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The U.S. Department of State Implements Legislative Changes to Expand Diplomatic Construction Projects Contractor Base
The U.S. Department of State has implemented key legislative changes to streamline the two-step process of qualifying potential bidders on diplomatic construction projects abroad. These changes are aimed at expanding the construction contractor base by opening bidding to more companies, including smaller, specialized, or newer firms.
These changes, passed in December 2024 as part of the State Authorization National Defense Authorization Act (NDAA), update the qualification process for construction contractors seeking to work on U.S. diplomatic facilities overseas.
Key Updates Include:
· Increased Dollar Threshold: The estimated total value dollar threshold for diplomatic construction or design projects that must be awarded to a U.S. business has increased from $10 million to $25 million where adequate competition exists.
· Revised Definition of Adequate Competition: The definition of adequate competition has been updated to require three qualified bidders instead of two, fostering a more competitive bidding environment if there is not enough interest from U.S. businesses.
· Updated U.S. Business Status Criteria: The qualification criteria now require firms to maintain a principal place of business in the United States and employ at least 65% U.S. citizens in principal management and supervisory roles, reduced from the previous 80% threshold.
· Streamlined Qualification Process: The qualification process has been simplified to reduce administrative burdens and improve clarity for firms seeking to compete on overseas construction projects.
These reforms are intended to increase opportunities for qualified firms, promote competition, and enhance the efficiency of overseas construction efforts.
Read our full Media Note here.
The U.S. Department of State Bureau of Overseas Buildings Operations is the single real property manager for the planning, acquisition, design, construction, operations, maintenance, and disposal of U.S. governmental diplomatic property overseas.
OBO provides the most effective facilities for U.S. diplomacy abroad.
For industry engagement inquiries, reach out to OBOExternalaffairs@state.gov
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