State Department awards $29M construction contract to Arkel Ortadogu JV LLC for Brazzaville warehouse

Contract Overview

Contract Amount: $29,083,622 ($29.1M)

Contractor: Arkel Ortadogu JV LLC

Awarding Agency: Department of State

Start Date: 2014-09-30

End Date: 2021-09-25

Contract Duration: 2,552 days

Daily Burn Rate: $11.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: BRAZZAVILLE, CONGO WAREHOUSE, MSGR AND SCAC IGF::OT::IGF

Plain-Language Summary

Department of State obligated $29.1 million to ARKEL ORTADOGU JV LLC for work described as: BRAZZAVILLE, CONGO WAREHOUSE, MSGR AND SCAC IGF::OT::IGF Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract duration of 2552 days (approximately 7 years) indicates a long-term need for the services. 3. The firm-fixed-price contract type generally shifts risk to the contractor, potentially stabilizing costs. 4. The award was made by the Department of State, implying a focus on diplomatic or overseas infrastructure. 5. The specific nature of the project (warehouse, messenger, SCAC IGF) suggests logistical support in a foreign location. 6. No small business set-aside was utilized, indicating the primary competition was not specifically targeted towards small businesses.

Value Assessment

Rating: fair

The contract value of $29,083,622.38 over approximately seven years averages to roughly $4.15 million per year. Benchmarking this against similar international construction projects for diplomatic facilities is challenging without more specific project details. However, the firm-fixed-price nature suggests that the initial bid was deemed competitive and acceptable by the agency. The absence of detailed cost breakdowns makes a precise value-for-money assessment difficult, but the long duration and the nature of the work (construction in a foreign location) can often lead to higher costs compared to domestic projects.

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 a bid. The data indicates there were 3 bids received. While three bidders suggest some level of competition, it is on the lower end for a contract of this magnitude and duration. A higher number of bidders typically leads to more robust price discovery and potentially lower prices for the government.

Taxpayer Impact: With three bids, taxpayers may not have received the absolute lowest possible price, as a more competitive field could have driven costs down further. However, the full and open nature ensures that the government did not unnecessarily restrict competition.

Public Impact

The primary beneficiaries are likely the Department of State personnel and operations requiring logistical support and storage in Brazzaville, Congo. The services delivered include the construction and potentially maintenance of a warehouse facility, along with messenger and SCAC IGF services. The geographic impact is localized to Brazzaville, Congo, supporting U.S. diplomatic or operational presence in the region. Workforce implications could include the employment of local labor in Congo for construction and ongoing operations, as well as potential deployment of U.S. personnel for oversight.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition (3 bidders) for a large contract may have resulted in a higher price than if more firms had participated.
The long contract duration could lead to cost overruns if market conditions or project requirements change significantly over the 7-year period.
Construction projects in foreign countries often carry inherent risks related to logistics, security, and local regulations that could impact cost and schedule.

Positive Signals

The firm-fixed-price contract structure transfers cost overrun risk to the contractor, Arkel Ortadogu JV LLC.
Awarding through full and open competition ensures a broad base of potential contractors were considered.
The contract is managed by the Department of State, an agency with extensive experience in managing overseas operations and facilities.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector. The global construction market is vast, with significant government spending allocated to infrastructure and facilities, particularly for overseas operations. The Department of State's spending on construction in foreign locations supports its diplomatic and security missions. Comparable spending benchmarks would depend heavily on the specific size, complexity, and location of the warehouse and associated services, but large-scale international construction projects can range from tens to hundreds of millions of dollars.

Small Business Impact

The data indicates that this contract was not awarded as a small business set-aside, and there is no indication of subcontracting goals for small businesses ('sb': false, 'st': ''). This suggests that the primary competition was not focused on engaging small businesses. Consequently, the direct impact on the small business ecosystem for this specific contract is likely minimal, with opportunities primarily flowing to the prime contractor and potentially larger subcontractors.

Oversight & Accountability

The Department of State is responsible for the oversight of this contract. As a federal agency, it is expected to have internal procurement regulations and contract management processes in place to ensure compliance and performance. Transparency is generally maintained through contract databases like FPDS. Inspector General oversight would typically fall under the Department of State's Office of Inspector General, which investigates fraud, waste, and abuse in agency programs and operations.

Related Government Programs

Department of State Overseas Buildings Operations
Federal Construction Contracts
Logistics and Warehousing Facilities
International Infrastructure Projects

Risk Flags

Limited Competition
Long Contract Duration
Foreign Construction Risks

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $29.1 million to ARKEL ORTADOGU JV LLC. BRAZZAVILLE, CONGO WAREHOUSE, MSGR AND SCAC IGF::OT::IGF

Who is the contractor on this award?

The obligated recipient is ARKEL ORTADOGU JV LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $29.1 million.

What is the period of performance?

Start: 2014-09-30. End: 2021-09-25.

What is the track record of Arkel Ortadogu JV LLC in performing similar government contracts?

Information regarding the specific track record of Arkel Ortadogu JV LLC on similar government contracts is not detailed in the provided data snippet. A comprehensive assessment would require reviewing past performance evaluations, contract history, and any reported issues or successes on previous awards. Federal procurement databases often contain contractor performance information, which would be crucial for evaluating their capability to successfully execute this Brazzaville warehouse project. Without this data, it's difficult to definitively assess their reliability and past performance in delivering complex construction and logistical support services, especially in challenging overseas environments.

How does the annual cost of this contract compare to similar international warehouse construction projects?

The contract's annual cost averages approximately $4.15 million ($29.08M / ~7 years). Comparing this to similar international warehouse construction projects is difficult without more specific details on the project's scope, size (square footage), security requirements, and the specific challenges of the Brazzaville location (e.g., logistics, labor costs, material sourcing). Generally, construction in foreign, potentially less developed, locations can be more expensive due to increased logistical complexities, security needs, and potentially higher labor and material costs. A benchmark would ideally involve comparing it to other State Department or DoD facilities built in similar regions, considering factors like construction type, duration, and included services.

What are the primary risks associated with a 7-year firm-fixed-price construction contract in Congo?

Key risks for a 7-year firm-fixed-price contract in Congo include: 1) **Political and Economic Instability:** Changes in local governance, regulations, or economic conditions could impact project feasibility or costs not covered by the fixed price. 2) **Logistical Challenges:** Transporting materials, equipment, and personnel to Brazzaville can be complex and prone to delays or increased costs. 3) **Security:** Ensuring the safety of personnel and the facility throughout the construction and operational phases is critical and may require significant security measures. 4) **Force Majeure Events:** Unforeseen events like natural disasters or widespread health crises could disrupt work. 5) **Contractor Performance:** While the risk is on the contractor, severe underperformance or financial distress could still lead to project delays or termination, impacting the government's operational needs.

What is the expected effectiveness of the warehouse and associated services for the Department of State's mission?

The effectiveness of the warehouse and associated services hinges on its ability to reliably support the Department of State's operations in Brazzaville. A well-constructed and managed warehouse ensures secure storage of critical supplies, equipment, and sensitive materials, facilitating smoother diplomatic and operational functions. Messenger and SCAC IGF (likely related to secure communications or logistics) services are vital for efficient communication and movement of goods. If the facility meets its design specifications and the services are performed reliably, it should enhance the logistical capabilities and operational readiness of the U.S. presence in Congo, contributing to the overall effectiveness of the mission in the region.

How has the Department of State's spending on international construction evolved over the past decade?

Analyzing the Department of State's spending evolution on international construction requires access to historical spending data beyond this single contract. Generally, spending in this area is driven by the need to maintain and upgrade diplomatic facilities worldwide, respond to security threats, and support evolving foreign policy objectives. Factors like geopolitical shifts, security concerns (e.g., post-Benghazi facility hardening), and global infrastructure development initiatives influence budget allocations. The trend likely reflects a consistent need for facility modernization and security enhancements, potentially with fluctuations based on major construction initiatives or budget appropriations cycles.

What are the implications of awarding a long-term contract to a single entity for construction and services?

Awarding a long-term contract (7 years) for both construction and services to a single entity like Arkel Ortadogu JV LLC can offer benefits such as continuity, streamlined management, and potentially economies of scale. The government benefits from having a single point of contact and a contractor familiar with the facility and its needs over time. However, it also concentrates risk with one company. If the contractor underperforms, faces financial difficulties, or experiences leadership changes, it could significantly disrupt operations. Furthermore, the government may miss opportunities to re-evaluate service providers or incorporate new technologies that might arise during the contract term if market conditions change.

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Commercial and Institutional Building Construction

Product/Service Code: ARCHITECT/ENGINEER SERVICES › ARCH-ENG SVCS - CONSTRUCTION

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: SAQMMA14R0112

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1055 CONVENTION ST, BATON ROUGE, LA, 70802

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $29,083,622

Exercised Options: $29,083,622

Current Obligation: $29,083,622

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline