Construction Opportunities in Israel for Federal Contractors

Cohen Seglias Pallas Greenhall & Furman PC

Earlier this month, my colleague, Michael Payne, and I attended Israel Industry Day sponsored by the Army Corps of Engineers (“USACE”) and the Israeli Ministry of Defense (“MOD”) in New York City. The purpose of the program was to present the Israel Foreign Military Sales (FMS) Construction Program and to introduce American and Israeli construction contractors and A/E firms to the upcoming construction 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 MOD facilities in Israel; as well as information on the solicitation and proposal process and various legal issues that apply to the Projects. The presentations provided by the USACE  from the event can be accessed on the Fed.Biz.Opps.Gov website. The projects are funded by the Foreign Military Finance program. Currently the Israel FMS Construction Program has $450,000,000 in on-going construction projects and $80,000,000 in Pre-award actions, 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.

While many contracts will be solicited as Multiple Award Task Order Contracts (“MATOC”), others will be solicited as stand-alone projects (designated as “C” Contracts) that will be solicited through individual Requests for Proposals. While the current MATOC is closed to those not in the MATOC pool, the C-Contracts will be available to otherwise qualified contractors. 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 ensure 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. There is a second Israel Industry Day in Tel Aviv, Israel, scheduled for December 4, 2017. It is expected that many Israeli subcontractors interested in teaming with US contractors will attend.

Given that there are many planned projects, and only a few US contractors operating in Israel, the Corps is interested in generating more participation by American firms and accordingly, there are many opportunities for contractors interested in working in Israel. 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.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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