DoD awards $28.8M for Afghanistan construction, raising questions on value and competition

Contract Overview

Contract Amount: $28,854,000 ($28.9M)

Contractor: Miscellaneous Foreign Awardees

Awarding Agency: Department of Defense

Start Date: 2008-06-18

End Date: 2009-12-27

Contract Duration: 557 days

Daily Burn Rate: $51.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 8

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: ANA GARRISON FARAH PHASE II, FARAH, AFGHANISTAN

Plain-Language Summary

Department of Defense obligated $28.9 million to MISCELLANEOUS FOREIGN AWARDEES for work described as: ANA GARRISON FARAH PHASE II, FARAH, AFGHANISTAN Key points: 1. Contract awarded for construction services in Afghanistan, a high-risk operational environment. 2. Full and open competition was utilized, suggesting a broad search for qualified bidders. 3. The contract duration of 557 days indicates a significant project timeline. 4. Fixed-price contract type aims to control costs, but execution risks remain. 5. The awardee is a miscellaneous foreign entity, requiring careful vetting and oversight. 6. No small business set-aside was applied, potentially limiting opportunities for smaller firms.

Value Assessment

Rating: questionable

Benchmarking construction costs in Afghanistan is challenging due to unique logistical and security factors. The $28.8 million award for miscellaneous construction services lacks specific details to definitively assess value for money. Without comparable projects or detailed cost breakdowns, it's difficult to determine if the pricing is competitive or reflects the inherent risks and complexities of operating in that region. Further analysis would require more granular data on the scope of work and materials.

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 bids. The presence of 8 bidders suggests a reasonable level of interest and competition for this requirement. However, the ultimate impact of this competition on price discovery and value cannot be fully assessed without knowing the bid amounts and the specific evaluation criteria used.

Taxpayer Impact: Full and open competition generally benefits taxpayers by encouraging a wider range of offers, potentially leading to more competitive pricing and better value. The participation of multiple bidders suggests that the government sought to leverage market forces to secure the best possible outcome.

Public Impact

The primary beneficiaries are the U.S. Department of Defense and its operational objectives in Afghanistan. Services delivered include commercial and institutional building construction, crucial for infrastructure development. The geographic impact is concentrated in Farah, Afghanistan, supporting military presence and operations. Workforce implications are likely to involve both local Afghan labor and potentially international contractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Geopolitical instability in Afghanistan presents significant execution risks.
Logistical challenges for material and personnel movement in a remote region.
Potential for cost overruns due to unforeseen security incidents or material shortages.
Limited transparency regarding the specific scope of 'miscellaneous' construction services.
Contractor's foreign status may introduce complexities in oversight and compliance.

Positive Signals

Full and open competition process can lead to better pricing and quality.
Fixed-price contract type provides cost certainty if managed effectively.
Awarded to a contractor with experience in the region (implied by foreign awardee status).
Contract duration allows for phased execution and potential learning curve adjustments.

Sector Analysis

This contract falls within the broader construction sector, specifically focusing on commercial and institutional building. The market for construction services in conflict zones like Afghanistan is highly specialized, characterized by significant security risks, logistical hurdles, and often higher costs compared to domestic projects. Comparable spending benchmarks are difficult to establish due to these unique environmental factors. The award represents a small fraction of overall U.S. military spending in Afghanistan.

Small Business Impact

This contract did not include a small business set-aside, nor is there an indication of subcontracting plans specifically for small businesses. The awardee is listed as a 'miscellaneous foreign awardee,' suggesting it is not a U.S.-based small business. This means the direct economic impact on the U.S. small business ecosystem for this specific contract is likely minimal.

Oversight & Accountability

Oversight would primarily be managed by the Department of the Army contracting office responsible for the award. Accountability measures are inherent in the fixed-price contract terms, with penalties for non-performance or delays. Transparency is limited by the public availability of contract details; however, internal DoD oversight mechanisms and potentially Inspector General reviews would scrutinize performance and expenditures.

Related Government Programs

Afghanistan Security Forces Fund (ASFF)
Commander's Emergency Response Program (CERP)
Base Realignment and Closure (BRAC) - Afghanistan
Logistics and Support Services Contracts

Risk Flags

High-risk operational environment (Afghanistan)
Potential for cost overruns
Logistical complexities
Security concerns
Limited transparency on specific scope

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.9 million to MISCELLANEOUS FOREIGN AWARDEES. ANA GARRISON FARAH PHASE II, FARAH, AFGHANISTAN

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 $28.9 million.

What is the period of performance?

Start: 2008-06-18. End: 2009-12-27.

What specific types of commercial and institutional buildings were constructed under this contract?

The contract description 'Commercial and Institutional Building Construction' is broad and does not specify the exact types of structures built. Given the context of military operations in Afghanistan, these could range from barracks, administrative facilities, training centers, hangars, or support infrastructure. Without more detailed documentation or reporting from the contracting agency, the precise nature of the construction remains unspecified. This lack of detail hinders a precise assessment of the project's scope and its alignment with operational needs.

How does the $28.8 million cost compare to similar construction projects in Afghanistan during the 2008-2009 period?

Direct cost comparisons for construction projects in Afghanistan during 2008-2009 are challenging due to the volatile security environment, logistical complexities, and fluctuating material costs. Projects often incurred significant premiums for risk mitigation, security, and transportation. While $28.8 million is a substantial sum, without detailed project scopes, square footage, material specifications, and security cost breakdowns for comparable projects, it is difficult to definitively state whether this award was high or low. The 'Miscellaneous Foreign Awardees' designation also adds a layer of complexity, as their cost structures might differ from U.S. prime contractors.

What were the primary risks identified for this contract, and how were they mitigated?

Primary risks for a construction contract in Afghanistan during this period would include security threats to personnel and assets, logistical challenges in delivering materials and equipment, political instability, potential for corruption, and the risk of project delays due to unforeseen circumstances. Mitigation strategies likely involved robust security protocols, detailed logistical planning, close coordination with local authorities, and potentially incorporating risk premiums into the contract price. The fixed-price nature of the contract suggests a transfer of some cost risk to the contractor, incentivizing them to manage these factors effectively.

What is the track record of 'MISCELLANEOUS FOREIGN AWARDEES' in executing similar DoD contracts?

The designation 'MISCELLANEOUS FOREIGN AWARDEES' is a broad category and does not refer to a specific entity with a consistent track record. It typically encompasses foreign companies that may not fit into standard U.S. contracting classifications. Assessing their track record would require identifying the specific company awarded this contract and then researching their past performance on DoD contracts, particularly in challenging environments like Afghanistan. Without knowing the specific awardee, it's impossible to evaluate their past performance, reliability, or capacity to execute complex construction projects.

How did the number of bidders (8) influence the final contract price and terms?

Having 8 bidders in a full and open competition generally suggests a healthy level of market interest, which typically exerts downward pressure on pricing. A larger pool of bidders increases the likelihood that the government will receive competitive offers that reflect the true cost of performance plus a reasonable profit margin. While we don't have the specific bid amounts, the presence of multiple competitors likely contributed to securing a price that was considered fair and reasonable by the contracting officer, compared to a scenario with only one or two bidders.

What oversight mechanisms were in place to ensure the quality and completion of the construction work?

Oversight for DoD construction contracts typically involves a multi-layered approach. This would include contract administration by the contracting officer's representative (COR), who monitors performance, quality, and compliance. On-site quality assurance personnel, engineers, and inspectors would likely be present to verify that work meets specifications and standards. Furthermore, the Department of Defense's Inspector General (IG) often conducts audits and investigations into contract execution, particularly for large sums in high-risk environments, to ensure funds are used appropriately and work is completed satisfactorily.

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Commercial and Institutional 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: W917PM08R0052

Offers Received: 8

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2011 CRYSTAL DR STE 911, ARLINGTON, VA, 08

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

Financial Breakdown

Contract Ceiling: $28,854,000

Exercised Options: $28,854,000

Current Obligation: $28,854,000

Contract Characteristics

Cost or Pricing Data: NO

Timeline