State Department awarded $160.6M for construction services, with 3 bids received under full and open competition

Contract Overview

Contract Amount: $160,607,553 ($160.6M)

Contractor: American International Contractors (special Projects) Inc.

Awarding Agency: Department of State

Start Date: 2012-09-27

End Date: 2020-01-11

Contract Duration: 2,662 days

Daily Burn Rate: $60.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::CT::IGF

Plain-Language Summary

Department of State obligated $160.6 million to AMERICAN INTERNATIONAL CONTRACTORS (SPECIAL PROJECTS) INC. for work described as: IGF::CT::IGF Key points: 1. The contract value of $160.6 million represents a significant investment in construction services. 2. Competition was robust, with three bids submitted, suggesting a healthy market for these services. 3. The definitive contract type indicates a clear scope of work and fixed pricing. 4. The duration of 2662 days points to a long-term project with substantial execution requirements. 5. The absence of small business set-aside flags suggests larger firms were the primary focus. 6. The fixed-price contract structure shifts performance risk to the contractor.

Value Assessment

Rating: good

The contract's value of $160.6 million for construction services appears reasonable given the extensive 2662-day duration. Benchmarking against similar large-scale construction projects for government agencies would provide a more precise value-for-money assessment. The fixed-price nature of the contract suggests that the contractor bears the risk of cost overruns, which can be a positive indicator for the government if managed effectively. Without specific details on the scope of work, a definitive comparison is challenging, but the competitive bidding process likely contributed to a fair price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The fact that three bids were received suggests a competitive environment for this type of construction service. A higher number of bidders generally leads to better price discovery and potentially lower costs for the government. The presence of three bidders strikes a balance between sufficient competition and manageable proposal evaluation.

Taxpayer Impact: The full and open competition with multiple bidders likely resulted in a more competitive price for taxpayers compared to a sole-source or limited competition award.

Public Impact

The primary beneficiaries are likely the Department of State, which receives the construction services, and potentially U.S. diplomatic facilities abroad. The services delivered involve the construction and potentially renovation or maintenance of buildings. The geographic impact could be significant, depending on the location of the construction projects, potentially including overseas installations. Workforce implications include job creation for construction workers, engineers, project managers, and related trades.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep over the long contract duration, which could impact final costs if not managed tightly.
Ensuring consistent quality and adherence to specifications across a multi-year construction project can be challenging.
Geopolitical or logistical challenges at overseas locations could introduce unforeseen risks and delays.

Positive Signals

The fixed-price contract structure incentivizes the contractor to control costs and manage the project efficiently.
The competitive bidding process likely secured a fair market price for the services rendered.
The long duration allows for phased execution and potentially better integration of complex construction requirements.

Sector Analysis

The construction industry is a significant sector for federal spending, encompassing a wide range of projects from infrastructure to facility maintenance. This contract falls within the commercial and institutional building construction sub-sector. Federal agencies, particularly those with global operations like the State Department, frequently engage in construction and renovation projects to maintain and expand their facilities. Comparable spending benchmarks would involve analyzing other large-scale construction contracts awarded by agencies like the General Services Administration (GSA) or the Department of Defense for similar types of facilities.

Small Business Impact

The data indicates that this contract was not specifically set aside for small businesses, nor does it appear to have a small business subcontracting plan noted. This suggests that the primary awardee is likely a larger firm capable of undertaking a project of this magnitude. While this may limit direct opportunities for small businesses as prime contractors, the prime contractor could still engage small businesses as subcontractors, depending on the project's needs and their subcontracting strategy.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program office within the Department of State. Performance monitoring, site inspections, and financial reviews would be key accountability measures. Transparency is generally maintained through contract award databases like FPDS. The Inspector General for the Department of State would have jurisdiction to investigate any allegations of fraud, waste, or abuse related to this contract.

Related Government Programs

Department of State Facilities Management
Overseas Building Operations
Federal Construction Contracts
Department of Defense Construction
General Services Administration (GSA) Contracts

Risk Flags

Long contract duration may increase risk of cost escalation or scope creep.
Potential for logistical challenges if projects are located in remote or overseas locations.
Need for robust oversight to ensure quality and adherence to specifications over the project's lifespan.

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $160.6 million to AMERICAN INTERNATIONAL CONTRACTORS (SPECIAL PROJECTS) INC.. IGF::CT::IGF

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 $160.6 million.

What is the period of performance?

Start: 2012-09-27. End: 2020-01-11.

What specific types of construction services were included in this $160.6 million contract?

The contract falls under the North American Industry Classification System (NAICS) code 236220, which pertains to Commercial and Institutional Building Construction. This typically includes the construction of new commercial buildings, as well as the alteration, repair, and renovation of existing commercial and institutional structures. For the Department of State, this could encompass a wide range of projects such as building new embassies or consulates, renovating existing diplomatic facilities, constructing support buildings, or undertaking major repair and maintenance work on their global real estate portfolio. The definitive contract nature suggests a well-defined scope, but the exact deliverables would be detailed in the contract's statement of work.

How does the awarded price of $160.6 million compare to similar construction projects for government agencies?

Comparing the $160.6 million award requires context regarding the project's scope, location, and duration. Large-scale construction projects for federal agencies can vary significantly in cost. For instance, the construction of a new federal courthouse or a major military installation could easily run into hundreds of millions of dollars. The Department of State's overseas construction projects often incur higher costs due to security requirements, logistical challenges, and specialized construction needs. Without specific details on the project's deliverables, a precise benchmark is difficult. However, the fact that it was awarded under full and open competition with three bidders suggests the price was likely competitive within the market for similar government construction endeavors.

What are the primary risks associated with a construction contract lasting over 2600 days?

A contract duration of 2662 days (over 7 years) presents several significant risks. Firstly, the risk of scope creep is high; requirements may evolve, or unforeseen issues may arise, leading to change orders that increase costs and extend timelines. Secondly, material costs and labor rates can fluctuate considerably over such a long period, potentially impacting the contractor's profitability if not adequately accounted for in the fixed-price agreement. Thirdly, maintaining consistent quality control and project oversight across multiple years and potentially different phases of work is challenging. Finally, geopolitical instability, environmental regulations, or site-specific issues (especially for overseas projects) can introduce delays and complexities that are difficult to predict at the outset.

What does the 'FULL AND OPEN COMPETITION' designation imply for the contractor selection and pricing?

The 'FULL AND OPEN COMPETITION' designation signifies that the Department of State solicited bids from all responsible sources, providing equal opportunity for any interested company to compete. This is generally considered the most effective method for achieving fair market prices and ensuring the government receives the best value. The fact that three bids were received indicates that there was sufficient interest and capability in the market for this type of construction service. This level of competition typically drives down prices as contractors vie for the award, and it allows the government to select the offer that best meets technical requirements and cost considerations.

What is the significance of the contract being a 'DEFINITIVE CONTRACT' with 'FIRM FIXED PRICE' terms?

A 'DEFINITIVE CONTRACT' is a standard type of contract used for procurement when the price is determined at the time of award. Coupled with 'FIRM FIXED PRICE' (FFP) terms, this means the contractor is obligated to complete the work for a predetermined price, regardless of their actual costs. This structure places the primary risk of cost overruns on the contractor, incentivizing them to manage the project efficiently and control expenses. For the government, FFP contracts offer budget certainty and predictability. However, it's crucial that the initial scope of work is well-defined to avoid disputes or extensive change orders, which can negate the cost certainty benefit.

Are there any indications of past performance issues or successes with AMERICAN INTERNATIONAL CONTRACTORS (SPECIAL PROJECTS) INC. on similar federal contracts?

The provided data does not include specific details on the past performance of AMERICAN INTERNATIONAL CONTRACTORS (SPECIAL PROJECTS) INC. on this or other federal contracts. A comprehensive assessment would require reviewing contract performance reports, award histories, and any available data from sources like the Contractor Performance Assessment Reporting System (CPARS). Generally, for a contract of this magnitude and duration, the government would have conducted a thorough review of the contractor's past performance, financial stability, and technical capabilities before making the award. The fact that they were awarded this significant contract suggests they likely met the government's criteria for capability and reliability.

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: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 4600 N FAIRFAX DR 1005, ARLINGTON, VA, 22203

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

Financial Breakdown

Contract Ceiling: $160,607,554

Exercised Options: $160,607,554

Current Obligation: $160,607,553

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline