Interior Department awards $4.38M contract for powerhouse service equipment to HDR Engineering, Inc

Contract Overview

Contract Amount: $4,376,856 ($4.4M)

Contractor: HDR Engineering, Inc.

Awarding Agency: Department of the Interior

Start Date: 2024-07-15

End Date: 2027-04-30

Contract Duration: 1,019 days

Daily Burn Rate: $4.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Energy

Official Description: GC DAM RIGHT POWERHOUSE (RPH) AND LEFT POWERHOUSE (LPH) STATION SERVICE EQUIPMENT

Place of Performance

Location: BELLEVUE, KING County, WASHINGTON, 98004

State: Washington Government Spending

Plain-Language Summary

Department of the Interior obligated $4.4 million to HDR ENGINEERING, INC. for work described as: GC DAM RIGHT POWERHOUSE (RPH) AND LEFT POWERHOUSE (LPH) STATION SERVICE EQUIPMENT Key points: 1. Contract value represents a significant investment in critical infrastructure maintenance. 2. Competition dynamics suggest a potentially competitive bidding process for specialized engineering services. 3. Risk indicators include the long performance period and the specialized nature of the equipment. 4. Performance context is tied to maintaining operational capacity of federal power generation facilities. 5. Sector positioning places this contract within the broader federal energy and infrastructure management landscape.

Value Assessment

Rating: good

The contract value of $4.38 million for powerhouse service equipment appears reasonable given the specialized nature of engineering services required for federal power generation facilities. Benchmarking against similar contracts for large-scale infrastructure projects suggests that HDR Engineering, Inc.'s bid is within an expected range. The firm fixed price contract type provides cost certainty for the government, although it relies on accurate initial scope definition. Further analysis would involve comparing the specific deliverables and technical requirements against industry standards and other awarded contracts for similar equipment and services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified bidders had the opportunity to submit proposals. The presence of two bidders suggests a moderate level of competition for this specialized engineering service. While not a large number of bidders, it implies that the market has at least a few capable firms. The government's ability to secure competitive pricing is enhanced by this approach, though the specific number of proposals received and the evaluation criteria would provide a clearer picture of the competitive intensity.

Taxpayer Impact: Full and open competition generally leads to better price discovery and potentially lower costs for taxpayers compared to sole-source or limited competition awards. This ensures that the government is receiving services at a fair market price.

Public Impact

The primary beneficiaries are the Department of the Interior and the Bureau of Reclamation, ensuring the continued operational efficiency of federal power generation facilities. Services delivered include specialized engineering and technical support for critical powerhouse equipment. Geographic impact is focused on the specific federal facilities where the GC DAM RIGHT POWERHOUSE (RPH) AND LEFT POWERHOUSE (LPH) stations are located. Workforce implications may involve specialized engineering and technical roles within HDR Engineering, Inc. and potentially support staff at the facility.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 3 years) increases the risk of scope creep or unforeseen technical challenges.
Reliance on a single awardee for specialized equipment services could pose a risk if performance issues arise.
The specialized nature of the equipment may limit the pool of qualified contractors, potentially impacting future competition.
Firm Fixed Price contracts can be disadvantageous to the government if the scope is not perfectly defined upfront, leading to change orders.

Positive Signals

Award to an established engineering firm (HDR Engineering, Inc.) suggests a higher likelihood of successful project execution.
Full and open competition, even with two bidders, indicates an effort to secure competitive pricing and qualified services.
The contract specifies a clear end date, providing a defined timeframe for service delivery and project completion.
The firm fixed price contract type offers budget predictability for the government.

Sector Analysis

This contract falls within the engineering services sector, specifically supporting federal energy infrastructure. The market for specialized powerhouse equipment and related engineering services is often characterized by a limited number of highly qualified firms due to the technical expertise and certifications required. Comparable spending benchmarks would typically be found within large-scale public works and energy infrastructure projects managed by federal agencies like the Department of the Interior, Army Corps of Engineers, or Department of Energy.

Small Business Impact

This contract was not specifically set aside for small businesses, and the awardee, HDR Engineering, Inc., is a large engineering firm. There is no explicit indication of subcontracting requirements for small businesses within the provided data. The impact on the small business ecosystem is likely minimal unless HDR Engineering, Inc. voluntarily engages small businesses for specialized support services not covered by their core capabilities.

Oversight & Accountability

Oversight for this contract will primarily be managed by the Bureau of Reclamation, a division of the Department of the Interior. Accountability measures are embedded in the contract terms, including performance standards and delivery schedules. Transparency is facilitated through federal contract databases where award details are published. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract.

Related Government Programs

Bureau of Reclamation Power Operations
Federal Power Marketing Administrations
Department of Energy - Energy Infrastructure Projects
Army Corps of Engineers - Civil Works Projects

Risk Flags

Long contract duration may increase risk.
Specialized nature of equipment could limit future competition.
Moderate competition level (2 bidders) may not yield optimal pricing.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Interior awarded $4.4 million to HDR ENGINEERING, INC.. GC DAM RIGHT POWERHOUSE (RPH) AND LEFT POWERHOUSE (LPH) STATION SERVICE EQUIPMENT

Who is the contractor on this award?

The obligated recipient is HDR ENGINEERING, INC..

Which agency awarded this contract?

Awarding agency: Department of the Interior (Bureau of Reclamation).

What is the total obligated amount?

The obligated amount is $4.4 million.

What is the period of performance?

Start: 2024-07-15. End: 2027-04-30.

What is the track record of HDR Engineering, Inc. in performing similar federal contracts for power generation equipment?

HDR Engineering, Inc. has a substantial track record with federal agencies, including the Department of the Interior and the Army Corps of Engineers, on various infrastructure projects. While specific details on 'powerhouse service equipment' contracts are not immediately available in this summary, their broader experience encompasses engineering design, construction management, and technical consulting for power plants, dams, and related facilities. A deeper dive into their contract history on platforms like SAM.gov or FPDS would reveal the scale, complexity, and success rates of their past performance in this specific niche. This would include examining past performance evaluations and any instances of contract disputes or terminations to fully assess their suitability for this current award.

How does the awarded amount of $4.38 million compare to similar federal contracts for powerhouse service equipment?

Benchmarking the $4.38 million award requires comparing it against contracts for similar scope, scale, and complexity of powerhouse service equipment. Given that this contract is for engineering services related to specific powerhouse stations (RPH and LPH), it's likely focused on design, integration, or specialized technical support rather than the outright purchase of major equipment. Contracts for large-scale equipment procurement can run into tens or hundreds of millions. However, for specialized engineering and technical services over a period of approximately 3 years, $4.38 million appears to be within a reasonable range, especially considering the specialized nature of federal power infrastructure. A more precise comparison would necessitate identifying contracts with identical or highly similar North American Industry Classification System (NAICS) codes (541330 - Engineering Services) and similar service descriptions.

What are the primary risks associated with this contract, and how are they being mitigated?

The primary risks associated with this contract include potential scope creep due to the long performance period (over 3 years), technical challenges in servicing specialized equipment, and the risk of contractor underperformance. Mitigation strategies are likely embedded within the contract's terms and conditions. The firm fixed price structure incentivizes the contractor to manage costs effectively, while the defined deliverables and performance standards provide a basis for oversight. The Bureau of Reclamation's project management team will be responsible for monitoring progress, ensuring adherence to specifications, and addressing any issues that arise. The selection of HDR Engineering, Inc., a firm with established expertise, also serves as a risk mitigation factor, suggesting a higher probability of successful execution.

How effective is the competition level (2 bidders) in ensuring value for taxpayers?

A competition level of two bidders represents a moderate level of competition. While it is better than a sole-source award, it may not be as robust as a scenario with three or more bidders, which typically drives prices down more aggressively. The effectiveness in ensuring value for taxpayers depends on several factors: the competitiveness of the bids submitted by the two firms, the thoroughness of the government's evaluation process, and the specific nature of the services required. If both bidders were highly qualified and submitted competitive proposals, taxpayers could still receive good value. However, a higher number of bidders generally increases the likelihood of securing the best possible price and innovative solutions. The government's negotiation strategy and the clarity of the solicitation's requirements also play a crucial role.

What is the historical spending pattern for similar engineering services by the Bureau of Reclamation or the Department of the Interior?

Historical spending patterns for engineering services by the Bureau of Reclamation and the Department of the Interior typically show consistent investment in infrastructure maintenance, upgrades, and new projects. These agencies manage vast water and power resources, necessitating ongoing engineering support. Spending on services like those awarded to HDR Engineering, Inc. can fluctuate based on capital improvement plans, the lifecycle of existing infrastructure, and specific project needs. Analyzing past contract awards using NAICS code 541330 for these agencies would reveal trends in contract values, types of services procured (e.g., design, environmental, construction management), and the primary contractors utilized. This historical data is crucial for understanding budget allocations and identifying potential areas for cost savings or efficiency improvements in future procurements.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: ARCHITECT/ENGINEER SERVICES › ARCH-ENG SVCS - GENERAL

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 406534490

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: HDR, Inc

Address: 412 E. PARKCENTER BLVD. SUITE 100, BOISE, ID, 83706

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $4,376,856

Exercised Options: $4,376,856

Current Obligation: $4,376,856

Actual Outlays: $3,263,832

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $94,237

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: 140R1019D0009

IDV Type: IDC

Timeline