate: $38.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: CONSTRUCTION SERVICES.

Plain-Language Summary

Department of State obligated $97.7 million to BL HARBERT INTERNATIONAL LLC for work described as: CONSTRUCTION SERVICES. Key points: 1. Contract value represents significant investment in infrastructure. 2. Full and open competition suggests a competitive bidding process. 3. Long duration of the contract indicates a substantial project scope. 4. Firms Fixed Price contract type shifts risk to the contractor. 5. No small business set-aside noted, potentially limiting small business participation. 6. Contract awarded by the Department of State highlights focus on diplomatic infrastructure.

Value Assessment

Rating: good

The contract value of $97.7 million for construction services is substantial. Benchmarking against similar large-scale government construction projects would be necessary for a precise value-for-money assessment. However, the firm-fixed-price nature of the contract suggests that the contractor bears the primary financial risk, which can be a positive indicator for cost control if managed effectively. The duration of the contract (2539 days) also implies a large, complex undertaking where initial pricing accuracy is crucial.

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. With 3 bidders and 3 offers received, the competition level appears moderate. This suggests that while multiple companies were interested, the market may not be exceptionally broad for this specific type of large-scale construction service for the State Department. Moderate competition can lead to reasonable pricing, but a higher number of bidders often drives prices down further.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to more cost-effective solutions and better pricing. Moderate bidder numbers suggest a fair price was likely achieved, though potentially not the absolute lowest possible.

Public Impact

The primary beneficiaries are the Department of State and its personnel, who will utilize the constructed facilities. The contract delivers essential construction services for government buildings and infrastructure. Geographic impact is likely localized to the specific site of construction, though the facilities themselves may serve a broader national interest. Workforce implications include job creation for construction workers, engineers, and project managers employed by the prime contractor and subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (2539 days) could lead to cost overruns if not meticulously managed.
Firm Fixed Price contracts can sometimes disincentivize contractors from seeking efficiencies beyond initial scope.
Lack of small business set-aside may limit opportunities for smaller firms in the construction ecosystem.

Positive Signals

Full and open competition suggests a robust bidding process.
Firm Fixed Price contract shifts significant risk to the contractor.
Award to a single entity (BL Harbert International LLC) implies they met all requirements.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector (NAICS 236220). This sector is characterized by large projects requiring significant capital, specialized labor, and adherence to strict building codes and government regulations. The market size for federal construction is substantial, driven by the need to maintain, upgrade, and build facilities for various government agencies. This specific contract likely represents a significant portion of work for the awarded firm within this sector.

Small Business Impact

The contract was not awarded as a small business set-aside, and the data indicates no specific small business participation was mandated or highlighted. This means that opportunities for small businesses would primarily come through subcontracting. The prime contractor, BL Harbert International LLC, would determine the extent of small business involvement. Without specific subcontracting goals, the impact on the small business ecosystem is uncertain and depends on the prime's procurement practices.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of State's contracting officers and project managers. Accountability measures are embedded in the firm-fixed-price contract terms, requiring the contractor to deliver specified services within the agreed-upon price. Transparency is generally maintained through contract award databases, though specific project details and oversight reports may not always be publicly accessible. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Department of State Facilities Management
Government Building Construction
Large Scale Infrastructure Projects
Federal Construction Contracts

Risk Flags

Potential for cost overruns due to long contract duration.
Risk of contractor financial distress if costs escalate unexpectedly.
Limited small business participation opportunities.

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $97.7 million to BL HARBERT INTERNATIONAL LLC. CONSTRUCTION SERVICES.

Who is the contractor on this award?

The obligated recipient is BL HARBERT INTERNATIONAL LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $97.7 million.

What is the period of performance?

Start: 2007-09-26. End: 2014-09-08.

What is the track record of BL Harbert International LLC with the Department of State and similar federal agencies?

BL Harbert International LLC has a history of performing large-scale construction projects for various government entities, including the Department of Defense and other federal agencies. Their experience often includes complex international projects and secure facility construction. A detailed review of their past performance ratings, any past disputes or contract modifications, and their specific work history with the Department of State would provide a clearer picture of their reliability and capability for this particular contract. Analyzing their performance on similar firm-fixed-price contracts would also be insightful for assessing risk and value.

How does the awarded amount compare to similar construction projects undertaken by the Department of State or other agencies?

The $97.7 million award for construction services is a significant sum, indicative of a large-scale project. To benchmark its value, one would compare it to the cost per square foot, cost per facility type, or total project cost of comparable government construction projects completed within the last 5-10 years. Factors such as geographic location (which impacts labor and material costs), specific security requirements, and the complexity of the build (e.g., specialized systems, historical preservation) heavily influence these comparisons. Without specific details on the project's scope and location, a precise comparison is difficult, but the amount suggests a major infrastructure investment.

What are the primary risks associated with a firm-fixed-price contract of this magnitude and duration?

The primary risk with a firm-fixed-price (FFP) contract of this magnitude ($97.7M) and long duration (2539 days) is that the contractor may face unforeseen cost increases (labor, materials, unforeseen site conditions) that erode their profit margin or lead to financial distress. Conversely, the government risks paying a premium if the contractor's initial bid was overly conservative to account for these risks. Effective risk management by the contractor is crucial, including robust cost estimation, supply chain management, and contingency planning. The government's role involves diligent oversight to ensure the contractor is performing adequately and not cutting corners.

What is the expected effectiveness of the completed construction in meeting the Department of State's operational needs?

The effectiveness of the completed construction hinges on how well the project meets the specific operational requirements defined in the contract's Performance Work Statement (PWS). This includes factors like functionality, durability, security, energy efficiency, and compliance with all relevant building codes and standards. The Department of State's project managers and technical experts are responsible for ensuring the design and execution align with their long-term needs for facilities. Post-occupancy evaluations and user feedback would be key indicators of effectiveness once the facilities are in use.

How has federal spending on construction services by the Department of State trended over the past decade?

Federal spending on construction services by the Department of State, like other agencies, can fluctuate based on budget appropriations, geopolitical needs, and infrastructure modernization priorities. Historically, the State Department invests significantly in maintaining and upgrading its embassies, consulates, and domestic facilities worldwide. Spending trends are influenced by global security concerns, the age of existing infrastructure, and specific diplomatic initiatives requiring new or renovated spaces. Analyzing historical spending data would reveal patterns of investment, potential peaks during major construction initiatives, and overall budget allocations for facilities.

What are the implications of awarding a large construction contract under full and open competition with only three bidders?

Awarding a large construction contract under full and open competition with only three bidders suggests a moderately competitive market for this specific type of service. While competition is present, a lower number of bidders might indicate high barriers to entry (e.g., bonding requirements, specialized expertise, security clearances) or a limited pool of qualified contractors capable of undertaking such a large and complex project for the Department of State. For taxpayers, this implies that while a competitive process was followed, the potential for achieving the absolute lowest price might be constrained compared to a scenario with numerous bidders. It also highlights the importance of ensuring the bidding process itself was fair and transparent.

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: SEALED BID

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: B.L. Harbert Holdings, L.L.C. (UEI: 147371236)

Address: 820 SHADES CREEK, BIRMINGHAM, AL, 90

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

Financial Breakdown

Contract Ceiling: $97,715,283

Exercised Options: $97,715,283

Current Obligation: $97,715,283

Timeline