USAID's $24.2M contract with Chemonics International for professional services shows fair value with 3 bidders

Contract Overview

Contract Amount: $24,193,693 ($24.2M)

Contractor: Chemonics International, Inc.

Awarding Agency: Agency for International Development

Start Date: 2016-10-01

End Date: 2021-09-30

Contract Duration: 1,825 days

Daily Burn Rate: $13.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: IGF::CL::IGF OVERSEAS CONTRACT

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20001

State: District of Columbia Government Spending

Plain-Language Summary

Agency for International Development obligated $24.2 million to CHEMONICS INTERNATIONAL, INC. for work described as: IGF::CL::IGF OVERSEAS CONTRACT Key points: 1. The contract's value appears reasonable given the scope of professional, scientific, and technical services provided. 2. Full and open competition suggests a healthy market for these services, potentially leading to better pricing. 3. The duration of the contract (5 years) indicates a need for sustained support in the specified service area. 4. Performance context is limited without specific details on deliverables and outcomes. 5. This contract falls within the broad professional services sector, supporting international development initiatives. 6. The cost-plus-fixed-fee pricing structure allows for flexibility but requires careful oversight to manage costs.

Value Assessment

Rating: fair

The contract's total value of $24.2 million over five years averages to approximately $4.84 million annually. Benchmarking this against similar large-scale professional services contracts for international development, this figure appears within a reasonable range, especially considering the specialized nature of the services. The cost-plus-fixed-fee (CPFF) structure, while common for complex projects, necessitates diligent oversight to ensure costs remain controlled and the fixed fee is justified by the services rendered. Without specific performance metrics or detailed cost breakdowns, a precise value-for-money assessment is challenging, but the competitive nature of the award provides some assurance.

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 offers. The presence of three bidders suggests a moderate level of competition for this specific contract. While three bidders are better than one or two, a higher number could potentially drive prices down further and encourage more innovative solutions. The agency likely benefited from a competitive process, but the ultimate impact on price discovery would depend on the specific proposals received and the evaluation criteria.

Taxpayer Impact: The full and open competition, with three bidders, suggests that taxpayers received a fair price through a structured bidding process. This level of competition helps prevent price gouging and encourages contractors to offer competitive terms.

Public Impact

The primary beneficiaries are likely USAID and its international development programs, receiving essential professional, scientific, and technical support. The services delivered are broad, encompassing 'All Other Professional, Scientific, and Technical Services,' which could include program management, technical assistance, research, and analysis for global initiatives. The geographic impact is likely global, supporting USAID's mission in various countries, though specific locations are not detailed. Workforce implications include the employment of professionals with expertise in international development, project management, and specialized technical fields.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contracts can incentivize cost overruns if not managed rigorously, potentially increasing the final cost to taxpayers.
The broad 'All Other Professional, Scientific, and Technical Services' category lacks specificity, making it harder to track precise service delivery and value.
Limited information on performance metrics makes it difficult to assess the effectiveness and efficiency of the contractor's work.
The contract duration of five years, while providing stability, could also mask inefficiencies if performance is not continuously monitored.

Positive Signals

Awarded under full and open competition, ensuring a broad pool of potential offerors and promoting market-based pricing.
The presence of multiple bidders (three) indicates a degree of market interest and competition for this type of contract.
The fixed fee component of the CPFF contract provides some cost predictability for the agency, assuming the fee is reasonable.
The contract supports critical international development efforts, aligning with the agency's core mission.

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, a broad category encompassing a wide range of expertise. The North American Industry Classification System (NAICS) code 541990, 'All Other Professional, Scientific, and Technical Services,' indicates a diverse set of activities. The market for these services is substantial, driven by government agencies requiring specialized support for complex programs, particularly in areas like international development, research, and consulting. Comparable spending benchmarks would typically involve analyzing other large contracts awarded by USAID or similar agencies for program management and technical assistance, often running into millions of dollars annually.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Consequently, there are no direct subcontracting implications for small businesses stemming from a specific set-aside requirement. However, the prime contractor, Chemonics International, may engage small businesses as subcontractors to fulfill parts of the contract, depending on their own subcontracting strategies and the nature of the services required. The absence of a small business set-aside means that large businesses were eligible to compete and potentially win the entire contract value.

Oversight & Accountability

Oversight for this contract would primarily fall under the Agency for International Development (USAID). As a cost-plus-fixed-fee contract, USAID would be responsible for monitoring expenditures, ensuring that costs are reasonable and allocable to the contract, and verifying that the fixed fee is earned based on performance. Transparency would be facilitated through contract reporting requirements and potentially through USAID's public contract databases. While no specific Inspector General (IG) jurisdiction is mentioned, USAID's Office of Inspector General would have oversight authority to investigate fraud, waste, and abuse related to this contract.

Related Government Programs

USAID Program Management Support Contracts
International Development Technical Assistance
Professional Services Contracts
Cost-Plus Contracts
Global Health Programs Support

Risk Flags

Cost-plus-fixed-fee contract requires diligent oversight to prevent cost overruns.
Broad service category lacks specificity, potentially hindering performance tracking.
Limited public information on specific deliverables and performance outcomes.
Contract duration of 5 years necessitates ongoing performance monitoring.

Frequently Asked Questions

What is this federal contract paying for?

Agency for International Development awarded $24.2 million to CHEMONICS INTERNATIONAL, INC.. IGF::CL::IGF OVERSEAS CONTRACT

Who is the contractor on this award?

The obligated recipient is CHEMONICS INTERNATIONAL, INC..

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 $24.2 million.

What is the period of performance?

Start: 2016-10-01. End: 2021-09-30.

What is Chemonics International's track record with USAID and other federal agencies, particularly on similar cost-plus-fixed-fee contracts?

Chemonics International is a well-established government contractor with a significant history of working with USAID and other federal agencies on international development projects. They frequently utilize cost-plus-fixed-fee (CPFF) contract types, which are common for the complex, long-term programs they manage. A review of public contract databases reveals numerous awards to Chemonics across various agencies, including USAID, Department of State, and others, often for large dollar values and multi-year durations. Their performance history generally indicates substantial experience in managing global programs. However, like many large contractors, they may have faced scrutiny or audits on specific contracts regarding cost management or performance, which is typical for the scale and complexity of their work. Assessing their overall track record requires examining specific contract performance reports and any documented issues or successes.

How does the average annual value of this contract compare to other large professional services contracts awarded by USAID?

This contract has an average annual value of approximately $4.84 million ($24.2M / 5 years). USAID awards a wide range of contracts, and large-scale professional services contracts, particularly those supporting major development initiatives or operating in challenging environments, can often exceed this amount. For instance, major program management contracts, large-scale technical assistance efforts, or multi-country grants management contracts awarded by USAID can range from tens to hundreds of millions of dollars over their lifecycles. Therefore, while $4.84 million annually is a substantial sum, it appears to be within the typical range for significant, long-term professional services engagements managed by USAID, especially when considering the breadth of 'All Other Professional, Scientific, and Technical Services' which can encompass diverse activities.

What are the primary risks associated with a Cost-Plus-Fixed-Fee (CPFF) contract of this magnitude and duration?

The primary risks associated with a CPFF contract of this magnitude ($24.2M) and duration (5 years) revolve around cost control and performance oversight. For the government, the main risk is that the contractor may not have sufficient incentive to control costs rigorously, as costs are reimbursed, and the profit (fixed fee) is predetermined. This can lead to cost overruns if not managed diligently. Another risk is scope creep, where the project expands beyond its original intent, leading to increased costs. For the contractor, risks include underestimating the effort required to earn the fixed fee, potentially leading to reduced profit margins, or facing challenges in meeting performance expectations while managing costs. Effective risk mitigation requires robust government oversight, clear performance metrics, and regular audits.

What specific types of 'All Other Professional, Scientific, and Technical Services' are typically procured under NAICS code 541990 by USAID?

Under NAICS code 541990, 'All Other Professional, Scientific, and Technical Services,' USAID procures a diverse array of specialized support. This can include services such as program evaluation and analysis, policy development and research, technical assistance in various sectors (e.g., agriculture, education, governance), project management support, feasibility studies, data collection and analysis, and specialized scientific consulting not covered by more specific NAICS codes. For international development, this often translates to providing expertise on the ground in partner countries, supporting the design and implementation of development programs, monitoring and evaluation of project outcomes, and providing strategic advice to USAID missions and implementing partners. The broadness of the code allows flexibility but necessitates clear task orders to define specific deliverables.

How has USAID's spending in the 'Professional, Scientific, and Technical Services' sector evolved over the past five fiscal years?

USAID's spending in the 'Professional, Scientific, and Technical Services' sector (often categorized under NAICS codes like 541990, 541611, 541690, etc.) has historically been substantial, reflecting the agency's reliance on external expertise for program design, implementation, monitoring, and evaluation across its global development portfolio. While precise year-over-year figures fluctuate based on program needs and budget allocations, this sector consistently represents a significant portion of USAID's contracting dollars. Trends often show increased reliance on these services for complex challenges, such as global health crises, climate change adaptation, and democratic governance initiatives. Detailed analysis would require accessing USAID's historical contracting data, often available through platforms like USAspending.gov, to track specific trends and identify shifts in spending priorities within this broad service category.

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) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 3

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 1717 H ST NW STE 1, WASHINGTON, DC, 20006

Business Categories: Category Business, Not Designated a Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $25,193,693

Exercised Options: $25,193,693

Current Obligation: $24,193,693

Actual Outlays: $9,425,593

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: AIDOAAI1300032

IDV Type: IDC

Timeline