Interior Department awards $15.8M contract for turbine runner replacement, highlighting manufacturing and infrastructure needs

Contract Overview

Contract Amount: $15,853,704 ($15.9M)

Contractor: Voith Hydro Inc

Awarding Agency: Department of the Interior

Start Date: 2018-06-26

End Date: 2026-05-15

Contract Duration: 2,880 days

Daily Burn Rate: $5.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::CT::IGF SPRING CREEK POWERPLANT UNIT 1&UNIT 2 FRANCIS TURBINE RUNNER REPLACEMENT

Place of Performance

Location: REDDING, SHASTA County, CALIFORNIA, 96001

State: California Government Spending

Plain-Language Summary

Department of the Interior obligated $15.9 million to VOITH HYDRO INC for work described as: IGF::CT::IGF SPRING CREEK POWERPLANT UNIT 1&UNIT 2 FRANCIS TURBINE RUNNER REPLACEMENT Key points: 1. Contract focuses on critical power generation equipment, indicating investment in aging infrastructure. 2. The award to Voith Hydro Inc. suggests a need for specialized manufacturing capabilities. 3. A firm fixed-price contract type aims to control costs and provide predictability. 4. The duration of the contract points to a significant scope of work or complex installation. 5. The North American Industry Classification System (NAICS) code 333611 relates to turbine manufacturing. 6. The contract is located in California, a key state for energy infrastructure.

Value Assessment

Rating: good

The contract value of $15.8 million for turbine runner replacement appears reasonable given the specialized nature of the equipment and the manufacturer's expertise. Benchmarking against similar large-scale turbine component replacements would provide a more precise value assessment. The firm fixed-price structure suggests an effort to manage costs effectively, but the total expenditure will depend on the final delivery and installation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The presence of 5 bidders suggests a competitive market for this type of specialized equipment. A competitive process generally leads to better price discovery and potentially more favorable terms for the government.

Taxpayer Impact: Full and open competition ensures that taxpayer dollars are used efficiently by leveraging market forces to secure the best possible price and quality for essential infrastructure components.

Public Impact

The primary beneficiaries are the Department of the Interior and potentially the public through reliable power generation from the Francis turbine units. The contract delivers critical replacement parts for power generation infrastructure, ensuring operational continuity. The geographic impact is centered in California, where the power plant is located. The contract supports specialized manufacturing jobs within the turbine manufacturing sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen issues arise during manufacturing or installation, despite the fixed-price nature.
Dependence on a single supplier for highly specialized components could pose a risk if supply chains are disrupted.
The long contract duration (2018-2026) may introduce risks related to technological obsolescence or changing regulatory requirements.

Positive Signals

Awarded through full and open competition, indicating a robust bidding process.
Firm fixed-price contract type helps to mitigate cost uncertainty for the government.
The contractor, Voith Hydro Inc., is a known entity in the hydropower equipment sector, suggesting experience and capability.
The contract addresses a critical need for infrastructure maintenance and operational reliability.

Sector Analysis

This contract falls within the industrial machinery and equipment manufacturing sector, specifically focusing on turbines for power generation. The market for large-scale turbine components is specialized, often dominated by a few global players with the necessary engineering and manufacturing expertise. Spending in this area is driven by the need to maintain and upgrade existing power infrastructure, as well as the development of new energy projects. Comparable spending benchmarks would involve looking at other large federal or utility-scale turbine replacement projects.

Small Business Impact

The contract was awarded through full and open competition and does not appear to have specific small business set-aside provisions. While the prime contractor is a large entity, there may be opportunities for small businesses to participate as subcontractors, particularly in areas like logistics, installation support, or component fabrication, depending on the prime contractor's subcontracting plan.

Oversight & Accountability

Oversight for this contract would primarily reside with the Bureau of Reclamation within the Department of the Interior. Accountability measures are embedded in the firm fixed-price contract terms, requiring delivery of specified components. Transparency is facilitated by the contract award being publicly available. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

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

Risk Flags

Long contract duration
Specialized manufacturing dependency
Potential for supply chain disruption

Frequently Asked Questions

What is this federal contract paying for?

Department of the Interior awarded $15.9 million to VOITH HYDRO INC. IGF::CT::IGF SPRING CREEK POWERPLANT UNIT 1&UNIT 2 FRANCIS TURBINE RUNNER REPLACEMENT

Who is the contractor on this award?

The obligated recipient is VOITH HYDRO 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 $15.9 million.

What is the period of performance?

Start: 2018-06-26. End: 2026-05-15.

What is the track record of Voith Hydro Inc. in fulfilling similar federal contracts for turbine components?

Voith Hydro Inc. is a well-established global manufacturer of hydropower equipment. While specific details on their past federal contract performance for turbine runner replacements are not immediately available in this data snippet, their long history and market presence suggest significant experience. Federal contracts of this nature typically undergo rigorous vetting, and the award to Voith Hydro Inc. implies they met the necessary technical and financial qualifications. Further analysis would involve reviewing past performance evaluations and contract completion records for similar projects awarded by agencies like the Department of the Interior, Army Corps of Engineers, or the Tennessee Valley Authority to assess their reliability and adherence to schedule and budget on government work.

How does the awarded price compare to market rates for similar turbine runner replacements?

The $15.8 million contract value for the Francis turbine runner replacement is a significant investment. Without specific details on the size, material, and complexity of the runners, a direct price comparison is challenging. However, large-scale hydropower components are highly specialized and custom-engineered, meaning costs can vary widely. Voith Hydro Inc. is a major player in this market, and their pricing is generally considered competitive for the quality and technology offered. To benchmark effectively, one would need to compare this award against other recent contracts for similar turbine runner replacements awarded by federal agencies or major utilities, considering factors like turbine capacity, runner diameter, material specifications, and the scope of associated services (e.g., design, manufacturing, delivery, installation support).

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

The primary risks associated with this contract include potential manufacturing delays, quality control issues, and the long lead times inherent in producing highly specialized equipment. Given the firm fixed-price nature, cost overruns are less of a direct risk to the government, but delays could impact power generation schedules. Mitigation strategies likely include stringent quality assurance protocols during manufacturing, detailed project management by both the contractor and the Bureau of Reclamation, and clear contractual milestones. The contractor's experience and the competitive bidding process also serve as risk mitigation factors, selecting a capable vendor. The extended delivery schedule (2018-2026) also presents a risk of technological obsolescence or changes in environmental regulations that might affect the installed equipment, though this is less common for core mechanical components like turbine runners.

What is the expected impact of this contract on the operational effectiveness of the power plant?

This contract is expected to significantly enhance the operational effectiveness of the Spring Creek Powerplant. Replacing aging turbine runners with new ones is crucial for maintaining or improving hydraulic efficiency, increasing power output, and ensuring the reliability and longevity of the generating units. Worn or damaged runners can lead to reduced efficiency, increased vibration, and potential catastrophic failure. By investing in new runners, the Bureau of Reclamation is ensuring that the plant can continue to operate safely and efficiently, meeting energy demands and fulfilling its operational mandates. This upgrade is a proactive measure to prevent costly downtime and maintain the plant's contribution to the regional power grid.

How does this spending compare to historical federal investments in hydropower infrastructure maintenance?

Federal spending on hydropower infrastructure maintenance, including component replacements like turbine runners, is a recurring necessity given the age of many federal dams and power plants. The $15.8 million for this specific contract represents a substantial, but not necessarily outlier, investment for a single major component replacement at a significant facility. Historical federal spending in this area fluctuates based on infrastructure condition assessments, budget allocations, and the prioritization of capital improvement projects. Agencies like the Bureau of Reclamation, Army Corps of Engineers, and the Power Marketing Administrations consistently allocate funds for maintenance and upgrades. This contract aligns with ongoing efforts to modernize and maintain the nation's hydropower assets, which are critical for renewable energy generation and grid stability.

Industry Classification

NAICS: Manufacturing › Engine, Turbine, and Power Transmission Equipment Manufacturing › Turbine and Turbine Generator Set Units Manufacturing

Product/Service Code: ENGINES AND TURBINES AND COMPONENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 140R2018R0005

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 760 E BERLIN RD, YORK, PA, 17408

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $15,853,704

Exercised Options: $15,853,704

Current Obligation: $15,853,704

Actual Outlays: $14,305,594

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline