State Department Awards $125.9M Contract for New Basra Consulate Construction to Perini Management Services
Contract Overview
Contract Amount: $125,914,311 ($125.9M)
Contractor: Perini Management Services, Inc.
Awarding Agency: Department of State
Start Date: 2011-03-14
End Date: 2014-11-05
Contract Duration: 1,332 days
Daily Burn Rate: $94.5K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 31
Pricing Type: FIRM FIXED PRICE
Sector: Construction
Official Description: CONSTRUCTION OF A NEW BASRA, IRAQ CONSULATE GENERAL.
Plain-Language Summary
Department of State obligated $125.9 million to PERINI MANAGEMENT SERVICES, INC. for work described as: CONSTRUCTION OF A NEW BASRA, IRAQ CONSULATE GENERAL. Key points: 1. The contract value of $125.9 million is substantial for a single construction project. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. The project duration of 1332 days indicates a long-term commitment and potential for cost overruns. 4. The sector is Commercial and Institutional Building Construction, a common area for government spending.
Value Assessment
Rating: fair
The award amount of $125.9 million for a consulate construction project needs comparison to similar international construction contracts. Without benchmarks for similar scale and complexity, assessing value is difficult.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
Full and open competition was employed, which typically fosters price discovery and competitive pricing. The number of offers (31) suggests significant interest and a robust bidding environment.
Taxpayer Impact: The use of full and open competition aims to ensure taxpayer funds are used efficiently by securing the best possible price through market forces.
Public Impact
Construction of diplomatic facilities impacts U.S. foreign policy and presence abroad. The project's success is crucial for maintaining diplomatic operations in Iraq. Job creation for construction workers and related industries is a positive impact.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long project duration (1332 days) increases risk of cost escalation and unforeseen issues.
- Geopolitical instability in Iraq could pose significant risks to project execution and safety.
- Fixed-price contracts can shift cost overrun risk to the contractor, but may lead to reduced quality if not managed well.
Positive Signals
- Full and open competition suggests a commitment to achieving value for money.
- A high number of offers (31) indicates strong market interest and potential for competitive pricing.
- The project supports U.S. diplomatic objectives in a key region.
Sector Analysis
This contract falls within the Commercial and Institutional Building Construction sector. Government construction projects, especially overseas, often carry higher costs due to security, logistics, and specialized requirements compared to domestic projects.
Small Business Impact
The data indicates the awardee is Perini Management Services, Inc., which is not explicitly identified as a small business. Further analysis would be needed to determine if small business subcontracting opportunities were included or met.
Oversight & Accountability
The Department of State is responsible for overseeing this contract. Given the project's scale and location, robust oversight is critical to manage risks, ensure quality, and control costs.
Related Government Programs
- Commercial and Institutional Building Construction
- Department of State Contracting
- Department of State Programs
Risk Flags
- High contract value
- Long project duration
- Construction in a high-risk environment (Iraq)
- Potential for cost overruns despite fixed-price contract
- Limited information on specific risk mitigation strategies
Tags
commercial-and-institutional-building-co, department-of-state, do, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of State awarded $125.9 million to PERINI MANAGEMENT SERVICES, INC.. CONSTRUCTION OF A NEW BASRA, IRAQ CONSULATE GENERAL.
Who is the contractor on this award?
The obligated recipient is PERINI MANAGEMENT SERVICES, INC..
Which agency awarded this contract?
Awarding agency: Department of State (Department of State).
What is the total obligated amount?
The obligated amount is $125.9 million.
What is the period of performance?
Start: 2011-03-14. End: 2014-11-05.
What is the cost per square foot for this consulate construction compared to similar international facilities?
Benchmarking the cost per square foot against comparable international consulate constructions is essential for a thorough value assessment. Without this data, it's difficult to determine if the $125.9 million award represents a fair market price or if it is inflated due to project complexity, security requirements, or location-specific challenges.
What specific risks are associated with constructing a diplomatic facility in Basra, Iraq, and how are they being mitigated?
Constructing in Basra, Iraq, presents significant risks including security threats, political instability, logistical challenges, and potential labor issues. Mitigation strategies likely involve stringent security protocols, contingency planning for disruptions, robust supply chain management, and close coordination with diplomatic and military personnel on the ground.
How effectively does the firm-fixed-price contract structure balance cost control with project quality and timely completion?
A firm-fixed-price contract aims to provide cost certainty for the government by shifting cost overrun risks to the contractor. However, it can incentivize cost-cutting that might compromise quality or lead to disputes if the scope is not perfectly defined. Effective management and oversight are crucial to ensure the contractor delivers the required quality within the agreed price and timeline.
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: SEALED BID
Offers Received: 31
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Tutor Perini Corporation (UEI: 006954432)
Address: 73 MOUNT WAYTE AVE, FRAMINGHAM, MA, 05
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $125,914,311
Exercised Options: $125,914,311
Current Obligation: $125,914,311
Contract Characteristics
Multi-Year Contract: Yes
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: SAQMMA11D0023
IDV Type: IDC
Timeline
Start Date: 2011-03-14
Current End Date: 2014-11-05
Potential End Date: 2014-11-05 00:00:00
Last Modified: 2014-11-06
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