Army Awards $656M Construction Contract to Foreign Entity for Afghan Facilities

Contract Overview

Contract Amount: $11,981,776 ($12.0M)

Contractor: Foreign Awardees (undisclosed)

Awarding Agency: Department of Defense

Start Date: 2005-08-26

End Date: 2008-05-15

Contract Duration: 993 days

Daily Burn Rate: $12.1K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIXED PRICE

Sector: Construction

Official Description: 200512!500229!2100!W912ER!TRANSATLANTIC PROGRAM CENTER !W912ER05C0013 !A!N! !N! ! !20050826!20060929!656107927!656107927!656107927!N!RSEA ENGINEERING CORPORATION !9-13F,207,SUNG CHIANG RD !TAIPEI CITY !TW!10472!00000! !AF!* !* !AFGHANISTA!+000011802337!Y!N!000011802337!Y199!OTHER MISCELLANEOUS BUILDINGS !C2 !CONSTRUCTION !000 !* !237990!E! !3! ! ! ! ! !20200930!B! ! !N!Z!B!U!J!1!001!N!4A!Z!N!A!B!AF!N!L!N! ! ! ! ! !A!A!000!A!B!N! ! ! ! ! ! !0001! !

Plain-Language Summary

Department of Defense obligated $12.0 million to FOREIGN AWARDEES (UNDISCLOSED) for work described as: 200512!500229!2100!W912ER!TRANSATLANTIC PROGRAM CENTER !W912ER05C0013 !A!N! !N! ! !20050826!20060929!656107927!656107927!656107927!N!RSEA ENGINEERING CORPORATION !9-13F,207,SUNG CHIANG RD !TAIPEI CITY !TW!10472!00000! !AF!* !* … Key points: 1. Contract awarded for construction of miscellaneous buildings in Afghanistan. 2. Significant portion of spending directed to a foreign awardee, raising transparency concerns. 3. Fixed-price contract type suggests cost certainty but potential for contractor profit. 4. The sector is Commercial and Institutional Building Construction, a common area for infrastructure projects.

Value Assessment

Rating: questionable

The contract value of $656,107,927 is substantial. Without specific benchmarks for similar construction projects in Afghanistan during that period, a direct pricing assessment is difficult. However, the scale suggests a need for rigorous cost validation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was not available for competition, indicating a limited competition approach. This method can sometimes lead to less favorable pricing for the government compared to full and open competition, as it restricts the pool of potential bidders.

Taxpayer Impact: The significant award to a foreign entity without clear competition raises questions about optimal use of taxpayer funds and potential for inflated costs.

Public Impact

Taxpayer funds are being used for construction in a foreign country, impacting the domestic economy. Lack of transparency regarding the foreign awardee makes it difficult to assess accountability and potential risks. The project's success and impact on the intended beneficiaries in Afghanistan are not detailed. Long contract duration (993 days) suggests a complex and potentially lengthy project lifecycle.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Foreign awardee
Limited transparency on awardee
High contract value

Positive Signals

Fixed-price contract type for cost control

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector. Spending in this sector can vary widely based on geographic location, project complexity, and geopolitical factors. The large value suggests a significant infrastructure undertaking.

Small Business Impact

The data indicates no specific set-aside for small businesses. Given the limited competition and foreign awardee, it is unlikely that small businesses were significantly involved in this contract.

Oversight & Accountability

The limited competition and foreign awardee raise concerns about oversight. Ensuring proper performance, adherence to standards, and financial accountability would require robust monitoring mechanisms by the Department of the Army.

Related Government Programs

Commercial and Institutional Building Construction
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Lack of transparency regarding the foreign awardee.
Limited competition raises concerns about potential overpricing.
Geopolitical risks associated with construction in Afghanistan.
Potential challenges in contract oversight and performance monitoring.
Unclear impact on small business participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.0 million to FOREIGN AWARDEES (UNDISCLOSED). 200512!500229!2100!W912ER!TRANSATLANTIC PROGRAM CENTER !W912ER05C0013 !A!N! !N! ! !20050826!20060929!656107927!656107927!656107927!N!RSEA ENGINEERING CORPORATION !9-13F,207,SUNG CHIANG RD !TAIPEI CITY !TW!10472!00000! !AF!* !* !AFGHANISTA!+000011802337!Y!N!000011802337!Y199!OTHER MISCELLANEOUS BUILDINGS !C2 !CONSTRUCTION !000 !* !237990!E! !3! ! ! ! ! !202

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 $12.0 million.

What is the period of performance?

Start: 2005-08-26. End: 2008-05-15.

What was the justification for limiting competition on this substantial construction contract?

The justification for limiting competition is not provided in the data. Typically, such limitations require specific circumstances, such as the existence of only one responsible source or urgent and compelling needs. Without this information, it's difficult to assess if the government received fair value or if alternative, more competitive approaches were overlooked.

What are the specific risks associated with awarding a large construction contract to a foreign entity without full competition?

Key risks include potential difficulties in oversight and enforcement of contract terms, currency exchange rate fluctuations impacting costs, differing legal and regulatory environments, and challenges in ensuring quality control and adherence to US standards. Furthermore, a lack of transparency can obscure potential conflicts of interest or undue influence.

How effectively did this construction project contribute to the stated or implied mission objectives in Afghanistan?

The provided data does not detail the specific mission objectives or the effectiveness of the completed construction. Assessing the project's contribution would require evaluating whether the facilities built met the intended needs, were utilized as planned, and supported broader strategic goals in Afghanistan.

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: FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $11,817,958

Exercised Options: $15,621

Current Obligation: $11,981,776

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline