Department of Defense contract for construction services in Afghanistan awarded to LAKESHORE ENGINEERING SERVICES, INC. for over $22.3 million

Contract Overview

Contract Amount: $22,315,148 ($22.3M)

Contractor: Lakeshore Engineering Services, Inc.

Awarding Agency: Department of Defense

Start Date: 2011-09-13

End Date: 2015-05-30

Contract Duration: 1,355 days

Daily Burn Rate: $16.5K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: FA8903-06-D-8505-0035; CONSTRUCT COLLECTION POINT/AFGHANISTA

Place of Performance

Location: DETROIT, WAYNE County, MICHIGAN, 48202

State: Michigan Government Spending

Plain-Language Summary

Department of Defense obligated $22.3 million to LAKESHORE ENGINEERING SERVICES, INC. for work described as: FA8903-06-D-8505-0035; CONSTRUCT COLLECTION POINT/AFGHANISTA Key points: 1. The contract value of over $22.3 million represents a significant investment in infrastructure development. 2. Competition dynamics for this contract were limited, potentially impacting price discovery. 3. The fixed-price contract type suggests a defined scope and cost control measures. 4. Performance duration of 1355 days indicates a substantial project timeline. 5. The contract was awarded by the Department of the Air Force, highlighting a specific branch's operational needs. 6. The project's geographic location in Afghanistan presents unique logistical and security challenges.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific details on the scope of construction and comparable projects in similar high-risk environments. The total award amount of over $22.3 million over a period of 1355 days suggests a substantial project. However, without a clear understanding of the deliverables and market rates for such specialized construction in Afghanistan, a definitive value-for-money assessment is difficult. The firm fixed-price nature of the contract provides some cost certainty, but the overall efficiency and effectiveness of the spending depend heavily on project execution and management.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating that while a competitive process was intended, certain sources were excluded. This suggests that the pool of potential bidders may have been restricted, which can influence the level of competition. The specific reasons for excluding sources are not detailed, making it difficult to fully assess the impact on price discovery. A limited competition can sometimes lead to higher prices compared to full and open competition.

Taxpayer Impact: The limited competition may have resulted in taxpayers paying a premium for these construction services, as a reduced number of bidders could lessen the downward pressure on pricing.

Public Impact

The primary beneficiaries of this contract are likely the U.S. military forces operating in Afghanistan, who would benefit from improved facilities and infrastructure. The services delivered include commercial and institutional building construction, essential for supporting operational and logistical needs. The geographic impact is concentrated in Afghanistan, addressing specific infrastructure requirements in that region. Workforce implications could include the employment of construction workers, engineers, and project managers, potentially both U.S. personnel and local labor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition could lead to higher costs for taxpayers.
The high-risk environment in Afghanistan may introduce unforeseen cost escalations and delays.
Lack of transparency regarding source exclusion hinders a full assessment of competitive fairness.

Positive Signals

Firm fixed-price contract provides cost certainty for the defined scope.
Award to a single contractor streamlines project management and execution.
The project addresses critical infrastructure needs in a challenging operational theater.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector. The global construction market is vast, with significant government spending allocated to infrastructure and facility development, particularly in support of defense and foreign policy objectives. Contracts of this nature, especially in overseas contingency operations, often command higher prices due to logistical complexities, security requirements, and specialized labor. Benchmarking against similar construction projects in austere environments is crucial for assessing value, though such data is often proprietary or difficult to obtain.

Small Business Impact

The contract details indicate that small business participation was not a primary focus, as the 'sb' field is false and there is no mention of small business set-asides. This suggests that the contract was likely awarded to a larger firm capable of handling the scale and complexity of the project. There is no explicit information on subcontracting plans, but for projects of this magnitude, it is common for prime contractors to engage subcontractors, which could potentially include small businesses for specialized tasks.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Department of the Air Force's contracting and program management offices. Inspector General investigations could be initiated if fraud, waste, or abuse is suspected. Transparency is often limited for contracts in contingency operations due to security and operational sensitivities. Accountability measures would be tied to the contract's performance clauses and delivery schedules.

Related Government Programs

Afghanistan Infrastructure Projects
Department of Defense Construction Contracts
Contingency Operations Support
Air Force Facility Development

Risk Flags

Limited competition may have inflated costs.
Geopolitical instability in Afghanistan poses inherent risks.
Lack of detailed scope information hinders comprehensive value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.3 million to LAKESHORE ENGINEERING SERVICES, INC.. FA8903-06-D-8505-0035; CONSTRUCT COLLECTION POINT/AFGHANISTA

Who is the contractor on this award?

The obligated recipient is LAKESHORE ENGINEERING SERVICES, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $22.3 million.

What is the period of performance?

Start: 2011-09-13. End: 2015-05-30.

What was the specific scope of construction for this contract, and what types of facilities were built?

The contract, FA8903-06-D-8505-0035, was for 'CONSTRUCT COLLECTION POINT/AFGHANISTAN.' While the exact specifications are not detailed in the provided data, the description suggests the construction of facilities intended for the collection or processing of information or personnel within Afghanistan. This could encompass a range of structures, from basic operational posts to more complex processing centers, depending on the military's requirements at the time. The 'Commercial and Institutional Building Construction' NAICS code further supports the idea of building functional structures rather than purely infrastructure like roads or bridges.

How does the $22.3 million award compare to similar construction contracts in Afghanistan during the 2011-2015 period?

Comparing this $22.3 million contract to similar projects in Afghanistan between 2011 and 2015 requires access to a broader dataset of defense contracts executed in that region during that timeframe. However, it is generally understood that construction projects in Afghanistan, particularly those supporting military operations, were often high-value due to significant logistical challenges, security premiums, and the specialized nature of the work. Projects involving the construction of bases, operational facilities, or critical infrastructure could easily run into tens or hundreds of millions of dollars. Without specific comparable project data, it's difficult to definitively state if this contract was above or below average, but the amount is consistent with the high cost environment of contingency operations.

What were the primary risks associated with executing a construction contract in Afghanistan during the period of performance?

Executing a construction contract in Afghanistan between 2011 and 2015 presented numerous significant risks. These included: 1) Security risks: The volatile security environment posed threats to personnel, equipment, and project sites, potentially leading to delays, increased security costs, and work stoppages. 2) Logistical challenges: Transporting materials, equipment, and personnel into and within Afghanistan was complex and expensive due to underdeveloped infrastructure and security concerns. 3) Political and economic instability: Fluctuations in the political landscape and local economy could impact project timelines, labor availability, and material costs. 4) Corruption: The prevalence of corruption in the region could pose risks related to procurement, permits, and local partnerships. 5) Environmental factors: Harsh weather conditions and challenging terrain could also affect construction schedules and costs.

What does the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' designation imply about the bidding process?

The designation 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' indicates a nuanced approach to competition. Initially, the solicitation was intended for full and open competition, meaning all responsible sources were encouraged to submit offers. However, subsequent to the initial solicitation, certain sources were excluded from consideration. The reasons for exclusion are not specified but could range from failure to meet specific technical qualifications, past performance issues, or other criteria outlined in the solicitation. This exclusion narrows the field of potential bidders from what would be expected in a purely full and open competition, potentially impacting the number of offers received and the resulting price competition.

What is the significance of the 'FIRM FIXED PRICE' contract type for this project?

A 'FIRM FIXED PRICE' (FFP) contract type is significant because it places the primary responsibility for cost control on the contractor, LAKESHORE ENGINEERING SERVICES, INC. Under an FFP agreement, the contractor agrees to a set price for the work, and their profit is determined by their ability to manage costs effectively. This provides the government with a high degree of cost certainty, as the total price is fixed regardless of the contractor's actual costs incurred. For the government, this contract type is generally preferred when the scope of work is well-defined and risks can be reasonably estimated, as it shifts the risk of cost overruns to the contractor. This can incentivize efficiency and timely completion.

Industry Classification

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

Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 7310 WOODWARD AVENUE, FIFT, DETROIT, MI, 48202

Business Categories: Category Business, Foreign-Owned and U.S.-Incorporated Business, Minority Owned Business, Not Designated a Small Business, Special Designations, Subchapter S Corporation, Indian (Subcontinent) American Owned Business

Financial Breakdown

Contract Ceiling: $22,315,148

Exercised Options: $22,315,148

Current Obligation: $22,315,148

Subaward Activity

Number of Subawards: 35

Total Subaward Amount: $30,104,180

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: FA890306D8505

IDV Type: IDC

Timeline