State Department's $26.2M contract with American Institute in Taiwan for international affairs services awarded without competition

Contract Overview

Contract Amount: $26,229,597 ($26.2M)

Contractor: American Institute in Taiwan

Awarding Agency: Department of State

Start Date: 2012-05-17

End Date: 2013-05-16

Contract Duration: 364 days

Daily Burn Rate: $72.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST NO FEE

Sector: Other

Official Description: AIT CONTRACT,

Plain-Language Summary

Department of State obligated $26.2 million to AMERICAN INSTITUTE IN TAIWAN for work described as: AIT CONTRACT, Key points: 1. The contract value of $26.2 million represents a significant investment in international affairs. 2. Awarded to a single entity, the lack of competition raises questions about potential price efficiencies. 3. The contract duration of one year suggests a focus on specific, time-bound objectives. 4. The 'COST NO FEE' contract type indicates that the government reimburses allowable costs without an additional profit margin. 5. The absence of small business participation flags a potential missed opportunity for economic inclusion. 6. The contract's focus on international affairs aligns with broader U.S. foreign policy objectives.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its specific nature and the lack of publicly available comparable data for 'International Affairs' services provided under a 'COST NO FEE' structure to the American Institute in Taiwan. The absence of competition means there was no market pressure to drive down costs. Without a competitive bidding process, it's difficult to ascertain if the reimbursed costs represent a fair market value or if alternative, more cost-effective solutions were overlooked. The government's reimbursement of costs without a fee structure suggests a focus on covering operational expenses rather than incentivizing profit, which can sometimes lead to less stringent cost control.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple potential vendors. This approach is typically used when only one vendor can provide the required goods or services, or in cases of urgent need. The lack of competition means that the government did not benefit from the price discovery and innovation that typically arise from a competitive bidding process. This can potentially lead to higher costs for taxpayers and may limit the range of solutions considered.

Taxpayer Impact: A sole-source award means taxpayers did not benefit from competitive pricing, potentially resulting in a higher overall cost for the services rendered.

Public Impact

The primary beneficiary of this contract is the American Institute in Taiwan, which receives funding to support its operations. The services delivered are related to international affairs, likely supporting diplomatic, cultural, or economic initiatives. The geographic impact is primarily focused on the regions where the American Institute in Taiwan operates, likely Taiwan. Workforce implications may include the employment of individuals to carry out the international affairs functions funded by this contract.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Absence of small business participation limits economic opportunities.
The 'COST NO FEE' structure could potentially reduce cost control incentives.
Limited transparency due to sole-source award makes value assessment difficult.

Positive Signals

The contract supports critical international affairs functions.
The 'COST NO FEE' structure ensures that only actual costs are reimbursed.
The American Institute in Taiwan is a specific entity suited for this type of engagement.

Sector Analysis

The contract falls within the 'International Affairs' sector, which encompasses a broad range of activities related to foreign policy, diplomacy, and international cooperation. Spending in this sector can vary significantly based on geopolitical events and national priorities. Comparable spending benchmarks are difficult to establish without more specific details on the services provided, but contracts supporting diplomatic missions and international organizations often represent substantial investments. The American Institute in Taiwan, while not a formal government agency, plays a crucial role in U.S.-Taiwan relations, making this a unique and potentially significant expenditure within the broader international affairs landscape.

Small Business Impact

This contract did not include any small business set-aside provisions, nor is there any indication of subcontracting opportunities for small businesses. The award to a single, presumably larger, entity means that the direct economic benefits for the small business ecosystem are likely minimal. This represents a missed opportunity to leverage small businesses for specific components of the international affairs work or to foster their growth through government contracting.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of State's internal review processes and potentially the Government Accountability Office (GAO) if specific concerns are raised. Transparency is limited due to the sole-source nature of the award. Accountability measures would depend on the performance metrics and reporting requirements stipulated in the contract, which are not detailed here. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arise.

Related Government Programs

Department of State Operations
Foreign Assistance Programs
Diplomatic Missions Support
International Cultural Exchange Programs

Risk Flags

Sole-source award lacks competitive pricing.
Potential for cost overruns without competitive pressure.
Limited transparency in contract justification and execution.
Absence of small business participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $26.2 million to AMERICAN INSTITUTE IN TAIWAN. AIT CONTRACT,

Who is the contractor on this award?

The obligated recipient is AMERICAN INSTITUTE IN TAIWAN.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $26.2 million.

What is the period of performance?

Start: 2012-05-17. End: 2013-05-16.

What specific services were rendered under this $26.2 million contract?

The provided data indicates the contract is for 'AIT CONTRACT' and falls under 'International Affairs'. While the specific services are not detailed, contracts of this nature with the American Institute in Taiwan (AIT) typically involve supporting U.S. interests and operations in Taiwan. This could encompass a wide range of activities, including facilitating diplomatic engagement, promoting U.S. economic and cultural ties, providing consular services support, and managing various programs aimed at strengthening bilateral relations. The 'COST NO FEE' contract type suggests that the government reimburses AIT for its direct, allowable costs incurred in performing these services, without any additional profit margin. Without further documentation, the precise scope of work remains general.

Why was this contract awarded on a sole-source basis instead of being competed?

The data explicitly states the contract was 'NOT COMPETED' and lists the contract type as 'sole-source'. While the specific justification for this sole-source award is not provided in the abbreviated data, common reasons for such awards include situations where only one responsible source can provide the required services, urgent and compelling needs that preclude competition, or when the contract is a follow-on to a previous sole-source award where competition is not feasible. Given the nature of the American Institute in Taiwan's role, it's possible that its unique position and established relationship with the Department of State were deemed essential, making competition impractical or undesirable for the specific objectives of this contract.

How does the 'COST NO FEE' contract type impact cost control and value for money?

The 'COST NO FEE' (Cost Reimbursement, No Fee) contract type means the government agrees to pay the contractor for all allowable costs incurred in performing the contract, but the contractor does not receive any profit. This structure is often used when the scope of work is uncertain or when the contractor is a non-profit or governmental entity, like the American Institute in Taiwan, which may not operate on a profit motive. While it ensures that the government covers legitimate expenses, it can reduce the contractor's incentive for stringent cost control compared to fixed-price contracts. The government must therefore rely heavily on robust oversight, detailed cost accounting, and clear performance metrics to ensure that costs are reasonable and that the overall value for money is achieved. Without competition, assessing value is even more critical.

What is the historical spending pattern for similar international affairs contracts by the Department of State?

The provided data is for a single contract and does not offer historical spending patterns. However, the Department of State consistently allocates significant funds towards international affairs, encompassing a wide array of activities such as diplomatic operations, foreign aid, public diplomacy, and support for international organizations. Spending in this category can fluctuate annually based on global events, administration priorities, and congressional appropriations. Contracts supporting entities like the American Institute in Taiwan, which facilitate U.S. engagement in critical regions, are a component of this broader spending. Analyzing historical data would require access to broader contract databases and budget reports to identify trends, average contract values, and common award mechanisms for similar services.

What are the potential risks associated with a sole-source contract of this magnitude?

A sole-source contract of $26.2 million carries several potential risks. Firstly, the lack of competition can lead to inflated costs, as there is no market pressure to ensure the most competitive pricing. Taxpayers may end up paying more than necessary for the services. Secondly, it limits the government's access to innovative solutions or alternative approaches that other potential contractors might offer. Thirdly, it can create a perception of favoritism or a lack of transparency, potentially undermining public trust. Finally, without the vetting process inherent in a competitive bid, there's a slightly elevated risk of selecting a contractor whose capabilities might not be as robust as a more thoroughly vetted competitor, although this is mitigated by the government's due diligence in sole-source justifications.

Industry Classification

NAICS: Public Administration › National Security and International Affairs › International Affairs

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Address: 1700 N MOORE ST STE 1700, ARLINGTON, VA, 22209

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

Financial Breakdown

Contract Ceiling: $26,229,597

Exercised Options: $26,229,597

Current Obligation: $26,229,597

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SAQMMA12D0101

IDV Type: IDC

Timeline