Army awards $42.2M construction contract to Fluor Intercontinental for Iraq facilities

Contract Overview

Contract Amount: $42,161,960 ($42.2M)

Contractor: Fluor Intercontinental, Inc.

Awarding Agency: Department of Defense

Start Date: 2004-02-06

End Date: 2009-09-30

Contract Duration: 2,063 days

Daily Burn Rate: $20.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 30

Pricing Type: COST PLUS AWARD FEE

Sector: Construction

Official Description: 200405!000415!2100!W912ER!TRANSATLANTIC PROGRAM CENTER !W912ER04D0004 !A!N! !N!0003 ! !20040206!20050204!130757870!059220392!006907190!N!FLUOR INTERCONTINENTAL, INC !6000 FAIRVIEW AT J A JON!CHARLOTTE !NC!28210!00000! !IZ!* !* !IRAQ !+000056281864!N!N!000000000000!Y199!OTHER MISCELLANEOUS BUILDINGS !C2 !CONSTRUCTION !000 !* !236220!E! !5!B!M! !A!D!20050111!B! ! !A! !A!U!R!2!030!B! !Z!N!Z! ! !N!M!N! ! ! ! ! !A!A!00 !A!B!N! ! ! !Y! ! !0001! !

Plain-Language Summary

Department of Defense obligated $42.2 million to FLUOR INTERCONTINENTAL, INC. for work described as: 200405!000415!2100!W912ER!TRANSATLANTIC PROGRAM CENTER !W912ER04D0004 !A!N! !N!0003 ! !20040206!20050204!130757870!059220392!006907190!N!FLUOR INTERCONTINENTAL, INC !6000 FAIRVIEW AT J A JON!CHARLOTTE !NC!28210!00000! !IZ!* !* !IRAQ !+000056281864!N!N!000000000000!Y199!OTHER MISC… Key points: 1. Contract awarded for construction services in Iraq, indicating significant logistical and operational support needs. 2. The contract's duration of over 5 years suggests a long-term commitment to infrastructure development or maintenance. 3. Awarded under full and open competition, implying a robust bidding process. 4. The cost-plus-award-fee structure incentivizes performance but requires careful oversight to manage costs. 5. The specific North American Industry Classification System (NAICS) code 236220 points to commercial and institutional building construction. 6. The contract was awarded by the Department of the Army, a major component of the Department of Defense.

Value Assessment

Rating: fair

The total award amount of $42.2 million for a multi-year construction project in a challenging environment like Iraq requires careful benchmarking. Without specific details on the scope of work, comparing this to similar projects is difficult. However, the cost-plus-award-fee (CPAF) contract type suggests that the final cost could fluctuate based on performance, making a direct price comparison challenging without understanding the award fee criteria and achieved performance. The duration of the contract (over 5 years) also means that the total value is spread over a significant period.

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 data shows 30 bids were received, suggesting a healthy level of interest and competition for this significant project. A higher number of bidders generally leads to more competitive pricing and a wider range of technical solutions, which is beneficial for the government.

Taxpayer Impact: The robust competition for this contract likely resulted in a more favorable price for taxpayers compared to a sole-source or limited competition award. It ensures that the government is receiving the best value by considering multiple offers.

Public Impact

The primary beneficiaries are the U.S. Army and potentially other U.S. government entities operating in Iraq, who will receive necessary facility construction and maintenance. Services delivered include the construction of commercial and institutional buildings, crucial for operational readiness and support. The geographic impact is concentrated in Iraq, supporting U.S. military and governmental operations in the region. Workforce implications could include the employment of construction workers, engineers, and project managers, both locally and potentially internationally.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-award-fee contracts can lead to cost overruns if not managed diligently, as the contractor is reimbursed for costs plus a fee that can be adjusted based on performance.
Operating in a high-risk environment like Iraq presents inherent security and logistical challenges that could impact project timelines and costs.
The long duration of the contract increases the potential for scope creep or changes in requirements, which need to be managed effectively.

Positive Signals

Awarded under full and open competition with 30 bids received, indicating strong market interest and likely competitive pricing.
The contract aims to provide essential infrastructure, supporting critical military and governmental operations.
The cost-plus-award-fee structure, while requiring oversight, can incentivize high performance and quality delivery.

Sector Analysis

This contract falls within the construction sector, specifically commercial and institutional building construction (NAICS 236220). The global construction market is vast, with significant government spending allocated to infrastructure and facility development, particularly in support of defense and foreign operations. This contract represents a portion of the Department of Defense's broader spending on construction and base support services, which can range from billions to tens of billions annually depending on global commitments.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions or subcontracting goals for this contract. Given the scale and nature of the work, it is possible that larger prime contractors like Fluor Intercontinental would be expected to engage small businesses for certain aspects of the project, but this is not explicitly detailed in the award information. Further investigation into subcontracting plans would be needed to assess the impact on the small business ecosystem.

Oversight & Accountability

The contract is managed by the Department of the Army, which has established oversight mechanisms for its procurement and construction projects. The cost-plus-award-fee (CPAF) structure necessitates robust monitoring of costs and performance to ensure the award fee is justified. Transparency would be enhanced by public reporting on performance metrics and cost breakdowns. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse related to this contract.

Related Government Programs

Department of Defense Construction Contracts
Overseas Military Construction
Iraq Reconstruction Projects
Army Corps of Engineers Contracts
Global Facility Management

Risk Flags

Potential for cost overruns due to CPAF structure.
Security and logistical risks in Iraq.
Long contract duration may lead to scope creep.
Need for robust performance monitoring.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $42.2 million to FLUOR INTERCONTINENTAL, INC.. 200405!000415!2100!W912ER!TRANSATLANTIC PROGRAM CENTER !W912ER04D0004 !A!N! !N!0003 ! !20040206!20050204!130757870!059220392!006907190!N!FLUOR INTERCONTINENTAL, INC !6000 FAIRVIEW AT J A JON!CHARLOTTE !NC!28210!00000! !IZ!* !* !IRAQ !+000056281864!N!N!000000000000!Y199!OTHER MISCELLANEOUS BUILDINGS !C2 !CONSTRUCTION !000 !* !236220!E! !5!B!M! !A!D!20050111!B! ! !A! !A!U!R!2!030!B! !Z!N!Z! ! !N!M!N! ! ! ! ! !A!A!00 !A!B!N! ! ! !Y! ! !0001! !

Who is the contractor on this award?

The obligated recipient is FLUOR INTERCONTINENTAL, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $42.2 million.

What is the period of performance?

Start: 2004-02-06. End: 2009-09-30.

What is the specific scope of work for the construction services provided under this contract?

The provided data indicates the contract is for 'OTHER MISCELLANEOUS BUILDINGS' and falls under the NAICS code 236220 for 'Commercial and Institutional Building Construction.' While the exact scope is not detailed, it implies the construction, renovation, or maintenance of various types of facilities in Iraq. This could range from administrative buildings and barracks to support facilities like warehouses or workshops. The contract's duration of over five years suggests a substantial and potentially ongoing need for these construction services, possibly related to base development, operational support, or infrastructure repair in the region.

How does the $42.2 million award compare to similar construction contracts awarded by the Department of Defense in overseas contingency operations?

Comparing the $42.2 million award requires context regarding the specific type of construction, location, and duration. Contracts for major base construction or significant infrastructure projects in high-cost, high-risk environments like Iraq can easily reach tens or hundreds of millions of dollars. For instance, the U.S. Army Corps of Engineers often manages large-scale projects exceeding this amount. However, smaller renovation or specialized facility contracts might be in the single-digit millions. Given the 5-year duration and the location, $42.2 million appears to be a moderate to significant award for construction services, likely covering multiple facilities or a substantial single project.

What are the primary risks associated with a Cost Plus Award Fee (CPAF) contract of this magnitude and duration?

The primary risks with a CPAF contract of this nature include potential cost growth and the challenge of objectively measuring performance to determine the award fee. For the government, there's a risk that costs could escalate beyond initial projections, even with the fee structure designed to incentivize efficiency. Ensuring that the performance metrics are clearly defined, measurable, and aligned with project objectives is crucial. If metrics are vague or subjective, it can lead to disputes or the contractor receiving higher fees than warranted. Contractor performance in a complex environment like Iraq also introduces risks related to security, logistics, and unforeseen site conditions, which can impact both cost and schedule.

What is Fluor Intercontinental's track record with large-scale construction contracts, particularly in overseas or contingency environments?

Fluor Intercontinental, as part of Fluor Corporation, has a significant track record in executing large-scale engineering and construction projects globally, including extensive experience in challenging overseas environments and contingency operations. They have been involved in major infrastructure, industrial, and government projects, often in regions with complex logistical and security requirements. While specific details of their past performance on similar Army contracts in Iraq are not provided in this data snippet, Fluor's general profile suggests they possess the capacity and experience to manage such a contract. However, a deeper dive into their performance history, including any past issues or commendations on similar contracts, would be necessary for a comprehensive assessment.

How has spending on construction services in Iraq evolved over the period this contract was active (2004-2009)?

Spending on construction services in Iraq during the period of this contract (roughly 2004-2009) was substantial, driven by the ongoing U.S. military presence and reconstruction efforts following the 2003 invasion. The initial years saw significant investment in establishing and expanding military bases, logistical hubs, and essential infrastructure. As the conflict evolved, spending shifted towards maintaining existing facilities, providing operational support, and contributing to reconstruction initiatives. This contract, awarded early in that period, likely reflects the initial phase of establishing or upgrading facilities to support military operations. Overall spending in this category was high during this timeframe, reflecting the scale of U.S. engagement.

What are the implications of awarding a construction contract of this size to a single large contractor like Fluor Intercontinental versus breaking it into smaller components?

Awarding a large, comprehensive contract like this to a single entity like Fluor Intercontinental offers potential benefits such as streamlined management, single-point accountability, and economies of scale. A single contractor can often achieve better coordination between different construction phases and trades, potentially leading to faster project completion and reduced administrative overhead for the government. However, it also concentrates risk with one company and may limit opportunities for smaller, specialized firms to participate directly. Breaking the contract into smaller components could foster greater competition among niche providers and potentially lower costs for specific tasks, but it would increase the government's administrative burden in managing multiple contracts and ensuring interoperability.

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

Offers Received: 30

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: Fluor Corporation (UEI: 006907190)

Address: 6000 FAIRVIEW AT J A JON, CHARLOTTE, NC, 28210

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W912ER04D0004

IDV Type: IDC

Timeline