DoD's $24.9M Southern Electrical Power System contract in Afghanistan faces scrutiny over foreign awardees and limited transparency

Contract Overview

Contract Amount: $24,939,212 ($24.9M)

Contractor: Foreign Awardees (undisclosed)

Awarding Agency: Department of Defense

Start Date: 2014-08-26

End Date: 2018-04-19

Contract Duration: 1,332 days

Daily Burn Rate: $18.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 14

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF SOUTHERN ELECTRICAL POWER SYSTEM (SEPS) PHASE II REPROCUREMENT, KANDAHAR PROVINCE, AFGHANISTAN. THIS CONTRACT IS FOR THE DESIGN AND CONSTRUCTION OF THE SOUTHERN ELECTRICAL POWER SYSTEM IN AFGHANISTAN THAT WILL EXPAND THE HIGH VOLTAGE (110KV) POWER SYSTEM FROM A NEW 110KV SUBSTATION (MAIWAND SUBSTATION) TO ANOTHER NEW 110KV SUBSTATION (PUSHMOL SUBSTATION) LOCATED IN KANDAHAR IN ORDER TO PROVIDE ELECTRICITY TO UN-SERVED POPULATION CENETERS, PROVIDE A BACKBONE FOR A NATIONAL GRID AND ALLOW FOR FUTURE EXPANSION OF THIS GRID. ADDITIONALLY, THE SEPS WILL REPAIR THE ELECTRICAL TRANSMISSION SYSTEM FROM DURAI JUNCTION TO BRESHNA KOT.

Plain-Language Summary

Department of Defense obligated $24.9 million to FOREIGN AWARDEES (UNDISCLOSED) for work described as: IGF::OT::IGF SOUTHERN ELECTRICAL POWER SYSTEM (SEPS) PHASE II REPROCUREMENT, KANDAHAR PROVINCE, AFGHANISTAN. THIS CONTRACT IS FOR THE DESIGN AND CONSTRUCTION OF THE SOUTHERN ELECTRICAL POWER SYSTEM IN AFGHANISTAN THAT WILL EXPAND THE HIGH VOLTAGE (110KV) POWER SYSTEM FROM A NE… Key points: 1. The contract aims to expand electrical infrastructure in Kandahar, Afghanistan, providing power to unserved areas and supporting a national grid. 2. Awardees are undisclosed foreign entities, raising concerns about transparency and accountability. 3. The project's success is tied to the stability and security of the region, posing inherent risks. 4. The sector involves critical infrastructure development, essential for economic growth and public services.

Value Assessment

Rating: questionable

The contract value of $24.9 million for power system construction in a challenging environment is difficult to benchmark without more detail on the scope and specific components. The firm fixed-price structure suggests an attempt to control costs, but the lack of transparency regarding awardees complicates a thorough value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

While advertised as full and open competition, the award to undisclosed foreign entities raises questions about the effectiveness of the price discovery process. It is unclear if domestic or international firms were genuinely able to compete and if the best value was secured.

Taxpayer Impact: Taxpayer funds are being used for significant infrastructure development in a foreign country. The lack of transparency regarding awardees and potential cost overruns could negatively impact the overall return on investment for taxpayers.

Public Impact

Provides essential electricity to previously unserved populations in Kandahar, Afghanistan. Establishes a backbone for a future national electrical grid, promoting long-term development. Repairs existing transmission systems, improving overall power reliability in the region. Potential for job creation and economic stimulus through construction activities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Undisclosed foreign awardees
Geopolitical instability in Afghanistan
Potential for cost overruns in a complex environment

Positive Signals

Addresses critical infrastructure needs
Supports long-term development goals
Firm fixed-price contract aims for cost control

Sector Analysis

This contract falls within the construction sector, specifically focusing on power and communication infrastructure. Spending in this area is often driven by national security interests and development aid, with costs heavily influenced by project complexity, location, and geopolitical factors.

Small Business Impact

The data indicates no specific set-asides for small businesses. Given the nature and scale of the project, it is likely that larger, potentially foreign, prime contractors were involved, with limited direct opportunities for U.S. small businesses.

Oversight & Accountability

The use of undisclosed foreign awardees presents a significant oversight challenge. Ensuring accountability, compliance with contract terms, and proper utilization of funds requires robust monitoring mechanisms, which may be difficult to implement effectively in this context.

Related Government Programs

Power and Communication Line and Related Structures Construction
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Lack of transparency in awardee selection
Geopolitical and security risks in Afghanistan
Potential for inadequate oversight of foreign contractors
Difficulty in verifying project performance and cost-effectiveness
Dependency on local stability for project success

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.9 million to FOREIGN AWARDEES (UNDISCLOSED). IGF::OT::IGF SOUTHERN ELECTRICAL POWER SYSTEM (SEPS) PHASE II REPROCUREMENT, KANDAHAR PROVINCE, AFGHANISTAN. THIS CONTRACT IS FOR THE DESIGN AND CONSTRUCTION OF THE SOUTHERN ELECTRICAL POWER SYSTEM IN AFGHANISTAN THAT WILL EXPAND THE HIGH VOLTAGE (110KV) POWER SYSTEM FROM A NEW 110KV SUBSTATION (MAIWAND SUBSTATION) TO ANOTHER NEW 110KV SUBSTATION (PUSHMOL SUBSTATION) LOCATED IN KANDAHAR IN ORDER TO PROVIDE ELECTRICITY TO UN-SERVED POPULATION CENETERS, PROVIDE A BACKBONE FOR A NATIONAL GRID AN

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 $24.9 million.

What is the period of performance?

Start: 2014-08-26. End: 2018-04-19.

What specific criteria were used to select the undisclosed foreign awardees, and how was their technical capability and financial stability assessed to ensure successful project completion?

The selection criteria for the undisclosed foreign awardees are not detailed in the provided data. Typically, such assessments would involve evaluating past performance, technical expertise, financial capacity, and adherence to security protocols. However, the lack of transparency makes it impossible to verify the rigor of these evaluations or ensure they were sufficient to mitigate risks associated with foreign contractors in a sensitive operational environment.

What mechanisms are in place to track the expenditure of the $24.9 million and ensure it aligns with the project's objectives, given the foreign awardees and the challenging operating environment?

Tracking expenditures with undisclosed foreign awardees in Afghanistan presents substantial challenges. Oversight likely relies on a combination of contract clauses, reporting requirements, and on-the-ground monitoring by DoD personnel or contracted third parties. However, the effectiveness of these mechanisms is difficult to ascertain without further information on the specific oversight plan and the resources allocated to it.

How does the long duration (1332 days) and the firm fixed-price nature of this contract balance the risks of cost escalation against the potential for reduced contractor incentive to optimize quality

A long-duration, firm fixed-price contract can incentivize contractors to complete work efficiently to maximize profit, but it also carries risks. If unforeseen issues arise due to the complex environment or design flaws, the contractor may be less motivated to invest additional resources for optimal quality, potentially leading to subpar infrastructure. Conversely, the fixed price protects the government from cost overruns unless significant contract modifications are required.

Industry Classification

NAICS: Construction › Utility System Construction › Power and Communication Line and Related Structures 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: W912ER14R0009

Offers Received: 14

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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

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

Financial Breakdown

Contract Ceiling: $25,754,212

Exercised Options: $24,939,212

Current Obligation: $24,939,212

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline