DoD's $39.6M Afghanistan power transmission project re-procured after initial termination for cause

Contract Overview

Contract Amount: $39,584,420 ($39.6M)

Contractor: Foreign Awardees (undisclosed)

Awarding Agency: Department of Defense

Start Date: 2014-08-28

End Date: 2018-05-10

Contract Duration: 1,351 days

Daily Burn Rate: $29.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 16

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT:IGF TITLE OF CONTRACT: NORTHEAST POWER SYSTEM (NEPS) PHASE 1 RE-PROCUREMENT, AFGHANISTAN. THIS CONTRACT REQUIRES DESIGNING AND CONSTRUCTING A SINGLE CIRCUIT 220 KV ELECTRICAL TRANSMISSION SYSTEM TO DELIVER POWER FROM THE NORTHEAST POWER SYSTEM AT ARGENDEH, KABUL PROVINCE SUBSTATION TO THE FUTURE SITE OF THE KABUL SOUTHWEST SUBSTATION AT DASHTI BARCHI, AFGHANISTAN. THE CONTRACT INCLUDES THE CONSTRUCTION OF A SUBSTATION NEAR PUL-E-ALAM, LOGAR PROVINCE. THIS CONTRACT IS THE RE-PROCUREMENT OF AN AFGHANISTAN INFRASTRUCTURE FUND PROJECT. THE INITIAL CONTRACT WAS TERMINATED FOR CAUSE.

Plain-Language Summary

Department of Defense obligated $39.6 million to FOREIGN AWARDEES (UNDISCLOSED) for work described as: IGF::OT:IGF TITLE OF CONTRACT: NORTHEAST POWER SYSTEM (NEPS) PHASE 1 RE-PROCUREMENT, AFGHANISTAN. THIS CONTRACT REQUIRES DESIGNING AND CONSTRUCTING A SINGLE CIRCUIT 220 KV ELECTRICAL TRANSMISSION SYSTEM TO DELIVER POWER FROM THE NORTHEAST POWER SYSTEM AT ARGENDEH, KABUL PROVINC… Key points: 1. The contract aims to build critical electrical infrastructure in Afghanistan, enhancing power delivery capabilities. 2. Re-procurement suggests potential challenges or unmet requirements in the initial contract. 3. The project's geographic focus in Afghanistan presents inherent logistical and security risks. 4. A firm-fixed-price contract type indicates that cost overruns are primarily the contractor's responsibility. 5. The project's termination for cause in its prior iteration warrants scrutiny of contractor performance and oversight. 6. The project's funding source, the Afghanistan Infrastructure Fund, highlights a strategic investment in the region's development.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its specific geographic context and the prior termination for cause. The initial contract's termination suggests potential issues with performance or cost management that could impact the overall value proposition. Without comparable projects in similar high-risk environments, assessing whether $39.6 million represents fair value is difficult. The firm-fixed-price structure aims to control costs, but the history of the contract raises concerns about achieving the intended value.

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 this is a re-procurement after a previous termination for cause might suggest that the initial competition did not fully mitigate risks or that the market for such specialized infrastructure projects in Afghanistan is limited. The number of bidders and their specific qualifications would provide further insight into the robustness of the competition.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages competitive pricing. However, the re-procurement aspect, stemming from a prior termination, could indicate that the initial competitive process did not fully account for the complexities and risks, potentially leading to less optimal outcomes for taxpayers in the long run.

Public Impact

The primary beneficiaries are likely Afghan communities and government entities in the Kabul and Logar provinces, who will gain access to more reliable electrical power. The project delivers essential electrical transmission infrastructure, including a 220 KV transmission line and a substation. The geographic impact is concentrated in the Northeast and Southwest regions of Afghanistan, specifically connecting power from the Northeast Power System to Kabul. Workforce implications may include the creation of construction jobs for local Afghan labor and specialized roles for foreign contractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Prior termination for cause raises significant concerns about contractor performance and project management.
The complex and potentially unstable security environment in Afghanistan poses substantial risks to project execution and personnel safety.
Undisclosed foreign awardees make it difficult to assess contractor track record and financial stability.
The re-procurement nature of this contract suggests potential issues with the initial planning, execution, or oversight.

Positive Signals

The project addresses a critical infrastructure need for power transmission in Afghanistan.
Full and open competition, in principle, should lead to better pricing and selection of qualified contractors.
The firm-fixed-price contract type shifts cost risk to the contractor, which can be beneficial if managed effectively.

Sector Analysis

This contract falls within the construction and infrastructure sector, specifically focusing on power transmission systems. The market for such projects in post-conflict or developing regions is often specialized, involving significant logistical, security, and engineering challenges. Comparable spending benchmarks are difficult to establish due to the unique operating environment in Afghanistan. However, large-scale power infrastructure projects globally can range from tens of millions to billions of dollars, depending on scale and complexity.

Small Business Impact

The data indicates that small business participation (ss: false, sb: false) was not a specific set-aside requirement for this contract. Therefore, the direct impact on small businesses through set-asides is likely minimal. Subcontracting opportunities for small businesses may exist, but this would depend on the prime contractor's strategy and the nature of the work packages. The overall impact on the small business ecosystem is likely indirect, related to the broader economic development facilitated by improved infrastructure.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army and potentially the Department of Defense's Inspector General, especially given the project's funding source (Afghanistan Infrastructure Fund) and its history. Accountability measures would be defined by the contract terms, including performance milestones and reporting requirements. Transparency may be limited due to the security context and the undisclosed nature of the foreign awardees.

Related Government Programs

Afghanistan Infrastructure Fund Projects
Department of Defense Construction Contracts
Power Grid Modernization Projects
International Infrastructure Development

Risk Flags

Prior termination for cause
Undisclosed contractor identity
High-risk operating environment (Afghanistan)
Potential for security disruptions
Logistical challenges

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $39.6 million to FOREIGN AWARDEES (UNDISCLOSED). IGF::OT:IGF TITLE OF CONTRACT: NORTHEAST POWER SYSTEM (NEPS) PHASE 1 RE-PROCUREMENT, AFGHANISTAN. THIS CONTRACT REQUIRES DESIGNING AND CONSTRUCTING A SINGLE CIRCUIT 220 KV ELECTRICAL TRANSMISSION SYSTEM TO DELIVER POWER FROM THE NORTHEAST POWER SYSTEM AT ARGENDEH, KABUL PROVINCE SUBSTATION TO THE FUTURE SITE OF THE KABUL SOUTHWEST SUBSTATION AT DASHTI BARCHI, AFGHANISTAN. THE CONTRACT INCLUDES THE CONSTRUCTION OF A SUBSTATION NEAR PUL-E-ALAM, LOGAR PROVINCE. THIS CONTRACT IS THE RE-PROCUREMEN

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 $39.6 million.

What is the period of performance?

Start: 2014-08-28. End: 2018-05-10.

What were the specific reasons for the initial contract's termination for cause?

The provided data indicates the initial contract was terminated for cause, but does not specify the exact reasons. Terminations for cause typically occur when a contractor fails to meet contractual obligations, such as poor performance, failure to make progress, violation of contract terms, or financial instability. Without further details from the contracting agency or relevant oversight reports, it is impossible to determine the precise failures that led to the termination. This lack of transparency is a significant concern, as understanding the root cause is crucial for preventing similar issues in the re-procured contract and for assessing the overall risk associated with this project.

How does the $39.6 million cost compare to similar power transmission projects in comparable regions?

Benchmarking the $39.6 million cost for this 220 KV transmission line and substation project in Afghanistan against similar projects is challenging due to several factors. Firstly, the security and logistical complexities inherent in operating in Afghanistan significantly inflate costs compared to projects in stable, developed nations. Secondly, the specific terrain, environmental conditions, and the exact scope of work (e.g., length of transmission line, substation complexity) vary greatly between projects. While $39.6 million might seem substantial, it could be within a reasonable range for a project of this nature in a high-risk environment, especially considering the potential for unforeseen challenges. However, without detailed cost breakdowns and comparisons to projects undertaken in similarly challenging geopolitical or operational contexts, a definitive value-for-money assessment is difficult.

What is the track record of the undisclosed foreign awardees for this contract?

The identity of the foreign awardees is undisclosed in the provided data, making it impossible to assess their track record. This lack of transparency is a significant concern for a contract that has already experienced a termination for cause. A robust assessment would require knowing the specific companies involved, their past performance on similar projects (especially in challenging environments), their financial stability, and their adherence to ethical business practices. Without this information, it is difficult to gauge the reliability and capability of the entities responsible for executing this critical infrastructure project, thereby increasing the perceived risk.

What are the key performance indicators (KPIs) and oversight mechanisms for this re-procured contract?

The provided data does not specify the key performance indicators (KPIs) or detailed oversight mechanisms for this re-procured contract. Typically, for infrastructure projects of this magnitude, KPIs would include adherence to schedule, quality of construction, safety compliance, and successful integration of the power system. Oversight would likely involve regular site inspections, progress reports from the contractor, and potentially third-party monitoring. Given the prior termination for cause, enhanced oversight, possibly involving more frequent reporting, stricter milestone reviews, and potentially independent quality assurance checks, would be expected. The Department of the Army, as the contracting agency, would be responsible for establishing and enforcing these measures.

How has spending on similar power infrastructure projects in Afghanistan evolved over time?

Historical spending data on similar power infrastructure projects in Afghanistan, particularly those funded by entities like the Afghanistan Infrastructure Fund (AIF) and managed by the Department of Defense, would provide valuable context. Such analysis could reveal trends in project costs, the success rates of awarded contracts (e.g., frequency of terminations), and the effectiveness of different contracting approaches. Understanding past spending patterns could highlight whether costs have escalated, if certain types of projects have been more prone to issues, or if specific contractors have consistently performed well or poorly. This historical perspective is crucial for evaluating the current contract's financial plan and risk mitigation strategies.

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: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W912ER14R0012

Offers Received: 16

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: $40,232,540

Exercised Options: $39,584,420

Current Obligation: $39,584,420

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline