State Department awards $42.8M for embassy design, with 48 bids received

Contract Overview

Contract Amount: $42,852,429 ($42.9M)

Contractor: Studio Gang Architects Ltd

Awarding Agency: Department of State

Start Date: 2017-09-25

End Date: 2026-09-21

Contract Duration: 3,283 days

Daily Burn Rate: $13.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 48

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: BRASILIA NEW EMBASSY COMPOUND.IGF::OT::IGF

Place of Performance

Location: CHICAGO, COOK County, ILLINOIS, 60642

State: Illinois Government Spending

Plain-Language Summary

Department of State obligated $42.9 million to STUDIO GANG ARCHITECTS LTD for work described as: BRASILIA NEW EMBASSY COMPOUND.IGF::OT::IGF Key points: 1. Contract value appears reasonable given the scope of architectural services for a new embassy compound. 2. Strong competition with 48 bids suggests a healthy market for these specialized services. 3. Long performance period (3283 days) may introduce risks related to scope creep or changing requirements. 4. This contract supports a critical diplomatic infrastructure project for the U.S. abroad. 5. Architectural services sector is characterized by specialized firms capable of handling complex, large-scale projects.

Value Assessment

Rating: good

The contract value of $42.8 million for architectural services for a new embassy compound is substantial, reflecting the complexity and scale of the project. Benchmarking against similar large-scale government architectural projects, this price appears within a reasonable range, especially considering the specialized nature of diplomatic facility design. The firm-fixed-price contract type suggests that the contractor bears the risk of cost overruns, which can be a positive indicator of value if the scope is well-defined.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, with a significant number of 48 bids received. This high level of competition is a strong positive signal, indicating that the market has sufficient capacity and interest in providing these services. A robust bidding process generally leads to more competitive pricing and a wider selection of qualified contractors, benefiting the government.

Taxpayer Impact: The extensive competition ensures that taxpayer dollars are likely being used efficiently, as multiple firms vied for the contract, driving down potential costs and ensuring a high-quality selection.

Public Impact

The primary beneficiaries are the U.S. Department of State and its personnel, who will utilize the new embassy compound. The services delivered include comprehensive architectural design for a major diplomatic facility. The geographic impact is centered on the location of the new embassy, enhancing U.S. diplomatic presence. The contract supports specialized architectural and engineering jobs within the firm and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 9 years) increases the risk of cost escalation due to inflation or unforeseen design changes.
Potential for scope creep if initial requirements are not precisely defined, leading to increased costs beyond the initial estimate.
Reliance on a single firm for such a critical and long-term project could pose risks if performance issues arise.

Positive Signals

Firm-fixed-price contract type limits the government's exposure to cost overruns.
High number of bidders (48) suggests strong competition and a robust selection process.
Awarding to a firm with a track record in architectural services (implied by winning a large contract) can be a positive signal.

Sector Analysis

The architectural services sector for large government projects is highly specialized, often dominated by firms with extensive experience in complex, high-security, and large-scale construction. This contract falls within the broader construction and engineering services market, which is significant in federal spending. Comparable spending benchmarks for major federal building projects, including embassies, often run into tens or hundreds of millions of dollars, depending on size, location, and security requirements.

Small Business Impact

The contract was awarded to STUDIO GANG ARCHITECTS LTD, and there is no indication of a small business set-aside. Given the scale and specialized nature of designing an embassy compound, it is unlikely that small businesses would be the primary awardees without subcontracting opportunities. Further analysis would be needed to determine if subcontracting plans include provisions for small businesses.

Oversight & Accountability

The contract is subject to standard federal procurement oversight mechanisms. The firm-fixed-price nature provides some cost control. Transparency is generally maintained through contract award databases. The Department of State's Office of Inspector General would likely have oversight jurisdiction for any issues related to performance or financial accountability.

Related Government Programs

Department of State Capital Security Construction Program
Federal Building Design and Construction
Architectural and Engineering Services Contracts

Risk Flags

Long contract duration may increase risk of cost escalation or scope changes.
Firm-fixed-price contracts can be challenging for very long-term projects if not managed carefully.
Complexity of embassy design requires specialized expertise and rigorous oversight.

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $42.9 million to STUDIO GANG ARCHITECTS LTD. BRASILIA NEW EMBASSY COMPOUND.IGF::OT::IGF

Who is the contractor on this award?

The obligated recipient is STUDIO GANG ARCHITECTS LTD.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $42.9 million.

What is the period of performance?

Start: 2017-09-25. End: 2026-09-21.

What is the track record of STUDIO GANG ARCHITECTS LTD with large federal contracts, particularly for diplomatic facilities?

Information regarding STUDIO GANG ARCHITECTS LTD's specific track record with large federal contracts, especially for diplomatic facilities, is not detailed in the provided data. However, winning a contract of this magnitude ($42.8 million) from the Department of State suggests they possess the necessary qualifications, experience, and capacity to handle such complex projects. Further investigation into their past performance on similar government contracts, client satisfaction reviews, and any history of disputes or performance issues would be necessary for a comprehensive assessment. Federal procurement databases and past performance reviews are key resources for this type of analysis.

How does the $42.8 million contract value compare to similar embassy construction or renovation projects?

The $42.8 million contract value for architectural services for a new embassy compound is substantial and aligns with the significant investment required for such critical diplomatic infrastructure. While exact comparisons are difficult without knowing the specific size, location, and security requirements of the new compound, major federal building projects, including embassies, often involve costs in the tens to hundreds of millions of dollars. This figure is likely competitive for the design phase of a large-scale, high-security facility. Factors such as the complexity of the site, geopolitical considerations, and specific programmatic needs of the embassy would influence the final design costs.

What are the primary risks associated with a firm-fixed-price contract for a project spanning over 9 years?

The primary risks associated with a firm-fixed-price (FFP) contract for a project spanning over 9 years (3283 days) primarily revolve around the potential for scope creep and the contractor's ability to manage costs over such an extended period. While FFP contracts are designed to protect the government from cost overruns, unforeseen changes in requirements, design evolution, or material cost inflation over nearly a decade could strain the contractor's ability to adhere to the fixed price. The government must ensure rigorous change control processes are in place. Conversely, the contractor bears the risk of underestimating costs or facing unexpected challenges, which could impact their profitability or willingness to perform diligently throughout the project lifecycle.

What does the high number of bidders (48) indicate about the market for architectural services for federal facilities?

The exceptionally high number of 48 bidders for this architectural services contract indicates a robust and competitive market for federal facility design. This suggests that there are numerous qualified firms capable of undertaking large-scale government projects, and that the Department of State's solicitation was widely disseminated and attractive to potential offerors. Such strong competition is beneficial for the government as it typically leads to more competitive pricing, a wider array of innovative design solutions, and a greater likelihood of selecting a contractor with the best overall value proposition. It also implies that the barriers to entry for firms interested in federal work are not prohibitively high.

Are there any specific performance metrics or milestones tied to this contract that indicate program effectiveness?

The provided data does not detail specific performance metrics or milestones tied to this contract. However, for a project of this nature and duration, performance would typically be evaluated against adherence to the architectural design schedule, quality of design deliverables (e.g., blueprints, specifications), compliance with building codes and security standards, and effective project management. The firm-fixed-price nature implies that the contractor is incentivized to complete the design within the agreed-upon scope and timeline. The Department of State would likely have internal quality assurance processes and potentially utilize third-party reviews to monitor progress and ensure the design meets all functional and security requirements for the new embassy.

How does this contract fit into the Department of State's broader strategy for diplomatic infrastructure?

This contract is a crucial component of the Department of State's ongoing efforts to modernize and secure its diplomatic infrastructure worldwide. The Bureau of Overseas Buildings Operations (OBO) is responsible for managing the design, construction, renovation, and maintenance of U.S. diplomatic facilities. Projects like the new embassy compound are essential for maintaining a safe and effective presence abroad, often replacing aging facilities or establishing new ones in response to evolving geopolitical needs. This specific contract for architectural services signifies the initial, critical phase of a major capital project, laying the groundwork for the physical realization of U.S. foreign policy objectives.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Architectural Services

Product/Service Code: ARCHITECT/ENGINEER SERVICES › ARCH-ENG SVCS - GENERAL

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: ARCHITECT-ENGINEER FAR 6.102

Offers Received: 48

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1520 W DIVISION ST, CHICAGO, IL, 60642

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

Financial Breakdown

Contract Ceiling: $42,852,429

Exercised Options: $42,852,429

Current Obligation: $42,852,429

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline