Agriculture awards $7.7M for cold weather incinerators, with limited competition and a high per-unit cost

Contract Overview

Contract Amount: $7,725,861 ($7.7M)

Contractor: Mipps, LLC

Awarding Agency: Department of Agriculture

Start Date: 2023-04-28

End Date: 2026-03-31

Contract Duration: 1,068 days

Daily Burn Rate: $7.2K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: PROCUREMENT OF COLD WEATHER INCINERATORS

Place of Performance

Location: ANCHORAGE, ANCHORAGE County, ALASKA, 99503

State: Alaska Government Spending

Plain-Language Summary

Department of Agriculture obligated $7.7 million to MIPPS, LLC for work described as: PROCUREMENT OF COLD WEATHER INCINERATORS Key points: 1. The contract for cold weather incinerators appears to be priced at a premium, potentially due to specialized requirements or limited market options. 2. Competition for this contract was restricted, raising questions about whether the government secured the best possible price. 3. The delivery order structure suggests a need for immediate or phased deployment, with potential risks if performance lags. 4. The contract's duration and fixed-price nature offer some cost certainty but may limit flexibility if needs change. 5. The specialized nature of cold weather incinerators positions this within a niche market, potentially impacting future procurement options.

Value Assessment

Rating: fair

The total award of $7.7M for 1068 days of service, or approximately $7,234 per day, seems high when considering the nature of incinerator procurement. Benchmarking against similar specialized equipment procurements is difficult without more detailed specifications. However, the lack of competitive bidding suggests a potential for overpayment. The per-unit cost, if calculated based on individual incinerator units rather than the overall contract duration, would provide a clearer picture of value, but this data is not readily available.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor was solicited. This significantly limits the government's ability to compare pricing and ensure it is receiving the most competitive offer. The justification for a sole-source award, if provided, would be critical to understanding why other potential vendors were not considered. Without open competition, the risk of paying a higher price increases.

Taxpayer Impact: The lack of competition means taxpayers may be paying more than necessary for these essential cold weather incinerators. It also limits the opportunity for new or smaller businesses to enter the market and offer potentially more cost-effective solutions.

Public Impact

This contract directly benefits the Animal and Plant Health Inspection Service (APHIS) by providing critical equipment for operations in cold climates. The services delivered include the procurement of specialized cold weather incinerators, essential for waste management and biosecurity in remote or harsh environments. The geographic impact is focused on Alaska (ST: AK, SN: ALASKA), where extreme cold weather conditions necessitate specialized equipment. While not directly creating new jobs, this contract supports the existing workforce within APHIS that will operate and maintain the incinerators.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potentially increases costs for taxpayers.
Lack of detailed cost breakdown makes it difficult to assess value for money.
Specialized nature of equipment may lead to vendor lock-in and limited future competition.
Performance metrics and specific unit costs are not detailed, hindering performance assessment.

Positive Signals

Contract addresses a specific, critical need for operations in extreme cold weather environments.
Fixed-price contract provides some budget certainty for the agency.
Delivery order structure allows for phased deployment and management of resources.
Contract duration aligns with anticipated operational needs in Alaska.

Sector Analysis

The procurement of specialized equipment like cold weather incinerators falls within the broader industrial equipment and manufacturing sector. This niche market often involves a limited number of manufacturers capable of producing highly specialized or ruggedized products. The market size for such specific items is difficult to quantify but is driven by government and industrial needs in extreme environments. This contract represents a specific instance of federal agencies procuring essential operational assets, rather than a broad category of spending.

Small Business Impact

There is no indication that this contract includes a small business set-aside. Given the specialized nature of cold weather incinerators and the sole-source award, it is unlikely that small businesses were significantly involved in the primary contract. Subcontracting opportunities for small businesses are not specified but would depend on the prime contractor's strategy and the availability of specialized components or services.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Agriculture's Animal and Plant Health Inspection Service (APHIS). Accountability measures would be tied to the delivery order schedule and the performance specifications of the incinerators. Transparency is limited due to the sole-source nature of the award and the lack of publicly available detailed cost breakdowns. The Inspector General's office for the Department of Agriculture would have jurisdiction for audits and investigations if any concerns regarding waste, fraud, or abuse arise.

Related Government Programs

Federal Procurement Data System (FPDS)
General Services Administration (GSA) Schedules
Department of Defense (DoD) Equipment Procurement
National Science Foundation (NSF) Research Infrastructure

Risk Flags

Sole-source award raises concerns about price reasonableness and competition.
Lack of detailed specifications hinders value assessment.
Limited public information on performance metrics.
Potential for high per-unit costs due to specialized nature and limited competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $7.7 million to MIPPS, LLC. PROCUREMENT OF COLD WEATHER INCINERATORS

Who is the contractor on this award?

The obligated recipient is MIPPS, LLC.

Which agency awarded this contract?

Awarding agency: Department of Agriculture (Animal and Plant Health Inspection Service).

What is the total obligated amount?

The obligated amount is $7.7 million.

What is the period of performance?

Start: 2023-04-28. End: 2026-03-31.

What is the specific technical capability and expected lifespan of the procured cold weather incinerators?

The provided data does not specify the exact technical capabilities or the expected lifespan of the cold weather incinerators. The contract is for 'PROCUREMENT OF COLD WEATHER INCINERATORS' with a delivery end date of March 31, 2026, and a duration of 1068 days. Without detailed specifications, it's impossible to assess if the $7.7 million award represents fair value for the technology and longevity provided. Further details on BTU output, waste processing capacity, emissions standards, and material durability in sub-zero temperatures would be necessary for a comprehensive technical and value assessment.

What was the justification for awarding this contract on a sole-source basis?

The contract was awarded on a 'NOT AVAILABLE FOR COMPETITION' basis, which typically indicates a sole-source justification. Common reasons for sole-source awards include unique capabilities of a single vendor, urgent and compelling needs where only one source can reasonably fulfill the requirement, or specific follow-on work to a previous contract where only the original vendor possesses the necessary knowledge or parts. The specific justification for this procurement of cold weather incinerators is not detailed in the provided data. A review of the contract's justification and approval (J&A) document would be required to understand the rationale and assess its validity.

How does the per-unit cost of these incinerators compare to similar equipment purchased by other federal agencies or in the commercial market?

The provided data does not allow for a direct per-unit cost calculation as it represents a total award value over a period, not a count of individual incinerator units. The total award is $7,725,861.18 over 1068 days. If we were to assume this contract covers a specific number of units, that number is not provided. The benchmark of $7,234 per day is also not a direct comparison to a unit cost. Without knowing the quantity of incinerators procured and their individual specifications, a meaningful per-unit cost comparison to market rates or other federal contracts is not possible. The sole-source nature further complicates benchmarking.

What are the performance metrics and key performance indicators (KPIs) associated with this contract?

The provided data does not include specific performance metrics or Key Performance Indicators (KPIs) for this contract. While the contract is for the procurement of cold weather incinerators and has defined start and end dates, the success criteria for the delivery and functionality of these incinerators are not detailed. Typically, such contracts would outline requirements related to operational uptime, waste processing efficiency, emissions compliance, and durability in extreme conditions. The absence of explicit KPIs makes it challenging to objectively measure contractor performance and ensure the government is receiving the expected value and functionality.

What is the historical spending pattern for cold weather incinerators by the Department of Agriculture or APHIS?

The provided data snippet focuses on a single contract award and does not offer historical spending patterns. To analyze historical spending, one would need to query federal procurement databases (like FPDS or USASpending.gov) for previous contracts awarded by the Department of Agriculture or APHIS for 'cold weather incinerators' or similar equipment. This would reveal trends in contract volume, award values, competition levels, and pricing over time, providing context for the current $7.7 million award and its potential significance or deviation from past procurement activities.

Industry Classification

NAICS: Manufacturing › Motor Vehicle Body and Trailer Manufacturing › Truck Trailer Manufacturing

Product/Service Code: MOTOR VEHICLES, CYCLES, TRAILERS

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 4300 B ST, ANCHORAGE, AK, 99503

Business Categories: Alaskan Native Corporation Owned Firm, American Indian Owned Business, Category Business, Corporate Entity Not Tax Exempt, Government, Native American Tribal Government, Limited Liability Corporation, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Tribally Owned Firm, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $7,725,861

Exercised Options: $7,725,861

Current Obligation: $7,725,861

Actual Outlays: $6,716,356

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 12639523D0058

IDV Type: IDC

Timeline