State Department awards $14M for new office building, completed in 2010

Contract Overview

Contract Amount: $14,041,644 ($14.0M)

Contractor: A. Arenson Ltd.

Awarding Agency: Department of State

Start Date: 2006-09-13

End Date: 2010-12-31

Contract Duration: 1,570 days

Daily Burn Rate: $8.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: NEW OFFICE BUILDING

Plain-Language Summary

Department of State obligated $14.0 million to A. ARENSON LTD. for work described as: NEW OFFICE BUILDING Key points: 1. Contract value appears reasonable for a new office building construction project of this scale. 2. Full and open competition suggests a competitive bidding process was utilized. 3. Contract duration of over four years indicates a significant construction undertaking. 4. The project falls under 'Other Foundation, Structure, and Building Exterior Contractors' within the construction sector. 5. Fixed-price contract type likely provided cost certainty for the government. 6. No small business set-aside was utilized, suggesting the primary contractor was not a small business.

Value Assessment

Rating: good

The contract value of approximately $14 million for a new office building is within a reasonable range for such projects, considering the scope and duration. Benchmarking against similar federal construction projects of comparable size and complexity would provide a more precise value-for-money assessment. The firm fixed-price nature of the award suggests that the contractor assumed the majority of the cost risk, which can be beneficial for the government if managed effectively.

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 bids. With three bidders participating, the competition level appears moderate. This suggests that while multiple companies were interested, the market might not have been saturated with potential offerors. The presence of multiple bids generally supports price discovery and can lead to more competitive pricing.

Taxpayer Impact: A competitive bidding process helps ensure that taxpayer funds are used efficiently by driving down costs through market forces. The existence of three bidders suggests a reasonable level of competition, which is favorable for taxpayers.

Public Impact

The primary beneficiaries of this contract are the Department of State personnel who will occupy the new office building. The service delivered is the construction of a new office facility, providing essential infrastructure for government operations. The geographic impact is localized to the site where the new office building was constructed. Workforce implications include employment opportunities for construction workers, engineers, architects, and project managers during the construction phase.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen issues arose during the extended construction period, despite the fixed-price nature.
Risk of delays impacting the operational readiness of the Department of State if construction timelines were not met.
Ensuring the quality of construction meets long-term durability and safety standards for a federal facility.

Positive Signals

Firm fixed-price contract structure provides budget certainty for the government.
Full and open competition likely resulted in a competitive bid and a fair market price.
The contract was awarded to A. Arenson Ltd., a known entity in construction, suggesting a degree of contractor reliability.

Sector Analysis

This contract falls within the construction sector, specifically focusing on building exterior contractors and foundations. The federal government is a significant consumer of construction services for administrative buildings, embassies, and other facilities worldwide. The market for such services is competitive, with numerous firms capable of undertaking large-scale projects. This particular contract represents a substantial investment in infrastructure for a key federal agency.

Small Business Impact

The contract was not set aside for small businesses, and the data does not indicate any subcontracting requirements for small businesses. This suggests that the primary contract was awarded to a larger entity, and the direct impact on the small business ecosystem through this specific award is likely minimal unless the prime contractor actively engages small businesses for subcontracting opportunities.

Oversight & Accountability

Oversight for federal construction projects typically involves a combination of agency contracting officers, project managers, and potentially the Government Accountability Office (GAO) or Inspectors General for significant issues. Transparency is generally maintained through contract award databases like FPDS. Accountability is enforced through contract terms, performance reviews, and potential penalties for non-compliance. The firm fixed-price nature shifts some accountability for cost control to the contractor.

Related Government Programs

Federal Building Construction
Department of State Facilities Management
Government Office Space Acquisition
Public Building Service Contracts

Risk Flags

Long contract duration may increase exposure to market fluctuations.
Fixed-price contracts can sometimes lead to scope creep if not managed tightly.
Construction projects inherently carry risks of delays and cost overruns.

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $14.0 million to A. ARENSON LTD.. NEW OFFICE BUILDING

Who is the contractor on this award?

The obligated recipient is A. ARENSON LTD..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $14.0 million.

What is the period of performance?

Start: 2006-09-13. End: 2010-12-31.

What was the track record of A. Arenson Ltd. with federal contracts prior to this award?

Information regarding A. Arenson Ltd.'s specific track record with federal contracts prior to this award is not detailed in the provided data. However, the award of a $14 million contract by the Department of State suggests a level of established capability and experience deemed sufficient by the agency. A deeper dive into federal procurement databases would be necessary to analyze their historical performance, past contract values, types of services rendered, and any reported issues or successes on previous government engagements. This would provide a more comprehensive understanding of their reliability and expertise in executing large-scale construction projects for federal clients.

How does the final cost compare to the initial estimated cost for this project?

The provided data only includes the awarded contract value of $14,041,644.39. It does not contain information about the initial estimated cost for the new office building project. Therefore, a direct comparison between the final cost and the initial estimate cannot be made from this dataset. To assess potential cost variances, one would need access to the project's original budget or cost estimates established by the Department of State during the planning phase. Such information would help determine if the project was completed within budget or if there were significant deviations.

What were the primary risks identified during the bidding process for this contract?

The provided data does not explicitly detail the risks identified during the bidding process for this specific contract. However, for a large-scale construction project like a new office building, common risks typically include potential construction delays, unforeseen site conditions, material cost fluctuations (though mitigated by fixed-price), labor availability, and ensuring compliance with stringent federal building codes and security requirements. The firm fixed-price contract structure suggests the government aimed to transfer significant cost-related risks to the contractor, A. Arenson Ltd. The presence of three bidders indicates some level of market interest, but the specific risk assessments made by each bidder would not be publicly available without further investigation.

What is the expected operational effectiveness or benefit derived from this new office building?

The primary benefit of this new office building is to provide modern, functional, and secure workspace for Department of State personnel. This can lead to improved operational effectiveness by consolidating offices, enhancing collaboration, upgrading outdated facilities, and potentially increasing energy efficiency. A new building can also improve employee morale and productivity. While the data doesn't quantify specific improvements, the investment suggests a strategic need to enhance the Department's infrastructure to support its mission-critical functions and diplomatic activities effectively.

How has the Department of State's spending on similar construction projects evolved over time?

The provided data focuses on a single contract awarded in 2006. To understand the evolution of the Department of State's spending on similar construction projects, a broader analysis of historical contract data would be required. This would involve examining spending trends, the number and value of construction contracts awarded annually, and the types of facilities being built or renovated over a significant period. Such an analysis could reveal patterns related to infrastructure investment cycles, agency growth, or shifts in construction priorities. Without this broader dataset, it's impossible to comment on the evolution of their spending in this category.

Were there any performance issues or disputes reported during the contract's execution?

The provided data summary does not include information on performance issues or disputes that may have arisen during the execution of this contract. Contract performance data, including any claims, disputes, or contractor performance evaluations, is typically maintained by the contracting agency and may be accessible through specific government reporting systems or via Freedom of Information Act (FOIA) requests. The fact that the contract was completed and closed out by its end date (December 31, 2010) suggests that it was likely fulfilled to the satisfaction of the Department of State, but this does not preclude the possibility of minor issues or disagreements having been resolved.

Industry Classification

NAICS: Construction › Foundation, Structure, and Building Exterior Contractors › Other Foundation, Structure, and Building Exterior Contractors

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

Address: 5 HASHITA, CAESAREA

Business Categories: Category Business, Foreign Owned, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $14,041,644

Exercised Options: $14,041,644

Current Obligation: $14,041,644

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Timeline