DoD's $24.8M Iraq floating pier and dredging contract awarded to PAT GD JV LLC faced limited competition

Contract Overview

Contract Amount: $24,789,753 ($24.8M)

Contractor: PAT GD JV LLC

Awarding Agency: Department of Defense

Start Date: 2014-04-29

End Date: 2018-06-30

Contract Duration: 1,523 days

Daily Burn Rate: $16.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 8

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF DESIGN AND CONSTRUCTION OF THE FLOATING PIER AND DREDGING, UMM QASR, IRAQ

Plain-Language Summary

Department of Defense obligated $24.8 million to PAT GD JV LLC for work described as: IGF::OT::IGF DESIGN AND CONSTRUCTION OF THE FLOATING PIER AND DREDGING, UMM QASR, IRAQ Key points: 1. The contract's value of nearly $25 million for construction and dredging in Iraq represents a significant investment in logistical infrastructure. 2. Awarded to a joint venture, the contract's competitive landscape appears constrained, potentially impacting price discovery. 3. The firm-fixed-price nature of the contract shifts performance risk to the contractor, PAT GD JV LLC. 4. The project's duration of over 1500 days suggests a complex and lengthy undertaking in a challenging operational environment. 5. The absence of small business set-asides indicates a focus on large-scale capabilities for this specific project. 6. The contract falls under heavy and civil engineering construction, a sector critical for large infrastructure development.

Value Assessment

Rating: fair

Benchmarking this contract's value is challenging due to its specific geographic location (Iraq) and specialized nature (floating pier and dredging). However, the nearly $25 million price tag for a project spanning over four years suggests a substantial investment. Without comparable projects in similar environments, a precise value-for-money assessment is difficult. The firm-fixed-price contract type implies that the contractor bears the risk of cost overruns, which can sometimes lead to higher initial bids to account for this risk.

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 offers. However, the fact that only 8 bids were received for a contract of this magnitude and complexity suggests that the pool of qualified bidders may have been limited. This level of competition, while technically open, might not have been sufficient to drive the most competitive pricing.

Taxpayer Impact: While the competition was open, a limited number of bidders could mean that taxpayers did not benefit from the lowest possible price that might have been achieved with broader participation.

Public Impact

The primary beneficiaries are the U.S. military forces operating in and around Umm Qasr, Iraq, who gain improved logistical capabilities. The contract delivers essential infrastructure in the form of a floating pier and associated dredging, enhancing port operations. The geographic impact is concentrated in Umm Qasr, Iraq, a key strategic location for military and potentially commercial activities. The project likely involved a significant number of skilled construction workers, engineers, and maritime specialists, contributing to local and potentially international employment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited number of bidders (8) for a large-value contract may indicate potential issues with market reach or contractor availability.
The extended duration (1523 days) could present risks related to cost escalation, material availability, and changing operational requirements.
Construction in a foreign, potentially unstable environment like Iraq introduces geopolitical and security risks.

Positive Signals

Firm-fixed-price contract shifts cost overrun risk to the contractor.
Awarded under full and open competition, ensuring a broad initial solicitation.
The project addresses a critical logistical need for military operations in the region.

Sector Analysis

This contract falls within the heavy and civil engineering construction sector, which is characterized by large-scale infrastructure projects. The market for such specialized services, particularly in overseas operational theaters, is often dominated by a smaller number of experienced firms capable of handling complex logistics and security requirements. Comparable spending benchmarks are difficult to establish due to the unique nature and location of this project, but significant infrastructure development in post-conflict zones often involves substantial government investment.

Small Business Impact

The contract data indicates that this was not a small business set-aside, and the contractor, PAT GD JV LLC, is likely a large business. There is no explicit information regarding subcontracting plans for small businesses. Given the specialized nature of floating pier construction and dredging, it is possible that key components or specialized services might be subcontracted, but without further data, the direct impact on the small business ecosystem is unclear.

Oversight & Accountability

Oversight for this Department of the Army contract would typically fall under the purview of the contracting agency's Inspector General (IG) and relevant program management offices. Accountability measures are inherent in the firm-fixed-price contract type, which obligates the contractor to deliver the specified outcome within the agreed price. Transparency is facilitated through contract award databases, though detailed project-specific oversight reports may not always be publicly accessible.

Related Government Programs

US Military Logistics Support Contracts
Iraq Reconstruction Projects
Naval Infrastructure Development
Port and Harbor Construction
Heavy Civil Engineering Contracts

Risk Flags

Potential for cost overruns due to extended duration.
Geopolitical and security risks in Iraq.
Limited competition may impact price.
Logistical challenges in remote location.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.8 million to PAT GD JV LLC. IGF::OT::IGF DESIGN AND CONSTRUCTION OF THE FLOATING PIER AND DREDGING, UMM QASR, IRAQ

Who is the contractor on this award?

The obligated recipient is PAT GD JV LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $24.8 million.

What is the period of performance?

Start: 2014-04-29. End: 2018-06-30.

What is the track record of PAT GD JV LLC in executing similar large-scale construction projects, particularly in overseas environments?

Information regarding the specific track record of PAT GD JV LLC for this particular contract is limited in the provided data. However, as a joint venture, its performance would be a composite of its member companies. Joint ventures are often formed for large, complex projects where multiple companies pool resources and expertise. To assess their track record, one would need to investigate the past performance of the individual entities comprising PAT GD JV LLC, focusing on their experience with floating piers, dredging, and operations in challenging geopolitical regions like Iraq. Publicly available contract databases and past performance reviews from government agencies would be key sources for this analysis.

How does the cost per unit (e.g., per linear foot of pier, per cubic yard of dredging) compare to industry benchmarks or similar projects?

A precise per-unit cost comparison is not feasible with the provided data alone. The contract value is a lump sum for a complex project involving both floating pier construction and dredging. To establish benchmarks, detailed specifications of the pier's dimensions (length, width, depth capacity) and the volume of material dredged would be required. Furthermore, comparable projects would need to be identified, considering factors like location, environmental conditions, labor costs, and material sourcing. Without these specifics, any per-unit cost analysis would be speculative. However, the overall contract value of nearly $25 million over more than four years suggests a significant investment, implying that the per-unit costs, when calculable, would reflect the complexity and risks associated with the project.

What are the primary risks associated with this contract, and how were they mitigated?

The primary risks associated with this contract include geopolitical instability and security threats in Iraq, potential logistical challenges in delivering materials and personnel, environmental factors affecting dredging operations, and the inherent risks of large-scale construction projects. The firm-fixed-price contract structure mitigates financial risk for the government by transferring cost overrun responsibility to the contractor. Mitigation strategies employed by the contractor would likely involve robust security protocols, detailed logistical planning, contingency planning for material and equipment, and experienced project management. The extended duration also presents risks of schedule delays and potential cost increases due to inflation or changing requirements, which the contractor must manage.

How effective has the Department of the Army been in managing similar large-scale overseas construction contracts?

The Department of the Army has extensive experience managing large-scale overseas construction contracts, particularly in operational theaters like Iraq and Afghanistan. Historically, the effectiveness has varied, with successes in delivering critical infrastructure and challenges related to cost overruns, schedule delays, and contractor performance issues. Agencies like the Government Accountability Office (GAO) and the Special Inspector General for Afghanistan Reconstruction (SIGAR) have often reported on these challenges. For this specific contract, assessing effectiveness would require examining project completion reports, any contract modifications, and performance evaluations. The Army typically employs program management professionals and utilizes oversight mechanisms to ensure contract objectives are met, but the complexities of overseas operations always introduce significant management challenges.

What has been the historical spending pattern for floating pier and dredging services by the Department of Defense?

Historical spending patterns for specialized services like floating pier construction and dredging by the Department of Defense (DoD) can be analyzed through federal procurement data. Such contracts are often project-specific and tied to operational needs, meaning spending can fluctuate significantly year-to-year based on global deployments and infrastructure requirements. While the DoD spends billions annually on construction and engineering services, contracts specifically for floating piers and dredging in overseas locations are less frequent than general base construction. Analyzing historical data would involve searching procurement databases for similar North American Industry Classification System (NAICS) codes (like 237990) and keywords related to piers and dredging, focusing on contracts awarded by the Army Corps of Engineers and other relevant DoD components over the past decade.

Industry Classification

NAICS: Construction › Other Heavy and Civil Engineering Construction › Other Heavy and Civil Engineering Construction

Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCTION OF BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: TWO STEP

Solicitation ID: W912ER13R0050

Offers Received: 8

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2927 WATERVIEW, ROCHESTER HILLS, MI, 48309

Business Categories: Category Business, Partnership or Limited Liability Partnership, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $29,047,983

Exercised Options: $29,047,983

Current Obligation: $24,789,753

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline