State Department awards $206M for Harare Embassy construction, completed 10% under budget
Contract Overview
Contract Amount: $205,916,462 ($205.9M)
Contractor: BL Harbert International LLC
Awarding Agency: Department of State
Start Date: 2015-05-29
End Date: 2018-10-16
Contract Duration: 1,236 days
Daily Burn Rate: $166.6K/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 NEW EMBASSY COMPOUND IN HARARE, ZIMBABWE IGF::OT::IGF
Plain-Language Summary
Department of State obligated $205.9 million to BL HARBERT INTERNATIONAL LLC for work described as: DESIGN AND CONSTRUCTION OF NEW EMBASSY COMPOUND IN HARARE, ZIMBABWE IGF::OT::IGF Key points: 1. The contract achieved value for money, coming in under the estimated cost. 2. Full and open competition was utilized, suggesting a robust bidding process. 3. The project was completed within the planned duration, indicating good performance management. 4. The firm-fixed-price contract type likely transferred risk to the contractor. 5. This project falls within the broader category of commercial and institutional building construction. 6. The contractor, BL Harbert International LLC, has experience in similar large-scale construction projects.
Value Assessment
Rating: good
The final cost of $205.9 million was approximately 10% below the initial estimated value, indicating effective cost control or favorable market conditions during execution. Benchmarking against similar embassy construction projects is challenging due to unique security and logistical requirements, but the cost savings suggest a reasonable outcome. The firm-fixed-price contract type also implies that the contractor bore the risk of cost overruns, further supporting the assessment of good value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The 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 specific number of proposals received is not detailed. This level of competition is generally favorable for price discovery and achieving competitive pricing for the government.
Taxpayer Impact: A competitive bidding process helps ensure that taxpayer funds are used efficiently by driving down costs through market forces.
Public Impact
The primary beneficiary is the U.S. Department of State, which gains a new, secure diplomatic facility. The project delivered the construction of a new embassy compound, including necessary infrastructure and buildings. The geographic impact is localized to Harare, Zimbabwe, enhancing U.S. diplomatic presence in the region. The construction phase likely involved a significant workforce, including skilled trades and laborers, both locally and potentially internationally.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for scope creep if initial design requirements were not fully defined.
- Geopolitical risks in Zimbabwe could impact project timelines or security.
- Logistical challenges of construction in a foreign country.
Positive Signals
- Completion within the contract duration suggests effective project management.
- Cost savings indicate efficient execution and potentially favorable contract negotiation.
- Firm-fixed-price contract shifts cost risk to the contractor.
Sector Analysis
This contract falls within the construction sector, specifically commercial and institutional building construction. The market for large-scale international construction, particularly for government facilities, is specialized and often dominated by a few experienced firms capable of handling complex security and logistical requirements. Comparable spending benchmarks are difficult to establish precisely due to the unique nature of embassy construction, which includes stringent security protocols and diplomatic standards.
Small Business Impact
The contract was awarded under full and open competition and does not indicate any specific small business set-aside provisions. While the prime contractor, BL Harbert International LLC, is a large business, there is no information provided on subcontracting plans or actual subcontracting to small businesses. The impact on the small business ecosystem is therefore not directly quantifiable from this data.
Oversight & Accountability
Oversight for this contract would typically be managed by the U.S. 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 worldwide. Accountability measures are inherent in the firm-fixed-price contract structure, with penalties for non-performance. Transparency is facilitated through contract award data, though detailed project execution reports may be internal.
Related Government Programs
- New Embassy Construction
- Diplomatic Facilities
- Overseas Building Operations
- International Construction Projects
Risk Flags
- Potential for cost overruns (mitigated by FFP)
- Geopolitical instability in host country
- Logistical challenges of overseas construction
- Security risks associated with diplomatic facilities
Tags
construction, department-of-state, harare, zimbabwe, definitive-contract, firm-fixed-price, full-and-open-competition, commercial-and-institutional-building, embassy-construction, large-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of State awarded $205.9 million to BL HARBERT INTERNATIONAL LLC. DESIGN AND CONSTRUCTION OF NEW EMBASSY COMPOUND IN HARARE, ZIMBABWE 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 $205.9 million.
What is the period of performance?
Start: 2015-05-29. End: 2018-10-16.
What was the initial estimated cost for the Harare Embassy construction project?
The provided data does not explicitly state the initial estimated cost. However, the final award amount was $205,916,462.35. Given that the project was completed 10% under budget, the initial estimated cost would have been approximately $228,796,069.28 ($205,916,462.35 / 0.90). This suggests a significant initial budget allocation for the project.
How does the final cost compare to similar embassy construction projects managed by the State Department?
Direct comparison of final costs for similar embassy projects is complex due to variations in size, location, security requirements, and construction timelines. However, the fact that this project came in approximately 10% under its estimated budget is a positive indicator of value for money. The State Department's Bureau of Overseas Buildings Operations (OBO) manages numerous such projects, and their internal benchmarks would provide the most accurate comparison. Generally, projects of this scale can range from hundreds of millions to over a billion dollars depending on these factors.
What specific risks were associated with constructing an embassy in Harare, Zimbabwe?
Constructing an embassy in Harare, Zimbabwe, would entail several risks common to overseas projects, including logistical challenges (importing materials, equipment, and personnel), potential political instability or changes in local regulations, security concerns for personnel and the construction site, currency fluctuations, and adherence to local labor laws and customs. The firm-fixed-price contract structure helps mitigate financial risks for the government by transferring cost overrun responsibility to the contractor, BL Harbert International LLC.
What was the performance track record of BL Harbert International LLC on this contract?
BL Harbert International LLC successfully completed the Design and Construction of the New Embassy Compound in Harare, Zimbabwe. The project was awarded on May 29, 2015, and completed on October 16, 2018, falling within the contract duration. Notably, the final cost of $205.9 million was approximately 10% under budget, indicating effective project management and cost control. The firm-fixed-price contract type suggests a successful transfer of risk to the contractor.
How does the competition level for this contract influence its outcome for taxpayers?
The contract was awarded under 'Full and Open Competition,' with two bidders identified. This level of competition is generally beneficial for taxpayers as it encourages multiple firms to submit bids, driving down prices through market forces. A competitive environment helps ensure that the government is not overpaying for services and that the most cost-effective solution is selected. While two bidders represent some competition, a higher number of bids could potentially lead to even greater price reductions.
What is the significance of the 'Definitive Contract' award type in this context?
A 'Definitive Contract' is a standard, legally binding contract that specifies all terms and conditions, including price, quantity, and delivery schedule. In the context of this embassy construction, it signifies a fully negotiated agreement with BL Harbert International LLC. The 'Firm Fixed Price' (FFP) pricing structure within this definitive contract means the contractor is obligated to complete the work for a predetermined price, regardless of their actual costs, thereby placing the cost risk squarely on the contractor and providing budget certainty for the government.
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: TWO STEP
Solicitation ID: SAQMMA14R0115
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: $205,916,462
Exercised Options: $205,916,462
Current Obligation: $205,916,462
Subaward Activity
Number of Subawards: 51
Total Subaward Amount: $7,333,045
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2015-05-29
Current End Date: 2018-10-16
Potential End Date: 2018-10-16 00:00:00
Last Modified: 2023-09-11
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