State Department Awards $94.1M for Riga Embassy Construction, Full Competition Used

Contract Overview

Contract Amount: $94,130,302 ($94.1M)

Contractor: American International Contractors (special Projects) Inc.

Awarding Agency: Department of State

Start Date: 2007-09-26

End Date: 2012-09-30

Contract Duration: 1,831 days

Daily Burn Rate: $51.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: DESIGN AND CONSTRUCTION OF NOB (RIGA, LATVIA)

Plain-Language Summary

Department of State obligated $94.1 million to AMERICAN INTERNATIONAL CONTRACTORS (SPECIAL PROJECTS) INC. for work described as: DESIGN AND CONSTRUCTION OF NOB (RIGA, LATVIA) Key points: 1. Significant investment in diplomatic infrastructure abroad. 2. Full and open competition suggests potential for competitive pricing. 3. Project duration of 5 years indicates a complex undertaking. 4. Construction sector is highly sensitive to economic and geopolitical factors.

Value Assessment

Rating: fair

The contract value of $94.1M for a major embassy construction project appears within a reasonable range for such undertakings. However, without specific benchmarks for embassy construction in similar regions or of comparable size, a precise valuation is difficult. The firm fixed-price contract type aims to control costs.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The use of full and open competition is a positive indicator for price discovery, allowing multiple qualified contractors to bid. This method generally leads to more competitive pricing than limited or sole-source procurements.

Taxpayer Impact: Taxpayer funds are being used for critical diplomatic infrastructure, with competition aiming to ensure value for money.

Public Impact

Enhances U.S. diplomatic presence and security in Latvia. Supports local economy through construction jobs and material sourcing. Modernization of facilities can improve consular services and operational efficiency.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long project duration increases risk of cost overruns and delays.
Geopolitical instability in the region could impact construction.
Firm fixed-price contracts can shift risk to the contractor, potentially leading to higher initial bids.

Positive Signals

Full and open competition promotes cost efficiency.
Investment in critical infrastructure demonstrates long-term commitment.
Experienced contractor likely selected through competitive process.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector. Spending in this sector can fluctuate based on government priorities, economic conditions, and the need for infrastructure upgrades or new facilities, particularly for overseas operations.

Small Business Impact

The data indicates this was a large contract awarded through full and open competition. There is no specific information provided regarding small business participation or subcontracting goals within this award, which is common for large, specialized construction projects.

Oversight & Accountability

Oversight would typically involve regular progress reports, site inspections, and contract management by the Department of State to ensure adherence to specifications, budget, and schedule. The firm fixed-price nature requires careful monitoring to prevent scope creep.

Related Government Programs

Commercial and Institutional Building Construction
Department of State Contracting
Department of State Programs

Risk Flags

Long project duration (1831 days).
Firm Fixed Price contract can lead to higher initial bids.
No specific mention of small business participation.
Construction projects are inherently subject to delays and cost overruns.
Geopolitical risks in the region.

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $94.1 million to AMERICAN INTERNATIONAL CONTRACTORS (SPECIAL PROJECTS) INC.. DESIGN AND CONSTRUCTION OF NOB (RIGA, LATVIA)

Who is the contractor on this award?

The obligated recipient is AMERICAN INTERNATIONAL CONTRACTORS (SPECIAL PROJECTS) INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $94.1 million.

What is the period of performance?

Start: 2007-09-26. End: 2012-09-30.

What was the initial estimated cost versus the final award amount, and how did the competitive bidding process influence this?

The provided data shows the final award amount at $94.1M. Without the initial estimate or details on the number of bids received, it's impossible to definitively state how the competitive process influenced the final price. However, full and open competition generally drives down costs compared to non-competitive methods, suggesting the final price likely reflects market conditions and contractor proposals.

What are the primary risks associated with a 5-year construction project in a foreign capital, and how are they mitigated?

Key risks include geopolitical instability, currency fluctuations, local labor availability and regulations, material sourcing challenges, and unforeseen site conditions. Mitigation strategies likely involve robust contract clauses, contingency planning, strong on-site project management, and potentially political risk insurance, though specific details are not provided.

How does the construction of this embassy contribute to the overall effectiveness of U.S. diplomatic operations in Latvia?

A modern, secure, and well-equipped embassy facility is crucial for effective diplomatic operations. It provides a safe environment for personnel, enhances communication capabilities, offers adequate space for staff and meetings, and projects a strong U.S. presence. This investment supports long-term diplomatic engagement and service delivery.

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: TWO STEP

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: American International Contractors Inc. (UEI: 131381402)

Address: 4600 N FAIRFAX DR 1005, ARLINGTON, VA, 08

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

Financial Breakdown

Contract Ceiling: $94,130,302

Exercised Options: $94,130,302

Current Obligation: $94,130,302

Timeline