State Department's $58.3M contract with American Institute in Taiwan for international affairs services awarded without competition

Contract Overview

Contract Amount: $58,340,134 ($58.3M)

Contractor: American Institute in Taiwan

Awarding Agency: Department of State

Start Date: 2013-05-01

End Date: 2014-10-30

Contract Duration: 547 days

Daily Burn Rate: $106.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST NO FEE

Sector: Other

Official Description: IGF::CL::IGF AIT CONTRACT

Plain-Language Summary

Department of State obligated $58.3 million to AMERICAN INSTITUTE IN TAIWAN for work described as: IGF::CL::IGF AIT CONTRACT Key points: 1. Contract awarded on a sole-source basis, raising questions about potential cost savings through competition. 2. Significant duration of 547 days suggests a substantial scope of services provided. 3. The contract's focus on international affairs indicates a critical role in diplomatic or foreign policy operations. 4. Lack of competition may limit opportunities for other qualified vendors and potentially impact pricing. 5. The 'COST NO FEE' contract type suggests reimbursement of costs without an additional profit margin for the contractor. 6. The award to the American Institute in Taiwan highlights a specific geopolitical focus for these funds.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and specific focus on international affairs services provided to the American Institute in Taiwan. Without competitive bids, it's difficult to assess if the pricing reflects market rates or if alternative, more cost-effective solutions were available. The 'COST NO FEE' structure implies that the government is covering the direct costs incurred by the contractor, but the overall efficiency and value for money are not easily quantifiable without comparative data.

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 vendors. This approach is typically used when only one vendor can provide the required goods or services, often due to unique capabilities, proprietary technology, or specific relationships. The lack of competition means there was no opportunity for price discovery through bidding, and it limits the government's ability to leverage market forces to secure the best possible pricing.

Taxpayer Impact: Taxpayers may not have received the benefit of competitive pricing, potentially leading to higher costs than if the contract had been open to multiple bidders. This also reduces opportunities for other businesses to compete for government contracts.

Public Impact

The primary beneficiary of this contract is the American Institute in Taiwan, which receives services crucial for its operations. The services delivered are related to international affairs, likely supporting diplomatic, cultural, or economic engagement. The geographic impact is centered around Taiwan, reflecting the specific mission of the American Institute. Workforce implications are likely internal to the American Institute in Taiwan or its direct service providers, rather than a broad public employment impact.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Lack of transparency in the justification for sole-source award.
Potential for cost overruns if not closely monitored due to 'COST NO FEE' structure.

Positive Signals

Contract supports critical international affairs functions.
Award to a specialized entity (AIT) suggests alignment with specific foreign policy objectives.
Clear contract duration and start/end dates provide a defined period of service.

Sector Analysis

This contract falls within the broader category of government services, specifically related to international affairs and diplomatic support. The market for such specialized services is often limited, with a few key organizations or entities possessing the necessary expertise and access. The American Institute in Taiwan operates in a unique space, making direct comparisons to general market spending difficult. The contract value of approximately $58.3 million over its term is substantial for a single, non-competed award in this niche sector.

Small Business Impact

There is no indication that this contract included small business set-asides or subcontracting requirements. As a sole-source award to a specific entity, it is unlikely to have been structured to promote small business participation. This contract does not appear to directly impact the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of State's contracting and financial management divisions. Given its sole-source nature, rigorous justification and approval processes are expected. Transparency regarding the specific services rendered and the justification for the sole-source award would be key areas for oversight. Inspector General jurisdiction would apply to any potential fraud, waste, or abuse.

Related Government Programs

Department of State Operations
International Relations Programs
Foreign Affairs Services
Diplomatic Support Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for unbenchmarked pricing

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $58.3 million to AMERICAN INSTITUTE IN TAIWAN. IGF::CL::IGF 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 $58.3 million.

What is the period of performance?

Start: 2013-05-01. End: 2014-10-30.

What specific services were rendered under this $58.3 million contract with the American Institute in Taiwan?

The provided data indicates the contract was for 'IGF::CL::IGF AIT CONTRACT' and falls under the 'International Affairs' (ND) category, awarded by the Department of State. While the specific line-item services are not detailed in the summary data, the nature of the American Institute in Taiwan (AIT) suggests these services likely supported AIT's mission in Taiwan. This could encompass a range of activities such as administrative support, logistical services, program management, cultural exchange facilitation, or other operational functions necessary for AIT to carry out its role in representing U.S. interests in Taiwan in the absence of formal diplomatic relations. The 'COST NO FEE' contract type implies that the government reimburses the contractor for allowable costs incurred in performing these services, without an additional profit margin.

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

The data explicitly states the contract type as 'NOT COMPETED' and the award is 'sole-source'. While the specific justification for this sole-source award is not provided in the summary data, common reasons include the unique capabilities of the contractor, the proprietary nature of the services or technology required, or a critical need that could only be met by a specific entity. Given the award is to the American Institute in Taiwan (AIT), it's plausible that AIT possesses unique access, authority, or operational capacity essential for the services, making competition impractical or impossible. A formal justification would typically be documented by the awarding agency (Department of State) outlining these specific reasons.

How does the 'COST NO FEE' contract type affect the value and oversight of this award?

A 'COST NO FEE' (CNF) contract means the contractor is reimbursed for all allowable direct and indirect costs incurred in performing the contract, but does not receive any additional fee or profit. This contract type is often used when the scope of work is not well-defined, or when the contractor is an entity with a public service mission rather than a commercial profit motive, such as the American Institute in Taiwan. From a value perspective, it aims to ensure that the government only pays for the actual costs incurred. However, it places a significant emphasis on robust oversight to ensure that costs are reasonable, allocable, and allowable. Without a profit motive, the contractor may have less incentive to control costs, making diligent monitoring by the government crucial to prevent overspending.

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

The provided data focuses on a single contract and does not offer historical spending patterns for similar services. To assess historical spending, one would need to analyze the Department of State's contract databases for awards related to international affairs, diplomatic support, or services provided to entities like the American Institute in Taiwan over multiple fiscal years. This would involve identifying comparable contract vehicles, tracking their values, durations, and competition levels. Without this broader dataset, it is impossible to determine if the $58.3 million award represents an increase, decrease, or consistent level of spending for such services.

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

Sole-source contracts, especially those of significant value like $58.3 million, carry inherent risks. The primary risk is the lack of price competition, which can lead to the government paying more than it would in a competitive environment. There's also a reduced incentive for the contractor to innovate or improve efficiency, as they face no direct market pressure from competitors. Furthermore, sole-source awards can create barriers to entry for other potential vendors, limiting market diversity. Oversight becomes critical to mitigate these risks, ensuring that the awarded price is fair and reasonable and that the services meet all requirements. The absence of competition also raises concerns about transparency and accountability.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL 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: $58,340,134

Exercised Options: $58,340,134

Current Obligation: $58,340,134

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SAQMMA12D0101

IDV Type: IDC

Timeline