DoD awards $168M for Border Roads Segment 3A construction, raising value-for-money questions
Contract Overview
Contract Amount: $16,821,320 ($16.8M)
Contractor: AL Raheeq AL Makhtoom Company
Awarding Agency: Department of Defense
Start Date: 2010-09-24
End Date: 2012-01-10
Contract Duration: 473 days
Daily Burn Rate: $35.6K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: BORDER ROADS SEGMENT 3A-CONSTRUCTION
Plain-Language Summary
Department of Defense obligated $16.8 million to AL RAHEEQ AL MAKHTOOM COMPANY for work described as: BORDER ROADS SEGMENT 3A-CONSTRUCTION Key points: 1. The contract's value-for-money is questionable given the lack of competition and fixed-price nature. 2. Competition dynamics were limited, with the contract awarded on a sole-source basis. 3. Risk indicators include the sole-source award and potential for cost overruns in fixed-price contracts. 4. Performance context is limited due to the lack of publicly available performance metrics. 5. Sector positioning is within the Defense construction sub-sector, focusing on infrastructure development.
Value Assessment
Rating: questionable
The contract's value is difficult to benchmark due to its sole-source nature and the absence of comparable bids. A firm fixed-price contract for construction can sometimes lead to higher initial costs to account for unforeseen risks, which may not be realized. Without competitive bids, it's challenging to ascertain if the awarded price represents a fair market value for the services rendered. The lack of transparency in the pricing structure further complicates a thorough 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 among multiple vendors. This approach is typically used when only one vendor can provide the required goods or services, or in specific emergency situations. The lack of competition limits the government's ability to leverage market forces to achieve the best possible price and terms. It also raises questions about whether alternative solutions or more cost-effective options were adequately explored.
Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. Sole-source awards can reduce the pressure on contractors to offer their most competitive pricing, potentially leading to higher overall expenditure for the government.
Public Impact
The primary beneficiaries are the Department of Defense and potentially military personnel requiring improved logistical routes. The service delivered is the construction of a specific segment of border roads, enhancing infrastructure. The geographic impact is localized to the area of Border Roads Segment 3A. Workforce implications include employment opportunities for construction workers and related support staff.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price discovery and potentially increases cost to taxpayers.
- Fixed-price contract may not reflect true cost efficiencies if risks do not materialize.
- Lack of performance data makes it difficult to assess contractor efficiency and effectiveness.
- Limited competition raises concerns about potential collusion or lack of market research.
Positive Signals
- Firm fixed-price contract provides cost certainty for the government, assuming no change orders.
- Award to a single entity may streamline project management if that entity has unique capabilities.
- Construction completion within the specified duration (473 days) would be a positive signal.
Sector Analysis
This contract falls within the Defense sector's construction sub-category, specifically focusing on infrastructure development. The market for large-scale civil engineering and construction projects for defense purposes is significant, often involving specialized requirements and security considerations. Comparable spending benchmarks are difficult to establish without more specific project details, but infrastructure projects of this scale typically represent substantial investments.
Small Business Impact
There is no indication that this contract involved small business set-asides or subcontracting requirements. The sole-source nature of the award further suggests that opportunities for small businesses to participate as prime contractors were not pursued. This contract does not appear to directly contribute to the small business ecosystem.
Oversight & Accountability
Oversight mechanisms for this contract would typically involve the Department of the Army's contracting officers and potentially the Inspector General's office. Accountability measures would be tied to the contract's performance clauses and the fixed-price agreement. Transparency is limited due to the sole-source nature and the lack of publicly available detailed performance reports.
Related Government Programs
- Department of Defense Infrastructure Projects
- Border Security Construction Contracts
- Army Corps of Engineers Construction Contracts
- Federal Highway Construction Contracts
Risk Flags
- Sole-source award
- Lack of competitive bidding
- Limited performance data
- Potential for cost overruns in fixed-price contracts
Tags
defense, department-of-defense, construction, highway-street-and-bridge-construction, firm-fixed-price, sole-source, infrastructure, border-security, army, large-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $16.8 million to AL RAHEEQ AL MAKHTOOM COMPANY. BORDER ROADS SEGMENT 3A-CONSTRUCTION
Who is the contractor on this award?
The obligated recipient is AL RAHEEQ AL MAKHTOOM COMPANY.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $16.8 million.
What is the period of performance?
Start: 2010-09-24. End: 2012-01-10.
What is the track record of AL RAHEEQ AL MAKHTOOM COMPANY with the Department of Defense?
Information regarding the specific track record of AL RAHEEQ AL MAKHTOOM COMPANY with the Department of Defense is not readily available in the provided data. A comprehensive assessment would require reviewing past performance evaluations, contract history, and any reported issues or successes on previous DoD contracts. Without this data, it's difficult to gauge their experience, reliability, and past performance quality in executing similar projects for the military.
How does the awarded amount compare to similar border road construction projects?
Direct comparison of the $168.2 million award for Border Roads Segment 3A to similar projects is challenging without more specific details about the scope, complexity, and location of comparable contracts. Factors such as terrain, material costs, security requirements, and labor rates can significantly influence project costs. The sole-source nature of this award also complicates benchmarking, as competitive bids often drive prices down. A thorough comparison would necessitate identifying projects with similar engineering requirements and geographical contexts, ideally those awarded through a competitive process.
What are the primary risks associated with this fixed-price construction contract?
The primary risks associated with this firm fixed-price construction contract include potential cost overruns if unforeseen issues arise during construction that necessitate change orders, although the fixed-price nature aims to mitigate this. Contractor performance risk is also present; if the contractor fails to meet quality standards or deadlines, it could lead to delays and additional costs for the government to rectify. Furthermore, the sole-source award introduces a risk that the government did not secure the most competitive pricing available in the market, potentially leading to a lower value for money.
What is the expected effectiveness of this road segment for border operations?
The expected effectiveness of Border Roads Segment 3A for border operations hinges on its specific design and intended use, which are not detailed in the provided data. Typically, such infrastructure improvements aim to enhance logistical support, facilitate troop movement, improve surveillance capabilities, and potentially support border patrol activities. The actual effectiveness would be measured by its contribution to operational efficiency, security posture, and the ability to sustain military or border control operations in the region. Without specific operational goals, assessing effectiveness remains speculative.
What have been historical spending patterns for border road construction by the Department of Defense?
Historical spending patterns for border road construction by the Department of Defense are not detailed in the provided data. To analyze this, one would need to examine past contracts awarded for similar infrastructure projects along borders, potentially looking at trends in contract values, types of services procured, and the agencies or branches involved. Understanding historical spending could reveal patterns of investment, the typical scale of such projects, and whether this $168.2 million award represents a significant deviation from past expenditures.
Were there any justifications provided for the sole-source award?
The provided data indicates the contract was awarded under 'NOT AVAILABLE FOR COMPETITION,' which is a common designation for sole-source procurements. However, the specific justifications for why this contract was deemed not available for competition are not included. Typically, sole-source justifications might include reasons such as unique capabilities of the contractor, urgent and compelling needs, or situations where only one responsible source can fulfill the requirement. A formal justification document would normally be required and potentially made public under certain regulations.
Industry Classification
NAICS: Construction › Highway, Street, and Bridge Construction › Highway, Street, and Bridge Construction
Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCT NONBUILDING FACILITIES
Competition & Pricing
Extent Competed: NOT AVAILABLE FOR COMPETITION
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: W5K9ZM10R0006
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: EMMAR TOWERS 6TH CIRCLE, AMMAN
Business Categories: Category Business, Foreign Owned, International Organization, Not Designated a Small Business, Special Designations
Financial Breakdown
Contract Ceiling: $16,821,320
Exercised Options: $16,821,320
Current Obligation: $16,821,320
Contract Characteristics
Cost or Pricing Data: NO
Timeline
Start Date: 2010-09-24
Current End Date: 2012-01-10
Potential End Date: 2012-01-10 00:00:00
Last Modified: 2014-12-30
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