Army awards $644M for Afghanistan hospital construction, highlighting significant foreign contractor involvement

Contract Overview

Contract Amount: $18,910,143 ($18.9M)

Contractor: Foreign Awardees (undisclosed)

Awarding Agency: Department of Defense

Start Date: 2004-10-09

End Date: 2006-03-09

Contract Duration: 516 days

Daily Burn Rate: $36.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: 200506!500113!2100!W917PM!AFGHANISTAN ENGINEER DIST !W917PM05C0005 !A!N! !N! ! !20041009!20060403!644018624!644018624!644018624!N!ZAFER TAAHHUT INSAAT VE TICARE!RESITGALIP CAD HATIR SOK !ANKARA !TU!* !00000! !AF!* !* !AFGHANISTA!+000016508725!N!N!000016950202!C114!HOSPITAL BUILDINGS !C2 !CONSTRUCTION !000 !* !236220!E! !3! ! ! ! ! !20200930!B! ! !A! !A!U!J!2!005!B! !Z!N!Z!B!AF!N!L!N! ! ! ! ! !A!A!000!A!B!N! ! !Y!Y! ! !0001! !

Plain-Language Summary

Department of Defense obligated $18.9 million to FOREIGN AWARDEES (UNDISCLOSED) for work described as: 200506!500113!2100!W917PM!AFGHANISTAN ENGINEER DIST !W917PM05C0005 !A!N! !N! ! !20041009!20060403!644018624!644018624!644018624!N!ZAFER TAAHHUT INSAAT VE TICARE!RESITGALIP CAD HATIR SOK !ANKARA !TU!* !00000! !AF!* !* … Key points: 1. Contract value represents a substantial investment in infrastructure development in a challenging operational environment. 2. The award to a foreign entity raises questions about price reasonableness and oversight compared to domestic contracts. 3. Long performance duration suggests a complex and potentially high-risk construction project. 4. The project's focus on hospital buildings indicates a critical need for healthcare infrastructure. 5. Full and open competition was utilized, theoretically promoting competitive pricing, but the foreign awardee warrants scrutiny.

Value Assessment

Rating: questionable

The contract value of $644 million for hospital construction in Afghanistan is substantial. Benchmarking this against similar large-scale construction projects, especially those in austere or foreign environments, is difficult due to unique risk factors and potential cost inflations. The award to a foreign entity, with limited disclosed details on their pricing structure, makes a direct value-for-money assessment challenging. Without more transparency on the contractor's cost breakdown and profit margins, it's hard to definitively state if this represents excellent 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 solicited. However, the fact that the award went to a foreign entity suggests either a lack of domestic capacity or a strategic decision to engage international firms for this specific project. The number of bidders and their specific qualifications are not detailed, but the outcome implies that the foreign awardee presented the most compelling offer despite potential logistical and geopolitical complexities.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it aims to drive down prices through market forces. However, when the awardee is foreign, the direct economic benefit to U.S. taxpayers through domestic job creation or investment is reduced.

Public Impact

The primary beneficiaries are the Afghan population who will gain access to improved healthcare facilities. The contract delivers essential hospital construction services in a region with significant infrastructure deficits. Geographic impact is concentrated within Afghanistan, specifically in areas requiring enhanced medical infrastructure. Workforce implications include potential employment for local Afghan labor and specialized international construction personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Foreign awardee nationality may complicate oversight and accountability.
Potential for cost overruns due to the complexities of operating in Afghanistan.
Limited transparency on the foreign contractor's pricing structure hinders value assessment.
The long contract duration increases exposure to changing geopolitical and economic conditions.

Positive Signals

Awarded under full and open competition, suggesting a competitive bidding process.
Focus on critical healthcare infrastructure addresses a significant humanitarian and developmental need.
The contract aims to build essential facilities, contributing to long-term stability.

Sector Analysis

This contract falls within the broader construction sector, specifically focusing on institutional buildings. The market for large-scale construction in post-conflict or developing regions is characterized by high risk, specialized logistics, and often involves international firms. Comparable spending benchmarks are difficult to establish precisely due to the unique operational environment in Afghanistan, but projects of this scale typically represent significant investments in national infrastructure.

Small Business Impact

There is no explicit indication of small business set-asides for this contract. Given the large scale and international nature of the award, it is unlikely that small businesses were the primary focus, though they may have participated as subcontractors. The implications for the small business ecosystem are minimal unless specific subcontracting plans were mandated and fulfilled.

Oversight & Accountability

Oversight mechanisms for contracts in Afghanistan are typically robust, involving contracting officers, project managers, and potentially Inspector General offices. However, the effectiveness of oversight can be challenged by the security situation and the logistical complexities of the operating environment. Transparency is often limited in such high-risk, foreign-awarded contracts, making a full assessment of accountability difficult without more detailed reporting.

Related Government Programs

Afghanistan Infrastructure Projects
Department of Defense Construction Contracts
Foreign Military Sales Support
Healthcare Facility Construction
Logistics and Base Support Services

Risk Flags

Foreign Awardee
High-Risk Environment Operation
Limited Transparency on Pricing
Long Contract Duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.9 million to FOREIGN AWARDEES (UNDISCLOSED). 200506!500113!2100!W917PM!AFGHANISTAN ENGINEER DIST !W917PM05C0005 !A!N! !N! ! !20041009!20060403!644018624!644018624!644018624!N!ZAFER TAAHHUT INSAAT VE TICARE!RESITGALIP CAD HATIR SOK !ANKARA !TU!* !00000! !AF!* !* !AFGHANISTA!+000016508725!N!N!000016950202!C114!HOSPITAL BUILDINGS !C2 !CONSTRUCTION !000 !* !236220!E! !3! ! ! ! ! !202

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 $18.9 million.

What is the period of performance?

Start: 2004-10-09. End: 2006-03-09.

What is the track record of the awardee, ZAFER TAAHHUT INSAAT VE TICARE, with the U.S. government or in similar international construction projects?

Information regarding the specific track record of ZAFER TAAHHUT INSAAT VE TICARE with the U.S. government or in comparable international construction projects is not readily available in the provided data snippet. Further research would be required to ascertain their past performance, including project completion history, quality of work, and any prior contract disputes or awards. Understanding their experience, particularly in high-risk environments like Afghanistan, is crucial for assessing the reliability and potential risks associated with this contract.

How does the cost per square foot or per bed compare to similar hospital construction projects in other regions or countries?

The provided data does not include details on the size of the hospital or the number of beds, making a cost-per-unit analysis impossible. To compare the cost-effectiveness, one would need the total square footage or bed capacity and then benchmark it against similar projects. Factors such as local labor costs, material availability, security expenses, and the specific medical capabilities being built would heavily influence such comparisons. Without these details, assessing the value for money on a per-unit basis is speculative.

What specific risks were identified during the solicitation process, and what mitigation strategies were put in place?

The provided data does not detail the specific risks identified during the solicitation process or the mitigation strategies employed. However, given the location (Afghanistan) and the nature of the project (large-scale construction), common risks would likely include security threats, logistical challenges, political instability, currency fluctuations, and potential for corruption. Mitigation strategies might involve enhanced security protocols, robust supply chain management, contingency planning, and stringent oversight mechanisms. A thorough review of the contract's source selection documentation would be necessary to identify these specifics.

What is the projected impact of these new hospital facilities on healthcare access and outcomes for the Afghan population?

The construction of new hospital facilities is projected to significantly improve healthcare access and outcomes for the Afghan population by providing modern medical infrastructure and potentially increasing the availability of services. This could lead to reduced mortality rates, better treatment for various illnesses, and improved maternal and child health. The specific impact will depend on the hospital's capacity, the services offered, the availability of qualified medical personnel, and the government's ability to sustain operations post-construction. The project directly addresses a critical need for enhanced healthcare infrastructure in the region.

How has spending on similar construction projects in Afghanistan evolved over time, and does this contract represent a trend?

Historical spending data on similar construction projects in Afghanistan would be needed to determine trends. This contract, awarded in 2004 for work extending into 2006, represents a significant investment during a period of intense reconstruction efforts. Analyzing spending patterns before and after this period, particularly for infrastructure and healthcare facilities, would reveal whether this contract was an outlier or part of a consistent investment strategy. Factors like the changing security situation and U.S. policy shifts would likely influence such spending trends over time.

What are the implications of awarding such a large contract to a foreign entity in terms of economic benefits and potential for knowledge transfer?

Awarding a large contract to a foreign entity like ZAFER TAAHHUT INSAAT VE TICARE has mixed implications. While it ensures the project's execution, the direct economic benefits to the U.S. economy (e.g., job creation, material sourcing) are diminished compared to a domestic award. However, it can foster international partnerships and potentially lead to knowledge transfer if local firms or labor are involved in subcontracting or training. The primary goal in such cases is often project completion in challenging environments, with economic benefits being a secondary consideration.

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Commercial and Institutional Building Construction

Product/Service Code: ARCHITECT/ENGINEER SERVICES › ARCH-ENG SVCS - CONSTRUCTION

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 5

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

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline