DoD's $49.4M specialty trade contract awarded to foreign entities raises value and competition questions

Contract Overview

Contract Amount: $49,405,877 ($49.4M)

Contractor: Miscellaneous Foreign Awardees

Awarding Agency: Department of Defense

Start Date: 2012-09-20

End Date: 2027-12-30

Contract Duration: 5,579 days

Daily Burn Rate: $8.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: FY12 7.1.2-7.1.6 SERVICES

Plain-Language Summary

Department of Defense obligated $49.4 million to MISCELLANEOUS FOREIGN AWARDEES for work described as: FY12 7.1.2-7.1.6 SERVICES Key points: 1. The contract's value appears high relative to the number of awards and duration. 2. Limited competition is suggested by the award to 'MISCELLANEOUS FOREIGN AWARDEES'. 3. The firm fixed-price structure may offer cost certainty but could limit flexibility. 4. The broad 'All Other Specialty Trade Contractors' NAICS code suggests a wide scope of potential services. 5. The long contract duration (5+ years) warrants scrutiny of performance and potential cost overruns. 6. The absence of small business set-asides is noted.

Value Assessment

Rating: questionable

Benchmarking this contract's value is challenging due to the broad service category and foreign awardees. The $49.4 million over five years averages roughly $9.88 million annually. Without specific service details, it's difficult to compare to market rates or similar domestic contracts. The firm fixed-price nature suggests an attempt to control costs, but the overall value proposition is unclear without more context on the services rendered and their necessity.

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 award to 'MISCELLANEOUS FOREIGN AWARDEES' suggests that either few domestic or specialized foreign entities participated, or that the evaluation criteria favored these specific awardees. The presence of only two awardees (no) for such a substantial contract value might indicate limited market interest or a highly specialized niche.

Taxpayer Impact: While full and open competition is generally beneficial for taxpayers, the outcome here, with awards to foreign entities and potentially limited bidders, raises questions about whether the most cost-effective solutions were secured. Further analysis is needed to confirm if competitive pressures effectively drove down prices.

Public Impact

Foreign entities are the primary beneficiaries of this contract, receiving significant federal funds. The contract is intended to cover 'All Other Specialty Trade Contractors' services, implying a broad range of potential support for Department of Defense operations. The geographic impact is likely global, supporting DoD activities wherever these foreign awardees are located or can provide services. Workforce implications are unclear but could involve foreign labor, potentially impacting domestic job creation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of transparency regarding the specific foreign entities awarded the contract.
Potential for higher costs due to foreign awardees and associated logistical complexities.
Uncertainty about the quality and oversight of services provided by foreign contractors.
Limited visibility into the specific services being procured under the broad NAICS code.

Positive Signals

The firm fixed-price contract type provides cost certainty for the government.
Awarding to foreign entities might be necessary for specific operational requirements or geographic presence.
The contract duration allows for sustained support, potentially reducing administrative burden of frequent re-competition.

Sector Analysis

This contract falls within the broad 'Specialty Trade Contractors' sector, which encompasses a wide array of construction and maintenance services. The Department of Defense is a significant consumer of such services globally. Benchmarking is difficult due to the 'miscellaneous' nature of the awardees and the lack of specific service details. However, federal spending on construction and maintenance services is substantial, and contracts of this magnitude are not uncommon, though the foreign awardee aspect is noteworthy.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (sb: false). There is no information provided regarding subcontracting plans or actual performance related to small businesses. This suggests that the primary focus was on larger, potentially foreign, entities capable of fulfilling the contract requirements, with no explicit mechanism to ensure small business participation.

Oversight & Accountability

Oversight mechanisms for this contract are not detailed in the provided data. Given the foreign awardees and the broad nature of the services, robust oversight would be critical to ensure performance, compliance, and value for money. The Department of the Army, as the awarding agency, would typically have contracting officers and potentially quality assurance representatives responsible for monitoring performance. Inspector General jurisdiction may apply depending on the nature of any potential fraud or mismanagement.

Related Government Programs

Department of Defense Construction Contracts
Specialty Trade Services Procurement
Foreign Military Sales Support
Global Operations Support Contracts

Risk Flags

Lack of specific contractor identification for foreign awardees.
Broad and undefined scope of services under NAICS code 238990.
Potential for increased costs and oversight challenges due to foreign awardees.
Long contract duration without clear performance milestones in provided data.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $49.4 million to MISCELLANEOUS FOREIGN AWARDEES. FY12 7.1.2-7.1.6 SERVICES

Who is the contractor on this award?

The obligated recipient is MISCELLANEOUS FOREIGN AWARDEES.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $49.4 million.

What is the period of performance?

Start: 2012-09-20. End: 2027-12-30.

What specific specialty trade services are being procured under this contract, and how were these services defined to justify the broad NAICS code?

The provided data uses the NAICS code '238990 - All Other Specialty Trade Contractors,' which is exceptionally broad. This code encompasses establishments primarily engaged in construction activities, other than those classified in the major groups for construction of buildings, heavy and civil engineering construction, or specialty trade contractors. Examples include foundation, structure, and building exterior contractors; concrete contractors; masonry contractors; stonework contractors; and general contractors for nonresidential maintenance and repair. Without further details from the contract's statement of work, it is impossible to ascertain the specific services. This lack of specificity makes it difficult to assess the necessity, scope, and potential for cost efficiencies. It is possible the contract was designed for flexibility to address unforeseen needs across various specialty trades.

What is the rationale for awarding a significant portion of this contract to 'MISCELLANEOUS FOREIGN AWARDEES' instead of domestic contractors?

The rationale for awarding to 'MISCELLANEOUS FOREIGN AWARDEES' is not explicitly stated in the provided data. However, several factors could contribute to such awards. These might include specific geographic requirements where foreign contractors have a presence or established infrastructure, specialized expertise not readily available domestically, or potentially more competitive pricing from foreign sources for certain services. It is also possible that the solicitation targeted international capabilities due to the nature of the Department of Defense's global operations. The term 'miscellaneous' suggests these might be multiple, smaller foreign entities aggregated under this designation, or a single entity providing a diverse range of services.

How does the $49.4 million contract value compare to historical spending on similar specialty trade services by the Department of the Army?

Comparing the $49.4 million contract value requires context on historical spending patterns for similar specialty trade services by the Department of the Army. Without access to historical procurement data specific to NAICS code 238990 or comparable service categories, a direct comparison is difficult. However, the duration of over five years (2012-2027) suggests an average annual spend of approximately $9.88 million. This annual figure needs to be evaluated against the typical scale and frequency of specialty trade needs within the Army's operational theaters. Large-scale construction, maintenance, and repair projects can easily reach these figures, especially in overseas environments.

What are the potential risks associated with awarding a large contract to 'MISCELLANEOUS FOREIGN AWARDEES' in terms of performance, oversight, and security?

Awarding a large contract to 'MISCELLANEOUS FOREIGN AWARDEES' presents several potential risks. Performance risks include challenges in ensuring consistent quality, adherence to specifications, and timely delivery, especially if oversight mechanisms are less robust than for domestic contracts. Oversight risks stem from geographical distance, differing regulatory environments, and potential language barriers, making monitoring and enforcement more complex. Security risks could involve vetting foreign personnel, protecting sensitive information, and ensuring compliance with U.S. security protocols. Additionally, currency fluctuations and differing legal frameworks can introduce financial and contractual risks. The 'miscellaneous' nature further complicates risk assessment due to a lack of specific entity identification.

Given the firm fixed-price (FFP) contract type, what is the potential impact on cost savings and contractor flexibility for the government?

A Firm Fixed-Price (FFP) contract type, like the one used here, generally aims to provide cost certainty for the government. The contractor assumes the risk of cost overruns, meaning the government pays a predetermined price regardless of the contractor's actual costs. This can lead to significant cost savings if the contractor accurately estimates expenses and manages them efficiently. However, FFP contracts can limit flexibility. If the scope of work needs to change significantly, modifications may be costly and time-consuming, potentially requiring new negotiations. Contractors may also be less inclined to incorporate innovative or cost-saving methods mid-contract if it deviates from the original FFP agreement, potentially missing opportunities for greater efficiency.

Industry Classification

NAICS: Construction › Other Specialty Trade Contractors › All Other Specialty Trade Contractors

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1275 FIRST ST NE, WASHINGTON, DC, 20417

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $49,405,877

Exercised Options: $49,405,877

Current Obligation: $49,405,877

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline