Interior Department awards $30.5M contract for generator rewind at New Melones Dam

Contract Overview

Contract Amount: $30,506,454 ($30.5M)

Contractor: GE Renewables US LLC

Awarding Agency: Department of the Interior

Start Date: 2022-08-26

End Date: 2026-05-31

Contract Duration: 1,374 days

Daily Burn Rate: $22.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: NEW MELONES GENERATOR REWIND

Place of Performance

Location: SONOMA, SONOMA County, CALIFORNIA, 95476

State: California Government Spending

Plain-Language Summary

Department of the Interior obligated $30.5 million to GE RENEWABLES US LLC for work described as: NEW MELONES GENERATOR REWIND Key points: 1. Contract awarded to GE Renewables US LLC for a critical infrastructure upgrade. 2. The project aims to enhance the reliability and efficiency of power generation. 3. Competition was robust, with three bidders vying for the contract. 4. The contract type is a firm-fixed-price definitive contract, indicating price certainty. 5. Project duration spans over three years, suggesting a complex and lengthy undertaking. 6. The work is located in California, a key state for energy infrastructure.

Value Assessment

Rating: good

The contract value of $30.5 million for a generator rewind appears reasonable given the scope of work for heavy civil engineering construction. Benchmarking against similar large-scale power generation equipment overhauls suggests that this price falls within expected ranges. The firm-fixed-price structure provides cost certainty for the government, although it places the risk of cost overruns on the contractor. Further analysis would require detailed cost breakdowns and comparison with specific, comparable projects.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. Three bidders participated in the competition, suggesting a healthy level of interest and a reasonable degree of competition for this specialized service. The presence of multiple bidders generally supports price discovery and can lead to more competitive pricing for the government.

Taxpayer Impact: The full and open competition process is beneficial for taxpayers as it encourages multiple companies to offer their best pricing and technical solutions, potentially leading to a lower overall cost for the government and ensuring the best value is obtained.

Public Impact

The primary beneficiaries are the Department of the Interior and the Bureau of Reclamation, ensuring continued operation of a critical energy asset. The contract delivers essential services for the maintenance and upgrade of a large-scale hydroelectric generator. The project's geographic impact is focused on California, specifically the New Melones Dam facility. The workforce implications include employment for skilled engineers, technicians, and construction personnel involved in the rewind process.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for schedule delays impacting power generation timelines.
Risk of unforeseen technical challenges during the rewind process.
Ensuring long-term performance and reliability post-completion.

Positive Signals

Award to a reputable contractor with expertise in power generation equipment.
Firm-fixed-price contract provides cost predictability.
Robust competition suggests a well-defined scope and market interest.

Sector Analysis

This contract falls within the Other Heavy and Civil Engineering Construction sector, specifically related to power generation infrastructure. The market for large-scale generator overhauls is specialized, often dominated by a few key manufacturers and service providers like GE Renewables. Spending in this area is driven by the need to maintain aging infrastructure, improve efficiency, and ensure grid reliability. Comparable spending benchmarks would involve analyzing other major hydroelectric or power plant equipment refurbishment projects.

Small Business Impact

There is no indication that this contract included a small business set-aside. Given the specialized nature of generator rewinds for large-scale power facilities, it is likely that the primary contractors are large, experienced firms. Subcontracting opportunities may exist for specialized components or services, but the prime contract is not specifically targeted towards small businesses.

Oversight & Accountability

The Bureau of Reclamation, as the contracting agency, is responsible for oversight of this contract. The firm-fixed-price nature of the contract provides a degree of accountability for the contractor to deliver within the agreed-upon cost. Transparency is facilitated by the public nature of federal contract awards. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Bureau of Reclamation Infrastructure Projects
Federal Power Generation Contracts
Renewable Energy Infrastructure
Dam Maintenance and Operations

Risk Flags

Potential for cost overruns if unforeseen technical issues arise.
Risk of project delays impacting power generation schedules.
Ensuring long-term reliability and performance of the upgraded generator.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Interior awarded $30.5 million to GE RENEWABLES US LLC. NEW MELONES GENERATOR REWIND

Who is the contractor on this award?

The obligated recipient is GE RENEWABLES US LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $30.5 million.

What is the period of performance?

Start: 2022-08-26. End: 2026-05-31.

What is the track record of GE Renewables US LLC in performing similar generator rewind contracts for federal agencies?

GE Renewables US LLC, a subsidiary of General Electric, has a long-standing and extensive track record in the energy sector, including the manufacturing, installation, and maintenance of power generation equipment globally. For federal agencies, they have been involved in numerous projects related to power plant upgrades, turbine maintenance, and generator services. While specific details on past federal generator rewind contracts of this exact scale would require deeper database searches, GE's overall experience in the power generation industry, particularly with hydroelectric facilities, suggests a strong capability to execute this type of project. Their history includes work on various dams and power stations, indicating familiarity with the operational and environmental considerations inherent in such projects. Past performance reviews and contract databases would provide more granular insights into their specific performance on prior government contracts.

How does the awarded amount of $30.5 million compare to the estimated cost or market value for similar generator rewind projects?

The awarded amount of $30.5 million for the New Melones Generator Rewind project needs to be benchmarked against similar large-scale hydroelectric generator overhauls. Factors influencing cost include the size and type of generator, the extent of the rewind (e.g., stator, rotor, insulation), the complexity of the facility, and the specific technical requirements. Without access to the government's cost estimate or detailed market data for comparable projects, a precise comparison is challenging. However, major power plant equipment overhauls can range from tens to hundreds of millions of dollars. Given that this is a significant component of a large dam's power generation capacity, $30.5 million appears to be within a plausible range for such a specialized and critical infrastructure project. The firm-fixed-price nature suggests the government sought cost certainty, and the competitive bidding process should have driven the price towards market value.

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

The primary risks associated with this contract include potential technical challenges during the generator rewind, which could lead to unforeseen complexities and cost overruns for the contractor, or schedule delays impacting power generation. There's also a risk related to the long-term performance and reliability of the generator post-rewind. Mitigation strategies are embedded within the contract structure and execution plan. The firm-fixed-price (FFP) contract shifts the primary financial risk of cost overruns to the contractor, incentivizing efficient project management. The selection of GE Renewables US LLC, a company with significant expertise in this area, serves as a mitigation for technical risks. The contract duration of over three years allows for phased execution and testing. Furthermore, the Bureau of Reclamation will likely implement rigorous oversight, quality assurance checks, and performance monitoring throughout the project lifecycle to ensure adherence to specifications and timely completion.

How effective is the competition level (3 bidders) in ensuring value for taxpayers on this project?

A competition level of three bidders for a specialized contract like the New Melones Generator Rewind is generally considered adequate to ensure reasonable value for taxpayers. While more bidders could potentially drive prices lower, three offers typically indicate sufficient market interest and a competitive environment. This number suggests that multiple qualified firms were willing and able to bid, preventing a situation of limited choice or potential collusion. The Bureau of Reclamation's decision to proceed with full and open competition allowed all eligible sources to participate, maximizing the potential for competitive offers. The firm-fixed-price contract type further ensures that the agreed-upon price is the maximum the government will pay, provided the contractor meets all requirements, thus providing cost certainty and value.

What is the historical spending pattern for generator maintenance and upgrades at the New Melones Dam or similar facilities?

Analyzing historical spending patterns for generator maintenance and upgrades at the New Melones Dam or similar facilities is crucial for contextualizing the $30.5 million award. Federal agencies like the Bureau of Reclamation typically have multi-year maintenance plans for their infrastructure assets. Generator rewinds are significant, capital-intensive projects that do not occur frequently, often happening every few decades depending on usage and equipment lifespan. Historical data would likely show periodic, substantial investments in major equipment overhauls rather than consistent annual spending. Comparing this contract's value to previous major repair or replacement projects at New Melones or comparable Bureau of Reclamation facilities would reveal if this expenditure is in line with past investment cycles and the scale of previous upgrades. Without specific historical data for this facility, it's reasonable to assume such a project represents a significant, planned capital investment.

Industry Classification

NAICS: Construction › Other Heavy and Civil Engineering Construction › Other Heavy and Civil Engineering Construction

Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR NONBUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 140R2022R0003

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Electric Company

Address: 8000 E MAPLEWOOD AVE STE 250, GREENWOOD VILLAGE, CO, 80111

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

Financial Breakdown

Contract Ceiling: $30,506,454

Exercised Options: $30,506,454

Current Obligation: $30,506,454

Actual Outlays: $28,439,534

Subaward Activity

Number of Subawards: 84

Total Subaward Amount: $10,766,589

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline