DoD's $209M Facilities Contract Awarded to Undisclosed Foreign Entities Amidst Full and Open Competition

Contract Overview

Contract Amount: $20,903,700 ($20.9M)

Contractor: Foreign Awardees (undisclosed)

Awarding Agency: Department of Defense

Start Date: 2013-12-31

End Date: 2015-05-18

Contract Duration: 503 days

Daily Burn Rate: $41.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF FACILITIES

Plain-Language Summary

Department of Defense obligated $20.9 million to FOREIGN AWARDEES (UNDISCLOSED) for work described as: IGF::OT::IGF FACILITIES Key points: 1. The contract's significant value raises questions about the vetting process for foreign awardees. 2. Full and open competition suggests a broad market search, but the lack of disclosed foreign entity details is unusual. 3. The fixed-price nature of the contract shifts performance risk to the contractor. 4. The contract duration of over 500 days indicates a substantial project scope. 5. The absence of small business set-aside flags a potential missed opportunity for domestic small business participation.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the undisclosed nature of the foreign awardees and the specific services rendered under 'Commercial and Institutional Building Construction'. Without knowing the exact scope of work and the specific foreign entities involved, a direct comparison to similar contracts or market rates is difficult. The firm fixed-price structure implies that the initial bid was deemed competitive, but the overall value proposition is obscured by the lack of transparency regarding the contractor's identity and location.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that the Department of Defense sought bids from all responsible sources. However, the number of bidders is not specified in the provided data. The fact that the award went to 'FOREIGN AWARDEES (UNDISCLOSED)' suggests that foreign entities were either the sole or primary bidders, or that the competition was structured in a way that favored international participation. This level of competition, while broad in theory, raises concerns about price discovery if the ultimate awardee's cost structure is opaque.

Taxpayer Impact: While full and open competition is generally beneficial for taxpayers by fostering a competitive bidding environment, the lack of transparency regarding the specific foreign awardees makes it difficult to ascertain if the best possible value was achieved. Taxpayers may not have benefited from the full potential of domestic competition.

Public Impact

The primary beneficiaries are likely the undisclosed foreign entities that secured a significant construction contract. The services delivered pertain to commercial and institutional building construction, potentially impacting military infrastructure or facilities. The geographic impact is not specified but would be tied to the location of the construction project within the Department of Defense's purview. Workforce implications could involve the employment of foreign labor for the construction, with limited direct benefit to the U.S. workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of transparency regarding the identity and location of the foreign awardees.
Potential for reduced oversight and accountability due to foreign contractor status.
Uncertainty about the economic benefit to U.S. businesses and workforce.
The 'Commercial and Institutional Building Construction' category is broad and could encompass various risks.

Positive Signals

Awarded under full and open competition, suggesting a potentially competitive pricing environment.
Firm fixed-price contract structure shifts performance risk to the contractor.
The contract duration indicates a significant and potentially impactful project.

Sector Analysis

This contract falls within the broader construction sector, specifically focusing on commercial and institutional buildings. The Department of Defense is a major consumer of construction services, often requiring specialized facilities for military operations. Comparable spending benchmarks would typically involve analyzing other large-scale construction projects awarded by federal agencies, considering factors like project type, location, and complexity. The market for such services is global, but domestic construction firms often compete for these contracts.

Small Business Impact

The data indicates that this contract did not include a small business set-aside (ss: false, sb: false). This suggests that the procurement was not specifically targeted to encourage participation from small businesses. Consequently, there are no direct subcontracting implications for small businesses stemming from a set-aside provision. The absence of such provisions means that small businesses would have had to compete directly with larger, potentially foreign, entities, which can be challenging.

Oversight & Accountability

Oversight mechanisms for this contract would primarily fall under the Department of Defense's contracting and inspection procedures. Accountability measures would be dictated by the terms of the firm fixed-price contract. Transparency is a concern due to the undisclosed nature of the foreign awardees. Inspector General jurisdiction would typically apply to ensure the proper use of funds and prevent fraud, waste, and abuse, though the specifics of oversight for foreign contractors may vary.

Related Government Programs

Department of Defense Facilities Construction
Global Construction Services Contracts
Foreign Military Sales Support
Commercial Building Development

Risk Flags

Lack of transparency regarding awardee identity
Potential for reduced domestic economic benefit
Uncertainty in value assessment due to foreign awardee

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.9 million to FOREIGN AWARDEES (UNDISCLOSED). IGF::OT::IGF FACILITIES

Who is the contractor on this award?

The obligated recipient is FOREIGN AWARDEES (UNDISCLOSED).

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $20.9 million.

What is the period of performance?

Start: 2013-12-31. End: 2015-05-18.

What specific types of commercial and institutional buildings were constructed under this contract?

The provided data categorizes the contract under 'Commercial and Institutional Building Construction' (nd: 236220) but does not specify the exact nature or purpose of the buildings. This could range from administrative offices, barracks, training facilities, or support structures. Further investigation into the contract's statement of work or associated documentation would be required to determine the precise scope of construction activities undertaken. Understanding the specific building types is crucial for assessing the contract's alignment with military needs and for benchmarking its value against similar projects.

What is the rationale behind awarding a significant construction contract to undisclosed foreign entities under full and open competition?

Awarding a contract to undisclosed foreign entities under full and open competition suggests that these entities were deemed the most capable or cost-effective bidders through the established procurement process. The 'full and open' designation implies that all responsible sources, including foreign ones, were permitted to bid. The lack of disclosure regarding the specific foreign awardees is unusual and could stem from various factors, such as national security considerations, complex international partnerships, or simply a lack of requirement to publicly name foreign prime contractors in certain contexts. However, it significantly hinders transparency and the ability to assess the true competitive landscape and value for taxpayers.

How does the firm fixed-price contract type mitigate or exacerbate risks for the Department of Defense?

A firm fixed-price (FFP) contract is designed to shift the majority of performance risk from the buyer (Department of Defense) to the seller (the contractor). Under an FFP agreement, the contractor is obligated to complete the work for a predetermined price, regardless of their actual costs. This provides cost certainty for the DoD. However, if the contractor significantly underestimates costs or encounters unforeseen challenges, they bear the financial burden, which could potentially lead to quality compromises or contractor default if the financial strain is too great. Conversely, if the contractor is highly efficient, they retain any cost savings, which is a benefit of competition.

What are the potential implications of awarding this contract to foreign entities on U.S. small businesses and the domestic construction industry?

The award to foreign entities, especially without specific small business set-asides, means that U.S. small businesses likely did not directly benefit from this contract. While the contract was competed broadly, the ultimate awardee's use of domestic subcontractors is not specified. If the foreign awardees primarily utilized their own resources or foreign subcontractors, the positive impact on the U.S. construction workforce and supply chain would be minimal. This highlights a potential missed opportunity for economic stimulus within the U.S. and underscores the importance of considering domestic capacity and small business participation in future procurements.

What oversight mechanisms are typically in place for contracts awarded to foreign entities by the Department of Defense?

Oversight for contracts awarded to foreign entities by the DoD typically involves a combination of contract administration, performance monitoring, and potentially security cooperation frameworks. Depending on the location of performance and the nature of the work, U.S. personnel may be involved in site inspections and progress reviews. Payment processes would be scrutinized, and compliance with contract terms rigorously enforced. However, the effectiveness of oversight can be complicated by jurisdictional issues, logistical challenges, and differing regulatory environments. The DoD's Inspector General would likely retain audit and investigative authority.

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

Solicitation ID: W5J9LE13R0015

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1800 F ST NW, WASHINGTON, DC, 20405

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

Financial Breakdown

Contract Ceiling: $20,903,700

Exercised Options: $20,903,700

Current Obligation: $20,903,700

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline