State Department Awards $339M Embassy Construction Contract to Caddell Construction Under Full and Open Competition

Contract Overview

Contract Amount: $339,123,426 ($339.1M)

Contractor: Caddell Construction CO. (DE), LLC

Awarding Agency: Department of State

Start Date: 2014-09-26

End Date: 2027-10-14

Contract Duration: 4,766 days

Daily Burn Rate: $71.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF DESIGN AND CONSTRUCTION OF THE NEW EMBASSY COMPOUND IN ASHGABAT, TURKMENISTAN.

Plain-Language Summary

Department of State obligated $339.1 million to CADDELL CONSTRUCTION CO. (DE), LLC for work described as: IGF::OT::IGF DESIGN AND CONSTRUCTION OF THE NEW EMBASSY COMPOUND IN ASHGABAT, TURKMENISTAN. Key points: 1. The contract value of $339.1 million for embassy construction is substantial, indicating a significant investment. 2. Caddell Construction Co. (DE), LLC, the awardee, faces competition from other firms in the commercial building construction sector. 3. Potential risks include project delays, cost overruns, and geopolitical factors in Turkmenistan. 4. The sector is commercial and institutional building construction, a field with established benchmarks for project management and cost.

Value Assessment

Rating: good

The contract's firm fixed price structure suggests an effort to control costs. Benchmarking against similar embassy construction projects would provide further insight into pricing reasonableness.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The use of full and open competition is a positive indicator for price discovery. This method allows multiple qualified contractors to bid, fostering a competitive environment that should lead to a more favorable price for the government.

Taxpayer Impact: The competitive bidding process aims to ensure taxpayer funds are used efficiently for this critical infrastructure project.

Public Impact

Construction of a new U.S. Embassy compound signifies a long-term commitment to diplomatic relations and presence in Turkmenistan. The project's scale suggests job creation, both directly for Caddell Construction and indirectly through subcontractors and material suppliers. The successful completion of the embassy will enhance U.S. diplomatic operations and security in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for schedule delays given the long duration and international location.
Geopolitical instability in the region could impact project execution.
Firm Fixed Price contracts can shift risk to the contractor, but scope creep needs careful management.

Positive Signals

Full and open competition suggests a robust procurement process.
The project addresses a critical government need for diplomatic infrastructure.
A long-term contract duration allows for phased execution and potential learning curve benefits.

Sector Analysis

The construction of large-scale institutional buildings, such as embassies, falls within the commercial and institutional building construction sector. Benchmarks for such projects often consider factors like square footage, complexity, and location.

Small Business Impact

The data indicates that small businesses were not directly awarded this prime contract, as the awardee is a large company. However, opportunities may exist for small businesses to participate as subcontractors to Caddell Construction.

Oversight & Accountability

The Department of State's internal oversight mechanisms and potentially the Government Accountability Office (GAO) would monitor contract performance, cost, and adherence to specifications to ensure accountability.

Related Government Programs

Commercial and Institutional Building Construction
Department of State Contracting
Department of State Programs

Risk Flags

Contract duration is lengthy (over 12 years).
International location presents logistical and geopolitical risks.
Firm Fixed Price shifts risk to contractor, but requires careful scope management.
No small business participation noted on prime contract.

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $339.1 million to CADDELL CONSTRUCTION CO. (DE), LLC. IGF::OT::IGF DESIGN AND CONSTRUCTION OF THE NEW EMBASSY COMPOUND IN ASHGABAT, TURKMENISTAN.

Who is the contractor on this award?

The obligated recipient is CADDELL CONSTRUCTION CO. (DE), LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $339.1 million.

What is the period of performance?

Start: 2014-09-26. End: 2027-10-14.

What is the estimated cost per square foot for this embassy construction, and how does it compare to similar projects?

The provided data does not include square footage, making a direct cost-per-square-foot calculation impossible. To assess value, a comparison would require detailed project specifications and cost data from comparable embassy or large institutional building projects, considering regional construction costs and specific security requirements.

What are the primary risks associated with constructing an embassy in Turkmenistan, and what mitigation strategies are in place?

Key risks include logistical challenges in a landlocked country, potential labor shortages, material sourcing difficulties, and the volatile geopolitical climate. Mitigation strategies likely involve robust supply chain management, partnerships with local entities, contingency planning for security, and close coordination with the U.S. Embassy and relevant government agencies.

How effectively does the firm fixed price contract ensure value for money given the project's complexity and duration?

A firm fixed price contract aims to ensure value by capping the government's cost exposure. However, its effectiveness depends on the accuracy of the initial cost estimate and the contractor's ability to manage risks and unforeseen issues within that price. Close monitoring of scope and performance is crucial to prevent cost overruns or quality compromises.

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: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Caddell Construction CO., Inc.

Address: 2700 LAGOON PARK DR, MONTGOMERY, AL, 36109

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: $339,123,426

Exercised Options: $339,123,426

Current Obligation: $339,123,426

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline