DoD spent over $47M on Afghanistan construction, awarded via full and open competition

Contract Overview

Contract Amount: $47,314,031 ($47.3M)

Contractor: Domestic Awardees (undisclosed)

Awarding Agency: Department of Defense

Start Date: 2011-08-05

End Date: 2014-11-10

Contract Duration: 1,193 days

Daily Burn Rate: $39.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: CONSTRUCT US FORCES - AFGHANISTAN HEADQUARTERS AND HOUSING/NEW KAUL COMPOUND

Plain-Language Summary

Department of Defense obligated $47.3 million to DOMESTIC AWARDEES (UNDISCLOSED) for work described as: CONSTRUCT US FORCES - AFGHANISTAN HEADQUARTERS AND HOUSING/NEW KAUL COMPOUND Key points: 1. Contract value represents significant investment in overseas infrastructure. 2. Full and open competition suggests a robust bidding process. 3. Fixed-price contract type shifts risk to the contractor. 4. Contract duration of nearly 3 years indicates a substantial project. 5. Awardee location is undisclosed, limiting transparency on domestic vs. foreign sourcing. 6. NAICS code 236220 points to commercial and institutional building construction.

Value Assessment

Rating: fair

The contract value of $47.3 million for construction services in Afghanistan is substantial. Without specific benchmarks for similar projects in that region and time period, a precise value-for-money assessment is difficult. However, the firm fixed-price nature of the contract implies that the contractor bore the risk of cost overruns, which can be a positive indicator for the government if the project was completed within budget. Further analysis would require comparison to similar construction projects in comparable operational environments.

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. The number of bids received is not specified, but this procurement method generally fosters competitive pricing. The agency sought a broad range of potential contractors, which should have led to a more competitive bidding environment and potentially better pricing for the government.

Taxpayer Impact: A full and open competition process is generally favorable for taxpayers as it maximizes the pool of potential bidders, increasing the likelihood of receiving competitive offers and achieving a fair market price.

Public Impact

The primary beneficiaries are likely U.S. military forces operating in Afghanistan, who would have utilized the constructed headquarters and housing. The services delivered include the construction of essential facilities, such as headquarters and housing, crucial for operational effectiveness. The geographic impact is specific to Afghanistan, supporting U.S. military presence and operations in that region. Workforce implications would include construction jobs, potentially both domestic and local to the region, depending on the contractor's sourcing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of transparency regarding the specific domestic awardee makes it difficult to assess contractor track record and potential conflicts of interest.
The undisclosed awardee location raises questions about the extent of domestic economic benefit derived from this substantial contract.
The nature of construction in a conflict zone presents inherent risks related to security, logistics, and unforeseen site conditions, which may not be fully captured in the contract terms.
The firm fixed-price nature, while shifting risk, could lead to change orders if unforeseen issues arise, potentially increasing the final cost.

Positive Signals

The use of 'full and open competition' suggests a commitment to a fair and transparent procurement process, maximizing the opportunity for qualified contractors to bid.
The firm fixed-price contract type is generally a positive signal, indicating that the government secured a price upfront and the contractor assumes cost overrun risks.
The contract duration of over three years suggests a significant and complex project, likely addressing a critical infrastructure need.
The award falls under the broad category of construction, a vital service for supporting military operations and infrastructure development.

Sector Analysis

This contract falls within the construction sector, specifically commercial and institutional building construction (NAICS 236220). The global construction market is vast, with significant government spending on infrastructure, particularly for defense and overseas operations. This contract represents a portion of the Department of Defense's investment in maintaining and developing facilities in support of its mission. Comparable spending benchmarks would typically involve analyzing costs of similar construction projects in challenging geopolitical environments.

Small Business Impact

The data indicates that small business participation was not a specific set-aside (ss: false, sb: false). This suggests the contract was not specifically targeted towards small businesses. Subcontracting opportunities for small businesses may exist depending on the prime contractor's strategy, but there is no explicit requirement indicated in the provided data. The impact on the small business ecosystem is likely indirect, relying on the prime contractor's procurement practices.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve contract administration by the Department of the Army, quality assurance surveillance plans (QASPs), and potentially audits by the Defense Contract Audit Agency (DCAA). Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse. Transparency is somewhat limited by the undisclosed awardee location, but contract award data is generally publicly available.

Related Government Programs

Afghanistan Security Forces Fund (ASFF)
Base Realignment and Closure (BRAC)
Military Construction, Defense-wide (MILCON)
Foreign Military Sales (FMS) Construction

Risk Flags

Undisclosed Awardee Identity
Potential for Cost Overruns via Change Orders
Security and Logistical Risks in Afghanistan
Lack of Specific Small Business Subcontracting Requirements

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $47.3 million to DOMESTIC AWARDEES (UNDISCLOSED). CONSTRUCT US FORCES - AFGHANISTAN HEADQUARTERS AND HOUSING/NEW KAUL COMPOUND

Who is the contractor on this award?

The obligated recipient is DOMESTIC 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 $47.3 million.

What is the period of performance?

Start: 2011-08-05. End: 2014-11-10.

What was the specific nature of the 'headquarters and housing' constructed under this contract?

The contract description 'CONSTRUCT US FORCES - AFGHANISTAN HEADQUARTERS AND HOUSING/NEW KAUL COMPOUND' indicates the project involved building facilities for U.S. forces. This likely included administrative buildings to serve as headquarters and residential structures for personnel. The 'New Kaul Compound' designation suggests a specific location or expansion within an existing base or area of operations. The exact specifications, size, and amenities of the headquarters and housing would be detailed in the contract's Statement of Work (SOW), which is not provided here. However, such construction in an operational theater typically prioritizes functionality, security, and basic living standards for deployed personnel.

How does the $47.3 million contract value compare to similar construction projects for U.S. forces in Afghanistan during the 2011-2014 period?

Benchmarking this $47.3 million contract requires comparing it to similar construction projects undertaken by the U.S. military in Afghanistan between 2011 and 2014. Factors influencing cost include project scope (e.g., size, complexity, specific facilities), location (security risks, logistical challenges), and the prevailing market rates for construction materials and labor in the region. Without access to detailed cost data for comparable projects, a precise comparison is challenging. However, construction in Afghanistan was generally more expensive than in the continental U.S. due to these factors. The value suggests a significant undertaking, potentially involving multiple buildings or extensive compound development, rather than a minor facility upgrade.

What are the potential risks associated with a firm fixed-price contract for construction in Afghanistan?

While a firm fixed-price (FFP) contract shifts cost overrun risk to the contractor, construction in a challenging environment like Afghanistan presents unique risks. These include security threats to personnel and equipment, logistical difficulties in transporting materials, potential for unforeseen site conditions (e.g., unexploded ordnance, difficult terrain), and political instability impacting project timelines. If these risks materialize and are not adequately addressed in the contract's contingency planning or force majeure clauses, the contractor might seek change orders or claim delays, potentially increasing the overall cost to the government despite the FFP structure. Effective oversight and risk management by the contracting officer are crucial.

What does the 'DOMESTIC AWARDEES (UNDISCLOSED)' designation imply about the contractor?

The designation 'DOMESTIC AWARDEES (UNDISCLOSED)' is unusual and potentially problematic for transparency. Typically, awardee information, including their location or business address, is disclosed. 'Domestic' implies the contractor is based in the United States. However, the 'undisclosed' aspect prevents the public from knowing which specific U.S. company received the $47.3 million contract. This lack of transparency could obscure potential conflicts of interest, prevent assessment of the contractor's past performance record, or hide connections to specific industries or regions. It raises questions about why the awardee's identity is being withheld.

How did the duration of 1193 days (approximately 3.2 years) impact the contract's overall cost and execution?

A contract duration of 1193 days (over three years) for a construction project of this magnitude suggests a complex and potentially phased undertaking. Longer durations can increase overall costs due to extended overhead, potential for material price escalation (even in FFP contracts, certain clauses might allow adjustments), and the prolonged need for project management and oversight. However, it also allows for more thorough execution, potentially accommodating unforeseen challenges in a difficult operating environment like Afghanistan without rushing critical safety or quality aspects. The extended timeline likely reflects the scale and complexity of building headquarters and housing facilities in a theater of operations.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W912ER11R0059

Offers Received: 4

Pricing Type: FIRM 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, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $47,314,031

Exercised Options: $47,314,031

Current Obligation: $47,314,031

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline