DoD awards $29.8M for Qatar facilities, with 8 bidders competing for construction services

Contract Overview

Contract Amount: $29,832,631 ($29.8M)

Contractor: United Construction Establishment

Awarding Agency: Department of Defense

Start Date: 2019-05-01

End Date: 2023-06-30

Contract Duration: 1,521 days

Daily Burn Rate: $19.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 8

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: CONSTRUCT FALCON-3 PHASE 2 FACILITIES AND INFRASTRUCTURE, STATE OF QATAR

Plain-Language Summary

Department of Defense obligated $29.8 million to UNITED CONSTRUCTION ESTABLISHMENT for work described as: CONSTRUCT FALCON-3 PHASE 2 FACILITIES AND INFRASTRUCTURE, STATE OF QATAR Key points: 1. Contract value appears reasonable given the scope of construction and infrastructure development in a foreign location. 2. Full and open competition suggests a healthy market for construction services in the region. 3. Contract duration of over 4 years indicates a complex and potentially high-risk project. 4. Fixed-price contract type shifts risk to the contractor, potentially impacting final cost if unforeseen issues arise. 5. This contract supports U.S. military presence and operational readiness in Qatar. 6. The award to a single contractor, United Construction Establishment, warrants monitoring for performance and adherence to scope.

Value Assessment

Rating: good

The contract value of approximately $29.8 million for constructing facilities and infrastructure in Qatar appears within a reasonable range for a project of this scale and complexity. Benchmarking against similar overseas construction projects awarded by the Department of Defense would provide a more precise assessment. The firm fixed-price nature of the contract suggests that the initial pricing was deemed acceptable, though it places the burden of cost overruns on the contractor.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, with 8 bidders participating. This indicates a robust competitive environment for the services required. The presence of multiple bidders generally leads to better price discovery and potentially more favorable terms for the government. The specific details of the bidding process and the evaluation criteria would further illuminate the effectiveness of the competition.

Taxpayer Impact: A competitive bidding process for this construction project likely resulted in a more cost-effective outcome for taxpayers compared to a sole-source award. The government benefited from multiple offers, driving down the price and ensuring a fair market value was obtained.

Public Impact

U.S. military personnel stationed in Qatar will benefit from improved facilities and infrastructure. The contract delivers essential construction and infrastructure development services. The geographic impact is localized to the State of Qatar, supporting U.S. diplomatic and military operations. The project likely created employment opportunities for local and potentially U.S. construction workers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (1521 days) increases the risk of cost escalation due to inflation or unforeseen site conditions.
Firm fixed-price contract can lead to disputes if scope creep or unforeseen issues arise, potentially impacting schedule and quality.
Performance in a foreign country may introduce logistical and regulatory complexities that could affect project execution.
Reliance on a single contractor for a large-scale project necessitates close oversight to ensure quality and timely completion.

Positive Signals

Awarded under full and open competition, indicating a competitive market and potentially good value.
Firm fixed-price contract provides cost certainty for the government, assuming no significant scope changes.
The contract supports critical infrastructure for U.S. operations abroad, enhancing readiness.
Multiple bidders (8) suggest a healthy level of interest and capability in the market.

Sector Analysis

This contract falls within the Industrial Building Construction sector, a segment of the broader construction industry. The global construction market is substantial, with significant government spending allocated to infrastructure and facility development, particularly for defense and diplomatic purposes. Comparable spending benchmarks would involve analyzing other overseas construction contracts awarded by the Department of Defense or State Department for similar types of facilities and infrastructure projects.

Small Business Impact

The data indicates that small business participation was not a specific set-aside for this contract (ss: false, sb: false). While the prime contractor is United Construction Establishment, the extent of small business subcontracting is not detailed here. Larger construction projects often involve numerous subcontracts, providing opportunities for small businesses. However, without specific subcontracting plans or reporting, the direct impact on the small business ecosystem remains unclear.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and project management offices. Accountability measures are inherent in the firm fixed-price contract type, which holds the contractor responsible for delivering the specified scope within the agreed price. Transparency is typically managed through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Overseas Military Construction
Foreign Military Sales Support
Department of Defense Facilities Management
U.S. Army Corps of Engineers Construction Contracts

Risk Flags

Potential for cost overruns despite fixed-price contract if unforeseen issues arise.
Risk of schedule delays due to complexities of overseas construction.
Dependence on a single contractor for a large-scale project.
Ensuring quality standards are met throughout the project lifecycle.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $29.8 million to UNITED CONSTRUCTION ESTABLISHMENT. CONSTRUCT FALCON-3 PHASE 2 FACILITIES AND INFRASTRUCTURE, STATE OF QATAR

Who is the contractor on this award?

The obligated recipient is UNITED CONSTRUCTION ESTABLISHMENT.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $29.8 million.

What is the period of performance?

Start: 2019-05-01. End: 2023-06-30.

What is the track record of United Construction Establishment in executing similar large-scale overseas construction projects for the U.S. government?

Assessing the track record of United Construction Establishment requires a review of their past performance on similar contracts. This would involve examining past performance evaluations, any history of contract disputes or terminations, and their experience with projects of comparable size, complexity, and geographic location. Information on their financial stability and capacity to manage large projects is also crucial. Without specific past performance data, it is difficult to definitively gauge their reliability for this significant undertaking in Qatar.

How does the awarded price compare to the estimated cost or independent government cost estimate for this project?

The provided data does not include the estimated cost or the independent government cost estimate for the 'CONSTRUCT FALCON-3 PHASE 2 FACILITIES AND INFRASTRUCTURE' project. To assess value for money, this contract's awarded price of $29.8 million should be compared against these benchmarks. A significant difference between the awarded price and the government's estimate could indicate either exceptional negotiation by the contracting team or potential issues with the estimate itself. Further analysis would require access to the government's cost projections.

What are the key performance indicators (KPIs) and milestones defined in the contract to measure the contractor's progress and success?

The contract details likely include specific Key Performance Indicators (KPIs) and milestones to track the progress and success of the construction project. These typically encompass adherence to schedule, quality of workmanship, safety compliance, and completion of defined project phases. The firm fixed-price nature suggests that meeting these milestones within the established timeline and budget is critical for the contractor's profitability. A thorough review of the contract's statement of work and performance clauses would reveal these specific metrics.

What are the potential risks associated with performing construction in Qatar, and how are they mitigated in the contract?

Construction in Qatar presents several potential risks, including geopolitical factors, local labor laws and availability, material sourcing challenges, climate conditions, and regulatory compliance. The contract likely addresses some of these through clauses related to force majeure, dispute resolution, and adherence to local laws. The firm fixed-price structure places the financial risk of many unforeseen issues on the contractor, but the government may still face risks related to schedule delays or quality compromises if the contractor struggles. Specific risk mitigation strategies would be detailed in the contract's terms and conditions.

How does this contract's value and scope compare to other recent U.S. military construction projects in the Middle East?

Comparing this $29.8 million contract for facilities and infrastructure in Qatar to other recent U.S. military construction projects in the Middle East provides valuable context. Projects in the region can vary significantly in cost due to factors like location, security requirements, labor costs, and the specific type of facilities being built (e.g., barracks, airfields, command centers). A broader analysis of similar projects would help determine if this award represents a competitive price point and efficient use of funds within the regional construction market for defense purposes.

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Industrial 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: W912ER19R0002

Offers Received: 8

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: HALOUL STREET, AL MAMOORA, FISH MARKET, DOHA

Business Categories: Category Business, Foreign Owned, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations

Financial Breakdown

Contract Ceiling: $29,832,631

Exercised Options: $29,832,631

Current Obligation: $29,832,631

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline