DoD Awards $59.5M for Iraq Construction, Highlighting Potential Overruns and Limited Competition
Contract Overview
Contract Amount: $59,532,467 ($59.5M)
Contractor: Fluor Intercontinental, Inc.
Awarding Agency: Department of Defense
Start Date: 2005-04-26
End Date: 2011-05-05
Contract Duration: 2,200 days
Daily Burn Rate: $27.1K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 30
Pricing Type: FIRM FIXED PRICE
Sector: Construction
Official Description: 200509!501073!2100!W912ER!TRANSATLANTIC PROGRAM CENTER !W912ER04D0004 !A!N! !N!0012 ! !20050426!20060426!130757870!059220392!006907190!N!FLUOR INTERCONTINENTAL, INC !6000 FAIRVIEW RD !CHARLOTTE !NC!28210!00000! !IZ!* !* !IRAQ !+000014182507!N!N!000000000000!Y199!OTHER MISCELLANEOUS BUILDINGS !C2 !CONSTRUCTION !000 !* !236220!E! !5!B!M! !B!D!20081114!B! ! !A! !A!Y!J!2!030!B! !Z!N!A! ! !N!M!N! ! ! ! ! !A!A!000!A!B!N! ! ! !Y! ! !0001! !
Plain-Language Summary
Department of Defense obligated $59.5 million to FLUOR INTERCONTINENTAL, INC. for work described as: 200509!501073!2100!W912ER!TRANSATLANTIC PROGRAM CENTER !W912ER04D0004 !A!N! !N!0012 ! !20050426!20060426!130757870!059220392!006907190!N!FLUOR INTERCONTINENTAL, INC !6000 FAIRVIEW RD !CHARLOTTE !NC!28210!00000! !IZ!* !* !IRAQ !+000014182507!N!N!000000000000!Y199!OTHER MISCELLANEO… Key points: 1. Significant contract value for construction services in a high-risk environment. 2. Limited competition raises concerns about price discovery and potential cost inefficiencies. 3. Long contract duration (2200 days) increases risk of scope creep and cost escalation. 4. Sector is construction, with a specific focus on building infrastructure.
Value Assessment
Rating: concerning
The awarded amount of $59.5M is substantial. However, the contract has already seen significant modifications, with the current value at $130.7M, indicating potential for substantial overruns and scope changes.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded using full and open competition. However, the significant increase in contract value post-award suggests that initial pricing may not have fully accounted for project complexities or that change orders have substantially altered the scope.
Taxpayer Impact: The substantial increase in contract value beyond the initial award raises concerns about taxpayer value and efficient use of funds, especially given the extended duration and modifications.
Public Impact
Taxpayers may be exposed to significant cost increases beyond the initial award. The project's location in Iraq presents inherent security and logistical challenges that can impact costs and timelines. The extended duration and multiple modifications suggest potential for inefficiencies and scope creep, impacting the overall value delivered.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Significant contract modifications and cost increases.
- Long contract duration.
- High-risk operating environment (Iraq).
- Potential for cost overruns.
Positive Signals
- Awarded through full and open competition.
- Contractor has experience in international construction.
Sector Analysis
This contract falls within the construction sector, specifically for commercial and institutional buildings. The value is significant, and the context of operating in Iraq adds considerable risk and complexity compared to domestic construction projects.
Small Business Impact
There is no indication that small businesses were involved as prime contractors or significant subcontractors in this award. The focus appears to be on large, established firms capable of handling complex international projects.
Oversight & Accountability
The significant increase in contract value and duration warrants close oversight to ensure funds are used effectively and the project remains on track. Robust monitoring of change orders and performance is crucial.
Related Government Programs
- Commercial and Institutional Building Construction
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Significant cost growth post-award.
- Extended contract duration.
- Operating in a high-risk environment.
- Potential for scope creep.
- Lack of transparency on specific cost drivers for modifications.
Tags
commercial-and-institutional-building-co, department-of-defense, do, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $59.5 million to FLUOR INTERCONTINENTAL, INC.. 200509!501073!2100!W912ER!TRANSATLANTIC PROGRAM CENTER !W912ER04D0004 !A!N! !N!0012 ! !20050426!20060426!130757870!059220392!006907190!N!FLUOR INTERCONTINENTAL, INC !6000 FAIRVIEW RD !CHARLOTTE !NC!28210!00000! !IZ!* !* !IRAQ !+000014182507!N!N!000000000000!Y199!OTHER MISCELLANEOUS BUILDINGS !C2 !CONSTRUCTION !000 !* !236220!E! !5!B!M! !B!D!20081114!B! ! !A! !A!Y!J!2!030!B! !Z!N!A! ! !N!M!N! ! ! ! ! !A!A!000!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 $59.5 million.
What is the period of performance?
Start: 2005-04-26. End: 2011-05-05.
What specific factors contributed to the nearly doubling of the contract value from the initial award to the current amount?
The substantial increase in contract value likely stems from a combination of factors inherent to operating in a complex environment like Iraq. These could include unforeseen site conditions, changes in security requirements, material cost fluctuations, extended logistical challenges, and the need for additional scope to meet evolving operational needs. Detailed review of contract modifications and change order justifications is necessary to pinpoint the exact drivers.
How effectively did the initial full and open competition price the risks associated with a long-term construction project in Iraq?
The significant increase in contract value suggests that the initial competition may not have fully captured the long-term risks and potential cost escalations associated with a project of this nature and duration in Iraq. While full and open competition is a strong process, the actual execution and unforeseen circumstances can lead to substantial deviations from initial estimates. Further analysis of the bidding process and post-award modifications is needed.
What is the projected taxpayer impact of the contract modifications and extended duration on the final delivery of the construction project?
The taxpayer impact is a significant increase in the total cost of the project beyond the initial award. The extended duration also means prolonged expenditure and potential for further cost creep. While the project aims to deliver essential infrastructure, the escalating costs raise questions about the efficiency of resource allocation and the ultimate value for money achieved by the government.
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
Offers Received: 30
Pricing Type: FIRM FIXED PRICE (J)
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
Parent Contract
Parent Award PIID: W912ER04D0004
IDV Type: IDC
Timeline
Start Date: 2005-04-26
Current End Date: 2011-05-05
Potential End Date: 2011-05-05 00:00:00
Last Modified: 2016-02-19
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