State Department awards $31.4M construction contract for Papua New Guinea facility

Contract Overview

Contract Amount: $31,397,378 ($31.4M)

Contractor: Caddell Construction CO., Inc.

Awarding Agency: Department of State

Start Date: 2011-11-08

End Date: 2015-07-06

Contract Duration: 1,336 days

Daily Burn Rate: $23.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: CONSTRUCTION OF NEC IN PORT MORESBY, PAPUA NEW GUINEA

Plain-Language Summary

Department of State obligated $31.4 million to CADDELL CONSTRUCTION CO., INC. for work described as: CONSTRUCTION OF NEC IN PORT MORESBY, PAPUA NEW GUINEA Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract duration of 1336 days indicates a significant, long-term construction project. 3. Fixed-price contract type helps mitigate cost overrun risks for the government. 4. The project is located in Papua New Guinea, implying logistical complexities and potential geopolitical considerations. 5. The North American Industry Classification System (NAICS) code 236220 points to commercial and institutional building construction. 6. No small business set-aside was utilized, indicating the primary awardee was not a small business.

Value Assessment

Rating: fair

The total award amount of $31.4 million for the construction of a facility in Papua New Guinea requires benchmarking against similar international construction projects. Without specific details on the facility's size, scope, and complexity, a precise value-for-money assessment is challenging. However, the fixed-price nature of the contract provides some cost certainty. The number of bids received (5) suggests a moderate level of interest, which can influence pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit a bid. Five bids were received, indicating a reasonable level of competition for this project. A higher number of bidders generally leads to more competitive pricing and a wider range of technical solutions.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it is expected to drive down costs through market forces and encourage innovative solutions from multiple contractors.

Public Impact

The primary beneficiary is the Department of State, which will gain a new or improved facility in Papua New Guinea. The project delivers construction services, contributing to infrastructure development in the region. The geographic impact is concentrated in Port Moresby, Papua New Guinea. The contract supports the construction workforce, potentially including local labor and specialized trades.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen logistical challenges arise in Papua New Guinea.
Geopolitical instability in the region could impact project timelines and security.
Quality control and oversight may be more complex for an overseas project.

Positive Signals

Fixed-price contract type limits the government's exposure to cost increases.
Full and open competition likely resulted in a competitive price.
The contractor, Caddell Construction Co., Inc., has experience in large-scale construction projects.

Sector Analysis

This contract falls within the construction sector, specifically commercial and institutional building construction. The global market for such construction is substantial, driven by government infrastructure needs and private development. Benchmarking this specific award requires comparison to similar embassy or government facility constructions in challenging international locations, considering factors like labor costs, material sourcing, and security requirements.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses in the provided data. This suggests that the primary contract was awarded to a large business capable of undertaking the project independently. The impact on the small business ecosystem is likely minimal unless the prime contractor voluntarily engages small businesses for specific tasks.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of State's Bureau of Overseas Buildings Operations (OBO) or a designated contracting officer's representative. Accountability measures are inherent in the firm-fixed-price contract, requiring the contractor to deliver the specified construction within the agreed-upon price. Transparency is generally maintained through contract award databases and reporting requirements, though specific project oversight details may not be publicly available.

Related Government Programs

Department of State Facilities Construction
Overseas Building Operations
Embassy Construction Projects
International Infrastructure Development

Risk Flags

Potential for logistical challenges in Papua New Guinea.
Security risks associated with overseas construction.
Geopolitical instability in the region.

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $31.4 million to CADDELL CONSTRUCTION CO., INC.. CONSTRUCTION OF NEC IN PORT MORESBY, PAPUA NEW GUINEA

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 $31.4 million.

What is the period of performance?

Start: 2011-11-08. End: 2015-07-06.

What is the specific purpose and scope of the NEC facility being constructed in Port Moresby?

The provided data does not specify the exact purpose or detailed scope of the NEC (likely referring to a New Embassy Compound or similar facility) in Port Moresby, Papua New Guinea. However, given the contractor's specialization and the agency involved (Department of State), it is highly probable that this construction project involves building or renovating critical infrastructure for U.S. diplomatic operations. This could include office spaces, residential quarters for personnel, security features, and support facilities necessary for the functioning of an embassy or consulate in a foreign country. The total award amount of approximately $31.4 million suggests a project of significant scale and complexity, likely encompassing multiple buildings and extensive site work.

How does the $31.4 million award compare to similar overseas construction projects by the Department of State?

Benchmarking the $31.4 million award requires comparing it to similar Department of State construction projects, particularly those in comparable geographic regions or with similar security and logistical challenges. For instance, the construction of new embassy compounds or major renovations in other parts of the Indo-Pacific or regions with developing infrastructure can serve as a reference point. Factors such as the size of the facility (square footage), the number of buildings, the level of security required, and the local cost of labor and materials in Papua New Guinea would influence the overall cost. Without these specific comparative metrics, it's difficult to definitively state if $31.4 million represents a high, low, or average cost. However, large-scale overseas construction projects for government facilities often run into tens of millions of dollars due to complexity and location.

What are the primary risks associated with constructing a facility in Papua New Guinea for the Department of State?

Constructing a facility in Papua New Guinea presents several significant risks. Logistical challenges are paramount, including the transportation of materials, equipment, and personnel to the site, which can be exacerbated by limited infrastructure. Security risks, both for the construction site and personnel, may be elevated depending on the local environment and geopolitical stability. Furthermore, unforeseen geological conditions, environmental factors, and potential labor disputes could impact project timelines and costs. The Department of State must also navigate local regulations, customs, and potential bureaucratic hurdles. The firm-fixed-price contract structure aims to mitigate financial risks for the government, but the contractor assumes greater risk for cost overruns stemming from these external factors.

What is Caddell Construction Co., Inc.'s track record with large-scale government construction projects, especially overseas?

Caddell Construction Co., Inc. has a well-established track record of undertaking large-scale construction projects, including significant work for the U.S. government, particularly the Department of State and the Department of Defense, often in overseas locations. They have been involved in building and renovating embassies, consulates, military facilities, and other government installations worldwide. Their experience typically includes managing complex logistics, adhering to stringent security requirements, and navigating the challenges of working in diverse and sometimes remote environments. The award of this $31.4 million contract in Papua New Guinea is consistent with their demonstrated capability in executing high-value, complex international construction projects for federal agencies.

How has the Department of State's spending on overseas construction evolved over the years, and where does this contract fit?

The Department of State's spending on overseas construction, particularly for diplomatic facilities, has generally seen significant investment, especially following security incidents like the 1998 embassy bombings. Programs like the New Embassy Compound (NEC) initiative aim to replace or upgrade aging and often vulnerable diplomatic posts with modern, secure facilities. Spending in this category can fluctuate based on global security needs, infrastructure modernization priorities, and budget allocations. This $31.4 million contract for a facility in Port Moresby fits within the broader pattern of the Department investing in secure and functional diplomatic infrastructure abroad. It represents a specific project within a larger, ongoing effort to maintain and enhance the U.S. presence globally.

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: 5

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: $31,397,378

Exercised Options: $31,397,378

Current Obligation: $31,397,378

Contract Characteristics

Cost or Pricing Data: NO

Timeline