State Department awards $188M contract for new Paraguay embassy complex construction

Contract Overview

Contract Amount: $187,956,299 ($188.0M)

Contractor: Caddell Construction CO. (DE), LLC

Awarding Agency: Department of State

Start Date: 2017-01-31

End Date: 2023-12-05

Contract Duration: 2,499 days

Daily Burn Rate: $75.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: ALL WORK TO CONSTRUCT THE NEW EMBASSY COMPLEX (NEC) IN ASUNCION, PARAGUAY, INCLUDING EARLY SITE-WORK, FACILITY RELOCATIONS&DEMOLITION.IGF::OT::IGF

Plain-Language Summary

Department of State obligated $188.0 million to CADDELL CONSTRUCTION CO. (DE), LLC for work described as: ALL WORK TO CONSTRUCT THE NEW EMBASSY COMPLEX (NEC) IN ASUNCION, PARAGUAY, INCLUDING EARLY SITE-WORK, FACILITY RELOCATIONS&DEMOLITION.IGF::OT::IGF Key points: 1. Contract awarded to Caddell Construction Co. for comprehensive embassy complex development. 2. Project scope includes early site work, facility relocation, and demolition. 3. The definitive contract was awarded under full and open competition. 4. Construction duration spans approximately 2499 days, indicating a long-term project. 5. The contract type is Firm Fixed Price, providing cost certainty. 6. This project represents a significant investment in diplomatic infrastructure.

Value Assessment

Rating: good

The contract value of $188 million for constructing a new embassy complex in Asuncion, Paraguay, appears reasonable given the scope of work. While direct comparisons are difficult without specific project details, large-scale diplomatic facility construction projects often involve substantial costs for design, materials, labor, and security. The firm fixed-price nature of the contract suggests that the pricing was established upfront, which can be beneficial for budget management. Benchmarking against similar embassy constructions globally would provide a more precise value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through full and open competition, indicating that multiple interested contractors had the opportunity to bid. This process is designed to foster a competitive environment, potentially leading to better pricing and quality. The presence of multiple bidders (3 indicated) suggests a healthy level of interest in this type of government construction work. The specific number of bids received and their relative competitiveness would offer further insight into the effectiveness of the competition.

Taxpayer Impact: Full and open competition generally benefits taxpayers by encouraging a wider range of proposals and driving down costs through market forces. This approach aims to ensure that the government secures the best value for its investment.

Public Impact

The U.S. Department of State benefits from the construction of a modern, secure, and functional embassy complex. The project delivers essential services related to diplomatic operations and representation in Paraguay. The geographic impact is concentrated in Asuncion, Paraguay, enhancing U.S. diplomatic presence. Workforce implications include job creation for construction workers, engineers, and project managers, both locally and potentially from the U.S.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns on a large, multi-year construction project.
Delays in construction could impact diplomatic operations and project timelines.
Geopolitical risks in the region could affect project execution and security.
Ensuring compliance with local building codes and environmental regulations.

Positive Signals

Firm Fixed Price contract provides cost certainty for the government.
Awarded through full and open competition, suggesting competitive pricing.
Experienced contractor (Caddell Construction Co.) likely brings expertise to the project.
Modern embassy infrastructure can improve long-term operational efficiency and security.

Sector Analysis

The construction of diplomatic facilities falls within the broader Commercial and Institutional Building Construction sector. This sector is characterized by large-scale projects requiring significant capital investment, specialized labor, and adherence to stringent quality and security standards. The market for such projects is often global, with a limited number of large construction firms capable of undertaking complex international assignments. The State Department's spending on embassy construction is a key component of its capital security and infrastructure modernization efforts.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Given the scale and complexity of constructing a new embassy complex, it is unlikely that small businesses would be primary contractors. However, there may be opportunities for small businesses to participate as subcontractors for specialized services or material supply, depending on the prime contractor's subcontracting plan.

Oversight & Accountability

Oversight for this contract would typically be managed by the U.S. Department of State's Bureau of Overseas Buildings Operations (OBO) or a designated project management team. Accountability measures would include regular progress reports, site inspections, and adherence to contract milestones. Transparency is generally maintained through contract award notifications and public reporting, though specific project details might be sensitive. The Inspector General's office for the Department of State would have jurisdiction for audits and investigations.

Related Government Programs

Embassy Construction Projects
Diplomatic Facility Modernization
Overseas Building Operations
International Construction Contracts

Risk Flags

Large-scale construction project with extended duration.
International project with potential logistical and security challenges.
Firm Fixed Price contract requires careful cost management by the contractor.

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $188.0 million to CADDELL CONSTRUCTION CO. (DE), LLC. ALL WORK TO CONSTRUCT THE NEW EMBASSY COMPLEX (NEC) IN ASUNCION, PARAGUAY, INCLUDING EARLY SITE-WORK, FACILITY RELOCATIONS&DEMOLITION.IGF::OT::IGF

Who is the contractor on this award?

The obligated recipient is CADDELL CONSTRUCTION CO. (DE), LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $188.0 million.

What is the period of performance?

Start: 2017-01-31. End: 2023-12-05.

What is the track record of Caddell Construction Co. in completing large-scale international construction projects, particularly for government entities?

Caddell Construction Co. has a significant track record in constructing large-scale projects, including numerous diplomatic facilities for the U.S. Department of State and other government agencies worldwide. They have experience with embassy compounds, consulates, and other secure facilities, often in challenging international locations. Their portfolio includes projects valued in the hundreds of millions of dollars, demonstrating their capacity to manage complex logistics, security requirements, and diverse construction needs. This experience suggests they are well-equipped to handle the demands of the new embassy complex in Asuncion, Paraguay, and have likely encountered and managed similar risks and challenges in past projects.

How does the awarded amount of $188 million compare to the cost of constructing similar-sized embassy complexes in other regions?

Directly comparing the $188 million cost for the Asuncion embassy complex to other similar projects requires detailed information on the size, scope, specific security features, and local economic conditions of each facility. However, embassy constructions are inherently expensive due to high security standards, specialized architectural requirements, and the need for long-term durability in potentially challenging environments. Projects of this magnitude can range from tens of millions to several hundred million dollars. Factors like labor costs, material availability, and geopolitical stability in the host country significantly influence the final price. Without a detailed breakdown of the Asuncion project's specifications and a benchmark of comparable recent projects, a precise value-for-money assessment is challenging, but the figure is within the expected range for a major diplomatic facility.

What are the primary risks associated with constructing a large embassy complex in Asuncion, Paraguay, and how are they being mitigated?

Primary risks for this project likely include construction delays due to unforeseen site conditions, weather, or logistical challenges in Asuncion. Security risks, both during construction and for the final facility, are paramount for diplomatic missions. Geopolitical instability in the region, though potentially low, is always a consideration. Economic factors, such as currency fluctuations or inflation, could impact costs if not adequately managed within the fixed-price contract. Mitigation strategies typically involve robust project management, detailed site investigations, stringent security protocols, contingency planning, and close collaboration with local authorities. The firm fixed-price contract itself mitigates some financial risk for the government by capping the total cost.

What is the historical spending pattern for the construction and maintenance of U.S. embassy facilities globally, and how does this contract fit within that trend?

The U.S. Department of State has a consistent and significant historical spending pattern on the construction, renovation, and maintenance of its diplomatic facilities worldwide through programs like the Bureau of Overseas Buildings Operations (OBO). This spending is driven by the need to maintain secure, functional, and modern representation abroad, often replacing aging infrastructure or establishing new presences. Annual budgets for these capital security and construction programs typically run into the billions of dollars. The $188 million contract for the Asuncion embassy complex represents a substantial, but not extraordinary, investment within this broader, ongoing global effort to upgrade and secure U.S. diplomatic infrastructure.

Given the 'Full and Open Competition' award, what was the level of competition, and how might this have influenced the final contract price?

The data indicates the contract was awarded under 'Full and Open Competition' and notes 3 bidders ('no': 3). This suggests that the bidding process was open to all responsible sources, and at least three entities submitted proposals. A higher number of bidders generally correlates with more competitive pricing, as contractors vie to win the contract by offering the most attractive terms. While three bidders represent a degree of competition, the specific dynamics—such as the qualifications of each bidder and the range of their proposed prices—would determine the extent to which competition effectively drove down costs. Without knowing the number of proposals received versus the number of bidders, or the specific bid amounts, it's difficult to definitively state how much the price was influenced, but the open competition framework is designed to achieve this.

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: TWO STEP

Offers Received: 3

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, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $187,956,299

Exercised Options: $187,956,299

Current Obligation: $187,956,299

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline