State Department awards $166M for Chad embassy construction, highlighting full and open competition

Contract Overview

Contract Amount: $166,231,152 ($166.2M)

Contractor: BL Harbert International LLC

Awarding Agency: Department of State

Start Date: 2014-02-19

End Date: 2017-04-27

Contract Duration: 1,163 days

Daily Burn Rate: $142.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: DESIGN AND CONSTRUCTION OF A NEW EMBASSY IN N'DJAMEAN, CHAD. IGF::OT::IGF

Plain-Language Summary

Department of State obligated $166.2 million to BL HARBERT INTERNATIONAL LLC for work described as: DESIGN AND CONSTRUCTION OF A NEW EMBASSY IN N'DJAMEAN, CHAD. IGF::OT::IGF Key points: 1. The contract value of $166.2 million represents a significant investment in diplomatic infrastructure. 2. Full and open competition suggests a robust bidding process, potentially leading to better pricing. 3. The definitive contract type indicates a clear scope and fixed price, reducing cost overrun risks. 4. The project duration of 1163 days points to a complex, multi-year construction effort. 5. The North American Industry Classification System (NAICS) code 236220 signifies commercial and institutional building construction. 6. The absence of small business set-aside or subcontracting goals warrants further investigation into small business participation.

Value Assessment

Rating: good

The contract's value of $166.2 million for the design and construction of a new embassy in N'Djamena, Chad, appears reasonable given the scope of such a project. While direct comparisons are difficult without more specific project details and market data for the region, the fixed-price nature of the contract provides a degree of cost certainty. Benchmarking against similar embassy construction projects globally would offer a more precise value assessment, but the initial award amount does not immediately raise red flags.

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 a bid. The presence of two bidders suggests a competitive environment, though the exact number of proposals received and the evaluation process are not detailed here. A higher number of bidders typically correlates with more competitive pricing and a wider range of innovative solutions.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a market where contractors strive to offer the best value and most competitive prices to win the contract.

Public Impact

The primary beneficiaries are the U.S. Department of State and its personnel, who will gain a secure and modern diplomatic facility. The project delivers essential services related to diplomatic operations and representation in Chad. The geographic impact is concentrated in N'Djamena, Chad, enhancing U.S. diplomatic presence in the region. The construction phase will likely involve a significant workforce, including skilled trades and project management personnel, potentially benefiting the local Chadian economy through employment opportunities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions or geopolitical instability in Chad impact the construction timeline or require additional security measures.
Dependence on a single prime contractor (BL Harbert International LLC) for successful project completion.
Limited visibility into the specific subcontracting plans and opportunities for small businesses.
The long duration of the project increases the risk of material price fluctuations or supply chain disruptions.

Positive Signals

Awarded under full and open competition, suggesting a competitive bidding process that likely secured a fair price.
The firm-fixed-price contract type provides cost certainty and limits the government's exposure to cost overruns.
The contractor, BL Harbert International LLC, has experience in large-scale construction projects, potentially indicating a strong track record.
The project aims to deliver critical diplomatic infrastructure, aligning with national security and foreign policy objectives.

Sector Analysis

The construction of diplomatic facilities falls within the broader commercial and institutional building construction sector. This sector is characterized by large-scale projects requiring specialized engineering, design, and project management expertise. The market size for such projects is substantial globally, driven by government infrastructure needs, private development, and international relations. This contract fits within the government's ongoing efforts to modernize and secure its diplomatic posts worldwide, often involving significant capital investments.

Small Business Impact

The contract data indicates that small business set-aside (ss) and small business (sb) flags are both false, meaning this was not specifically set aside for small businesses. There is no explicit mention of subcontracting goals (st, sn). This suggests that small businesses may participate as subcontractors to the prime contractor, BL Harbert International LLC, but their inclusion is not mandated by the contract terms. Further analysis would be needed to determine the extent of small business involvement and its impact on the small business ecosystem.

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 abroad. Accountability measures are inherent in the firm-fixed-price contract, which holds the contractor responsible for delivering the project within the agreed-upon cost and schedule. Transparency is facilitated through contract award databases and reporting requirements, though specific details of ongoing oversight activities may not be publicly available. The Inspector General of the Department of State would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

U.S. Embassy Construction Projects
Overseas Diplomatic Infrastructure
Department of State Capital Construction
International Building Projects

Risk Flags

Limited Competition
Geopolitical Risk
Logistical Challenges
Potential for Cost Overruns

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $166.2 million to BL HARBERT INTERNATIONAL LLC. DESIGN AND CONSTRUCTION OF A NEW EMBASSY IN N'DJAMEAN, CHAD. 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 $166.2 million.

What is the period of performance?

Start: 2014-02-19. End: 2017-04-27.

What is the track record of BL Harbert International LLC in constructing similar overseas facilities?

BL Harbert International LLC has a significant track record in constructing large-scale projects, including overseas facilities for government agencies. They have been involved in building embassies, consulates, and other secure facilities in various international locations. Their experience often includes navigating complex logistical challenges, security requirements, and diverse regulatory environments inherent in such projects. A review of their past performance, including project completion times, budget adherence, and client satisfaction, would provide further insight into their capability to successfully execute the N'Djamena embassy project. Publicly available contract databases and agency performance reviews can offer more detailed information on their specific project history and performance metrics.

How does the awarded amount compare to the estimated cost or budget for this project?

The provided data indicates an award amount of $166,231,152. However, the initial estimated cost or the approved budget for the design and construction of the new embassy in N'Djamena, Chad, is not included in this dataset. Without this information, it is difficult to definitively assess whether the contract was awarded at, above, or below the government's anticipated expenditure. Typically, the award amount represents the negotiated price after the competitive bidding process. If the award is significantly higher than initial estimates, it could suggest an underestimation of project costs or increased competition driving up prices. Conversely, an award below estimates might indicate successful cost-saving measures or aggressive bidding.

What are the key risk indicators associated with constructing an embassy in Chad?

Constructing an embassy in Chad presents several risk indicators. Geopolitical instability and security concerns in the region are paramount, potentially impacting personnel safety, project security, and construction continuity. Logistical challenges are also significant, given Chad's landlocked status and potentially underdeveloped infrastructure, which can affect the timely delivery of materials and equipment, increasing costs and timelines. Local labor regulations, environmental considerations, and the potential for unforeseen site conditions (e.g., soil stability, climate impacts) also pose risks. Furthermore, the political and economic climate within Chad can influence project feasibility and long-term operational costs. The Department of State's Overseas Buildings Operations (OBO) typically conducts thorough risk assessments for such projects.

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

The Department of State, primarily through its Bureau of Overseas Buildings Operations (OBO), has a consistent history of investing in the construction and renovation of U.S. diplomatic facilities worldwide. Historical spending patterns reveal a significant and ongoing commitment to modernizing and securing these critical assets. Annual budgets allocated for capital construction projects often run into the hundreds of millions, and sometimes billions, of dollars, reflecting the global scale of U.S. diplomatic engagement. Spending fluctuates based on the number of major projects initiated, their complexity, and the geopolitical priorities driving the need for new or upgraded facilities. Major construction programs, like the one for the N'Djamena embassy, are a recurring feature of the State Department's budget.

How does the competition level (2 bidders) typically affect pricing for large construction contracts?

A competition level with only two bidders for a large construction contract like this embassy project can have mixed effects on pricing. On one hand, having multiple bidders generally drives prices down as companies compete to win the contract. With only two bidders, there is less pressure to undercut competitors compared to a scenario with five or more. However, if the two bidders are highly qualified and the project is complex, they may have significant leverage. The government aims for 'full and open competition' to maximize the pool of potential bidders. If only two submitted proposals, it might indicate barriers to entry for other firms (e.g., high bonding requirements, specialized expertise needed) or a lack of interest from the broader market. The final price achieved depends heavily on the government's negotiation strategy and the perceived value and risk associated with each bid.

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: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: B.L. Harbert Holdings, L.L.C.

Address: 820 SHADES CREEK PKWY STE 3000, 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: $166,231,152

Exercised Options: $166,231,152

Current Obligation: $166,231,152

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $1,107,193

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline