DoD's $18.6M road construction contract awarded to foreign entities raises questions on value and competition

Contract Overview

Contract Amount: $18,655,691 ($18.7M)

Contractor: Miscellaneous Foreign Awardees

Awarding Agency: Department of Defense

Start Date: 2009-09-23

End Date: 2014-06-30

Contract Duration: 1,741 days

Daily Burn Rate: $10.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 9

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: CONSTRUCT BAF ROADS

Plain-Language Summary

Department of Defense obligated $18.7 million to MISCELLANEOUS FOREIGN AWARDEES for work described as: CONSTRUCT BAF ROADS Key points: 1. The contract's value of $18.6 million for road construction appears significant, warranting scrutiny for cost-effectiveness. 2. Awarding to 'Miscellaneous Foreign Awardees' suggests limited domestic competition and potential geopolitical considerations. 3. The duration of 1741 days (approx. 4.7 years) indicates a long-term commitment, requiring sustained oversight. 4. The firm-fixed-price contract type shifts risk to the contractor, but requires careful scope management. 5. The absence of small business set-asides or participation suggests a lack of focus on supporting smaller domestic firms. 6. The contract's classification under 'Highway, Street, and Bridge Construction' places it within a critical infrastructure sector.

Value Assessment

Rating: questionable

Benchmarking the $18.6 million cost for highway, street, and bridge construction over nearly five years is challenging without specific project details and location. However, awarding to a group identified as 'Miscellaneous Foreign Awardees' raises concerns about whether the most cost-effective options were pursued, especially if domestic firms with relevant expertise were available. The firm-fixed-price nature suggests a defined cost, but the lack of transparency regarding the specific services and the foreign nature of the awardees makes a direct value-for-money assessment difficult. Further analysis would be needed to compare this to similar projects executed by domestic entities or within comparable regions.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition,' indicating that all responsible sources were permitted to submit bids. However, the fact that the award went to 'Miscellaneous Foreign Awardees' suggests that either foreign entities were the most competitive, or there were limitations in domestic contractor participation or awareness of the opportunity. With 9 bidders, the competition level appears moderate, but the nature of the awardees warrants further investigation into the breadth and depth of the actual competition.

Taxpayer Impact: While full and open competition is generally beneficial for taxpayers, awarding to foreign entities may mean that taxpayer funds are not directly benefiting the domestic economy through job creation or investment in U.S. businesses.

Public Impact

The primary beneficiaries are likely the foreign entities that received the contract award, providing them with significant revenue. The services delivered include highway, street, and bridge construction, which are critical infrastructure components. The geographic impact is likely concentrated in the area where the construction projects are being undertaken, potentially overseas given the awardees. Workforce implications could involve foreign labor for the construction, with limited direct benefit to the U.S. workforce unless specific subcontracting or oversight roles are filled domestically.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Award to 'Miscellaneous Foreign Awardees' raises concerns about potential lack of domestic economic benefit and oversight challenges.
Limited transparency on the specific nature of the construction projects and the exact foreign entities involved.
The long contract duration (1741 days) increases the risk of scope creep or unforeseen cost escalations if not managed tightly.
The absence of small business participation suggests a missed opportunity to foster domestic small business growth in infrastructure development.

Positive Signals

The contract was awarded through full and open competition, theoretically ensuring a competitive bidding process.
The firm-fixed-price contract type provides cost certainty to the government, assuming the scope is well-defined.
The Department of the Army's involvement suggests a structured procurement process and established oversight mechanisms.
The contract addresses a critical infrastructure need for highway, street, and bridge construction.

Sector Analysis

The contract falls within the Construction sector, specifically focusing on heavy civil engineering projects like roads and bridges. The U.S. construction market is vast, with significant government spending on infrastructure. This contract, valued at $18.6 million, represents a moderate-sized project within the broader federal construction spending landscape. Comparable spending benchmarks would typically involve analyzing per-mile costs for road construction or per-square-foot costs for bridge elements, adjusted for geographic location and project complexity. The award to foreign entities is less common for domestic infrastructure but can occur for overseas military base construction or specific international aid projects.

Small Business Impact

This contract does not appear to have involved any small business set-asides, as indicated by 'sb': false. The award to 'Miscellaneous Foreign Awardees' further suggests that small businesses, particularly domestic ones, were unlikely to be primary recipients of this contract's value. There is no information provided regarding subcontracting plans, but the nature of the awardees makes significant subcontracting to U.S. small businesses improbable. This contract does not contribute to the small business ecosystem in the U.S.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army, which awarded the contract. As a Department of Defense contract, it is subject to various internal oversight mechanisms, including contract management teams and potentially the Defense Contract Audit Agency (DCAA) for financial audits. Transparency is limited by the 'Miscellaneous Foreign Awardees' designation, making specific oversight actions difficult to ascertain. Inspector General jurisdiction would apply if fraud, waste, or abuse were suspected.

Related Government Programs

Military Construction
Overseas Contingency Operations
Federal Highway Administration Programs
Department of Defense Infrastructure Projects

Risk Flags

Awardee Nationality
Lack of Domestic Economic Benefit
Potential Oversight Challenges
Limited Transparency on Specifics

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.7 million to MISCELLANEOUS FOREIGN AWARDEES. CONSTRUCT BAF ROADS

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 $18.7 million.

What is the period of performance?

Start: 2009-09-23. End: 2014-06-30.

What specific projects were undertaken using this $18.6 million contract, and where were they located?

The provided data indicates the contract was for 'CONSTRUCT BAF ROADS' and falls under 'Highway, Street, and Bridge Construction.' However, the specific location and detailed project scope are not explicitly stated. The designation 'BAF' might refer to Bagram Airfield in Afghanistan, a significant U.S. military base, which would align with the award to foreign entities for construction services in an overseas operational theater. Without explicit confirmation of the location and detailed project descriptions, it is difficult to provide a precise breakdown of the services rendered. Further investigation into contract line item numbers (CLINs) and associated documentation would be necessary to fully understand the scope and geographic deployment of these funds.

How does the cost of this contract compare to similar road construction projects, particularly those undertaken by the DoD?

Comparing the $18.6 million cost requires context regarding the scale and nature of the road construction. If 'BAF' refers to Bagram Airfield, the cost might be benchmarked against similar infrastructure projects in overseas military bases, which often incur higher costs due to logistical challenges, security requirements, and specialized materials. For domestic highway projects, cost per mile can range significantly, from a few million dollars for basic rural roads to tens of millions for complex urban interchanges or bridges. Given the firm-fixed-price nature and the duration, the DoD likely sought competitive bids for a defined scope. However, without specific project details (e.g., miles of road, type of construction, terrain), a direct cost comparison is speculative. The award to foreign entities could also influence cost structures compared to domestic contracts.

What are the risks associated with awarding a significant construction contract to 'Miscellaneous Foreign Awardees'?

Awarding to 'Miscellaneous Foreign Awardees' presents several risks. Firstly, there's a potential lack of familiarity with U.S. contracting regulations, quality standards, and reporting requirements, which could lead to compliance issues or subpar work. Secondly, oversight and accountability can be more challenging, especially if the awardees are located in regions with different legal frameworks or geopolitical sensitivities. Thirdly, there's a risk of reduced transparency regarding the ultimate beneficiaries of the funds and the labor practices employed. Finally, it may represent a missed opportunity to stimulate the domestic economy and support U.S. small businesses, which are often prioritized in federal contracting.

What does the moderate number of bidders (9) signify in the context of 'Full and Open Competition' for this contract?

Nine bidders in a 'Full and Open Competition' generally suggests a reasonable level of interest and market engagement for the contract opportunity. It indicates that the solicitation was likely visible and accessible to a range of potential contractors. However, the significance of this number is tempered by the fact that the award went to 'Miscellaneous Foreign Awardees.' This could imply that while nine bids were received, the most competitive offers came from foreign entities, or that the pool of domestic bidders capable of meeting the specific requirements was smaller than anticipated. It warrants further examination to understand if the competition was truly robust across all capable market segments.

How has the Department of the Army historically approached infrastructure construction contracts, particularly those awarded to foreign entities?

The Department of the Army, as a major component of the DoD, frequently engages in infrastructure construction, especially for overseas bases and installations. Historically, contracts for overseas construction have often involved a mix of U.S. prime contractors (who may then subcontract to foreign firms) and direct awards to foreign construction companies, particularly in regions where local expertise and capacity are prevalent or where logistical advantages exist. The approach often balances cost-effectiveness, security requirements, and the need for rapid deployment of services. The 'Miscellaneous Foreign Awardees' designation suggests a specific procurement strategy, possibly driven by the operational context or a lack of readily available U.S. prime contractors for that particular scope and location.

What are the implications of the contract's end date (June 30, 2014) given its start date (September 23, 2009)?

The contract's duration spanned from September 23, 2009, to June 30, 2014, totaling approximately 4 years and 9 months (1741 days). This extended period indicates a substantial construction project or a series of related projects rather than a short-term task. The end date being in the past means the contract is completed. This long duration necessitates robust project management and oversight to ensure timely completion, adherence to scope, and cost control throughout its lifecycle. For taxpayers, a completed long-term project implies a sustained investment in infrastructure. Analyzing the final cost against the initial estimates and the delivered outcomes would be crucial for assessing the overall success and value realization of this long-term commitment.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W912ER09R0044

Offers Received: 9

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2011 CRYSTAL DR STE 911, ARLINGTON, VA, 08

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

Financial Breakdown

Contract Ceiling: $19,244,186

Exercised Options: $18,655,691

Current Obligation: $18,655,691

Contract Characteristics

Cost or Pricing Data: NO

Timeline