State Department's $104.7M contract with American Institute in Taiwan for international affairs services shows questionable value

Contract Overview

Contract Amount: $104,739,967 ($104.7M)

Contractor: American Institute in Taiwan

Awarding Agency: Department of State

Start Date: 2014-10-15

End Date: 2019-10-30

Contract Duration: 1,841 days

Daily Burn Rate: $56.9K/day

Competition Type: NOT COMPETED

Pricing Type: COST NO FEE

Sector: Other

Official Description: IGF::CL::IGF AIT

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20520

State: District of Columbia Government Spending

Plain-Language Summary

Department of State obligated $104.7 million to AMERICAN INSTITUTE IN TAIWAN for work described as: IGF::CL::IGF AIT Key points: 1. The contract's value-for-money is questionable given the lack of competition and the cost-plus-no-fee pricing structure. 2. Competition dynamics were limited, with the contract being sole-sourced. 3. Risk indicators include the absence of competitive bidding and potential for cost overruns with a cost-plus contract. 4. Performance context is broad, covering international affairs, making specific outcome assessment difficult without further detail. 5. Sector positioning is within government services and international relations, a critical but often opaque area of federal spending.

Value Assessment

Rating: questionable

The $104.7 million awarded to the American Institute in Taiwan for international affairs services lacks clear benchmarks for value. As a cost-plus-no-fee contract, it incentivizes cost incurrence rather than efficiency. Without competitive bidding, it's difficult to assess if the pricing reflects fair market value or if alternative, more cost-effective solutions were explored. The broad scope of 'international affairs' also makes direct comparison to similar, narrowly defined contracts challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. The lack of competition means there were no other bidders to compare against, and the government did not leverage market forces to drive down costs or improve service offerings. This approach bypasses the standard procurement process designed to ensure the best value is obtained through a competitive environment.

Taxpayer Impact: For taxpayers, a sole-source award means the absence of competitive pressure likely resulted in a higher price than could have been achieved through open competition. It also raises concerns about whether the most innovative or cost-effective solutions were considered.

Public Impact

The primary beneficiaries are likely the entities and individuals involved in the international affairs initiatives supported by this contract. Services delivered are broadly categorized under international affairs, potentially encompassing diplomatic support, program management, and logistical assistance. The geographic impact is likely global, given the nature of international affairs, though specific regions may be prioritized. Workforce implications could involve personnel from the American Institute in Taiwan and potentially other contractors or local staff in the regions where services are rendered.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpricing and reduced innovation.
Cost-plus-no-fee structure may not adequately incentivize cost control.
Broad service description makes performance monitoring and accountability challenging.
Sole-source nature limits transparency into the selection process and justification.

Positive Signals

The contract supports critical international affairs functions, suggesting a recognized need for these services.
The American Institute in Taiwan is a specific entity, implying a targeted relationship for service delivery.
The duration of the contract (over 4 years) suggests a sustained need and potentially established working relationship.

Sector Analysis

This contract falls within the government services sector, specifically related to international affairs and diplomacy. The market for such services is often specialized, involving entities with unique expertise and established relationships with government agencies. Benchmarking comparable spending is difficult due to the unique nature of the American Institute in Taiwan and the broad scope of 'international affairs,' which can encompass a wide range of activities from cultural exchange to complex diplomatic support.

Small Business Impact

There is no indication that this contract included small business set-asides. The sole-source nature of the award further suggests that subcontracting opportunities for small businesses were likely not a primary consideration in the procurement strategy. This contract does not appear to directly contribute to the small business ecosystem through set-aside goals.

Oversight & Accountability

Oversight mechanisms for this contract are not detailed in the provided data. Given its sole-source nature and broad scope, robust oversight would be crucial to ensure accountability and prevent cost overruns. Transparency is limited due to the lack of competitive bidding. Inspector General jurisdiction would typically apply to Department of State contracts, but specific oversight activities for this award are unknown.

Related Government Programs

Department of State Operations
International Development Assistance
Diplomatic and Consular Programs
Foreign Military Financing
Public Diplomacy and Public Affairs

Risk Flags

Sole-source award
Cost-plus contract type
Lack of transparency in justification
Broad service scope
Potential for cost overruns

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $104.7 million to AMERICAN INSTITUTE IN TAIWAN. IGF::CL::IGF AIT

Who is the contractor on this award?

The obligated recipient is AMERICAN INSTITUTE IN TAIWAN.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $104.7 million.

What is the period of performance?

Start: 2014-10-15. End: 2019-10-30.

What is the specific mission and scope of services covered under this $104.7 million contract awarded to the American Institute in Taiwan?

The provided data categorizes this contract under 'International Affairs' (NAICS 928120) and indicates it was awarded to the American Institute in Taiwan (AIT). The contract type is 'COST NO FEE' (PT), and it was awarded as a 'NOT COMPETED' (CT) delivery order (AW) with a period of performance from October 15, 2014, to October 30, 2019, totaling $104,739,967.18. The broad classification of 'International Affairs' suggests the services could range widely, potentially including support for diplomatic missions, cultural exchange programs, logistical support for U.S. interests abroad, or other functions managed by the Department of State through AIT. Without more specific contract line item details or a statement of work, the precise mission and scope remain generalized.

Why was this contract awarded on a sole-source basis instead of through full and open competition?

The data explicitly states the contract was 'NOT COMPETED' (CT), indicating a sole-source award. The specific justification for this sole-source determination is not provided in the abbreviated data. Typically, sole-source awards are justified under specific circumstances outlined in federal acquisition regulations, such as when only one responsible source can provide the required supplies or services, or in cases of urgent and compelling need. For a contract of this magnitude and duration supporting 'International Affairs,' the justification would likely relate to the unique capabilities or established role of the American Institute in Taiwan in fulfilling specific U.S. foreign policy objectives or operational requirements that cannot be met by other entities.

How does the 'COST NO FEE' contract type impact the value and risk for the government compared to other contract types?

A 'COST NO FEE' (PT) contract is a type of cost-reimbursement contract where the contractor is reimbursed for allowable costs but receives no fee or profit. This structure is typically used when the contractor is a non-profit organization or a government-owned entity, like the American Institute in Taiwan, where profit is not an objective. For the government, the primary benefit is that the contractor has no profit motive, potentially leading to lower overall costs compared to fixed-price contracts with profit. However, the risk shifts significantly to the government, as it bears the full financial risk of cost overruns. The government must meticulously monitor and audit costs to ensure they are allowable, allocable, and reasonable, as there is no incentive for the contractor to control costs beyond what is necessary to perform the contract.

What are the potential risks associated with a sole-source, cost-plus contract for international affairs services?

Sole-source, cost-plus contracts, like this one, carry inherent risks. The absence of competition means the government cannot leverage market forces to ensure the best price or most innovative solutions, potentially leading to higher costs than a competed contract. The 'COST NO FEE' structure, while removing profit, still requires the government to reimburse all allowable costs, placing the financial risk of cost overruns squarely on the taxpayer. Without a profit motive, the contractor may have less incentive to aggressively control expenses. Furthermore, the broad 'International Affairs' scope can make it challenging to define clear performance metrics and hold the contractor accountable for specific outcomes, increasing the risk of inefficient resource allocation or unmet objectives.

Can spending on 'International Affairs' be benchmarked against similar contracts or programs to assess value?

Benchmarking spending on 'International Affairs' is inherently difficult due to the broad and often unique nature of the services involved. Unlike standardized goods or services, international affairs activities can encompass a vast array of diplomatic, cultural, security, and development initiatives, often tailored to specific geopolitical contexts. Contracts within this category may involve specialized entities like the American Institute in Taiwan, which have unique operational mandates. While general spending trends within the Department of State or on foreign assistance can be tracked, direct comparisons of specific contract values are challenging without detailed information on the scope, objectives, and performance metrics of each contract. The lack of competition in this specific award further complicates any attempt at a direct value-for-money comparison.

Industry Classification

NAICS: Public Administration › National Security and International Affairs › International Affairs

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Address: 1700 N MOORE ST STE 1700, ARLINGTON, VA, 22209

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

Financial Breakdown

Contract Ceiling: $104,995,984

Exercised Options: $104,995,984

Current Obligation: $104,739,967

Actual Outlays: $0

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SAQMMA12D0101

IDV Type: IDC

Timeline