State Department awards $20M for hardened trailer systems in Syria, raising questions on value and competition

Contract Overview

Contract Amount: $19,989,215 ($20.0M)

Contractor: Arkel International, L.L.C.

Awarding Agency: Department of State

Start Date: 2013-09-30

End Date: 2018-09-30

Contract Duration: 1,826 days

Daily Burn Rate: $10.9K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: ARKEL INTERNATIONAL WILL SUPPORT THE DEPARTMENT OF STATE BY PROVIDING THE DESIGN, FABRICATION, SHIPMENT, STORAGE, INSTALLATION, AND CONSTRUCTION OF HARDENED ALTERNATIVE TRAILER SYSTEMS (HATS) IN DAMASCUS, SYRIA. IGF::OT::IGF

Place of Performance

Location: CHARLESTON, CHARLESTON County, SOUTH CAROLINA, 29401

State: South Carolina Government Spending

Plain-Language Summary

Department of State obligated $20.0 million to ARKEL INTERNATIONAL, L.L.C. for work described as: ARKEL INTERNATIONAL WILL SUPPORT THE DEPARTMENT OF STATE BY PROVIDING THE DESIGN, FABRICATION, SHIPMENT, STORAGE, INSTALLATION, AND CONSTRUCTION OF HARDENED ALTERNATIVE TRAILER SYSTEMS (HATS) IN DAMASCUS, SYRIA. IGF::OT::IGF Key points: 1. The contract's value appears reasonable given the specialized nature of hardened structures and international deployment. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. The duration of the contract (5 years) indicates a long-term need for these facilities. 4. The project involves significant logistical challenges, including fabrication, shipment, and installation in a complex environment. 5. Performance context is limited, but the need for hardened structures implies security concerns. 6. Sector positioning is within construction and facility support for diplomatic missions.

Value Assessment

Rating: fair

Benchmarking the value of hardened alternative trailer systems (HATS) is challenging due to their specialized nature and the inherent risks associated with deployment in locations like Damascus, Syria. The $19.99 million award over five years averages approximately $4 million annually. While this figure may seem substantial, it must be considered against the costs of constructing traditional hardened facilities, which are often significantly higher. The firm-fixed-price contract type suggests that the contractor bears the risk of cost overruns, which can be a positive indicator for value if the price was set competitively.

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 bids. The specific number of bidders is not provided, but this procurement method generally fosters price discovery and encourages multiple companies to offer their best pricing and technical solutions. The use of full and open competition is a positive sign for achieving a fair market price.

Taxpayer Impact: Taxpayers benefit from the potential for competitive pricing and the assurance that the government sought the best value through an open process, rather than being limited to a select few providers.

Public Impact

Diplomatic personnel in Damascus will benefit from enhanced security through the provision of hardened facilities. The services delivered include design, fabrication, shipment, storage, installation, and construction of specialized trailer systems. The geographic impact is specific to the U.S. Embassy in Damascus, Syria. Workforce implications include jobs in manufacturing, logistics, and construction, potentially both domestically and internationally.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen logistical or security challenges arise during installation in Syria.
Dependency on a single contractor for a critical security infrastructure component.
Geopolitical instability in Syria could impact project timelines and costs.
Limited public information on the specific technical requirements and performance standards for the HATS.

Positive Signals

Awarded under full and open competition, suggesting a competitive pricing environment.
Firm-fixed-price contract type shifts cost overrun risk to the contractor.
Long-term contract duration (5 years) indicates a sustained commitment to security needs.
Specialized nature of the product suggests a focus on critical security infrastructure.

Sector Analysis

This contract falls within the construction and facility support services sector, specifically catering to government and diplomatic infrastructure needs. The market for hardened and secure facilities is specialized, often driven by government requirements in high-risk environments. Comparable spending benchmarks are difficult to establish due to the unique nature of 'hardened alternative trailer systems' and their deployment locations. However, large-scale construction projects for embassies or secure government facilities can range from tens to hundreds of millions of dollars.

Small Business Impact

The provided data indicates that small business participation was not a primary set-aside criterion for this contract (ss: false, sb: false). While the prime contractor, Arkel International, L.L.C., is not explicitly identified as large or small, the nature of the contract suggests it may be awarded to larger firms with the capacity for international logistics and specialized construction. There is no direct information on subcontracting plans for small businesses, which could represent missed opportunities for smaller firms to participate in this project.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of State's contracting officers and program managers. The Inspector General of the Department of State would have jurisdiction to investigate any allegations of fraud, waste, or abuse. Transparency is facilitated by the contract award being publicly available, but detailed project milestones, performance reports, and specific security requirements are likely not fully public due to the sensitive nature of the deployment location.

Related Government Programs

Department of State Facilities Management
Overseas Security Construction
Embassy Security Infrastructure
Logistics and Transportation Services

Risk Flags

Geopolitical Risk
Logistical Complexity
Security Infrastructure

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $20.0 million to ARKEL INTERNATIONAL, L.L.C.. ARKEL INTERNATIONAL WILL SUPPORT THE DEPARTMENT OF STATE BY PROVIDING THE DESIGN, FABRICATION, SHIPMENT, STORAGE, INSTALLATION, AND CONSTRUCTION OF HARDENED ALTERNATIVE TRAILER SYSTEMS (HATS) IN DAMASCUS, SYRIA. IGF::OT::IGF

Who is the contractor on this award?

The obligated recipient is ARKEL INTERNATIONAL, L.L.C..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $20.0 million.

What is the period of performance?

Start: 2013-09-30. End: 2018-09-30.

What is the track record of Arkel International, L.L.C. in performing similar international construction and security projects?

Information regarding Arkel International, L.L.C.'s specific track record with similar international construction and security projects, particularly in high-risk environments like Syria, is not detailed in the provided data. A comprehensive assessment would require reviewing past performance evaluations, contract history with government agencies, and any reported issues or successes on comparable projects. Understanding their experience with fabrication, international shipping, on-site installation, and adherence to security protocols in challenging geopolitical areas is crucial for evaluating their capability to successfully execute this contract. Without this specific performance data, it is difficult to definitively assess their suitability beyond the fact that they were awarded this contract.

How does the cost of these hardened alternative trailer systems compare to traditional hardened construction methods for diplomatic facilities?

Direct cost comparisons between Hardened Alternative Trailer Systems (HATS) and traditional hardened construction methods for diplomatic facilities are complex and depend heavily on specific project requirements, location, and threat assessments. Traditional construction often involves significant on-site labor, material sourcing, and extended timelines, which can lead to very high costs, especially in secure or remote locations. HATS, being prefabricated units, might offer advantages in terms of faster deployment and potentially lower on-site construction costs. However, the 'hardened' aspect implies specialized materials and engineering, which inherently increases unit cost. The $19.99 million award for multiple units over five years suggests a significant investment, but it's plausible that it represents a more cost-effective solution compared to building equivalent permanent hardened structures from scratch in Damascus, considering logistical and security overheads.

What are the specific security risks and mitigation strategies associated with deploying these systems in Damascus, Syria?

The provided data does not detail the specific security risks or mitigation strategies for deploying these hardened trailer systems in Damascus, Syria. However, general risks associated with such an environment include political instability, potential for conflict, terrorism threats, and logistical challenges related to transportation and installation. Mitigation strategies would typically involve robust security protocols during fabrication, shipping, and installation, coordination with local security forces and diplomatic security agencies, secure site selection, and potentially blast-resistant designs and materials for the HATS themselves. The need for 'hardened' systems inherently acknowledges a high-threat environment, implying that the Department of State has conducted a thorough risk assessment and incorporated appropriate security measures into the contract requirements.

What is the expected lifespan and maintenance requirement for these hardened alternative trailer systems?

The provided data does not specify the expected lifespan or detailed maintenance requirements for the Hardened Alternative Trailer Systems (HATS). However, the contract duration of five years (September 30, 2013, to September 30, 2018) suggests an anticipated operational period within that timeframe, potentially longer if the systems are durable and maintainable. Typically, hardened structures are designed for longevity, but their lifespan is contingent on the quality of materials, construction, environmental factors, and the rigor of the maintenance schedule. Maintenance would likely involve regular inspections, structural integrity checks, and potential repairs to ensure continued protection. The contract's scope includes 'installation,' which may implicitly cover initial setup and potentially some level of post-installation support or training for maintenance personnel.

How does this spending align with overall Department of State expenditures on diplomatic security and infrastructure?

This $19.99 million contract for hardened trailer systems in Damascus represents a specific investment within the broader context of the Department of State's overall spending on diplomatic security and infrastructure. The Department consistently allocates significant resources to protect its personnel and facilities worldwide, especially in high-risk posts. Expenditures encompass a wide range of initiatives, including physical security upgrades, personnel security, cybersecurity, emergency preparedness, and the construction or renovation of diplomatic facilities. While this particular award is substantial for a single project, it must be viewed as one component of a larger, multi-faceted security strategy. Analyzing its alignment would require comparing it to the total budget allocated for diplomatic security and infrastructure over the contract period and assessing how it contributes to the Department's strategic security objectives.

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Commercial and Institutional Building Construction

Product/Service Code: PREFAB STRUCTURES/SCAFFOLDING

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SEALED BID

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1048 FLORIDA BLVD, BATON ROUGE, LA, 70802

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

Financial Breakdown

Contract Ceiling: $19,989,215

Exercised Options: $19,989,215

Current Obligation: $19,989,215

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: SUPPLIES OR SERVICES PURSUANT TO FAR 12.102(F)

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SAQMMA11D0026

IDV Type: IDC

Timeline