USAID's $288.7M contract for 100 MW Kabul power generation capacity awarded non-competitively

Contract Overview

Contract Amount: $288,710,175 ($288.7M)

Contractor: Domestic Awardees (undisclosed)

Awarding Agency: Agency for International Development

Start Date: 2007-06-15

End Date: 2010-05-31

Contract Duration: 1,081 days

Daily Burn Rate: $267.1K/day

Competition Type: NON-COMPETITIVE DELIVERY ORDER

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Energy

Official Description: THE PURPOSE OF THIS AWARD IS TO PROVIDE 100 MW OF ADDITIONAL GENERATING CAPACITY FOR KABUL

Plain-Language Summary

Agency for International Development obligated $288.7 million to DOMESTIC AWARDEES (UNDISCLOSED) for work described as: THE PURPOSE OF THIS AWARD IS TO PROVIDE 100 MW OF ADDITIONAL GENERATING CAPACITY FOR KABUL Key points: 1. Significant investment in critical infrastructure for Afghanistan. 2. Lack of competition raises concerns about optimal pricing and value. 3. Long-term contract duration suggests a sustained need for power. 4. Contract type (Cost Plus Fixed Fee) can incentivize cost overruns. 5. Awardee details are undisclosed, limiting transparency. 6. Performance period spans over three years, indicating a substantial project.

Value Assessment

Rating: questionable

Benchmarking this contract is challenging due to the undisclosed domestic awardee and the unique geopolitical context of Afghanistan. The Cost Plus Fixed Fee (CPFF) contract type, while common for complex projects, carries inherent risks of cost escalation if not rigorously managed. Without competitive bids, it's difficult to ascertain if the fixed fee represents fair compensation for the contractor's effort or if the overall cost structure aligns with market rates for similar infrastructure development in challenging environments. The absence of comparative data makes a definitive value-for-money assessment difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a non-competitive delivery order, indicating that a full and open competition was not conducted. The specific reasons for this sole-source award are not detailed, but such awards typically occur when only one source is capable of meeting the requirement, or in urgent situations. The lack of multiple bidders means there was no price discovery through a competitive bidding process, potentially leading to higher costs for the government.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure to drive down costs. The government did not benefit from the potential cost savings that often result from a competitive procurement process.

Public Impact

Provides essential electricity to the city of Kabul, Afghanistan. Enhances the stability and economic development of the region. Benefits residents and businesses in Kabul through increased power availability. Supports critical services such as healthcare and education that rely on consistent power. May indirectly support local employment through the operation and maintenance of the power infrastructure.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition limits price discovery and potentially increases costs.
Cost Plus Fixed Fee structure can lead to cost overruns if not managed tightly.
Undisclosed awardee reduces transparency and accountability.
Geopolitical risks associated with operating in Afghanistan could impact project delivery and costs.

Positive Signals

Addresses a critical need for power generation capacity in a high-demand area.
Long-term contract duration suggests a commitment to sustained infrastructure development.
Focus on essential services like power generation has a direct positive impact on population welfare.

Sector Analysis

This contract falls within the energy sector, specifically focusing on power generation infrastructure. The market for power generation solutions is diverse, ranging from large-scale utility projects to smaller, localized installations. Given the context of providing 100 MW of capacity, this likely involves significant engineering, procurement, and construction (EPC) services. Comparable spending benchmarks would typically involve analyzing costs per megawatt for similar projects in regions with comparable risk profiles and logistical challenges, though such data is often proprietary or project-specific.

Small Business Impact

The data indicates this contract was awarded to domestic awardees, but details regarding small business participation or set-asides are not provided. Given the scale and nature of providing 100 MW of generating capacity, it is likely that the prime contractor is a large firm. Subcontracting opportunities for small businesses may exist in areas such as logistics, specialized equipment supply, or local labor, but this is not explicitly stated. The impact on the small business ecosystem is therefore unclear without further information on subcontracting plans.

Oversight & Accountability

Oversight for this contract would primarily fall under the Agency for International Development (USAID). As a non-competitive award, it warrants heightened scrutiny to ensure fair pricing and effective performance. Transparency is limited by the undisclosed awardee. Accountability measures would typically involve regular performance reviews, milestone tracking, and financial audits, especially given the CPFF contract type. The Inspector General's office for USAID would likely have jurisdiction for oversight and investigation of any potential fraud, waste, or abuse.

Related Government Programs

Afghanistan Infrastructure Projects
Energy Security Initiatives
USAID Development Contracts
Power Generation Capacity Building

Risk Flags

Non-competitive award
Cost Plus Fixed Fee contract type
Undisclosed awardee
Geopolitical risk environment

Frequently Asked Questions

What is this federal contract paying for?

Agency for International Development awarded $288.7 million to DOMESTIC AWARDEES (UNDISCLOSED). THE PURPOSE OF THIS AWARD IS TO PROVIDE 100 MW OF ADDITIONAL GENERATING CAPACITY FOR KABUL

Who is the contractor on this award?

The obligated recipient is DOMESTIC AWARDEES (UNDISCLOSED).

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 $288.7 million.

What is the period of performance?

Start: 2007-06-15. End: 2010-05-31.

What specific domestic entities were awarded this contract, and what is their track record in similar large-scale power generation projects?

The provided data indicates 'DOMESTIC AWARDEES (UNDISCLOSED)' for this contract. Consequently, the specific entities awarded the contract are not publicly available. Without knowing the identity of the awardees, it is impossible to assess their track record in executing similar large-scale power generation projects, especially in complex or high-risk environments like Afghanistan. This lack of transparency hinders a thorough evaluation of the contractor's capability and past performance, which are crucial factors in determining the likelihood of successful project completion and value for money. Further investigation would be required to uncover the identities of these awardees and their relevant experience.

How does the cost per megawatt for this contract compare to similar power generation projects undertaken in comparable geopolitical or economic environments?

The total contract value is $288,710,174.68 for 100 MW of generating capacity, equating to approximately $2.89 million per megawatt. Benchmarking this figure is challenging due to the unique context of Afghanistan and the non-competitive nature of the award. However, in general, costs for power generation projects can vary widely based on technology (e.g., gas turbine, diesel, renewable), location, infrastructure requirements, and geopolitical risk premiums. Projects in developing or unstable regions often incur higher costs due to logistical challenges, security needs, and the need for robust infrastructure. Without specific details on the type of generation technology used and comparable projects in similar risk environments, a precise comparison is difficult. However, costs in the range of $1 million to $3 million per megawatt are not uncommon for certain types of power plants, especially when factoring in the complexities of deployment in challenging locations.

What were the specific justifications for awarding this contract on a non-competitive basis, and were alternative competitive strategies considered?

The data explicitly states this contract was awarded as a 'NON-COMPETITIVE DELIVERY ORDER' (CT: NON-COMPETITIVE DELIVERY ORDER). The specific justifications for this non-competitive award are not detailed in the provided data. Typically, non-competitive awards are made under specific circumstances outlined in federal acquisition regulations, such as when only one responsible source can satisfy the agency's needs, in cases of urgent and compelling need, or when a public interest determination is made. Without further documentation or agency explanation, it is unknown if alternative competitive strategies were considered or why they were deemed unsuitable. The lack of competition raises concerns about potential price inflation and limits the government's ability to secure the best possible value.

What are the primary risks associated with the Cost Plus Fixed Fee (CPFF) contract type in this context, and what mitigation strategies were employed?

The Cost Plus Fixed Fee (CPFF) contract type, used here, reimburses the contractor for allowable costs plus a fixed fee representing profit. The primary risk with CPFF is that it can incentivize the contractor to incur higher costs, as the fee (profit) remains constant regardless of the final cost. This can lead to cost overruns if not managed diligently. Mitigation strategies typically involve robust government oversight, detailed cost tracking, performance metrics, and clear definition of allowable costs. For this contract, the effectiveness of mitigation would depend on the rigor of USAID's contract management, including regular audits and performance reviews. Given the project's location and duration, additional risks related to security, logistics, and political instability would also need careful management.

How has USAID's spending on power generation capacity in Afghanistan evolved over time, and does this contract represent a significant shift or continuation of previous efforts?

The provided data pertains to a single contract awarded on June 15, 2007, with an end date of May 31, 2010. It represents a specific investment of $288.7 million for 100 MW of capacity in Kabul. To understand the evolution of USAID's spending on power generation in Afghanistan, a broader analysis of historical contract data would be necessary. This would involve examining contracts awarded by USAID and other relevant agencies over multiple years, looking at the total dollar amounts, the number of contracts, the types of services procured (e.g., generation, transmission, distribution), and the geographic focus within Afghanistan. Without this broader dataset, it is difficult to determine if this particular contract was a significant shift or a continuation of established spending patterns. However, the substantial value of this single award suggests a significant commitment to addressing power needs in Kabul during that period.

Industry Classification

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

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

Competition & Pricing

Extent Competed: NON-COMPETITIVE DELIVERY ORDER

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 1800 F ST NW, WASHINGTON, DC, 20405

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $3,365,409,561

Exercised Options: $3,063,816,317

Current Obligation: $288,710,175

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: AID306I000600517

IDV Type: IDC

Timeline