Department of Defense awards $14.8M contract for Jeddah school construction, facing limited competition
Contract Overview
Contract Amount: $14,798,912 ($14.8M)
Contractor: AL Arrab Contracting CO. Ltd
Awarding Agency: Department of Defense
Start Date: 2006-01-21
End Date: 2012-08-31
Contract Duration: 2,414 days
Daily Burn Rate: $6.1K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Construction
Official Description: CONSTRUCTION OF DEPENDENT SCHOOLS IN JEDDAH, KINGDOM OF SAUDI ARABIA
Plain-Language Summary
Department of Defense obligated $14.8 million to AL ARRAB CONTRACTING CO. LTD for work described as: CONSTRUCTION OF DEPENDENT SCHOOLS IN JEDDAH, KINGDOM OF SAUDI ARABIA Key points: 1. Contract value of $14.8 million for construction services. 2. Awarded as a definitive contract with a firm fixed price. 3. Project duration spanned over 2400 days. 4. Contractor is AL ARRAB CONTRACTING CO. LTD. 5. Construction falls under Commercial and Institutional Building Construction NAICS code. 6. No small business set-aside was utilized. 7. Limited competition was a factor in the award.
Value Assessment
Rating: fair
The contract value of $14.8 million for the construction of dependent schools in Jeddah, Saudi Arabia, appears substantial. Without specific benchmarks for similar international construction projects by the Department of Defense, a precise value-for-money assessment is challenging. The firm fixed-price structure suggests cost certainty for the government, but the long duration of the project (over 2400 days) could introduce risks related to inflation and material cost fluctuations that are borne by the contractor. Further analysis would require comparison with similar overseas construction projects.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was awarded under 'NOT AVAILABLE FOR COMPETITION,' indicating a limited competitive environment. This suggests that only one or a very small number of bidders were considered or able to participate. The reasons for this limitation are not detailed but could stem from specialized requirements, geographic location, or existing relationships. A limited competition environment generally leads to less price discovery and potentially higher costs for the government compared to full and open competition.
Taxpayer Impact: The limited competition for this contract means taxpayers may not have benefited from the most competitive pricing that could have been achieved through a broader bidding process. This could translate to a higher overall expenditure for the construction services provided.
Public Impact
Benefits military families and their dependents by providing educational facilities. Services delivered include the construction of school buildings. Geographic impact is focused on Jeddah, Kingdom of Saudi Arabia. Workforce implications include employment for construction labor and related trades during the project's execution.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition may have resulted in a higher price than if more bidders had participated.
- The extended project duration (over 6 years) increases the risk of cost overruns or delays, even with a fixed-price contract, due to unforeseen circumstances.
- Lack of transparency regarding the reasons for limited competition makes it difficult to assess if the government received the best possible value.
- The contract was awarded to a single entity, AL ARRAB CONTRACTING CO. LTD, without clear indication of performance history or vetting in this specific context.
Positive Signals
- The contract was awarded as a Firm Fixed Price, providing cost certainty to the government.
- The project was completed, indicating successful delivery of the construction services.
- The Department of Defense managed the contract, implying established oversight processes for overseas construction.
Sector Analysis
This contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the broader construction industry. The Department of Defense frequently engages in construction projects globally to support military operations and personnel. Benchmarking this specific contract's value against other overseas military construction projects would provide better context, but the $14.8 million figure is a substantial investment for a school facility. The market for such international construction is often specialized, involving companies with experience in foreign contracting and logistics.
Small Business Impact
The contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. This means the primary contract was awarded to a larger entity, and the direct benefits to the small business ecosystem are likely minimal unless the prime contractor voluntarily engaged small businesses for specific tasks or supplies.
Oversight & Accountability
Oversight for this contract would have been managed by the Department of Defense, likely through its contracting and engineering divisions responsible for overseas construction projects. Accountability measures would typically involve contract milestones, quality inspections, and adherence to the firm fixed-price agreement. Transparency regarding the award process is limited due to the 'NOT AVAILABLE FOR COMPETITION' status. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected during the contract's lifecycle.
Related Government Programs
- Department of Defense Overseas Construction
- Military Family Housing Construction
- International Construction Contracts
- Educational Facility Construction
Risk Flags
- Limited Competition
- Long Contract Duration
- Overseas Construction
Tags
construction, department-of-defense, department-of-the-army, definitive-contract, firm-fixed-price, limited-competition, international, school-construction, commercial-and-institutional-building-construction, saudi-arabia
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $14.8 million to AL ARRAB CONTRACTING CO. LTD. CONSTRUCTION OF DEPENDENT SCHOOLS IN JEDDAH, KINGDOM OF SAUDI ARABIA
Who is the contractor on this award?
The obligated recipient is AL ARRAB CONTRACTING CO. LTD.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $14.8 million.
What is the period of performance?
Start: 2006-01-21. End: 2012-08-31.
What was the specific justification for awarding this contract as 'NOT AVAILABLE FOR COMPETITION'?
The provided data indicates the contract was 'NOT AVAILABLE FOR COMPETITION.' This designation typically implies that only one responsible source was available or that the solicitation was issued under circumstances where full and open competition was not feasible or practical. Common reasons include urgent and compelling needs, specific capabilities possessed by only one contractor, or situations where national security concerns restrict the pool of potential bidders. Without further documentation from the Department of Defense, the precise justification remains unknown. This lack of transparency limits the ability to assess whether the government truly obtained the best value under the circumstances.
How does the $14.8 million cost compare to similar overseas school construction projects by the Department of Defense?
A direct comparison of the $14.8 million cost for constructing dependent schools in Jeddah, Saudi Arabia, to similar overseas projects by the Department of Defense is challenging without access to a comprehensive database of comparable contracts. Factors such as location, size, specific educational requirements (e.g., number of classrooms, specialized labs), prevailing labor and material costs in the region, and the overall economic climate at the time of the award significantly influence project costs. However, $14.8 million represents a substantial investment for a single educational facility, suggesting it was a significant undertaking, potentially involving multiple buildings or extensive infrastructure.
What were the primary risks associated with the long contract duration (2414 days)?
The contract duration of 2414 days (approximately 6.6 years) presented several inherent risks, even with a Firm Fixed Price (FFP) award. For the government, the primary risk was the potential for the contractor to become financially strained or go out of business over such a long period, leading to project delays or termination. For the contractor, the risks included significant exposure to inflation in material and labor costs, currency fluctuations (especially in an international context), and potential changes in regulatory requirements or site conditions over the extended timeline. While FFP aims to cap government cost, unforeseen issues could still lead to change orders or disputes, impacting the overall project timeline and final expenditure.
What is the track record of AL ARRAB CONTRACTING CO. LTD with the Department of Defense?
The provided data identifies AL ARRAB CONTRACTING CO. LTD as the contractor for this specific project. However, it does not offer details about their broader track record with the Department of Defense or other federal agencies. To assess their performance history, one would need to consult federal procurement databases (like SAM.gov or FPDS) for other contracts awarded to this company, examining factors such as past performance ratings, contract modifications, and any history of disputes or terminations. Without this additional information, it's difficult to gauge their reliability and experience on similar projects.
Were there any performance issues or contract disputes during the execution of this project?
The provided data does not contain information regarding performance issues or contract disputes related to the 'CONSTRUCTION OF DEPENDENT SCHOOLS IN JEDDAH, KINGDOM OF SAUDI ARABIA' contract. Typically, such details would be found in contract modification histories, performance review reports, or legal filings associated with the contract. The successful completion of the project by the specified end date (August 31, 2012) might suggest that major performance issues were avoided or resolved, but it does not preclude the possibility of minor disputes or challenges encountered during the lengthy construction period.
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: NOT AVAILABLE FOR COMPETITION
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: OROBA STREET, RIYADH
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $14,798,912
Exercised Options: $14,798,912
Current Obligation: $14,798,912
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2006-01-21
Current End Date: 2012-08-31
Potential End Date: 2012-08-31 00:00:00
Last Modified: 2021-08-18
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