DOT awards $151M for ARTCC water treatment, with competition indicating potential value

Contract Overview

Contract Amount: $151,404 ($151.4K)

Contractor: Kurita America Inc

Awarding Agency: Department of Transportation

Start Date: 2024-10-01

End Date: 2026-09-30

Contract Duration: 729 days

Daily Burn Rate: $208/day

Competition Type: COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: ZMP ARTCC WATER TREATMENT SERVICES, MN

Place of Performance

Location: FARMINGTON, DAKOTA County, MINNESOTA, 55024

State: Minnesota Government Spending

Plain-Language Summary

Department of Transportation obligated $151,404 to KURITA AMERICA INC for work described as: ZMP ARTCC WATER TREATMENT SERVICES, MN Key points: 1. Contract awarded to Kurita America Inc. for water treatment services at ZMP ARTCC. 2. The contract duration is approximately two years, with a firm-fixed-price structure. 3. Competition under SAP suggests a potentially competitive bidding process. 4. The North American Industry Classification System (NAICS) code 221310 points to a specialized service. 5. The contract is for water supply and irrigation systems, crucial for facility operations. 6. The award value of $151.4M over two years warrants benchmarking against similar facilities.

Value Assessment

Rating: good

The contract value of $151.4 million over two years for water treatment services at the ZMP ARTCC appears to be within a reasonable range for such specialized infrastructure support. Benchmarking against similar facilities managed by the FAA or other government agencies would provide a more precise assessment of value for money. The firm-fixed-price structure offers cost certainty to the government, assuming the scope of work is well-defined.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was competed under SAP (Simplified Acquisition Procedures), indicating a competitive process, likely with multiple bidders vying for the award. While specific bidder numbers are not provided, the use of SAP for a contract of this value suggests that the FAA sought competitive pricing. This level of competition is generally favorable for price discovery and ensuring the government receives a fair market price.

Taxpayer Impact: The competitive nature of this award, even under SAP, suggests that taxpayer funds are being utilized efficiently by leveraging market forces to obtain the best possible pricing for essential water treatment services.

Public Impact

The primary beneficiaries are the Federal Aviation Administration (FAA) and the personnel operating the ZMP ARTCC, ensuring a safe and compliant operational environment. The services delivered are critical for maintaining the functionality and safety of air traffic control operations by ensuring water quality and system integrity. The geographic impact is localized to the ZMP ARTCC facility in Minnesota. The contract supports specialized technical roles within the water treatment industry, potentially involving skilled labor for maintenance and operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the scope of work is not precisely managed under the firm-fixed-price contract.
Dependence on a single contractor for a critical utility service could pose a risk if performance issues arise.
The use of SAP, while competitive, might not always yield the absolute lowest price compared to full and open competition for larger contract values.

Positive Signals

The contract was competed, indicating a degree of market engagement and potential for competitive pricing.
The firm-fixed-price contract provides budget certainty for the FAA.
The award is to an established entity, Kurita America Inc., suggesting a level of contractor capability.

Sector Analysis

The water treatment services sector is a critical component of infrastructure maintenance across various industries, including government facilities. This contract falls under the broader category of facility support services and specialized industrial maintenance. The market for such services is often characterized by a mix of large, established players and smaller, specialized firms. Government contracts in this area are essential for ensuring compliance with environmental regulations and maintaining operational continuity.

Small Business Impact

The provided data indicates that small business participation was not a specific set-aside for this contract (ss: false, sb: false). Therefore, the primary focus is on the prime contractor's performance. There is no explicit information regarding subcontracting plans for small businesses, which could be an area for further inquiry to understand the broader economic impact.

Oversight & Accountability

Oversight for this contract would typically fall under the Federal Aviation Administration's contracting officer and program managers. Accountability measures are embedded within the firm-fixed-price contract terms, requiring Kurita America Inc. to deliver specified services. Transparency is generally maintained through contract award databases, though detailed performance metrics may not always be publicly accessible. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

FAA ARTCC Operations and Maintenance
Federal Facilities Water Management
Government Infrastructure Support Services
Environmental Compliance Contracts

Risk Flags

Contract duration exceeds one year
Contract value exceeds $100,000
Contract awarded under Simplified Acquisition Procedures (SAP)

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $151,404 to KURITA AMERICA INC. ZMP ARTCC WATER TREATMENT SERVICES, MN

Who is the contractor on this award?

The obligated recipient is KURITA AMERICA INC.

Which agency awarded this contract?

Awarding agency: Department of Transportation (Federal Aviation Administration).

What is the total obligated amount?

The obligated amount is $151,404.

What is the period of performance?

Start: 2024-10-01. End: 2026-09-30.

What is the historical spending pattern for water treatment services at ZMP ARTCC or similar FAA facilities?

Analyzing historical spending for water treatment at ZMP ARTCC or comparable facilities is crucial for contextualizing the current $151.4 million award. Without specific historical data for this exact location, we can infer trends from broader FAA spending on facility maintenance and utilities. Typically, such contracts are awarded on multi-year terms, often with options for extension. Spending can fluctuate based on infrastructure upgrades, regulatory changes, and the specific needs of the facility. For instance, if ZMP ARTCC recently underwent significant expansion or faced new water quality mandates, spending might have increased. Conversely, if older systems were replaced with more efficient ones, costs could stabilize or decrease. Benchmarking against other ARTCCs of similar size and age would reveal if this award represents a typical investment or an outlier, potentially driven by unique local conditions or service requirements.

How does Kurita America Inc.'s performance on previous federal contracts compare to industry standards?

Evaluating Kurita America Inc.'s past performance is essential for assessing the risk associated with this new $151.4 million contract. A review of their federal contracting history, accessible through databases like the Federal Procurement Data System (FPDS) or the Contractor Performance Assessment Reporting System (CPARS), would reveal their track record. Key metrics include on-time delivery, quality of service, adherence to budget, and any past disputes or contract terminations. Positive performance indicators, such as consistently high ratings on CPARS and a lack of significant contract issues, would suggest a lower risk profile. Conversely, a history of performance problems, such as repeated delays, quality deficiencies, or unresolved issues, would raise concerns about their ability to meet the requirements of this significant water treatment contract. Understanding their past successes and failures provides valuable insight into their reliability and capability.

What are the specific risks associated with a firm-fixed-price contract for water treatment services?

A firm-fixed-price (FFP) contract for water treatment services, while offering cost certainty, carries specific risks. The primary risk for the government is that the contractor may cut corners on quality or service to maximize profit if the initial price was set too low or if unforeseen issues arise. Conversely, if the scope of work was underestimated by the contractor, they might seek change orders, potentially increasing costs. For the contractor, the risk lies in underestimating the complexity, frequency of required maintenance, or the cost of materials and labor, leading to reduced profit margins or even losses. Effective management and clear definition of the scope of work are critical to mitigate these risks. Regular performance monitoring and proactive communication are necessary to ensure the contractor meets all requirements without compromising service quality or incurring unexpected government costs.

What is the market size and competitive landscape for water treatment services for federal facilities?

The market for water treatment services for federal facilities is substantial, driven by the vast number of government-owned and operated buildings and infrastructure across the country. This sector includes a wide range of services, from routine maintenance and chemical treatment to specialized system design, installation, and repair. The competitive landscape features a mix of large, diversified facility management companies and smaller, specialized environmental service providers. Federal agencies often utilize various contracting methods, including full and open competition, sole-source awards, and simplified acquisition procedures, depending on the contract value and complexity. The demand is influenced by factors such as aging infrastructure, evolving environmental regulations, and the need for operational efficiency and safety. Companies like Kurita America Inc. operate within this competitive environment, vying for contracts based on technical expertise, pricing, and past performance.

How does the geographic location (Minnesota) influence the cost and scope of water treatment services?

The geographic location in Minnesota can influence the cost and scope of water treatment services due to several factors. Climate plays a significant role; colder temperatures in Minnesota may necessitate specific winterization protocols for water systems, potentially increasing maintenance requirements and costs compared to warmer climates. Local labor costs, availability of specialized technicians, and regional supply chain logistics for chemicals and equipment also impact pricing. Furthermore, Minnesota's specific state and local environmental regulations regarding water quality, discharge, and chemical usage might impose unique requirements that differ from federal standards alone, potentially affecting the scope of services needed. The presence of specific water contaminants or hardness levels characteristic of the region's geology could also necessitate tailored treatment approaches, influencing both the technical solutions and the associated costs.

Industry Classification

NAICS: Utilities › Water, Sewage and Other Systems › Water Supply and Irrigation Systems

Product/Service Code: QUALITY CONTROL, TEST, INSPECTION › INSPECTION SERVICES

Competition & Pricing

Extent Competed: COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Solicitation ID: 697DCK-24-R-00204

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 6600 94TH AVE N, MINNEAPOLIS, MN, 55445

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

Financial Breakdown

Contract Ceiling: $218,166

Exercised Options: $200,244

Current Obligation: $151,404

Actual Outlays: $57,794

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline