State Department's Djibouti NEC Project contract awarded to Caddell Construction for over $125 million

Contract Overview

Contract Amount: $125,403,660 ($125.4M)

Contractor: Caddell Construction CO., Inc.

Awarding Agency: Department of State

Start Date: 2008-09-30

End Date: 2016-08-16

Contract Duration: 2,877 days

Daily Burn Rate: $43.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: DJIBOUTI NEC PROJECT

Plain-Language Summary

Department of State obligated $125.4 million to CADDELL CONSTRUCTION CO., INC. for work described as: DJIBOUTI NEC PROJECT Key points: 1. The contract value of $125.4 million represents a significant investment in infrastructure for the U.S. Embassy in Djibouti. 2. Awarded under full and open competition, the contract suggests a competitive bidding process that likely influenced pricing. 3. The duration of the contract (2877 days, or approximately 8 years) indicates a long-term commitment to the project. 4. The project falls under the Commercial and Institutional Building Construction NAICS code, highlighting its focus on physical infrastructure development. 5. The use of a Firm Fixed Price contract type generally transfers risk to the contractor, potentially stabilizing costs. 6. The absence of small business set-aside flags suggests the primary contractor was not specifically incentivized to engage small businesses for this award.

Value Assessment

Rating: fair

The total contract value of $125.4 million for the Djibouti NEC Project is substantial. Without specific benchmarks for similar embassy construction projects in comparable regions, a precise value-for-money assessment is challenging. However, the duration of the contract (nearly 8 years) suggests a complex and extensive undertaking. The firm fixed-price nature of the award implies that the contractor bore the primary risk for cost overruns, which can be a positive indicator for the government if the project was completed within the agreed-upon budget. Further analysis would require comparing the cost per square foot or per functional unit against similar international construction projects.

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 a bid. This suggests a robust bidding process where multiple contractors likely vied for the opportunity. The presence of four bidders (no=4) provides a reasonable level of competition, which typically helps in achieving more competitive pricing and better terms for the government. The open nature of the competition is a positive sign for price discovery and ensuring the government receives a fair market price for the construction services.

Taxpayer Impact: A full and open competition generally benefits taxpayers by fostering a competitive environment that drives down costs and encourages innovation among bidders, leading to better value for public funds.

Public Impact

The primary beneficiaries are the U.S. Department of State and its personnel, who will utilize the new facilities at the embassy in Djibouti. The project delivers critical infrastructure improvements, likely enhancing the security, functionality, and operational capacity of the U.S. diplomatic mission. The geographic impact is concentrated in Djibouti, supporting U.S. foreign policy and diplomatic operations in the Horn of Africa region. The project likely involved a significant construction workforce, potentially including local labor and subcontractors, contributing to economic activity in Djibouti.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (nearly 8 years) could present risks related to material cost fluctuations or unforeseen site conditions over time.
The lack of specific details on the project scope makes it difficult to assess if the final cost aligns with the initial expectations for the infrastructure delivered.
Reliance on a single prime contractor for such a long and complex project could pose risks if the contractor faces financial or operational difficulties.

Positive Signals

Awarded under full and open competition with multiple bidders suggests a competitive pricing environment.
Firm Fixed Price contract type shifts cost overrun risk to the contractor.
The project addresses critical infrastructure needs for a key diplomatic post, indicating strategic importance.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a broad category encompassing the building of non-residential structures. The U.S. Department of State frequently engages in construction and renovation projects globally to maintain and upgrade its diplomatic facilities. Spending in this sector can vary significantly based on geopolitical needs, infrastructure modernization efforts, and security requirements. Comparable spending benchmarks would typically involve analyzing the cost per square foot for similar government facilities built in international locations, considering regional construction costs and security provisions.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (sb=false) and there are no specific subcontracting plans mentioned (st=""). This suggests that the primary focus was on securing a qualified large contractor capable of undertaking a project of this scale and complexity. While this may limit direct opportunities for small businesses as prime contractors on this specific award, large prime contractors often engage small businesses as subcontractors. However, without explicit subcontracting goals or reporting, the extent of small business participation remains unclear.

Oversight & Accountability

Oversight for this contract would primarily fall under the purview of the U.S. Department of State's Bureau of Overseas Buildings Operations (OBO) and its contracting officers. The firm fixed-price nature of the contract implies that performance milestones and quality control would be key areas of oversight. Transparency is typically managed through contract award databases and reporting requirements. While specific Inspector General (IG) involvement isn't detailed here, the Department of State's Office of Inspector General would have jurisdiction to investigate any allegations of fraud, waste, or abuse related to this contract.

Related Government Programs

U.S. Embassy Construction Projects
Overseas Diplomatic Infrastructure
Global Construction Contracts
Department of State Facilities Management

Risk Flags

Long contract duration
Potential for cost escalation (mitigated by FFP)
Geopolitical risks in region
Logistical challenges in Djibouti

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $125.4 million to CADDELL CONSTRUCTION CO., INC.. DJIBOUTI NEC PROJECT

Who is the contractor on this award?

The obligated recipient is CADDELL CONSTRUCTION CO., INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $125.4 million.

What is the period of performance?

Start: 2008-09-30. End: 2016-08-16.

What was the track record of Caddell Construction Co., Inc. with the Department of State prior to this award?

Caddell Construction Co., Inc. has a significant history of working with the U.S. Department of Defense and other federal agencies on large-scale construction projects, including overseas facilities. While specific details on their prior contracts with the Department of State for this particular project are not provided in the summary data, their extensive experience in similar environments suggests a level of familiarity with government contracting requirements and international construction challenges. A deeper dive into their contract history with the State Department would reveal the volume and nature of previous work, providing context for their selection as the prime contractor for the Djibouti NEC Project.

How does the cost per square foot of this project compare to similar embassy construction projects?

The provided data does not include the square footage of the Djibouti NEC Project, making a direct cost-per-square-foot comparison impossible. To benchmark this effectively, one would need to obtain the total square footage of the completed or planned facility and compare it against the total contract value of $125.4 million. Furthermore, relevant comparisons would involve other U.S. embassy or consulate construction projects in similar geographic regions (e.g., Africa, Middle East) and of comparable complexity and security standards. Factors such as local labor costs, material availability, security requirements, and site conditions significantly influence per-square-foot costs, necessitating careful selection of comparable projects for an accurate assessment.

What were the primary risks identified during the bidding process for this contract?

The summary data does not explicitly detail the risks identified during the bidding process. However, given the project's nature (overseas construction for a diplomatic facility) and the contract type (firm fixed price), potential risks likely included geopolitical instability in the region, logistical challenges in Djibouti, fluctuating material costs over the long contract duration, and ensuring compliance with stringent U.S. government security and construction standards. The firm fixed-price award suggests that bidders were expected to account for these risks in their pricing. The fact that it was a full and open competition with four bidders implies that these risks were assessed and deemed manageable by the participating companies.

How effective was the full and open competition in ensuring value for taxpayers?

The full and open competition, with four bidders participating, is generally considered an effective mechanism for ensuring value for taxpayers. This process allows multiple qualified contractors to submit proposals, fostering a competitive environment that typically drives down prices and encourages the most efficient and cost-effective solutions. The Department of State likely evaluated proposals not only on price but also on technical merit, past performance, and other factors to ensure the best overall value. While the final cost of $125.4 million is substantial, the competitive bidding process suggests that this price reflects a market-driven outcome rather than an inflated cost due to limited competition.

What is the historical spending trend for similar infrastructure projects by the Department of State?

Historical spending data for similar infrastructure projects by the Department of State would reveal trends in the scale, cost, and frequency of such undertakings. The Department of State, through its Bureau of Overseas Buildings Operations (OBO), manages a portfolio of construction and renovation projects worldwide. Analyzing past spending on embassy compounds, consulates, and related facilities would show whether the $125.4 million for the Djibouti NEC Project is within the typical range for major projects, or if it represents an outlier. Factors influencing historical spending include global security needs, diplomatic priorities, aging infrastructure requiring replacement, and budget allocations over time. Without access to specific historical spending figures for comparable projects, it's difficult to place this contract within a broader trend.

Were there any performance issues or contract modifications during the contract's lifecycle?

The provided summary data does not contain information regarding performance issues or contract modifications for the Djibouti NEC Project. The contract was awarded in September 2008 and completed in August 2016, spanning a period of nearly eight years. During such a long duration, it is common for construction contracts to undergo modifications due to unforeseen circumstances, design changes, or scope adjustments. Assessing performance would typically involve reviewing contract close-out documentation, payment histories, and any formal disputes or claims filed. The absence of readily available modification data in this summary suggests either a straightforward execution or that such details are not publicly surfaced in this particular data extract.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2700 LAGOON PARK DR, MONTGOMERY, AL, 36109

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

Financial Breakdown

Contract Ceiling: $125,403,660

Exercised Options: $125,403,660

Current Obligation: $125,403,660

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline