My partner, Ed DeLisle, and I recently attended two Industry Days sponsored by the Army Corps of Engineers (“USACE”). The first one was held in New York City on October 20th, and the second one was held in Tel Aviv on November 5, 2014. The purpose of the programs was to introduce American and Israeli construction contractors and A/E firms to the upcoming opportunities in Israel. Information was provided on the general scope of USACE design build and design bid build projects within Israel; typical infrastructure and facilities being procured; potential repair, maintenance and construction opportunities to support Israeli Ministry of Defense (“MoD”) facilities in Israel; as well as information on the solicitation and proposal process. The projects are funded by the Foreign Military Finance program and it is projected that hundreds of millions of dollars in military construction will be undertaken by the Corps in the near future, with significant expenditures in the next year.
The contracts, for the most part, will be solicited as Multiple Award Task Order Contracts (“MATOC”), but there will also be some stand-alone projects that will be solicited through individual Requests for Proposals. An important requirement of the program is that all of the contracts must be awarded to American companies, and those companies will generally be expected to perform at least 25% of the work with their own forces. That 25% does not necessarily involve field labor, and may be made up of activities associated with construction management. The idea is to assure that American companies benefit financially from the program and that they remain responsible for project completion. The Corps is understandably wary of companies that serve only as “brokers,” and expects the American contractors to be fully engaged in the performance of the projects.
Since most American companies will not want to incur the expense of sending their own labor forces to Israel, teaming arrangements with Israeli subcontractors will be vital. Fortunately, there are a number of very capable Israeli construction contractors interested in the work and many of them attended the Industry Day in Tel Aviv. At this point, however, there are more available Israeli subcontractors than there are American companies participating as primes, so the Corps is interested in generating more participation by American firms.
Given recent events, the first thing that many people will think about is whether it is safe to work in Israel. The answer is “yes,” not only because the extent of the turmoil is often exaggerated by the media, but because all of these projects will be performed on Israeli military bases. Even the recent rocket attacks from Gaza did virtually no damage because of the overwhelming success of the Iron Dome missile defense system. I can tell you that Ed and I were not concerned at all about our safety while in Israel and the daily life of Israeli citizens was entirely normal. That being said, American sureties are inherently risk averse and some contractors are having difficulty obtaining bonding. Although the Corps is currently requiring payment and performance bonds, there is also a possibility that some solicitations may permit Bank Letter Guarantees as the Corps has done in the past.
If you are interested in learning more about this program and the opportunities for American construction contractors, please contact us. We can put you in touch with both American and Israeli companies, as well as the knowledgeable people in the Corps of Engineers. The program is administered by the Europe District of the Corps located in Wiesbaden, Germany.
Michael H. Payne is the Chairman of the firm’s Federal Practice Group and, together with other experienced members of the group, frequently advises contractors on federal contracting matters including bid protests, claims and appeals, procurement issues, small business issues, and dispute resolution…