Department of State awards $153,940 for switchgear, with limited competition and a high per-unit cost

Contract Overview

Contract Amount: $153,940 ($153.9K)

Contractor: Siemens Industry Inc

Awarding Agency: Department of State

Start Date: 2026-04-10

End Date: 2026-05-30

Contract Duration: 50 days

Daily Burn Rate: $3.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: BREAKERS FOR CHANCERY SWITCHGEAR - 7901

Place of Performance

Location: BUFFALO GROVE, LAKE County, ILLINOIS, 60089

State: Illinois Government Spending

Plain-Language Summary

Department of State obligated $153,940 to SIEMENS INDUSTRY INC for work described as: BREAKERS FOR CHANCERY SWITCHGEAR - 7901 Key points: 1. The contract value of $153,940 for switchgear appears reasonable for the scope, but the per-unit cost warrants further investigation. 2. Limited competition for this contract may have impacted pricing and potentially reduced the overall value for the government. 3. The short performance period of 50 days suggests a need for urgent replacement or a specific, time-bound project. 4. The contract is for switchgear apparatus manufacturing, a critical component for electrical infrastructure. 5. The award to Siemens Industry Inc. indicates a reliance on established suppliers for specialized equipment. 6. The fixed-price contract type helps mitigate cost overrun risks for the government.

Value Assessment

Rating: fair

The total award of $153,940 for switchgear is a moderate amount. Benchmarking against similar contracts for switchgear apparatus manufacturing is difficult without more specific technical details. However, the provided data suggests a per-unit cost that is higher than typical market rates for standard switchgear components, indicating potential overpayment or a need for specialized, high-cost equipment.

Cost Per Unit: The per-unit cost is approximately $500 ($153,940 / 3079 units), which appears high when compared to general market rates for basic switchgear components. This could be justified by specific technical requirements, brand, or urgency, but warrants scrutiny.

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning only one vendor was considered. This significantly limits competition and raises concerns about whether the Department of State received the best possible pricing and terms. Without a competitive bidding process, it is difficult to ascertain if alternative, more cost-effective solutions were available.

Taxpayer Impact: Sole-source awards mean taxpayers may not be getting the most competitive price, as the government did not explore options from multiple suppliers.

Public Impact

The Department of State benefits from this contract by ensuring the functionality of its electrical infrastructure. The services delivered include the provision of switchgear and switchboard apparatus. The geographic impact is localized to Illinois, where the supplier is based. There are no direct workforce implications mentioned, but the contract supports the manufacturing sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potentially increases costs for taxpayers.
High per-unit cost compared to general market rates suggests potential for overpayment or need for specialized, expensive equipment.
Lack of transparency in the justification for sole-sourcing.
Short performance period could indicate rushed procurement, potentially leading to higher costs or overlooked risks.

Positive Signals

Award to a known entity (Siemens Industry Inc.) suggests reliability and established product quality.
Firm Fixed Price contract type provides cost certainty for the government.
The contract addresses a specific need for critical electrical infrastructure components.

Sector Analysis

The contract falls within the electrical equipment manufacturing sector, specifically switchgear and switchboard apparatus. This is a critical component for maintaining reliable power distribution in facilities. The market for such equipment is dominated by established industrial manufacturers. Spending benchmarks for similar apparatus can vary widely based on voltage, capacity, and specific features required for government facilities.

Small Business Impact

This contract does not appear to have a small business set-aside. Given the sole-source nature of the award, there are no subcontracting opportunities for small businesses directly stemming from this specific procurement action. The impact on the small business ecosystem is therefore minimal for this particular award.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of State's internal procurement and financial management controls. As a purchase order, it is subject to standard auditing procedures. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of State Facilities Management
Electrical Infrastructure Upgrades
Government Procurement of Industrial Equipment
Critical Infrastructure Protection

Risk Flags

Sole-source justification requires rigorous review.
High per-unit cost warrants further investigation.
Limited competition may impact price discovery.
Short performance period could indicate urgency or rushed procurement.

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $153,940 to SIEMENS INDUSTRY INC. BREAKERS FOR CHANCERY SWITCHGEAR - 7901

Who is the contractor on this award?

The obligated recipient is SIEMENS INDUSTRY INC.

Which agency awarded this contract?

Awarding agency: Department of State (Department of State).

What is the total obligated amount?

The obligated amount is $153,940.

What is the period of performance?

Start: 2026-04-10. End: 2026-05-30.

What is the specific technical requirement or reason that necessitated a sole-source award for this switchgear?

The provided data does not specify the exact technical requirements that led to a sole-source award. Typically, sole-source justifications are made when only one vendor possesses the unique capability, technology, or compatibility required for a specific application, or in cases of urgent and compelling need where competition is not feasible. For switchgear, this could involve proprietary technology, integration with existing complex systems, or specific security certifications held by only one manufacturer. Without further documentation from the Department of State, the precise rationale remains unclear, but it is crucial for ensuring value for money that such justifications are robust and well-documented.

How does the per-unit cost of $500 for switchgear compare to industry benchmarks for similar equipment?

A per-unit cost of approximately $500 for switchgear is on the higher end when considering basic, off-the-shelf components. Standard circuit breakers or small distribution panels might cost significantly less. However, the term 'switchgear' can encompass a wide range of equipment, from simple distribution boards to complex, high-voltage switchgear assemblies with advanced protective relays and monitoring systems. If this contract is for highly specialized, custom-engineered, or high-capacity switchgear, or includes installation and integration services, the per-unit cost could be justified. Without detailed specifications of the 3079 units procured, a definitive comparison to industry benchmarks is challenging, but it warrants scrutiny to ensure the price reflects the actual value and complexity of the equipment.

What is Siemens Industry Inc.'s track record with the Department of State for similar procurements?

Siemens Industry Inc. is a major global manufacturer of electrical equipment and automation solutions. Their track record with the Department of State for similar procurements would likely involve supplying electrical components, control systems, and potentially larger infrastructure projects. A review of historical contract data would reveal the frequency and value of awards to Siemens by the Department of State. Generally, large government agencies often procure from established, reputable manufacturers like Siemens due to their product reliability, support infrastructure, and ability to meet stringent specifications. However, the specific performance and pricing history on past contracts would be key to assessing value for money in this instance.

What are the potential risks associated with a sole-source award for critical infrastructure components like switchgear?

The primary risk of a sole-source award for critical infrastructure components like switchgear is the lack of competitive pricing, potentially leading to higher costs for the government and taxpayers. It also reduces the incentive for the sole provider to offer the best possible service or innovation. Furthermore, it limits the government's ability to explore alternative solutions that might be more suitable or cost-effective. Dependence on a single supplier can also create supply chain risks, especially if that supplier faces production issues or goes out of business. For critical infrastructure, ensuring a robust and competitive supply chain is vital for operational continuity and resilience.

What is the historical spending pattern for switchgear and related apparatus by the Department of State?

Historical spending data for switchgear and related apparatus by the Department of State would provide context for the current $153,940 award. Analyzing past contracts would reveal the typical award amounts, the frequency of procurements, the primary contractors, and the competition levels. If the Department of State historically procures similar quantities and types of switchgear through competitive bidding at lower per-unit costs, this sole-source award at a potentially higher unit price would be a significant deviation. Conversely, if past sole-source awards for specialized equipment have been common and justified, it might indicate a consistent approach to managing specific infrastructure needs.

Industry Classification

NAICS: Manufacturing › Electrical Equipment Manufacturing › Switchgear and Switchboard Apparatus Manufacturing

Product/Service Code: ELECTRICAL/ELECTRONIC EQPT COMPNTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1000 E DEERFIELD PKWY, BUFFALO GROVE, IL, 60089

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: $153,940

Exercised Options: $153,940

Current Obligation: $153,940

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline