State Department awards $28.6M design-build contract for San Salvador Embassy, utilizing full and open competition

Contract Overview

Contract Amount: $28,624,289 ($28.6M)

Contractor: Futron, Inc.

Awarding Agency: Department of State

Start Date: 2022-06-16

End Date: 2026-05-31

Contract Duration: 1,445 days

Daily Burn Rate: $19.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: DESIGN BUILD SERVICES FOR THE US EMBASSY IN SAN SALVADOR CSU.

Plain-Language Summary

Department of State obligated $28.6 million to FUTRON, INC. for work described as: DESIGN BUILD SERVICES FOR THE US EMBASSY IN SAN SALVADOR CSU. Key points: 1. The contract's firm-fixed-price structure aims to control costs and provide predictability. 2. A single award indicates potential for concentrated contractor performance. 3. The multi-year duration suggests a significant, long-term project. 4. The project falls under commercial and institutional building construction, a common government need. 5. The use of definitive contract type implies a clear scope of work. 6. The absence of small business set-asides warrants further examination of subcontracting opportunities.

Value Assessment

Rating: good

The contract value of $28.6 million for design and build services for an embassy is within a reasonable range for such complex international projects. Benchmarking against similar embassy construction or renovation projects globally would provide a more precise value-for-money assessment. The firm-fixed-price (FFP) award type suggests that the contractor bears the risk of cost overruns, which is generally favorable for the government in terms of price certainty, assuming the initial price was competitive.

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 offers. With three bids received, the competition level appears moderate. While more bidders could potentially drive prices lower, three offers suggest that the market for this type of specialized construction service is not overly constrained. The agency's ability to attract multiple qualified bidders is a positive sign for price discovery.

Taxpayer Impact: Full and open competition, even with a moderate number of bidders, generally benefits taxpayers by encouraging competitive pricing and ensuring the government receives proposals from a range of qualified contractors.

Public Impact

The primary beneficiaries are the U.S. Department of State and its personnel, who will gain improved diplomatic facilities. The contract delivers essential design and construction services for a critical U.S. diplomatic mission abroad. The geographic impact is concentrated in San Salvador, El Salvador, supporting U.S. foreign policy infrastructure. The project will likely create jobs in the construction sector, both directly and indirectly, in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the initial fixed price did not adequately account for all design and construction complexities.
Risk of delays impacting the project timeline and operational readiness of the embassy.
Dependence on a single contractor for both design and build phases could lead to accountability challenges if issues arise.
Limited visibility into subcontracting opportunities for small businesses due to the absence of specific set-asides.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Full and open competition suggests a potentially competitive bidding process.
Award to a single contractor simplifies management and accountability.
The project addresses a critical need for diplomatic infrastructure.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a broad category encompassing the erection of non-residential buildings. The global market for such construction, particularly for government facilities like embassies, is substantial, driven by national security and diplomatic needs. This specific project represents a significant investment in U.S. diplomatic infrastructure abroad, requiring specialized expertise in design, security, and international construction standards. Comparable spending benchmarks would typically involve other embassy construction or renovation projects managed by the State Department or similar international bodies.

Small Business Impact

The contract was not awarded as a small business set-aside, and there is no indication of specific subcontracting goals for small businesses. This suggests that opportunities for small businesses may be limited to those that can secure subcontracts directly from the prime contractor, Futron, Inc. Further analysis would be needed to determine if Futron has a history of engaging small businesses as subcontractors or if the nature of the specialized work inherently limits small business participation.

Oversight & Accountability

Oversight for this contract will primarily reside with 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 firm-fixed-price contract terms, with performance milestones and quality standards likely stipulated. Transparency may be enhanced through public contract databases, but detailed project specifics and oversight reports are typically internal to the agency.

Related Government Programs

Embassy Construction and Maintenance
Overseas Diplomatic Facilities
International Building Projects
Department of State Capital Investments

Risk Flags

Potential for cost overruns if initial estimates were inaccurate.
Risk of project delays due to unforeseen site conditions or international logistical challenges.
Contractor performance risk on a complex design-build project.
Security risks associated with construction in a foreign environment.

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $28.6 million to FUTRON, INC.. DESIGN BUILD SERVICES FOR THE US EMBASSY IN SAN SALVADOR CSU.

Who is the contractor on this award?

The obligated recipient is FUTRON, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $28.6 million.

What is the period of performance?

Start: 2022-06-16. End: 2026-05-31.

What is the track record of Futron, Inc. in completing similar large-scale international construction projects on time and within budget?

Assessing Futron, Inc.'s track record requires a review of their past performance on contracts of similar scope, complexity, and geographic location. Key indicators include on-time completion rates, adherence to budget, quality of work, and any history of disputes or contract modifications. Information from sources like the Federal Procurement Data System (FPDS) or contractor performance evaluation reports (CPARS) would be crucial. Without specific data on Futron's past performance on comparable projects, it is difficult to definitively assess their capability to successfully execute the San Salvador Embassy design-build contract. A history of successful, similar projects would increase confidence in their ability to meet the contract's objectives.

How does the awarded price of $28.6 million compare to the estimated cost or benchmark for similar embassy construction projects?

To benchmark the $28.6 million award, one would compare it to the cost per square foot or per project of similar U.S. embassy construction or major renovation projects undertaken by the Department of State or other federal agencies in comparable regions. Factors such as security requirements, local labor and material costs, and the specific design complexity significantly influence these costs. If this project involves new construction of a significant size, $28.6 million might be considered competitive, especially given the firm-fixed-price nature which shifts cost risk to the contractor. However, without access to the agency's cost estimates or data on comparable projects, a precise value-for-money assessment is challenging. A higher number of bids in the competition could also suggest the price was competitive.

What are the primary risks associated with a firm-fixed-price contract for a complex design-build project in an international setting?

The primary risks with a firm-fixed-price (FFP) contract for a complex design-build project in an international setting include the potential for the contractor to cut corners on quality to maintain profitability if costs escalate unexpectedly, or to underbid the project initially. For the government, the risk is that the contractor may not have adequately accounted for all design and construction complexities, leading to potential disputes or claims for equitable adjustments if unforeseen conditions arise. In an international context, risks are amplified by factors such as political instability, currency fluctuations, differing regulatory environments, supply chain disruptions, and local labor issues, all of which can impact costs and timelines. Robust contract administration and clear specifications are crucial to mitigate these risks.

What is the expected impact of this contract on the U.S. diplomatic mission's operational capabilities in San Salvador?

This contract is expected to significantly enhance the U.S. diplomatic mission's operational capabilities in San Salvador by providing modern, secure, and functional facilities. A new or renovated embassy building typically improves workspace efficiency, enhances security infrastructure to protect personnel and sensitive information, and provides better amenities for diplomatic functions and public services. The design-build approach aims to deliver a facility tailored to the specific needs of the mission, potentially leading to more streamlined operations and improved collaboration among different State Department bureaus and agencies housed within the embassy. The project's completion should ensure the long-term viability and effectiveness of the U.S. presence in El Salvador.

How has the Department of State's spending on embassy construction and related services trended over the past five years?

Analyzing the Department of State's spending trends on embassy construction and related services over the past five years would reveal patterns in investment in diplomatic infrastructure. This would involve examining aggregate data for capital security construction programs, facility upgrades, and new embassy projects. Trends might indicate an increasing focus on modernizing aging facilities, enhancing security measures in response to evolving threats, or expanding diplomatic presence in certain regions. Understanding these historical spending patterns provides context for the current $28.6 million award, helping to determine if it aligns with or deviates from established investment strategies and budget allocations for overseas facilities.

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: SEALED BID

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Futron, Incorporated

Address: 14067 CROWN CT, WOODBRIDGE, VA, 22193

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Minority Owned Business, Small Business, Special Designations, Subchapter S Corporation, Indian (Subcontinent) American Owned Business, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $28,624,289

Exercised Options: $28,624,289

Current Obligation: $28,624,289

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline