State Department awards $17.6M for professional services in Iraq, raising questions about competition and value

Contract Overview

Contract Amount: $17,623,505 ($17.6M)

Contractor: Alutiiq Commercial Enterprises LLC

Awarding Agency: Department of State

Start Date: 2017-04-01

End Date: 2023-09-30

Contract Duration: 2,373 days

Daily Burn Rate: $7.4K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: LABOR HOURS

Sector: Other

Official Description: IGF::OT::IGF AWARD OF CONTRACT FOR PROFESSIONAL SERVICES IN IRAQ

Plain-Language Summary

Department of State obligated $17.6 million to ALUTIIQ COMMERCIAL ENTERPRISES LLC for work described as: IGF::OT::IGF AWARD OF CONTRACT FOR PROFESSIONAL SERVICES IN IRAQ Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. Significant contract duration of nearly 4 years suggests a long-term need for these services. 3. The administrative management and general management consulting services category is broad, requiring clarity on specific deliverables. 4. Lack of competition raises concerns about whether the government secured the best possible value. 5. The contract's value, while substantial, needs benchmarking against similar services in complex environments. 6. Performance context is limited, making it difficult to assess the effectiveness of services provided.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without more specific details on the services rendered and comparable contracts. The $17.6 million award over nearly four years, with a reported base contract value of $7.4 million, suggests a significant investment. However, the absence of competitive bidding means there's no direct market comparison to ascertain if the pricing is optimal. The 'Labor Hours' contract type can sometimes lead to cost overruns if not managed meticulously, further complicating a value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. This typically occurs when only one vendor is capable of providing the required services, or in situations deemed urgent or critical. The lack of competition means that multiple potential vendors were not evaluated, and the government did not benefit from a bidding process that could drive down prices and encourage innovation. This approach limits the government's ability to ensure it is receiving the most cost-effective solution available in the market.

Taxpayer Impact: For taxpayers, a sole-source award means there is a higher risk of paying a premium for services due to the absence of competitive pressure. Without competing offers, it is harder to verify that the price paid reflects fair market value.

Public Impact

The primary beneficiaries are likely the Department of State personnel and operations in Iraq requiring administrative and management support. Services delivered are expected to include general management consulting and administrative support, crucial for the functioning of diplomatic or operational missions. The geographic impact is focused on Iraq, supporting U.S. government activities within that region. Workforce implications may include the employment of personnel by Alutiiq Commercial Enterprises LLC to fulfill the contract requirements in Iraq.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially leading to higher costs.
Lack of detailed performance metrics makes it difficult to assess contractor effectiveness.
The broad nature of 'Administrative Management and General Management Consulting Services' could lead to scope creep or unclear deliverables.
Contract duration of nearly four years requires robust oversight to ensure continued value and relevance.

Positive Signals

Alutiiq Commercial Enterprises LLC is a known entity, suggesting some level of established capability.
The contract addresses a specific need for professional services in a complex operational environment.
The award is a definitive contract, implying a commitment to a defined scope of work.

Sector Analysis

The contract falls within the professional services sector, specifically administrative and management consulting. This sector is characterized by a wide range of service providers, from large corporations to specialized small businesses. The market size for government consulting services is substantial, with agencies frequently outsourcing expertise for operational support, strategic planning, and administrative functions. This contract appears to support the Department of State's operations in a challenging geopolitical region, a common area for such service procurements.

Small Business Impact

This contract was not awarded to a small business, nor does it appear to have a specific small business set-aside component. The prime contractor, Alutiiq Commercial Enterprises LLC, is a large business. There is no information provided regarding subcontracting plans or requirements for small business participation. Therefore, this award does not directly contribute to the small business contracting goals of the government and may not offer subcontracting opportunities for small businesses.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of State's contracting officers and program managers. Given the location of services in Iraq, there may also be oversight from the Special Inspector General for Afghanistan Reconstruction (SIGAR) or other relevant oversight bodies if the services overlap with their jurisdiction, though SIGAR's mandate is specific. Transparency is limited due to the sole-source nature and lack of publicly available performance reports. Accountability would be managed through contract clauses, performance reviews, and potential remedies for non-performance.

Related Government Programs

Department of State operational support contracts
Professional services contracts in conflict zones
Administrative and Management Consulting Services contracts

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for cost overruns with 'Labor Hours' contract type
Broad service category requires clear performance metrics

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $17.6 million to ALUTIIQ COMMERCIAL ENTERPRISES LLC. IGF::OT::IGF AWARD OF CONTRACT FOR PROFESSIONAL SERVICES IN IRAQ

Who is the contractor on this award?

The obligated recipient is ALUTIIQ COMMERCIAL ENTERPRISES LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $17.6 million.

What is the period of performance?

Start: 2017-04-01. End: 2023-09-30.

What specific tasks and deliverables were included in this $17.6 million contract for professional services in Iraq?

The provided data indicates the contract is for 'Administrative Management and General Management Consulting Services' (NAICS code 541611) awarded to Alutiiq Commercial Enterprises LLC by the Department of State. However, the specific tasks and detailed deliverables are not publicly available in the summary data. Contracts of this nature typically involve providing expertise to improve organizational efficiency, strategic planning, operational support, and administrative functions. Given the location in Iraq, these services could range from logistical support management to advising on local operational procedures or supporting diplomatic missions. Without access to the full contract statement of work, a precise breakdown of services is not possible.

How does the $17.6 million contract value compare to similar professional services contracts awarded by the Department of State in Iraq or similar regions?

Direct comparison of this $17.6 million contract value is difficult without knowing the precise scope of services and duration. However, professional services contracts for government operations in complex environments like Iraq can range widely. Contracts for logistical support, security consulting, and administrative management in such regions often run into tens or even hundreds of millions of dollars over several years. The Department of State, like other agencies operating in high-risk areas, frequently procures extensive support services. The value of this contract appears substantial but not necessarily outside the norm for supporting significant government operations in a challenging geopolitical setting. Further analysis would require benchmarking against contracts with identical or highly similar service descriptions and geographic focus.

What are the key risks associated with a sole-source award of this magnitude and duration?

A sole-source award of this magnitude ($17.6 million over nearly four years) carries several key risks. Primarily, the absence of competition means the government may not have secured the best possible price, potentially leading to overpayment. There's also a risk that the chosen contractor may not be the most innovative or efficient provider available, as there was no market pressure to demonstrate superior capabilities. Furthermore, without a competitive process, the government has less assurance that the contractor's proposed approach is the most effective for achieving the desired outcomes. The long duration increases the risk of the contract becoming outdated or misaligned with evolving needs if not actively managed and potentially re-competed or modified.

What is the track record of Alutiiq Commercial Enterprises LLC in performing similar government contracts, particularly in challenging environments?

Alutiiq Commercial Enterprises LLC has a history of performing government contracts, including those with the Department of State and other federal agencies. Information available suggests they have experience in providing various support services, potentially including logistics, base operations, and professional services, often in complex or overseas locations. However, a detailed assessment of their track record specifically for 'Administrative Management and General Management Consulting Services' in Iraq would require a deeper dive into contract performance reports, past performance evaluations, and any documented issues or successes on previous engagements. Without specific performance data tied to this contract or very similar ones, it's difficult to definitively assess their suitability and past success in this precise role.

How does the 'Labor Hours' contract type (PT) influence cost control and potential for overruns in this contract?

The 'Labor Hours' contract type (PT) means that the contractor is reimbursed for the direct labor hours expended at specified fixed hourly rates, plus the cost of materials and other direct costs. This type of contract is often used when the extent or duration of the work cannot be determined in advance. While it provides flexibility, it also shifts a significant portion of the cost risk to the government. If the contractor's labor hours are not efficiently managed, or if the project takes longer than anticipated, costs can escalate rapidly. Effective oversight, including monitoring labor hours, ensuring productivity, and managing scope, is crucial to prevent cost overruns and ensure value for money under a Labor Hours contract.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Administrative Management and General Management Consulting Services

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

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: SAQMMA17R0033

Offers Received: 1

Pricing Type: LABOR HOURS (Z)

Evaluated Preference: NONE

Contractor Details

Address: 3909 ARCTIC BLVD STE 500, ANCHORAGE, AK, 99503

Business Categories: 8(a) Program Participant, Alaskan Native Corporation Owned Firm, Category Business, Corporate Entity Tax Exempt, Limited Liability Corporation, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Tribally Owned Firm, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $18,685,887

Exercised Options: $18,685,887

Current Obligation: $17,623,505

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline