State Department's $30.5M Niger building contract awarded to Pernix Group, Inc. for engineering services

Contract Overview

Contract Amount: $30,482,121 ($30.5M)

Contractor: Pernix Group, Inc.

Awarding Agency: Department of State

Start Date: 2011-06-10

End Date: 2015-04-30

Contract Duration: 1,420 days

Daily Burn Rate: $21.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: DESIGN/BUILD OF OFFICE BUILDING COMPOUND IN NIAMEY, NIGER

Plain-Language Summary

Department of State obligated $30.5 million to PERNIX GROUP, INC. for work described as: DESIGN/BUILD OF OFFICE BUILDING COMPOUND IN NIAMEY, NIGER Key points: 1. The contract value of $30.5M for a design/build project in Niger suggests a significant investment in overseas infrastructure. 2. Awarded under full and open competition, the contract indicates a competitive bidding process for this engineering services requirement. 3. The definitive contract type with a firm fixed price suggests a clear scope and budget, potentially mitigating cost overruns. 4. The duration of 1420 days (nearly 4 years) points to a complex, long-term project requiring substantial planning and execution. 5. The absence of small business set-asides or subcontracting information warrants further investigation into small business participation. 6. The project's location in Niamey, Niger, highlights the strategic importance of U.S. diplomatic facilities in Africa.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific details on the scope of the office building compound. However, a $30.5 million expenditure for a design-build project in a challenging overseas location like Niger indicates a substantial investment. Comparing this to similar overseas construction projects for diplomatic facilities would be necessary to assess if the pricing is competitive. The firm fixed-price nature suggests a defined cost, but the actual value depends heavily on the quality of construction and adherence to specifications.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' suggesting that all responsible sources were permitted to submit bids. With 3 bidders identified, this indicates a moderate level of competition for the engineering services required for the office building compound. While not an exceptionally high number of bidders, it suggests that multiple firms were interested and capable of undertaking the project, which generally aids in price discovery and potentially leads to more competitive pricing.

Taxpayer Impact: A competitive bidding process for this contract likely resulted in a more favorable price for taxpayers compared to a sole-source award. The presence of multiple bidders suggests that the government received proposals from various firms, allowing for comparison and selection of the most cost-effective option.

Public Impact

The primary beneficiaries are the U.S. Department of State personnel and operations in Niamey, Niger, who will utilize the new office building compound. The contract delivers essential infrastructure services, specifically the design and construction of a secure and functional office facility. The geographic impact is localized to Niamey, Niger, enhancing the U.S. diplomatic presence in the region. Workforce implications include employment opportunities for construction workers, engineers, architects, and project managers, both locally in Niger and potentially from the contractor's home country.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions or logistical challenges arise in Niger.
Risk of delays due to the complex nature of overseas construction projects and potential political instability.
Ensuring adherence to quality standards and building codes in a foreign jurisdiction can be challenging.
Dependence on a single contractor (Pernix Group, Inc.) for the entire design and build process carries inherent risks.
Limited transparency on specific small business subcontracting plans, if any, could be a concern for broader economic impact.

Positive Signals

Awarded under full and open competition, indicating a structured procurement process.
Firm fixed-price contract type helps to control costs and provides budget certainty.
The project's long duration (1420 days) suggests a comprehensive and well-planned approach to construction.
The contractor, Pernix Group, Inc., has experience in overseas construction, which is a positive signal for project execution.
The project aims to enhance U.S. diplomatic infrastructure, a critical government function.

Sector Analysis

This contract falls within the Engineering Services sector, specifically related to construction and facility development. The North American Industry Classification System (NAICS) code 541330 (Engineering Services) covers establishments primarily engaged in providing architectural, engineering, and related services. The market for such services, particularly for government overseas facilities, is substantial, driven by the need for secure and functional diplomatic posts. Comparable spending benchmarks would involve analyzing other design-build contracts for embassies, consulates, or military installations in similar geopolitical regions.

Small Business Impact

The data indicates that this contract was not awarded as a small business set-aside (ss: false) and there is no explicit mention of small business subcontracting goals (sb: false). This suggests that small businesses may not have been specifically targeted for this particular contract. Further investigation would be needed to determine if any subcontracting opportunities were made available to small businesses by the prime contractor, Pernix Group, Inc. The lack of set-aside could mean that the project's scale or complexity was deemed unsuitable for small business participation, or that the competition focused on larger, established firms.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of State's contracting officers and program managers. As a definitive contract, it is subject to standard federal procurement regulations and oversight. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any issues of fraud, waste, or abuse arise during the contract's performance. The firm fixed-price nature and defined duration provide some inherent accountability, but ongoing monitoring of progress and quality is crucial.

Related Government Programs

Overseas Building Operations (State Department)
Diplomatic Security Service Construction Projects
Department of State Facilities Management
Engineering and Architectural Services Contracts
Design-Build Construction Contracts

Risk Flags

Potential for cost escalation due to overseas logistics
Security risks in the operating environment
Long project duration increases exposure to changing conditions
Limited information on small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $30.5 million to PERNIX GROUP, INC.. DESIGN/BUILD OF OFFICE BUILDING COMPOUND IN NIAMEY, NIGER

Who is the contractor on this award?

The obligated recipient is PERNIX GROUP, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $30.5 million.

What is the period of performance?

Start: 2011-06-10. End: 2015-04-30.

What is Pernix Group, Inc.'s track record with similar overseas construction projects for the U.S. government?

Pernix Group, Inc. has a history of undertaking complex construction projects, including those for government clients in challenging overseas environments. Their portfolio often includes design-build projects for embassies, military bases, and other critical infrastructure. Analyzing their past performance on similar contracts, including any reported cost variances, schedule delays, or quality issues, would provide valuable insight into their capabilities and reliability for this specific project in Niger. Specific contract data, such as past performance reviews and award histories with agencies like the Department of State or Department of Defense, would be crucial for a comprehensive assessment.

How does the cost per square foot of this building compare to similar diplomatic facilities constructed by the State Department?

To compare the cost per square foot, we would need the total square footage of the office building compound, which is not provided in the abbreviated data. Assuming we had this information, we would then research the average cost per square foot for similar U.S. diplomatic facilities built in comparable regions. Factors such as security requirements, material costs, labor rates, and logistical challenges in the specific location (Niamey, Niger) significantly influence per-square-foot costs. A higher cost per square foot might be justified by unique security features or extreme logistical hurdles, but a significant deviation from benchmarks would warrant further scrutiny.

What are the primary risks associated with constructing a government facility in Niamey, Niger, and how were they mitigated?

Constructing a government facility in Niamey, Niger, presents several risks, including political instability, security concerns, logistical challenges related to importing materials and equipment, and potential labor issues. Environmental factors, such as extreme heat and dust, can also impact construction timelines and costs. Mitigation strategies would typically involve thorough site assessments, robust security planning, contingency budgeting for unforeseen delays, strong local partnerships, and adherence to international construction standards. The contract's firm fixed-price nature suggests that the contractor assumed a significant portion of these risks, but the government would still be concerned with project completion and functionality.

What was the estimated budget for this project prior to the competitive bidding process?

The provided data does not include the government's independent government cost estimate (IGCE) or the anticipated budget prior to the solicitation. In a full and open competition, the government typically develops an IGCE based on market research and project requirements. The fact that the contract was awarded at $30,482,121.40 suggests that this amount was within the competitive range of the bids received and likely aligned with the government's expectations. Without the IGCE, it's difficult to definitively assess how closely the winning bid matched the government's initial cost assessment.

How does the $30.5 million contract value compare to the State Department's overall spending on overseas facilities over the past five years?

To compare this contract's value to the State Department's overall spending on overseas facilities, we would need data on the department's historical expenditures in this category. The $30.5 million represents a significant investment for a single project, but its proportion within the department's total facilities budget would determine its relative scale. If the State Department annually spends hundreds of millions or billions on overseas infrastructure, this contract would be one of many. Conversely, if annual spending is closer to this figure, it indicates a major capital investment. Analyzing trends in overseas facility spending would reveal if this contract is part of an increased or decreased investment cycle.

What are the specific performance metrics or deliverables outlined in the contract for the design and construction phases?

The abbreviated data does not detail the specific performance metrics or deliverables. However, for a design-build contract of this nature, key deliverables would typically include detailed architectural and engineering plans, construction schedules, progress reports, quality control documentation, and final handover of the completed facility. Performance metrics would likely focus on adherence to schedule, budget, quality standards, safety regulations, and functional requirements of the office compound. The firm fixed-price contract implies that meeting these defined deliverables within the agreed-upon price is paramount.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

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: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 151 E 22ND ST, LOMBARD, IL, 60148

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

Financial Breakdown

Contract Ceiling: $30,482,121

Exercised Options: $30,482,121

Current Obligation: $30,482,121

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline