USAID's $357M Kenya Investment Mechanism Activity awarded to Palladium International LLC for technical services

Contract Overview

Contract Amount: $35,681,381 ($35.7M)

Contractor: Palladium International LLC

Awarding Agency: Agency for International Development

Start Date: 2018-08-20

End Date: 2024-03-26

Contract Duration: 2,045 days

Daily Burn Rate: $17.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: COST PLUS AWARD FEE

Sector: Other

Official Description: USAID|KENYA AND EAST AFRICA/KENYA INVESTMENT MECHANISM (KIM)ACTIVITY

Plain-Language Summary

Agency for International Development obligated $35.7 million to PALLADIUM INTERNATIONAL LLC for work described as: USAID|KENYA AND EAST AFRICA/KENYA INVESTMENT MECHANISM (KIM)ACTIVITY Key points: 1. Contract value represents a significant investment in economic development initiatives. 2. Full and open competition suggests a robust bidding process. 3. The contract duration of over 2000 days indicates a long-term program commitment. 4. Cost Plus Award Fee structure incentivizes performance and cost control. 5. The 'All Other Professional, Scientific, and Technical Services' NAICS code is broad, encompassing diverse support functions. 6. No small business set-aside was applied, potentially limiting direct participation for smaller firms.

Value Assessment

Rating: fair

The total award of $356.8 million over approximately 5.5 years suggests a substantial investment. Benchmarking this against similar large-scale USAID economic development activities is challenging without more granular data on specific deliverables and performance metrics. The Cost Plus Award Fee (CPAF) structure, while common for complex services, can lead to higher overall costs if award fees are consistently met, potentially exceeding a fixed-price equivalent. However, it also allows for flexibility and incentivizes contractor performance.

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 proposals. The data shows 5 proposals were received, suggesting a competitive environment. This level of competition is generally positive for price discovery and ensures that the agency receives a range of technical approaches and pricing structures, allowing for selection of the best value.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure the most effective and cost-efficient solution for achieving USAID's development objectives in Kenya.

Public Impact

The primary beneficiaries are likely businesses and entrepreneurs in Kenya and the East Africa region, through improved investment climates and access to capital. The activity aims to stimulate private sector investment, create jobs, and foster economic growth. Geographic impact is focused on Kenya and potentially broader East African markets. Workforce implications include potential job creation within the recipient country and employment for technical experts involved in program implementation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Broad NAICS code may obscure specific service costs and performance.
CPAF structure can lead to higher costs if award fees are consistently achieved.
Long contract duration may reduce agility in adapting to changing development needs.

Positive Signals

Full and open competition indicates a thorough vetting of potential contractors.
Multiple proposals received suggest a healthy market response.
Award fee mechanism incentivizes contractor performance and achievement of objectives.

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, specifically related to economic development and investment promotion. Such activities are crucial for USAID's mission to foster growth and stability in developing nations. Comparable spending benchmarks would involve analyzing other large-scale USAID or international development agency programs focused on private sector engagement and investment facilitation in similar regions.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of specific subcontracting goals for small businesses in the provided data. This means that while Palladium International LLC may choose to subcontract, there is no mandatory requirement for them to prioritize small business participation. The impact on the small business ecosystem is therefore indirect and depends on the prime contractor's procurement decisions.

Oversight & Accountability

USAID typically employs robust oversight mechanisms for its contracts, including regular performance reviews, financial audits, and site visits. The Cost Plus Award Fee structure inherently includes performance monitoring to determine award fee payouts. Transparency is generally maintained through contract awards databases and public reporting requirements, though specific operational details may be sensitive. Inspector General jurisdiction would apply for investigations into fraud, waste, or abuse.

Related Government Programs

USAID Economic Growth Programs
USAID Investment and Trade Facilitation
East Africa Regional Development Initiatives
Private Sector Development Contracts

Risk Flags

Broad NAICS code lacks specificity.
CPAF structure may lead to higher costs.
Potential for scope creep given broad service definition.

Frequently Asked Questions

What is this federal contract paying for?

Agency for International Development awarded $35.7 million to PALLADIUM INTERNATIONAL LLC. USAID|KENYA AND EAST AFRICA/KENYA INVESTMENT MECHANISM (KIM)ACTIVITY

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 $35.7 million.

What is the period of performance?

Start: 2018-08-20. End: 2024-03-26.

What is the historical performance record of Palladium International LLC with USAID, particularly on similar large-scale economic development contracts?

Palladium International LLC has a significant history of working with USAID on various development projects. While specific performance ratings for this particular contract are not publicly detailed in the provided data, the company has managed numerous large contracts globally. Analyzing past contract performance data, including any reported issues, successful outcomes, and audit findings, would provide a clearer picture of their track record. Generally, companies managing contracts of this magnitude are expected to have established project management systems and experienced personnel. However, a deeper dive into past contract closeouts and any associated disputes or performance deficiencies would be necessary for a comprehensive assessment.

How does the total contract value of $356.8 million compare to other USAID economic development activities in the East Africa region?

The $356.8 million award for the Kenya Investment Mechanism (KIM) Activity is substantial, placing it among significant USAID investments in economic growth and private sector development within the East Africa region. While exact comparisons require access to a comprehensive database of all USAID awards, activities of this scale typically aim to achieve broad economic impact, such as stimulating large volumes of private investment, creating thousands of jobs, or significantly improving the business regulatory environment. Smaller, more targeted projects might range from a few million to tens of millions of dollars. This contract's value suggests a comprehensive, multi-year strategy to address complex development challenges and foster systemic change in Kenya's investment landscape.

What are the key performance indicators (KPIs) used to assess Palladium International LLC's success under this Cost Plus Award Fee contract?

Under a Cost Plus Award Fee (CPAF) contract, Key Performance Indicators (KPIs) are critical for determining the 'award' portion of the contractor's fee. While the specific KPIs for this USAID KIM Activity are not detailed in the provided data, they would typically align with the contract's objectives. For an investment mechanism activity, these could include metrics such as: the amount of private sector investment mobilized (e.g., in USD), the number of jobs created or sustained, the number of new businesses supported or established, improvements in the ease of doing business rankings, the value of deals facilitated, or the number of policy reforms influenced. USAID would have established a performance evaluation plan outlining these KPIs, their targets, and the methodology for measuring them, which would then inform the fee determination.

What is the risk associated with the broad 'All Other Professional, Scientific, and Technical Services' NAICS code for this contract?

The broad nature of the 'All Other Professional, Scientific, and Technical Services' (NAICS 541990) code presents several potential risks. Firstly, it lacks specificity, making it difficult to benchmark costs or performance against industry standards for particular services. This ambiguity can complicate oversight and make it harder to identify potential cost overruns or inefficiencies related to specific tasks. Secondly, the wide scope means the contractor could be performing a diverse range of activities, potentially stretching management capacity or requiring expertise across many domains. This could increase the risk of subpar performance in certain areas if not managed effectively. Finally, it may be challenging for external stakeholders to understand the precise nature and value of the services being procured.

How does the 'full and open competition' award method impact the potential for innovation and cost savings for USAID?

Awarding a contract through 'full and open competition' generally enhances the potential for both innovation and cost savings. By allowing all responsible sources to compete, USAID broadens the pool of potential solutions and technical approaches. This increased competition incentivizes bidders to offer not only competitive pricing but also innovative methods to achieve the contract's objectives more effectively or efficiently. The presence of multiple bidders, as indicated by the 5 proposals received, creates pressure to differentiate through value, which can include novel strategies or technologies. Furthermore, a competitive process helps establish a market-based price, reducing the likelihood of paying an inflated cost for the services rendered.

What are the implications of the 'DEFINITIVE CONTRACT' award type for program flexibility and long-term planning?

A 'Definitive Contract' is a standard contract type that, once awarded, represents the final agreement between the parties. For a program like the Kenya Investment Mechanism Activity, this implies a fixed scope and terms for the duration of the contract (ending March 26, 2024, based on the data, though the duration is listed as 2045 days, suggesting a potential discrepancy or that the end date is provisional). While definitive contracts provide certainty for both the government and the contractor regarding obligations and pricing, they can sometimes limit flexibility. If the program's needs evolve significantly, modifications might be required, which can be a formal and sometimes lengthy process. However, the Cost Plus Award Fee structure does allow for some performance-based adjustments to compensation, offering a degree of adaptability within the defined scope.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Other Professional, Scientific, and Technical Services › All Other Professional, Scientific, and Technical Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: SOL-615-17-000006

Offers Received: 5

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

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

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

Financial Breakdown

Contract Ceiling: $35,681,381

Exercised Options: $35,681,381

Current Obligation: $35,681,381

Actual Outlays: $32,398,838

Subaward Activity

Number of Subawards: 64

Total Subaward Amount: $11,288,093

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline