State Department awards $191.6M design-build contract for new consulate in Guadalajara, Mexico

Contract Overview

Contract Amount: $191,636,225 ($191.6M)

Contractor: BL Harbert International LLC

Awarding Agency: Department of State

Start Date: 2018-09-29

End Date: 2022-11-17

Contract Duration: 1,510 days

Daily Burn Rate: $126.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: DESIGN-BUILD SERVICES FOR NEW CONSULATE COMPOUND, GUADALAJARA, MEXICO

Plain-Language Summary

Department of State obligated $191.6 million to BL HARBERT INTERNATIONAL LLC for work described as: DESIGN-BUILD SERVICES FOR NEW CONSULATE COMPOUND, GUADALAJARA, MEXICO Key points: 1. Contract awarded to BL Harbert International LLC for a firm-fixed-price design-build project. 2. Project scope includes construction of a new consulate compound in Guadalajara, Mexico. 3. The contract duration is 1510 days, indicating a significant, long-term construction effort. 4. Awarded under full and open competition, suggesting a robust bidding process. 5. No small business set-aside was utilized for this contract. 6. The contract type is a definitive contract, typically used for complex projects.

Value Assessment

Rating: good

The contract value of $191.6 million for a new consulate compound appears reasonable given the scale and complexity of such a project. Design-build contracts often offer cost efficiencies by integrating design and construction phases. Benchmarking against similar large-scale government construction projects abroad would provide further context on value for money. The firm-fixed-price structure shifts risk to the contractor, which can lead to more predictable costs.

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 a bid. The presence of two bids suggests a competitive environment, though more bidders would typically indicate stronger price discovery. The agency's approach to competition for this significant project likely aimed to secure the best value through a broad solicitation.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down prices and improve the quality of services offered.

Public Impact

The primary beneficiary is the U.S. Department of State, which will gain a new, modern consulate facility. The project delivers essential infrastructure for diplomatic operations and services in Mexico. The geographic impact is concentrated in Guadalajara, Mexico, enhancing U.S. diplomatic presence. The construction phase will likely create numerous jobs for skilled and unskilled labor in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions or design challenges arise.
Geopolitical risks associated with operating in Mexico could impact project timelines or security.
Contractor performance risk, though mitigated by firm-fixed-price, requires diligent oversight.

Positive Signals

Firm-fixed-price contract structure transfers significant cost risk to the contractor.
Design-build approach can lead to efficiencies and streamlined project delivery.
Award under full and open competition suggests a competitive selection process.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the construction industry. Large-scale government projects like embassies and consulates represent a substantial portion of federal spending in this sector, often requiring specialized expertise in design, security, and international standards. The market for such projects is competitive, with a few large firms capable of undertaking complex international builds.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. The scale and nature of the project likely favored larger, experienced contractors. The absence of small business participation could limit opportunities for smaller firms in this specific instance, though larger prime contractors may engage small businesses for specialized services.

Oversight & Accountability

Oversight for this contract would typically be managed by the U.S. Department of State's Bureau of Overseas Buildings Operations (OBO), which is responsible for managing the design, construction, and maintenance of U.S. diplomatic facilities worldwide. Accountability measures are embedded in the contract terms, including performance standards and payment schedules tied to milestones. Transparency is generally maintained through contract awards databases and reporting requirements.

Related Government Programs

Embassy and Consulate Construction Projects
Overseas Diplomatic Infrastructure
Federal Design-Build Contracts
International Construction Services

Risk Flags

Low bidder count
Potential for cost overruns in complex overseas construction
Geopolitical risks in host country

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $191.6 million to BL HARBERT INTERNATIONAL LLC. DESIGN-BUILD SERVICES FOR NEW CONSULATE COMPOUND, GUADALAJARA, MEXICO

Who is the contractor on this award?

The obligated recipient is BL HARBERT INTERNATIONAL LLC.

Which agency awarded this contract?

Awarding agency: Department of State (Department of State).

What is the total obligated amount?

The obligated amount is $191.6 million.

What is the period of performance?

Start: 2018-09-29. End: 2022-11-17.

What is the historical spending pattern for the construction of U.S. consulates and embassies abroad?

The construction of U.S. diplomatic facilities abroad is a recurring and significant expenditure for the federal government, primarily managed by the Department of State. Historical data indicates a consistent need for new construction, major renovations, and security upgrades to existing facilities. Projects vary widely in cost, influenced by location, size, security requirements, and construction complexity. For instance, major new embassy or consulate constructions can range from tens of millions to several hundred million dollars. Factors such as geopolitical stability, evolving security threats, and the need to modernize aging infrastructure drive this spending. The Bureau of Overseas Buildings Operations (OBO) manages these projects, often utilizing design-build contracts to streamline delivery and manage costs, similar to the Guadalajara consulate project. Analyzing past projects reveals trends in contract types, competition levels, and the average cost per square foot for different types of facilities.

How does the cost of this contract compare to similar overseas construction projects undertaken by the U.S. government?

Comparing the $191.6 million cost for the Guadalajara consulate to similar projects requires access to detailed data on other overseas construction efforts. However, based on general knowledge of federal construction projects, this figure appears to be within the expected range for a new, large-scale diplomatic facility. Projects involving design-build services for secure compounds in foreign locations are inherently complex and costly due to factors like specialized security features, logistical challenges in remote areas, adherence to stringent U.S. government standards, and fluctuating local labor and material costs. For context, other new embassy or consulate constructions have also reached or exceeded this price point. The firm-fixed-price nature of this contract suggests an effort to cap costs, but the baseline cost reflects the significant investment required for such critical infrastructure.

What are the primary risks associated with a design-build contract for an overseas construction project?

Design-build contracts, while offering potential efficiencies, carry specific risks, especially for overseas projects. A primary risk is the integration of design and construction; if the design is flawed or incomplete, it can lead to significant cost overruns and schedule delays during the construction phase, even with a fixed price. For overseas projects, logistical challenges, such as importing materials and equipment, navigating local regulations and customs, and securing necessary permits, pose substantial risks. Geopolitical instability, security concerns in the host country, and potential labor disputes can also disrupt timelines and increase costs. Furthermore, ensuring compliance with both U.S. government standards (e.g., security, accessibility) and local building codes and environmental regulations adds complexity. The contractor's ability to manage these multifaceted risks effectively is crucial for project success.

What is BL Harbert International LLC's track record with large federal construction contracts, particularly overseas?

BL Harbert International LLC has a significant track record of executing large-scale construction projects, including numerous contracts with U.S. federal agencies, particularly for overseas facilities. They have been involved in building embassies, consulates, and other government installations through the Department of State's Bureau of Overseas Buildings Operations (OBO) and other agencies. Their experience often includes complex projects requiring high levels of security, specialized construction techniques, and adherence to stringent quality standards in challenging international environments. The award of a $191.6 million design-build contract for the Guadalajara consulate suggests they possess the requisite experience, financial capacity, and technical expertise to manage such a significant undertaking. Reviewing their past performance on similar projects would provide further insight into their reliability and success rates.

How does the competition level (2 bidders) for this contract potentially impact the final price and quality?

A competition with only two bidders, while technically 'full and open,' is on the lower end of what is typically considered robust competition for a contract of this magnitude. Generally, a higher number of bidders (e.g., 3-5 or more) creates more pressure on each firm to offer competitive pricing and superior technical solutions to win the contract. With only two bidders, there is a greater possibility that the price offered might be higher than it would have been in a more crowded field. However, the quality of the bidders is also a critical factor. If these two bidders are highly qualified and experienced, they may still offer competitive terms. The agency's evaluation process would have assessed not only price but also technical merit, past performance, and risk, aiming to select the best overall value, not just the lowest price.

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: TWO STEP

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 820 SHADES CREEK PKWY STE 3000, BIRMINGHAM, AL, 35209

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $191,636,225

Exercised Options: $191,636,225

Current Obligation: $191,636,225

Subaward Activity

Number of Subawards: 112

Total Subaward Amount: $18,759,561

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline