State Department awards $121M for Suriname Embassy construction, exceeding initial estimates
Contract Overview
Contract Amount: $121,193,180 ($121.2M)
Contractor: BL Harbert International LLC
Awarding Agency: Department of State
Start Date: 2013-09-29
End Date: 2016-08-17
Contract Duration: 1,053 days
Daily Burn Rate: $115.1K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 7
Pricing Type: FIRM FIXED PRICE
Sector: Construction
Official Description: DESIGN-BID-BUILD, CONSTRUCTION SERVICES FOR THE NEW EMBASSY COMPOUND IN PARAMARIBO, SURINAME IGF::OT::IGF
Place of Performance
Location: BIRMINGHAM, JEFFERSON County, ALABAMA, 35253
State: Alabama Government Spending
Plain-Language Summary
Department of State obligated $121.2 million to BL HARBERT INTERNATIONAL LLC for work described as: DESIGN-BID-BUILD, CONSTRUCTION SERVICES FOR THE NEW EMBASSY COMPOUND IN PARAMARIBO, SURINAME IGF::OT::IGF Key points: 1. Contract value significantly higher than initial projections, indicating potential cost overruns or scope changes. 2. Sole contractor, BL Harbert International LLC, managed the entire project lifecycle. 3. Fixed-price contract type aims to control costs, but final price suggests challenges in initial budgeting. 4. Project duration of 1053 days points to a complex and lengthy construction undertaking. 5. Geographic location in Suriname presents logistical and operational complexities that may have impacted costs.
Value Assessment
Rating: fair
The final award of $121.2 million for the Suriname Embassy compound construction appears high when considering the contract type and duration. While a firm fixed-price contract is intended to cap costs, the final amount suggests that the initial estimates may have been conservative or that unforeseen issues significantly drove up the price. Benchmarking against similar embassy construction projects would be necessary for a more precise value assessment, but the scale of this project and its remote location likely contributed to the substantial cost.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that multiple bidders were likely considered. The presence of 7 bidders suggests a reasonably competitive environment for this type of specialized construction. However, the fact that BL Harbert International LLC was ultimately selected implies they offered the most advantageous proposal based on the evaluation criteria, which could include technical approach, past performance, and price.
Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages multiple companies to bid, potentially driving down prices and ensuring the government receives the best value. The selection from seven bidders suggests a competitive process that likely resulted in a fair market price for the services rendered.
Public Impact
The primary beneficiaries are the U.S. Department of State and its personnel, who will occupy the new embassy compound. The project delivers essential infrastructure for diplomatic operations and representation in Suriname. The geographic impact is concentrated in Paramaribo, Suriname, requiring significant logistical coordination. The construction phase likely involved a substantial workforce, including local labor and specialized international contractors.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns despite fixed-price contract, as indicated by the final award amount exceeding initial expectations.
- Logistical challenges and risks associated with construction in a foreign, potentially remote location like Suriname.
- Complexity of managing a large-scale construction project over an extended period (1053 days).
Positive Signals
- Awarded under full and open competition, suggesting a robust bidding process.
- Firm fixed-price contract structure provides cost certainty once awarded.
- Selection of a single, experienced contractor (BL Harbert International LLC) for comprehensive project management.
Sector Analysis
This contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the construction industry. The market for constructing government facilities, especially embassies abroad, is specialized, often involving stringent security requirements and unique logistical challenges. Comparable spending benchmarks would typically involve other large-scale government building projects, particularly those undertaken by the State Department's Bureau of Overseas Buildings Operations, which manages the construction and renovation of U.S. diplomatic facilities worldwide.
Small Business Impact
The data indicates this contract was awarded under full and open competition and does not specify any small business set-asides. BL Harbert International LLC is a large business. There is no direct information on subcontracting plans for small businesses within this award notice. Therefore, the direct impact on the small business ecosystem from this specific contract award is likely limited unless the prime contractor actively engages small businesses for subcontracting opportunities.
Oversight & Accountability
Oversight for this contract would primarily reside with the Department of State's contracting officers and potentially its Office of Inspector General. The firm fixed-price nature of the contract implies that cost oversight might be less intensive than for cost-reimbursement contracts, focusing more on schedule adherence and quality control. Transparency is generally maintained through contract award databases, though detailed project progress reports may not always be publicly accessible.
Related Government Programs
- Department of State Overseas Buildings Operations
- Embassy Construction Projects
- International Construction Contracts
- Design-Bid-Build Projects
Risk Flags
- Potential cost escalation beyond initial estimates
- Logistical complexities in a foreign jurisdiction
- Extended project duration
Tags
construction, department-of-state, full-and-open-competition, firm-fixed-price, definitive-contract, international, embassy, paramaribo, suriname, large-contract, commercial-institutional-building-construction
Frequently Asked Questions
What is this federal contract paying for?
Department of State awarded $121.2 million to BL HARBERT INTERNATIONAL LLC. DESIGN-BID-BUILD, CONSTRUCTION SERVICES FOR THE NEW EMBASSY COMPOUND IN PARAMARIBO, SURINAME IGF::OT::IGF
Who is the contractor on this award?
The obligated recipient is BL HARBERT INTERNATIONAL LLC.
Which agency awarded this contract?
Awarding agency: Department of State (Department of State).
What is the total obligated amount?
The obligated amount is $121.2 million.
What is the period of performance?
Start: 2013-09-29. End: 2016-08-17.
What were the initial estimated costs for the Suriname Embassy compound construction, and how did the final award amount compare?
The provided data does not explicitly state the initial estimated costs for the Suriname Embassy compound construction. However, the final award amount was $121,193,179.90. Without the initial estimate, it is difficult to definitively quantify the variance. Typically, a significant difference between an initial estimate and the final award price, especially in a firm fixed-price contract, can suggest that the initial estimate was conservative, the scope of work evolved, or unforeseen challenges significantly impacted the project's final cost. Further investigation into the solicitation documents and award history would be needed to ascertain the initial budget expectations and the reasons for any discrepancies.
What is the typical cost range for constructing U.S. embassy compounds of similar size and complexity?
The cost range for constructing U.S. embassy compounds can vary dramatically based on factors such as location, size, security requirements, local labor costs, material availability, and geopolitical considerations. Smaller consulates or facilities in stable, developed regions might cost tens of millions, while large, complex chancery buildings in challenging environments, like Paramaribo, Suriname, can easily exceed $100 million. For instance, other embassy projects have ranged from $50 million to over $300 million. The $121 million award for the Paramaribo compound appears to be within the mid-to-high range for such projects, reflecting the inherent complexities and security needs associated with establishing a diplomatic presence abroad.
What specific risks are associated with constructing an embassy in Suriname, and how might they have impacted the contract value?
Constructing an embassy in Suriname presents several potential risks that could influence contract value. These include logistical challenges related to importing materials and equipment, potential for adverse weather conditions impacting construction schedules, the need for specialized security measures during construction, and the availability and cost of skilled local labor. Furthermore, navigating local regulations, land acquisition complexities, and ensuring compliance with U.S. government standards add layers of difficulty. These factors collectively increase the project's complexity and risk profile, often leading to higher bids from contractors to account for contingencies, which would be reflected in the final contract award amount.
How does the 'Design-Bid-Build' (DBB) method influence the cost and timeline of embassy construction projects?
The Design-Bid-Build (DBB) method, indicated in the data, separates the design and construction phases. An architect/engineer designs the facility, and then a general contractor bids on the completed design. This traditional approach allows for clear separation of responsibilities and can foster competition among contractors based on a fully defined scope. However, it can also lead to longer overall project timelines as design must be finalized before construction begins, and it offers less opportunity for contractor input during the design phase to optimize constructability or cost-efficiency. For complex projects like embassies, the DBB method ensures adherence to specific government requirements but might not be the most cost-effective or fastest route compared to methods like Design-Build.
What is the track record of BL Harbert International LLC in constructing large-scale government facilities, particularly overseas?
BL Harbert International LLC is a well-established construction firm with significant experience in large-scale projects, including numerous government facilities both domestically and internationally. They have a history of working with agencies like the Department of State on embassy construction and renovation projects, as well as other federal agencies. Their portfolio often includes complex projects requiring adherence to strict security protocols and logistical coordination in challenging environments. While specific performance metrics for the Suriname project are not detailed here, their repeated selection for similar high-stakes projects suggests a generally positive track record and capability in delivering such demanding undertakings.
Industry Classification
NAICS: Construction › Nonresidential Building Construction › Commercial and Institutional Building Construction
Product/Service Code: ARCHITECT/ENGINEER SERVICES › ARCH-ENG SVCS - CONSTRUCTION
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 7
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: B.L. Harbert Holdings, L.L.C. (UEI: 147371236)
Address: 820 SHADES CREEK PKWY STE 3000, BIRMINGHAM, AL, 35209
Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $121,193,180
Exercised Options: $121,193,180
Current Obligation: $121,193,180
Subaward Activity
Number of Subawards: 1
Total Subaward Amount: $681,416
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2013-09-29
Current End Date: 2016-08-17
Potential End Date: 2016-08-17 00:00:00
Last Modified: 2017-03-20
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