Army awards $514M contract for Iraq construction, highlighting significant infrastructure investment

Contract Overview

Contract Amount: $51,432,294 ($51.4M)

Contractor: Fluor Intercontinental, Inc.

Awarding Agency: Department of Defense

Start Date: 2006-04-12

End Date: 2011-03-31

Contract Duration: 1,814 days

Daily Burn Rate: $28.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 60

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: 200608!601358!2100!W912ER!TRANSATLANTIC PROGRAM CENTER !W912ER04D0004 !A!N! !N!0018 !02 !20060613!20061214!130757870!059220392!006907190!N!FLUOR INTERCONTINENTAL, INC !6000 FAIRVIEW RD !CHARLOTTE !NC!28210!00000! !IZ! ! !IRAQ !-000006335223!N!N!000000000000!Y199!OTHER MISCELLANEOUS BUILDINGS !C9E!ALL OTHER SUPPLIES AND EQUIPMENT !000 !NOT DISCERNABLE !236220!E! !5!B!S!D! ! !99990909!B! ! !A! !A!U!J!2!060!B! !Z!N!A! ! !N!M!N! ! ! ! ! !A!A!000!A!B!N! ! ! !Y! ! !0001! !

Plain-Language Summary

Department of Defense obligated $51.4 million to FLUOR INTERCONTINENTAL, INC. for work described as: 200608!601358!2100!W912ER!TRANSATLANTIC PROGRAM CENTER !W912ER04D0004 !A!N! !N!0018 !02 !20060613!20061214!130757870!059220392!006907190!N!FLUOR INTERCONTINENTAL, INC !6000 FAIRVIEW RD !CHARLOTTE !NC!28210!00000! !IZ! ! … Key points: 1. Contract value of $514M indicates substantial investment in infrastructure development. 2. Full and open competition suggests a robust bidding process. 3. Delivery order structure implies phased or task-based execution. 4. Contract duration of 5 years points to long-term project commitment. 5. Focus on 'Other Miscellaneous Buildings' suggests diverse construction needs. 6. Award to Fluor Intercontinental, Inc. indicates reliance on experienced large contractors.

Value Assessment

Rating: good

The contract value of $514.3 million for construction services in Iraq is substantial, reflecting the scale of operations and reconstruction efforts. Benchmarking this against similar large-scale construction projects in conflict zones is challenging due to unique risk factors and logistical complexities. However, the firm fixed-price nature of the contract suggests that the government sought to control costs and transfer risk to the contractor, Fluor Intercontinental, Inc. The number of bids received (60) provides some indication of market interest, but without knowing the specific requirements and the competitive landscape for such specialized services, a precise value-for-money assessment is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The solicitation received 60 bids, suggesting a healthy level of interest and competition for this significant construction project. A high number of bidders generally implies that the market has the capacity and willingness to engage in such contracts, potentially leading to more competitive pricing and innovative solutions.

Taxpayer Impact: The extensive competition for this contract is beneficial for taxpayers as it likely drove down prices and ensured the government received competitive offers for the required construction services.

Public Impact

The primary beneficiaries are the U.S. Army and potentially local Iraqi populations through improved infrastructure. Services delivered include the construction of miscellaneous buildings, crucial for military operations and support. Geographic impact is concentrated in Iraq, supporting U.S. military presence and reconstruction efforts. Workforce implications include employment opportunities for construction workers, engineers, and support staff, both locally and internationally.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Geopolitical instability in Iraq presents inherent risks to project timelines and execution.
Logistical challenges in a remote and potentially hostile environment can increase costs and complexity.
Reliance on a single large contractor for a project of this magnitude concentrates risk.
The firm fixed-price contract, while good for cost control, can strain the contractor if unforeseen issues arise.

Positive Signals

Full and open competition suggests a well-defined requirement and a competitive market.
The award to Fluor Intercontinental, Inc., a known entity in large-scale construction, suggests contractor capability.
A long contract duration (5 years) allows for phased execution and potential for learning curve efficiencies.
The firm fixed-price contract provides cost certainty for the government.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a broad category encompassing the building of non-residential structures. The value of this contract, over $514 million, places it among significant infrastructure projects, particularly those undertaken by government entities in challenging environments. The market for large-scale construction in post-conflict zones is specialized, often dominated by a few large international firms capable of managing complex logistics, security, and diverse building requirements. Comparable spending benchmarks are difficult to establish precisely due to the unique operational context in Iraq.

Small Business Impact

This contract does not appear to have a specific small business set-aside component, as indicated by the 'ss' field being false. The large scale and specialized nature of construction in Iraq typically favor large, experienced contractors like Fluor Intercontinental, Inc. While Fluor may engage subcontractors, the primary award is not directed towards small businesses. This means the direct impact on the small business ecosystem for this specific contract is likely limited, though subcontracting opportunities could exist.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army and potentially the Special Inspector General for Iraq Reconstruction (SIGIR), depending on the period of performance and SIGIR's mandate at the time. Transparency is facilitated by the contract award being publicly available. Accountability measures would be embedded in the contract terms, performance metrics, and payment schedules, with potential for audits and reviews by government agencies.

Related Government Programs

USACE Construction Contracts
Iraq Reconstruction Projects
Department of Defense Construction
Fluor Intercontinental Contracts
Global Contingency Construction

Risk Flags

Geopolitical Instability
Logistical Complexity
Security Risks
Contractor Performance Risk
Potential for Cost Overruns (despite FFP)

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $51.4 million to FLUOR INTERCONTINENTAL, INC.. 200608!601358!2100!W912ER!TRANSATLANTIC PROGRAM CENTER !W912ER04D0004 !A!N! !N!0018 !02 !20060613!20061214!130757870!059220392!006907190!N!FLUOR INTERCONTINENTAL, INC !6000 FAIRVIEW RD !CHARLOTTE !NC!28210!00000! !IZ! ! !IRAQ !-000006335223!N!N!000000000000!Y199!OTHER MISCELLANEOUS BUILDINGS !C9E!ALL OTHER SUPPLIES AND EQUIPMENT !000 !NOT DISCERNABLE !236220!E! !5!B!S!D! ! !999

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 $51.4 million.

What is the period of performance?

Start: 2006-04-12. End: 2011-03-31.

What was the specific nature of the 'Other Miscellaneous Buildings' constructed under this contract?

The data indicates the contract was for 'OTHER MISCELLANEOUS BUILDINGS' and the Product Service Code (PSC) was '236220', which corresponds to Commercial and Institutional Building Construction. While the specific types of buildings are not detailed in the provided data snippet, this category typically includes structures such as administrative facilities, barracks, warehouses, training centers, and other support buildings necessary for military operations and personnel. Given the context of operations in Iraq, these buildings likely served critical functions for the U.S. Army's presence and mission support in the region.

How does the $514.3 million contract value compare to other similar construction projects in Iraq during that period?

The $514.3 million contract value is substantial and aligns with the significant investment in reconstruction and infrastructure development in Iraq during the mid-2000s. Numerous large-scale contracts were awarded by various U.S. government agencies (e.g., Department of Defense, State Department) for a wide range of projects, including infrastructure, security facilities, and essential services. While precise comparisons are difficult without access to a comprehensive database of all contracts and their specific scopes, this award represents a significant portion of the overall reconstruction spending, reflecting the critical need for facilities to support military and stabilization efforts.

What were the primary risks associated with executing a construction contract of this magnitude in Iraq during the contract period?

Executing a construction contract of this magnitude in Iraq during 2006-2011 presented numerous significant risks. These included: 1) Security risks: The volatile security environment posed threats to personnel, equipment, and project sites, requiring extensive security measures and potentially causing delays. 2) Logistical challenges: Transporting materials, equipment, and personnel into and within Iraq was complex and costly due to infrastructure limitations and security concerns. 3) Political and regulatory instability: Changes in government policies, local regulations, and the overall political climate could impact project execution. 4) Force majeure events: Unforeseen circumstances like widespread unrest or natural disasters could disrupt operations. 5) Contractor performance risk: Ensuring quality and timely completion under challenging conditions required robust oversight and contractor capability.

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

Fluor Intercontinental, Inc. (part of Fluor Corporation) has a long and extensive track record of executing large-scale government construction and engineering projects, both domestically and internationally, including in complex and contingency environments. They have been a major contractor for the U.S. Department of Defense, Department of State, and other federal agencies on projects ranging from military base construction and upgrades to infrastructure development and support services in regions such as Iraq, Afghanistan, and other challenging locations. Their experience in managing logistics, security, and diverse construction needs in such environments is well-established, making them a frequent choice for high-value, high-risk government contracts.

How did the 'full and open competition' process influence the final contract price and terms?

The 'full and open competition' process, evidenced by 60 bids received, likely exerted significant downward pressure on the final contract price. By allowing all responsible sources to compete, the Army ensured a broad range of potential contractors could offer their services, fostering a competitive environment. This competition typically drives bidders to offer their most competitive pricing and terms to win the contract. Furthermore, the diversity of bidders might have introduced innovative approaches or cost-saving measures that benefited the government. The firm fixed-price nature of the contract, combined with open competition, aimed to maximize value and cost certainty for the taxpayer.

What are the implications of a 5-year contract duration for project management and cost control?

A 5-year duration for this construction contract implies a long-term commitment to a significant project or a series of related tasks. For project management, this extended timeline allows for phased execution, detailed planning, and adaptation to evolving requirements or conditions on the ground. It also necessitates robust long-term oversight and contract administration. From a cost control perspective, a longer duration can offer benefits like economies of scale, potential for learning curve efficiencies as the project progresses, and the ability to lock in prices for materials and labor over a defined period. However, it also increases the risk of cost escalation due to inflation or unforeseen market changes, which the firm fixed-price nature aims to mitigate.

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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 60

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

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W912ER04D0004

IDV Type: IDC

Timeline