Palladium International LLC awarded $67.1M contract to reduce poverty and improve living conditions in Guatemala

Contract Overview

Contract Amount: $67,129,977 ($67.1M)

Contractor: Palladium International LLC

Awarding Agency: Agency for International Development

Start Date: 2018-01-19

End Date: 2025-01-18

Contract Duration: 2,556 days

Daily Burn Rate: $26.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 9

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: THE PURPOSE OF THIS CONTRACT IS TO REDUCE POVERTY AND IMPROVE LIVING CONDITIONS, CLOSING GAPS BETWEEN GUATEMALA AND MIGRANT COUNTRIES, TO CREATE A GUATEMALA IN WHICH ECONOMIC OPPORTUNITY EXISTS AND IRREGULAR MIGRATION IS NOT NECESSARY IN ORDER TO FIND SUCH OPPORTUNITIES.

Plain-Language Summary

Agency for International Development obligated $67.1 million to PALLADIUM INTERNATIONAL LLC for work described as: THE PURPOSE OF THIS CONTRACT IS TO REDUCE POVERTY AND IMPROVE LIVING CONDITIONS, CLOSING GAPS BETWEEN GUATEMALA AND MIGRANT COUNTRIES, TO CREATE A GUATEMALA IN WHICH ECONOMIC OPPORTUNITY EXISTS AND IRREGULAR MIGRATION IS NOT NECESSARY IN ORDER TO FIND SUCH OPPORTUNITIES. Key points: 1. Contract aims to address root causes of migration by fostering economic opportunity. 2. Focus on closing gaps between Guatemala and migrant-receiving countries. 3. Performance period spans over seven years, indicating a long-term commitment. 4. Contract type is Cost Plus Fixed Fee, allowing for cost reimbursement plus a fee. 5. Competition was full and open, suggesting a broad search for qualified contractors. 6. The contract is a definitive contract, typically used for complex or long-term projects. 7. No small business set-aside was utilized for this procurement.

Value Assessment

Rating: fair

The contract's value of $67.1 million over seven years suggests a significant investment in poverty reduction and migration mitigation. Benchmarking this against similar international development contracts is challenging due to the specific geographic and programmatic focus. The Cost Plus Fixed Fee (CPFF) structure means costs are reimbursed, plus a negotiated fee, which can incentivize efficiency but also carries the risk of cost overruns if not managed tightly. Value for money will depend heavily on the measurable impact on poverty and migration rates.

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 a bid. The presence of 9 bidders suggests a competitive environment for this type of development work. A higher number of bidders generally leads to better price discovery and potentially more innovative solutions, though the specific impact on price for a CPFF contract is moderated by the cost-reimbursement nature.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure the most effective and efficient approach to addressing complex development challenges, potentially leading to better outcomes for the allocated funds.

Public Impact

Beneficiaries include impoverished populations in Guatemala, aiming to improve their living conditions and economic prospects. Services delivered focus on poverty reduction, economic opportunity creation, and addressing factors contributing to irregular migration. Geographic impact is concentrated within Guatemala, with potential ripple effects on migrant-receiving countries. Workforce implications include local employment opportunities within Guatemala for project implementation and support roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in Cost Plus Fixed Fee contracts if not rigorously monitored.
Measuring the direct impact of development aid on complex issues like migration can be challenging and subject to external factors.
Long-term sustainability of poverty reduction efforts beyond the contract period requires careful planning and local capacity building.

Positive Signals

Full and open competition suggests a robust selection process, potentially yielding a highly qualified contractor.
The significant investment indicates a strong commitment from the agency to address critical development issues.
A seven-year performance period allows for sustained engagement and the potential for deep impact.

Sector Analysis

This contract falls within the broader 'Other Scientific and Technical Consulting Services' category, but its core function is international development and foreign assistance. The market for such services is driven by government funding for global development initiatives, poverty alleviation, and stabilization efforts. Comparable spending benchmarks would typically be found within USAID's portfolio of development contracts in Latin America and other regions facing similar challenges.

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. This suggests that the primary focus was on securing the most capable large-scale implementer for this complex development project, rather than specifically promoting small business participation.

Oversight & Accountability

Oversight is likely managed by the Agency for International Development (USAID), which awarded the contract. Accountability measures would be embedded in the contract's performance work statement, requiring regular reporting on progress, expenditures, and impact. Transparency is typically facilitated through contract award databases and public reporting requirements for federal spending, though detailed programmatic oversight information may be less accessible.

Related Government Programs

USAID Development Assistance Programs
Foreign Military Financing
Millennium Challenge Corporation Grants
International Narcotics Control and Law Enforcement

Risk Flags

Cost Overrun Risk
Measuring Development Impact
Political Instability
Security Concerns
Sustainability of Interventions

Frequently Asked Questions

What is this federal contract paying for?

Agency for International Development awarded $67.1 million to PALLADIUM INTERNATIONAL LLC. THE PURPOSE OF THIS CONTRACT IS TO REDUCE POVERTY AND IMPROVE LIVING CONDITIONS, CLOSING GAPS BETWEEN GUATEMALA AND MIGRANT COUNTRIES, TO CREATE A GUATEMALA IN WHICH ECONOMIC OPPORTUNITY EXISTS AND IRREGULAR MIGRATION IS NOT NECESSARY IN ORDER TO FIND SUCH OPPORTUNITIES.

Who is the contractor on this award?

The obligated recipient is PALLADIUM INTERNATIONAL LLC.

Which agency awarded this contract?

Awarding agency: Agency for International Development (Agency for International Development).

What is the total obligated amount?

The obligated amount is $67.1 million.

What is the period of performance?

Start: 2018-01-19. End: 2025-01-18.

What specific metrics will be used to measure the success of poverty reduction and the impact on migration?

Success metrics for this contract would typically be detailed in the Performance Work Statement (PWS) and include indicators related to income levels, employment rates, access to education and healthcare, and potentially migration intent or actual migration flows. USAID often uses a framework of intermediate results and final outcomes. For instance, intermediate results might include increased agricultural yields or access to vocational training, while final outcomes could be reduced poverty rates (e.g., percentage of population below a certain poverty line) and a measurable decrease in irregular migration from targeted regions. The contract's effectiveness hinges on the clarity, measurability, and attainability of these defined metrics, and rigorous monitoring and evaluation plans are crucial to track progress and make necessary adjustments.

How does the Cost Plus Fixed Fee (CPFF) structure compare to other contract types for international development projects?

The Cost Plus Fixed Fee (CPFF) contract type reimburses the contractor for allowable costs incurred, plus a predetermined fixed fee representing profit. This structure is often used for complex projects where the scope of work is not precisely defined at the outset, or where innovation and flexibility are paramount, such as in research and development or large-scale development initiatives like this one. Compared to Firm-Fixed-Price (FFP) contracts, CPFF offers less cost certainty for the government but allows for greater adaptability. It differs from Cost-Plus-Incentive-Fee (CPIF) contracts, which adjust the fee based on performance against targets. For international development, CPFF can be advantageous when navigating unpredictable local conditions, but it requires robust government oversight to manage costs effectively and ensure value for taxpayer money.

What is Palladium International LLC's track record with USAID or similar development agencies?

Palladium International LLC has a significant history of working on international development projects, often funded by agencies like USAID. They have been involved in a wide array of programs focusing on areas such as economic growth, health, education, governance, and environmental sustainability across various countries. Their portfolio includes managing large, complex contracts that aim to achieve substantial development outcomes. A review of their past performance, including project evaluations and client feedback (often available through government contract databases or agency reports), would provide deeper insight into their capabilities, efficiency, and success rates in delivering on similar objectives. Their experience suggests they are a capable implementer for this type of large-scale development contract.

What are the potential risks associated with implementing development projects in regions prone to irregular migration?

Implementing development projects in regions associated with irregular migration presents several risks. Political instability or changes in government policy can disrupt project activities and funding. Socioeconomic factors, such as existing poverty, lack of opportunity, and social unrest, can be deeply entrenched and resistant to change, making desired outcomes difficult to achieve within the contract period. Security concerns, including crime or conflict, may affect staff safety and operational continuity. Furthermore, external shocks like natural disasters, climate change impacts, or economic downturns can exacerbate existing problems and undermine project progress. The effectiveness of interventions also depends on community buy-in and participation, which can be challenging to secure and maintain.

How does this contract's funding compare to other US government efforts aimed at addressing migration from Central America?

The $67.1 million allocated to this Palladium International LLC contract represents a significant, but not singular, component of the U.S. government's broader strategy to address migration from Central America. U.S. foreign assistance to the region, including programs managed by USAID, the State Department, and other agencies, often totals hundreds of millions or even billions of dollars annually, encompassing various initiatives beyond direct poverty reduction. These efforts can include security cooperation, rule of law programs, humanitarian aid, and support for regional governance. Therefore, while this specific contract is substantial for its defined objectives within Guatemala, it should be viewed as part of a larger, multi-faceted U.S. policy approach to migration and regional stability.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Other Scientific and Technical Consulting Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: SOL-520-17-000003

Offers Received: 9

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 1331 PENNSYLVANIA AVE NW STE 600, WASHINGTON, DC, 20004

Business Categories: Category Business, Corporate Entity Not Tax Exempt, DoT Certified Disadvantaged Business Enterprise, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $69,895,427

Exercised Options: $69,895,427

Current Obligation: $67,129,977

Actual Outlays: $54,207,334

Subaward Activity

Number of Subawards: 35

Total Subaward Amount: $18,103,513

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline