State Department's $134.5M Embassy Construction Contract Awarded to BL Harbert International

Contract Overview

Contract Amount: $134,513,149 ($134.5M)

Contractor: BL Harbert International LLC

Awarding Agency: Department of State

Start Date: 2012-09-30

End Date: 2015-10-02

Contract Duration: 1,097 days

Daily Burn Rate: $122.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: DESIGN/BUILD SERVICES FOR NEW EMBASSY COMPOUND (NEC) IN COTONOU, BENIN.IGF::OT::IGF

Plain-Language Summary

Department of State obligated $134.5 million to BL HARBERT INTERNATIONAL LLC for work described as: DESIGN/BUILD SERVICES FOR NEW EMBASSY COMPOUND (NEC) IN COTONOU, BENIN.IGF::OT::IGF Key points: 1. Contract awarded through full and open competition, suggesting a robust market for such services. 2. The definitive contract type indicates a long-term relationship for a specific project. 3. The firm-fixed-price structure shifts cost risk to the contractor. 4. Project duration of approximately three years. 5. The contract value is substantial, reflecting the complexity and scale of constructing an embassy. 6. No small business set-aside was utilized, indicating the primary contractor is not a small business.

Value Assessment

Rating: good

The contract value of $134.5 million for the design and build of an embassy compound in Cotonou, Benin, appears reasonable given the scope of work. While direct comparisons are difficult without specific project details, similar large-scale international construction projects often fall within this range. The firm-fixed-price contract type suggests that the contractor has assumed the primary cost risk, which can be beneficial for the government if managed effectively. Benchmarking against other embassy construction projects would provide a more precise value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit offers. The presence of four bidders (no=4) indicates a competitive environment for this type of large-scale construction project. A competitive process generally leads to better price discovery and potentially more innovative solutions as contractors vie for the award.

Taxpayer Impact: The full and open competition likely resulted in a more favorable price for taxpayers compared to a sole-source or limited competition scenario. Multiple bidders help ensure that the government is not overpaying for the services rendered.

Public Impact

The primary beneficiary is the U.S. Department of State, which will gain a new embassy compound in Cotonou, Benin. The contract delivers design and construction services for a critical diplomatic facility. The geographic impact is localized to Cotonou, Benin, enhancing U.S. diplomatic presence in the region. The project will likely create construction-related jobs in the local economy of Benin and potentially for U.S. expatriate workers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions or design challenges arise, despite the fixed-price nature.
Ensuring adherence to security and construction standards for an embassy facility requires rigorous oversight.
Logistical challenges in a foreign country could impact project timelines and costs.

Positive Signals

Firm-fixed-price contract shifts cost risk to the contractor.
Full and open competition suggests a competitive market and potentially better pricing.
The contractor, BL Harbert International LLC, has experience in large-scale construction projects.

Sector Analysis

The construction sector, particularly for large-scale institutional and government facilities, is characterized by significant capital investment and specialized expertise. This contract falls within the Commercial and Institutional Building Construction sub-sector. The market for international construction, especially for diplomatic facilities, is often dominated by a few large, experienced firms capable of managing complex projects in diverse geopolitical and logistical environments. Benchmarking would involve comparing this contract's value and scope to other embassy constructions or similar government building projects globally.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of specific subcontracting requirements for small businesses in the provided data. This suggests that the primary focus was on selecting the most capable large contractor for this significant international project. The absence of set-asides means that opportunities for small businesses would likely be through direct subcontracting by BL Harbert International, rather than through a mandated program.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of State's Bureau of Overseas Buildings Operations (OBO), which is responsible for managing the design, construction, and maintenance of U.S. diplomatic facilities worldwide. Accountability measures would include contract milestones, quality control inspections, and adherence to the firm-fixed-price agreement. Transparency is generally maintained through contract award databases and reporting requirements, though specific project details might be sensitive.

Related Government Programs

Embassy Construction Projects
Overseas Diplomatic Facilities
International Construction Contracts
Department of State Construction Contracts

Risk Flags

Potential for cost escalation due to unforeseen site conditions or logistical challenges in Benin.
Ensuring compliance with stringent security and construction standards for a diplomatic facility.
Contractor's ability to manage complex international supply chains and local labor.

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $134.5 million to BL HARBERT INTERNATIONAL LLC. DESIGN/BUILD SERVICES FOR NEW EMBASSY COMPOUND (NEC) IN COTONOU, BENIN.IGF::OT::IGF

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 $134.5 million.

What is the period of performance?

Start: 2012-09-30. End: 2015-10-02.

What is BL Harbert International LLC's track record with large-scale government construction projects, particularly overseas?

BL Harbert International LLC has a significant track record in constructing large-scale projects, including numerous government facilities and overseas projects. They have been involved in building embassies, consulates, and other secure facilities for the U.S. Department of State and Department of Defense. Their experience often includes navigating complex logistical challenges, security requirements, and diverse regulatory environments inherent in international construction. Reviewing their portfolio and past performance on similar contracts would provide further insight into their capabilities and reliability for projects of this magnitude and importance.

How does the $134.5 million contract value compare to similar embassy construction projects undertaken by the State Department?

The $134.5 million contract value for the design and build of the New Embassy Compound in Cotonou, Benin, is substantial but falls within the typical range for such projects. Embassy construction projects are complex undertakings that involve high security standards, specialized design requirements, and often remote or challenging locations. Factors influencing cost include the size of the facility, the specific security features mandated, the local labor and material costs, and the overall geopolitical environment. While direct comparisons require detailed project specifications, this figure is consistent with other large-scale diplomatic facility constructions globally.

What are the primary risks associated with a firm-fixed-price contract for constructing an embassy in a foreign country?

While a firm-fixed-price (FFP) contract shifts cost overrun risk to the contractor, several risks remain, especially for overseas construction. These include potential delays due to unforeseen site conditions, import/export regulations, political instability, or local labor disputes, which can still impact the contractor's profitability and potentially lead to claims or disputes. Ensuring the contractor has robust contingency plans and risk mitigation strategies is crucial. Furthermore, the government must ensure the contract clearly defines the scope to prevent contractor claims for work outside the original agreement. Quality control and adherence to specifications are also critical, as the government relies on the contractor to deliver a facility meeting all requirements.

What is the historical spending pattern for embassy construction and renovation by the Department of State?

The Department of State, primarily through its Bureau of Overseas Buildings Operations (OBO), has a consistent and significant historical spending pattern for the construction and renovation of U.S. diplomatic facilities worldwide. This spending is driven by the need to maintain secure, functional, and modern embassy and consulate properties, often replacing aging infrastructure or establishing new presences. Annual budgets for the OBO can run into billions of dollars, allocated across numerous new construction projects, major renovations, and smaller repairs. The spending reflects a long-term commitment to diplomatic infrastructure as a critical component of foreign policy and national security.

How does the competition level (4 bidders) for this contract potentially impact the final price and quality?

Having four bidders for this contract suggests a healthy level of competition within the market for large-scale international construction. A competitive environment generally pressures bidders to offer more attractive pricing to secure the award. It also encourages contractors to propose innovative solutions and demonstrate superior capabilities to differentiate themselves. For taxpayers, this typically translates to better value for money, as the government is likely to receive a more competitive bid than if there were fewer or no competing offers. The quality of the final product can also be enhanced as contractors strive to meet or exceed contract specifications to build their reputation.

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

Address: 820 SHADES CREEK, BIRMINGHAM, AL, 35209

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

Financial Breakdown

Contract Ceiling: $134,513,149

Exercised Options: $134,513,149

Current Obligation: $134,513,149

Subaward Activity

Number of Subawards: 8

Total Subaward Amount: $1,542,716

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline