State Department awards $467.7M for Embassy operations and maintenance in Baghdad, with PAE Government Services Inc. as contractor

Contract Overview

Contract Amount: $467,670,266 ($467.7M)

Contractor: PAE Government Services, Inc.

Awarding Agency: Department of State

Start Date: 2013-06-01

End Date: 2026-09-30

Contract Duration: 4,869 days

Daily Burn Rate: $96.1K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::OT::IGF OPERATIONS AND MAINTENANCE SUPPORT SERVICES FOR THE EMBASSY COMPOUND IN BAGHDAD.

Plain-Language Summary

Department of State obligated $467.7 million to PAE GOVERNMENT SERVICES, INC. for work described as: IGF::OT::IGF OPERATIONS AND MAINTENANCE SUPPORT SERVICES FOR THE EMBASSY COMPOUND IN BAGHDAD. Key points: 1. Contract provides essential support services for the U.S. Embassy compound in Baghdad, ensuring operational continuity. 2. The contract's duration spans over 13 years, indicating a long-term need for these services. 3. A significant portion of the contract value is allocated to facilities support services. 4. The award was made under full and open competition, suggesting a robust bidding process. 5. The contract type is Firm Fixed Price, which shifts cost risk to the contractor. 6. The contract value represents a substantial investment in maintaining diplomatic infrastructure abroad.

Value Assessment

Rating: good

The contract value of $467.7 million over approximately 13 years suggests a significant investment in maintaining a critical diplomatic facility. Benchmarking this against similar large-scale O&M contracts for overseas embassies is challenging due to unique security and operational requirements. However, the firm-fixed-price structure implies that the contractor bears the risk of cost overruns, which can be a positive indicator for value if managed effectively. The total value, averaged annually, is approximately $36 million, which for a large, complex embassy operation, appears within a reasonable range for comprehensive support.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through full and open competition, indicating that multiple qualified bidders had the opportunity to submit proposals. The specific number of bidders is not detailed, but this procurement method generally fosters a competitive environment, which can lead to better pricing and service offerings for the government. The extensive duration of the contract suggests that the competition likely focused on long-term capability and cost-effectiveness.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it increases the likelihood of obtaining the best value by encouraging a wide range of providers to compete, potentially driving down costs and improving service quality.

Public Impact

The primary beneficiaries are the U.S. Department of State and its personnel operating at the Embassy in Baghdad, ensuring a secure and functional working environment. Services include essential operations and maintenance for the embassy compound, covering facilities management and related support. The geographic impact is concentrated in Baghdad, Iraq, supporting U.S. diplomatic missions in a high-security environment. The contract supports a workforce involved in facilities management, security, and logistical operations, though the exact number of personnel is not specified.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 13 years) could lead to complacency or reduced innovation if not actively managed.
Firm Fixed Price contracts can sometimes lead to contractors cutting corners on quality if not rigorously overseen.
Dependence on a single contractor for critical O&M services in a high-risk environment presents a concentration of risk.
The sheer scale of the contract value necessitates robust oversight to ensure funds are used efficiently and effectively.

Positive Signals

Awarded through full and open competition, suggesting a competitive process that should yield good value.
Firm Fixed Price contract structure places cost control responsibility on the contractor.
The contract addresses essential operational needs for a critical diplomatic facility, ensuring continuity of government functions.
Long-term nature of the contract allows for stable planning and execution of complex O&M tasks.

Sector Analysis

This contract falls within the Facilities Support Services sector, a broad category encompassing a wide range of services necessary for the operation and maintenance of physical infrastructure. The market for such services, particularly for government facilities in challenging overseas locations, is specialized and often dominated by large, experienced contractors capable of managing complex logistics, security, and operational requirements. The value of this contract is substantial, reflecting the critical nature and scale of supporting a major U.S. diplomatic mission.

Small Business Impact

The data indicates that small business participation (sb) is marked as false, and there is no specific information on small business set-asides (ss). This suggests that the contract was not specifically targeted towards small businesses, and subcontracting opportunities for small businesses are not explicitly detailed in this summary. Larger prime contractors often utilize small businesses for specialized support, but without specific set-aside requirements or reporting, the direct impact on the small business ecosystem is unclear.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of State's contracting officers and program managers. Given the critical nature and location of the services, it is likely subject to regular performance reviews, site inspections, and financial audits. The contract's duration and value suggest that it may also fall under the purview of the Department of State's Inspector General for audits and investigations to ensure accountability and prevent fraud, waste, and abuse.

Related Government Programs

Embassy Operations and Maintenance Contracts
Overseas Facilities Management
Department of State Support Services
Logistics and Base Operations Support

Risk Flags

Long-term contract duration
High-risk operating environment
Sole contractor for critical services
Firm Fixed Price contract risks

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $467.7 million to PAE GOVERNMENT SERVICES, INC.. IGF::OT::IGF OPERATIONS AND MAINTENANCE SUPPORT SERVICES FOR THE EMBASSY COMPOUND IN BAGHDAD.

Who is the contractor on this award?

The obligated recipient is PAE GOVERNMENT SERVICES, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $467.7 million.

What is the period of performance?

Start: 2013-06-01. End: 2026-09-30.

What is the historical spending pattern for Embassy operations and maintenance in Baghdad under previous contracts?

Analyzing historical spending for Embassy operations and maintenance in Baghdad is crucial for contextualizing the current $467.7 million award. While specific prior contract data is not provided here, such contracts typically involve significant, multi-year commitments due to the complex and enduring nature of supporting diplomatic missions in high-threat environments. Previous awards would likely have covered similar scope, including facilities management, security infrastructure support, life support services, and logistical operations. Variations in spending over time could be attributed to changes in security postures, infrastructure upgrades, inflation, and the number of personnel requiring support. A detailed historical analysis would involve comparing annual expenditures, contract modifications, and performance metrics to identify trends and assess the cost-effectiveness of previous arrangements, providing a baseline against which the current contract's value can be more accurately benchmarked.

How does the per-unit cost of services under this contract compare to similar O&M contracts for U.S. Embassies in other high-risk regions?

Benchmarking the per-unit cost for this contract against similar O&M contracts for U.S. Embassies in other high-risk regions is complex due to the unique operational environment of Baghdad. Factors such as heightened security requirements, logistical challenges in Iraq, local labor costs, and specific infrastructure needs significantly influence pricing. Contracts in locations like Kabul or other conflict zones might offer comparable data points, but direct comparisons require careful normalization of variables. The $467.7 million total contract value, spread over potentially thousands of personnel and extensive facilities, needs to be broken down into specific service categories (e.g., per-person support, per-square-foot facility maintenance) for a meaningful comparison. Without detailed service breakdowns and cost allocation, a precise per-unit comparison is difficult, but the overall value suggests a premium is likely factored in for the elevated risks and operational complexities inherent in Baghdad.

What is PAE Government Services, Inc.'s track record with large-scale overseas O&M contracts, particularly in challenging environments?

PAE Government Services, Inc. (now part of Amentum) has a substantial track record in providing large-scale operations and maintenance (O&M) services, including extensive experience in supporting U.S. government facilities in challenging and high-risk overseas environments. The company has historically been a major player in logistics, base operations support, and facilities management for military and diplomatic installations globally. Their portfolio often includes contracts similar in scope and complexity to the Baghdad Embassy support, involving security, life support, infrastructure maintenance, and personnel management. Evaluating their performance on this specific contract would involve reviewing past performance evaluations, any documented issues or successes on similar contracts, and their overall reputation within the government contracting community for delivering on complex, long-term requirements in demanding geopolitical locations.

What are the key performance indicators (KPIs) used to measure the success of this contract, and how has PAE performed against them?

Key Performance Indicators (KPIs) for a contract of this nature typically focus on ensuring the operational readiness and safety of the Embassy compound. These would likely include metrics related to facility uptime and maintenance response times (e.g., for power, water, HVAC systems), security infrastructure functionality, waste management efficiency, and the provision of essential life support services. Performance against these KPIs is usually tracked through regular reporting by the contractor and verified by government representatives. While specific performance data for this contract is not detailed in the provided summary, the Department of State would have mechanisms in place to monitor PAE's adherence to contractual obligations and service level agreements. Consistent failure to meet KPIs could lead to contract deficiencies, penalties, or even termination, whereas strong performance would be reflected in positive evaluations and continued contract renewals or extensions.

Are there any specific risks associated with the firm-fixed-price (FFP) contract type for this particular service in Baghdad?

The Firm-Fixed-Price (FFP) contract type for O&M services in Baghdad, while shifting cost risk to the contractor (PAE Government Services, Inc.), introduces specific considerations. The primary risk is that the contractor might prioritize cost savings over quality or safety if profit margins are squeezed, potentially leading to deferred maintenance or cutting corners on essential services, especially given the challenging operating environment. Another risk is that unforeseen circumstances in Baghdad (e.g., major security incidents requiring extensive repairs, sudden supply chain disruptions, or significant inflation) could impose extreme financial strain on the contractor, potentially leading to disputes, requests for equitable adjustments, or even contract default if not managed carefully. Robust government oversight and clear performance standards are critical under an FFP to mitigate these risks and ensure the required level of service and safety is maintained throughout the contract's long duration.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Facilities Support Services › Facilities Support Services

Product/Service Code: UTILITIES AND HOUSEKEEPING › HOUSEKEEPING SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: PAE Government Services Inc.

Address: 1320 N COURTHOUSE RD STE 700, ARLINGTON, VA, 22201

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

Financial Breakdown

Contract Ceiling: $506,509,433

Exercised Options: $486,057,419

Current Obligation: $467,670,266

Actual Outlays: $72,230,424

Subaward Activity

Number of Subawards: 463

Total Subaward Amount: $93,969,014

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SAQMMA12D0165

IDV Type: IDC

Timeline