State Department awards $10.1M construction contract for Algiers facility, raising questions about competition

Contract Overview

Contract Amount: $10,148,768 ($10.1M)

Contractor: Coho Construction Management LLC

Awarding Agency: Department of State

Start Date: 2024-03-06

End Date: 2026-10-29

Contract Duration: 967 days

Daily Burn Rate: $10.5K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: REC PROJECT - ALGIERS, ALGERIA

Plain-Language Summary

Department of State obligated $10.1 million to COHO CONSTRUCTION MANAGEMENT LLC for work described as: REC PROJECT - ALGIERS, ALGERIA Key points: 1. Contract awarded for construction services in Algeria, indicating a need for overseas infrastructure. 2. The contract duration of 967 days suggests a significant, multi-year project. 3. Fixed-price contract type aims to control costs, but the lack of competition is a concern. 4. The project falls under commercial and institutional building construction, a broad category. 5. No specific small business set-aside was identified, potentially limiting opportunities for smaller firms.

Value Assessment

Rating: questionable

The contract value of $10.1 million for construction services in Algiers, Algeria, is difficult to benchmark without comparable projects in the same region. The firm fixed-price structure is a positive sign for cost control. However, the lack of competitive bidding prevents a thorough assessment of whether this price represents fair market value. Without a competitive process, it's challenging to determine if the government secured the best possible price and quality.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not openly competed. The specific justification for this approach is not detailed in the provided data. Sole-source awards can sometimes be necessary for specialized requirements or urgent needs, but they typically result in less price competition and potentially higher costs for the government.

Taxpayer Impact: Sole-source awards mean taxpayers may not be getting the most competitive pricing available, as the usual market pressures of open competition are absent.

Public Impact

The primary beneficiary is the Department of State, which will gain improved or new facilities in Algeria. The services delivered include commercial and institutional building construction. The geographic impact is localized to Algiers, Algeria, supporting U.S. diplomatic or operational presence. Workforce implications would include construction labor in Algeria, potentially managed by the prime contractor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpayment and reduced value for taxpayer funds.
Sole-source awards can limit opportunities for a wider range of contractors, including small businesses.
Transparency regarding the justification for a sole-source award is limited in the provided data.

Positive Signals

Firm fixed-price contract type helps to establish cost certainty for the government.
The contract is for a specific construction project, indicating a clear requirement being met.
The award is to a known entity, COHO CONSTRUCTION MANAGEMENT LLC, suggesting some level of pre-qualification or prior relationship.

Sector Analysis

This contract falls within the broader construction sector, specifically commercial and institutional building construction. The global construction market is vast, with significant government spending on overseas facilities for diplomatic missions, military bases, and other operational needs. Benchmarking this specific award is challenging due to its unique geographic location and the lack of competitive data. However, government construction projects abroad often involve higher logistical costs and security considerations.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This means that opportunities for small business participation, either as prime contractors or subcontractors, were not specifically mandated by the contract terms. Without a set-aside, the prime contractor has discretion over subcontracting, and it is unclear if small businesses will be involved.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of State's contracting and program management offices. Given the overseas location, additional oversight may be provided by regional security officers or embassy personnel. The contract type (firm fixed-price) implies a focus on adherence to the agreed-upon scope and price. Transparency is limited by the sole-source nature of the award and the lack of detailed justification provided.

Related Government Programs

Department of State Facilities Construction
Overseas Construction Projects
Commercial Building Construction
Government Contracts in North Africa

Risk Flags

Lack of Competition
Sole-Source Award Justification Unclear
Overseas Project Risks

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $10.1 million to COHO CONSTRUCTION MANAGEMENT LLC. REC PROJECT - ALGIERS, ALGERIA

Who is the contractor on this award?

The obligated recipient is COHO CONSTRUCTION MANAGEMENT LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $10.1 million.

What is the period of performance?

Start: 2024-03-06. End: 2026-10-29.

What is the specific justification for awarding this construction contract on a sole-source basis?

The provided data does not include the specific justification for the sole-source award. Typically, sole-source contracts are awarded when only one responsible source is available to meet the government's needs. This could be due to unique capabilities, urgent requirements, or specific circumstances related to the location or nature of the project. Without further information from the Department of State, the exact rationale remains unknown. This lack of transparency is a concern for ensuring fair competition and optimal use of taxpayer funds.

How does the $10.1 million contract value compare to similar construction projects for U.S. facilities abroad?

Direct comparison of the $10.1 million contract value for construction in Algiers, Algeria, is challenging due to limited publicly available data on similar projects in that specific region and for the Department of State. Construction costs abroad can vary significantly based on location, security requirements, logistical challenges, labor costs, and material availability. While $10.1 million is a substantial amount, its value for money can only be truly assessed through a competitive bidding process or by comparing it to highly specific, localized project cost data, which is not readily available.

What are the potential risks associated with a sole-source construction contract in a foreign country?

Sole-source contracts, especially in foreign countries, carry several risks. Firstly, the lack of competition can lead to inflated prices, meaning the government may pay more than necessary. Secondly, without competitive pressure, there might be less incentive for the contractor to ensure the highest quality or efficiency. Thirdly, managing a construction project in a foreign country involves geopolitical, logistical, and cultural risks that require robust oversight. The absence of multiple bidders means the government relies heavily on the selected contractor's capabilities and integrity, and there's a reduced ability to pivot if issues arise.

What is the track record of COHO CONSTRUCTION MANAGEMENT LLC in performing government contracts, particularly overseas?

Information regarding the specific track record of COHO CONSTRUCTION MANAGEMENT LLC in performing government contracts, especially overseas, is not detailed in the provided data snippet. A comprehensive assessment would require reviewing past performance evaluations, contract history, and any reported issues or successes on previous federal awards. Without this background information, it is difficult to gauge their experience, reliability, and past performance in delivering similar projects under government oversight.

What are the implications of the firm fixed-price contract type for project cost and scope management?

A firm fixed-price (FFP) contract type is generally favored by the government for construction projects when the scope of work is well-defined and risks can be reasonably assessed. Under an FFP contract, the contractor agrees to a total price for a well-defined product or service. This provides cost certainty for the government, as the contractor bears the primary risk of cost overruns. However, it also means that any changes to the scope of work typically require formal change orders, which can be costly and time-consuming. For the contractor, it incentivizes efficiency to maximize profit but can also lead to pressure to cut corners if not properly overseen.

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: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1577 C ST, ANCHORAGE, AK, 99501

Business Categories: 8(a) Program Participant, American Indian Owned Business, Category Business, Corporate Entity Tax Exempt, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Tribally Owned Firm, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $10,148,768

Exercised Options: $10,148,768

Current Obligation: $10,148,768

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline