State Department awards $12.4M for overseas security construction, a sole-source contract

Contract Overview

Contract Amount: $12,378,606 ($12.4M)

Contractor: Kuk/Kbrs Global

Awarding Agency: Department of State

Start Date: 2004-12-10

End Date: 2012-04-19

Contract Duration: 2,687 days

Daily Burn Rate: $4.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: CONSTRUCTION OF OVERSEAS POST SECURITY AREAS

Plain-Language Summary

Department of State obligated $12.4 million to KUK/KBRS GLOBAL for work described as: CONSTRUCTION OF OVERSEAS POST SECURITY AREAS Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Long duration of nearly 7 years suggests a complex or phased project. 3. Firm Fixed Price contract type provides cost certainty for the government. 4. No indication of small business participation or set-aside. 5. Project falls under commercial and institutional building construction. 6. Contract awarded in 2004, with performance extending to 2012.

Value Assessment

Rating: questionable

Without a competitive bidding process, it is difficult to assess if the $12.4 million award represents good value for money. The lack of comparison to similar sole-source contracts or market rates for overseas security construction makes a precise value assessment challenging. The firm fixed-price nature offers some cost predictability, but the absence of competition raises concerns about potential overpricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one contractor was solicited. This significantly limits the opportunity for price discovery and competition, potentially leading to higher costs for the government. The rationale for a sole-source award is not provided, but it typically implies unique capabilities or urgent needs.

Taxpayer Impact: Sole-source awards mean taxpayers may not benefit from the cost savings typically achieved through competitive bidding, potentially resulting in less efficient use of public funds.

Public Impact

The primary beneficiaries are likely the personnel and operations secured by the enhanced overseas post security areas. The contract delivers construction services to improve physical security infrastructure at diplomatic facilities. Geographic impact is specific to the overseas locations where the security areas are constructed. Workforce implications include construction jobs, both directly and indirectly, during the project's execution.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpricing and value for money.
Sole-source award limits transparency in the procurement process.
Long contract duration could indicate potential for cost overruns or scope creep if not managed effectively.
Absence of small business participation may limit opportunities for smaller firms in this sector.

Positive Signals

Firm Fixed Price contract provides cost certainty for the government.
Contract addresses critical security needs for overseas posts.
Awarded by the Department of State, indicating a focus on diplomatic infrastructure.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector. The market for overseas construction, particularly for government facilities requiring high security, can be specialized. Benchmarking this specific contract is difficult without knowing the exact locations and security requirements, but large-scale construction projects for government entities often involve significant investment. The duration and value suggest a substantial undertaking.

Small Business Impact

There is no indication that this contract included a small business set-aside or that small businesses were specifically targeted for subcontracting. The sole-source nature of the award further reduces the likelihood of small business involvement, as the primary contractor was selected without a broad solicitation process. This may limit opportunities for the small business ecosystem to participate in projects of this scale and nature.

Oversight & Accountability

Oversight mechanisms for this contract would typically be managed by the Department of State's contracting officers and project managers. Accountability measures would be tied to the firm fixed-price contract terms and performance milestones. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse related to the contract.

Related Government Programs

Overseas Building Operations
Diplomatic Security Construction
Federal Construction Contracts
Department of State Facilities Management

Risk Flags

Sole-source award
Lack of competition
Long contract duration
No small business participation indicated

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $12.4 million to KUK/KBRS GLOBAL. CONSTRUCTION OF OVERSEAS POST SECURITY AREAS

Who is the contractor on this award?

The obligated recipient is KUK/KBRS GLOBAL.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $12.4 million.

What is the period of performance?

Start: 2004-12-10. End: 2012-04-19.

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

The provided data does not specify the justification for the sole-source award. Typically, sole-source contracts are justified when only one responsible source is available, or when there is a compelling urgency, or when the agency has unique requirements that cannot be met by other sources. For a construction project of this nature, potential justifications could include highly specialized security requirements, unique site conditions at an overseas location, or a critical and immediate need for security upgrades that precluded a full and open competition. Without further documentation from the Department of State, the exact reason remains unknown.

How does the $12.4 million cost compare to similar overseas security construction projects?

Direct comparison of the $12.4 million cost is challenging without more specific details about the scope of work, location, and security enhancements. Overseas construction projects, especially those involving security for diplomatic facilities, can vary significantly in cost due to factors like logistics, local labor rates, material availability, and the complexity of security features required. As this was a sole-source award, there is no competitive data to benchmark against. To provide a meaningful comparison, one would need to identify similar projects undertaken by the State Department or other agencies in comparable regions and assess their costs relative to their scope and duration.

What are the potential risks associated with a sole-source award for a construction project of this magnitude and duration?

The primary risk associated with a sole-source award for a large construction project is the potential for inflated pricing due to the lack of competitive pressure. Without multiple bids, the government may not achieve the most cost-effective solution. Additionally, sole-source awards can sometimes indicate a lack of market research or planning, potentially leading to the selection of a contractor who may not be the best fit in terms of performance or cost. The long duration (2687 days) also introduces risks such as potential cost overruns if the initial fixed price did not adequately account for inflation or unforeseen site conditions, and contractor performance degradation over an extended period.

What was the historical spending pattern for overseas security construction by the Department of State prior to this award?

The provided data snippet focuses solely on this single contract and does not offer historical spending patterns for the Department of State's overseas security construction. To analyze historical spending, one would need access to broader contract databases or budget information from the Department of State covering multiple fiscal years. This would allow for an assessment of trends, average contract values, and the frequency of sole-source versus competitive awards for similar types of construction projects. Without this broader context, it's impossible to determine if this $12.4 million award represents a typical investment or an outlier.

What performance metrics or oversight were in place to ensure the successful completion of the construction?

While the data indicates a Firm Fixed Price contract type, which implies a defined scope and price, it does not detail the specific performance metrics or oversight mechanisms employed by the Department of State. Typically, for large construction contracts, oversight involves contract officers' representatives (CORs), project managers, site inspections, and adherence to construction schedules and quality standards. Performance would be measured against the contract's technical specifications and delivery timeline. The long duration suggests a need for robust ongoing oversight to manage potential changes, ensure quality, and control costs within the fixed-price framework.

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 COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 240 E TUDOR STE 200, ANCHORAGE, AK, 00

Business Categories: 8(a) Program Participant, Category Business, HUBZone Firm, Minority Owned Business, Native American Owned Business, Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $12,378,606

Exercised Options: $12,378,606

Current Obligation: $12,378,606

Parent Contract

Parent Award PIID: SALMEC02D0051

IDV Type: IDC

Timeline