The Department of State has introduced legislative changes intended to facilitate the process of qualifying construction contractors for diplomatic projects abroad. These updates, part of the State Authorization National Defense Authorization Act passed in December 2024, aim to broaden the pool of companies eligible to bid on these projects. By amending the qualification criteria, the Department intends to encourage participation from smaller, specialized, or newer firms.
A significant change is the adjustment of the dollar threshold for diplomatic construction or design projects that must be awarded to U.S. businesses. The threshold has increased from $10 million to $25 million, provided there is adequate competition. The definition of "adequate competition" has also been updated, now requiring at least three qualified bidders instead of two. This change intends to create a more competitive environment for bidding, particularly when interest from U.S. businesses is insufficient.
Updates have also been made regarding the criteria for a firm's U.S. business status. Companies must now maintain a principal place of business in the United States and employ at least 65% U.S. citizens in principal management and supervisory positions, a decrease from the previous requirement of 80%.
These adjustments are paired with efforts to streamline the qualification process. By reducing administrative barriers and clarifying the application procedures, the Department aims to make it easier for companies to compete for overseas construction projects.
The Department of State anticipates these reforms will broaden opportunities for qualified companies, thereby fostering competition and enhancing the efficiency of overseas construction initiatives.
For more information, inquiries can be directed to OBOExternalAffairs@state.gov or the website state.gov/obo.
