DoD's $30M Electrical Distribution System Contract Awarded to Foreign Entity Raises Value Questions

Contract Overview

Contract Amount: $29,984,656 ($30.0M)

Contractor: Miscellaneous Foreign Awardees

Awarding Agency: Department of Defense

Start Date: 2009-09-14

End Date: 2013-03-05

Contract Duration: 1,268 days

Daily Burn Rate: $23.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 8

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: ELECTRICAL DISTRIBUTION SYSTEM

Plain-Language Summary

Department of Defense obligated $30.0 million to MISCELLANEOUS FOREIGN AWARDEES for work described as: ELECTRICAL DISTRIBUTION SYSTEM Key points: 1. The contract's value proposition is unclear given the significant award to a foreign entity. 2. Competition dynamics show a full and open approach, but the ultimate awardee warrants scrutiny. 3. Risk indicators are elevated due to the foreign awardee and the contract's duration. 4. Performance context is limited without specific delivery details or quality metrics. 5. The contract falls within the construction sector, specifically water and sewer infrastructure. 6. The lack of small business involvement is noted, with no set-aside or subcontracting plans evident.

Value Assessment

Rating: questionable

Benchmarking the value of this $30 million contract is challenging without specific performance data or comparable domestic project costs. Awarding a significant infrastructure contract to a miscellaneous foreign awardee raises questions about cost-effectiveness and potential for domestic economic benefit. Further analysis would be needed to determine if the pricing reflects fair market value compared to similar projects executed by domestic firms.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely considered. However, the fact that the award went to a 'miscellaneous foreign awardee' suggests that either domestic capabilities were not competitive or that foreign entities offered a significantly more attractive proposal. The level of competition is positive, but the outcome warrants further investigation into the bidding process.

Taxpayer Impact: While full and open competition is generally beneficial for taxpayers by fostering competitive pricing, the award to a foreign entity may limit direct economic benefits to the U.S. economy, such as job creation or investment in domestic industries.

Public Impact

The primary beneficiaries are likely the foreign entity awarded the contract and potentially the Department of Defense through the provision of electrical distribution system services. The services delivered include the construction and maintenance of electrical distribution systems, crucial for military base operations. The geographic impact is specific to the location of the Department of the Army facility where the electrical distribution system is being upgraded or maintained. Workforce implications are unclear, but awarding to a foreign entity may mean limited direct job creation within the U.S. for this specific contract.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Award to a foreign entity may reduce domestic economic impact and job creation.
Lack of transparency on specific performance metrics makes value assessment difficult.
The contract duration of over three years could introduce unforeseen risks and cost overruns.
Limited information on the contractor's specific experience with U.S. military infrastructure.

Positive Signals

Awarded under full and open competition, suggesting a potentially competitive bidding process.
The contract addresses a critical infrastructure need for the Department of the Army.
The firm fixed-price contract type can provide cost certainty if managed effectively.

Sector Analysis

This contract falls within the construction sector, specifically related to utility infrastructure. The North American Industry Classification System (NAICS) code 237110 covers 'Water and Sewer Line and Related Structures Construction,' which often includes associated electrical distribution components. The market for such infrastructure projects is substantial, driven by ongoing needs for modernization and maintenance of essential services for government facilities and civilian populations.

Small Business Impact

There is no indication that this contract included a small business set-aside. The award to a 'miscellaneous foreign awardee' further suggests that small businesses, particularly domestic ones, were not primary recipients of this prime contract. Subcontracting opportunities for U.S. small businesses are not specified and may be limited if the prime contractor utilizes primarily foreign resources.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Accountability measures would be defined in the contract terms and conditions, including performance standards and payment schedules. Transparency is dependent on the agency's reporting practices and the availability of contract data, which can be limited for foreign awards.

Related Government Programs

Department of Defense Infrastructure Projects
Military Base Construction and Maintenance
Electrical Utility Infrastructure Contracts
Foreign Military Sales Support (indirectly)
Federal Construction Contracts

Risk Flags

Awardee Nationality
Lack of Specific Contractor Identification
Limited Performance Data

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $30.0 million to MISCELLANEOUS FOREIGN AWARDEES. ELECTRICAL DISTRIBUTION SYSTEM

Who is the contractor on this award?

The obligated recipient is MISCELLANEOUS FOREIGN AWARDEES.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $30.0 million.

What is the period of performance?

Start: 2009-09-14. End: 2013-03-05.

What is the specific nature of the 'electrical distribution system' work performed under this contract?

The contract data indicates the North American Industry Classification System (NAICS) code is 237110, which pertains to 'Water and Sewer Line and Related Structures Construction.' While this code primarily covers water and sewer infrastructure, electrical distribution systems are often integral components of such projects, especially on military installations. This could involve the installation, repair, or upgrade of power lines, substations, transformers, and related control systems necessary for the functioning of water and sewer facilities or broader base infrastructure. Without more specific contract details or performance reports, the exact scope remains generalized under the broad category of utility infrastructure construction.

What is the track record of 'Miscellaneous Foreign Awardees' in executing similar federal contracts?

The designation 'Miscellaneous Foreign Awardees' is broad and lacks specificity regarding the contractor's identity, nationality, or prior performance history. This makes it difficult to assess their track record directly. Federal procurement databases often categorize awardees by their legal entity and location. A 'miscellaneous foreign awardee' might encompass a wide range of entities, from established international corporations to smaller, less-known foreign firms. To evaluate their suitability, one would need to identify the specific entity and then research their past performance on federal contracts, looking for indicators of successful project completion, adherence to budget and schedule, and overall quality of work. The lack of readily available specific performance data for such a broad category presents a challenge for thorough analysis.

How does the $30 million contract value compare to similar domestic electrical distribution system projects?

Directly comparing the $30 million contract value to similar domestic projects is challenging without detailed project specifications, scope of work, and geographic location. However, federal contracts for electrical distribution systems on military bases can range significantly in cost depending on the size of the facility, the complexity of the existing infrastructure, and the scope of upgrades or new installations. Projects involving extensive underground work, high-voltage systems, or integration with existing complex networks tend to be more costly. Generally, a $30 million contract for such a system would be considered a substantial award. To assess value for money, a detailed cost breakdown, comparison with bids from domestic contractors (if available), and analysis of the specific technical requirements would be necessary.

What are the potential risks associated with awarding a significant infrastructure contract to a foreign entity?

Awarding a significant infrastructure contract to a foreign entity can introduce several risks. These include potential challenges in oversight and communication due to different time zones, languages, and regulatory environments. There may also be risks related to supply chain security, intellectual property protection, and ensuring compliance with U.S. labor and environmental standards. Furthermore, from an economic perspective, awarding contracts to foreign entities may result in less direct benefit to the U.S. economy in terms of job creation, material sourcing, and tax revenue compared to awarding to domestic firms. Security risks, such as potential foreign government influence or espionage, could also be a concern depending on the nature of the infrastructure and the awardee's home country.

What is the historical spending pattern for electrical distribution systems by the Department of the Army?

Historical spending patterns for electrical distribution systems by the Department of the Army are likely substantial, given the vast network of bases and facilities requiring reliable power infrastructure. Analyzing past contracts would reveal trends in contract values, awardees (domestic vs. foreign), contract types (e.g., firm-fixed-price, cost-plus), and the duration of these projects. This contract, valued at approximately $30 million over a period of roughly 3.5 years (from September 2009 to March 2013), appears to be a significant, multi-year investment. Understanding historical spending can help benchmark current contract values, identify recurring needs, and assess the effectiveness of past procurement strategies in ensuring cost-efficiency and timely delivery of critical infrastructure upgrades.

Industry Classification

NAICS: Construction › Utility System Construction › Water and Sewer Line and Related Structures Construction

Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCT NONBUILDING FACILITIES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W912ER09R0046

Offers Received: 8

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2011 CRYSTAL DR STE 911, ARLINGTON, VA, 22202

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

Financial Breakdown

Contract Ceiling: $29,984,656

Exercised Options: $29,984,656

Current Obligation: $29,984,656

Contract Characteristics

Cost or Pricing Data: NO

Timeline