Army awarded $787M for water turbines, with Voith Hydro Inc. receiving over $256M

Contract Overview

Contract Amount: $25,629,708 ($25.6M)

Contractor: Voith Hydro Inc

Awarding Agency: Department of Defense

Start Date: 1998-09-30

End Date: 2004-07-09

Contract Duration: 2,109 days

Daily Burn Rate: $12.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: 199812!96CE!0713!CW21 !USA ENGINEER DIST SAVANNAH !DACW2198C0072 !A!*!* !19980930!20040430!786812842!786812842!103720579!N!0AT82!VOITH HYDRO, INC !E BERLIN RD !YORK !PA!17404!87048!133!42!YORK !YORK !PENN !0001!+000000100000!N!N!000000000000!2830!WATER TURBINES & WATER WHEELS & COMPS !S1 !SERVICES !5000!NOT DISCERNABLE OR CLASSIFIED !3511!3!*!*!*!B!A!*!A !Y!J!2!002!C!* !Z!N!Z!* !* !N!C!*!Z!A!A!A!A!*!* !*!N!A!C!N!*!*!*!*!*!

Place of Performance

Location: CLARKS HILL, MCCORMICK County, SOUTH CAROLINA, 29821

State: South Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $25.6 million to VOITH HYDRO INC for work described as: 199812!96CE!0713!CW21 !USA ENGINEER DIST SAVANNAH !DACW2198C0072 !A!*!* !19980930!20040430!786812842!786812842!103720579!N!0AT82!VOITH HYDRO, INC !E BERLIN RD !YORK !PA!17404!87048!133!42!YORK !YORK … Key points: 1. Contract awarded for water turbines and related components, indicating a significant investment in hydropower infrastructure. 2. The contract was competed fully and openly, suggesting a competitive bidding process. 3. A substantial portion of the award went to a single contractor, Voith Hydro, Inc., raising questions about concentrated risk. 4. The contract duration was over 2000 days, implying a long-term need for these components or services. 5. The award falls under the manufacturing of turbine and turbine generator set units, a specialized industrial sector.

Value Assessment

Rating: fair

The total award amount of $786,812,842 for water turbines and components appears substantial. While Voith Hydro, Inc. received a significant portion ($256,297,080.08), it's difficult to assess value for money without detailed breakdowns of services or specific equipment procured. Benchmarking against similar large-scale turbine procurements would be necessary for a comprehensive value assessment. The contract's long duration (over 2000 days) suggests a potentially complex or phased delivery, which can impact overall cost-effectiveness.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit bids. The presence of two bids suggests a moderate level of competition for this specialized procurement. While two bidders are better than one, a higher number of bids could potentially lead to more aggressive pricing and better value for the government.

Taxpayer Impact: A fully and openly competed contract generally benefits taxpayers by fostering competition that can drive down prices and encourage innovation.

Public Impact

The U.S. Army benefits from the acquisition of critical hydropower components, likely for maintaining or upgrading its facilities. Services delivered include the manufacturing and potentially installation/maintenance of water turbines and related equipment. The geographic impact is primarily linked to the contractor's location in York, PA, and the eventual deployment sites of the turbines, which could be nationwide. Workforce implications include jobs in manufacturing, engineering, and project management at Voith Hydro, Inc. and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Concentration of a large portion of the award to a single contractor (Voith Hydro, Inc.) could represent a single point of failure or dependency.
The long contract duration might introduce risks related to technological obsolescence or changing operational requirements over time.
Lack of specific details on the 'services' component makes it hard to assess the full scope and potential risks associated with service delivery.

Positive Signals

The contract was awarded through full and open competition, indicating a commitment to a fair and transparent procurement process.
The procurement of specialized equipment like water turbines suggests investment in critical infrastructure, potentially enhancing energy security or operational capabilities.
The award to a known entity like Voith Hydro, Inc. might suggest a reliance on established expertise for complex projects.

Sector Analysis

This contract falls within the industrial manufacturing sector, specifically focusing on heavy machinery and energy infrastructure components. The market for large-scale water turbines is specialized, often dominated by a few key global players. The U.S. Army's procurement of such equipment is significant, contributing to the overall demand within this niche industry. Comparable spending benchmarks would likely involve other large federal or utility-scale hydropower projects.

Small Business Impact

The data indicates that this contract was not specifically set aside for small businesses (sb: false). There is no explicit information regarding subcontracting plans for small businesses within the provided data. Therefore, the direct impact on the small business ecosystem from this specific award is not discernible from the given details, though large prime contractors often utilize small businesses for various support roles.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the U.S. Army Corps of Engineers, given the agency (Department of the Army) and the nature of the procurement (infrastructure-related). Accountability measures would be embedded in the contract's terms and conditions, including performance standards and delivery schedules. Transparency is facilitated by the contract award data being publicly available, but detailed operational oversight information is usually internal.

Related Government Programs

Army Corps of Engineers Civil Works Projects
Federal Hydropower Infrastructure Investments
Department of Energy - Energy Infrastructure Modernization
Manufacturing Sector Federal Contracts

Risk Flags

Long contract duration may increase risk of obsolescence or changing requirements.
Significant portion of award to a single contractor could indicate concentrated risk.
Lack of detailed service scope makes full value assessment difficult.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $25.6 million to VOITH HYDRO INC. 199812!96CE!0713!CW21 !USA ENGINEER DIST SAVANNAH !DACW2198C0072 !A!*!* !19980930!20040430!786812842!786812842!103720579!N!0AT82!VOITH HYDRO, INC !E BERLIN RD !YORK !PA!17404!87048!133!42!YORK !YORK !PENN !0001!+000000100000!N!N!000000000000!2830!WATER TURBINES & WATER WHEELS & COMPS !S1 !SERVICES !5000!NOT DISCERNABLE OR CLASSIFIED !3511!3!*!*!*!B!A!*!A !Y!J!2!0

Who is the contractor on this award?

The obligated recipient is VOITH HYDRO INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $25.6 million.

What is the period of performance?

Start: 1998-09-30. End: 2004-07-09.

What is the track record of Voith Hydro, Inc. with federal contracts, particularly with the Department of Defense?

Voith Hydro, Inc. has a history of engaging with federal agencies, including the Department of Defense. While this specific contract (DACW2198C0072) represents a significant award, a comprehensive review would involve examining their performance on other contracts, including delivery timeliness, quality of goods/services, and adherence to contract terms. Analyzing past performance data, such as contract modifications, disputes, or terminations, would provide a clearer picture of their reliability and capability in fulfilling large-scale federal requirements. Without access to a detailed contract history database, it's challenging to provide an exhaustive assessment, but their ability to secure such a large award suggests a level of established capability and past success.

How does the awarded price of $256,297,080.08 for water turbines compare to market rates or similar government procurements?

Benchmarking the $256,297,080.08 awarded to Voith Hydro, Inc. against market rates for water turbines is complex due to the highly specialized nature of such equipment and the variability in project scope, size, and specifications. Large-scale turbines for federal projects often involve custom engineering, significant installation, and long-term support, which can command premium pricing compared to off-the-shelf components. To assess value, comparisons would ideally be made with other Department of Defense or Army Corps of Engineers procurements of similar turbine types and capacities, or with major civilian hydropower projects. Factors like the number of bidders, contract type (e.g., Firm Fixed Price), and duration also influence pricing. A preliminary assessment suggests this is a substantial investment, and further analysis against comparable projects is needed to definitively determine if it represents good value for money.

What are the primary risks associated with a contract of this duration (over 2000 days) for water turbine manufacturing?

Contracts spanning over 2000 days for water turbine manufacturing carry several inherent risks. Firstly, there's the risk of technological obsolescence; advancements in turbine technology could occur during the contract period, potentially making the procured equipment less efficient or outdated by the time of full deployment. Secondly, economic fluctuations, such as changes in material costs (steel, specialized alloys) or labor rates, can impact the contractor's profitability and potentially lead to cost overruns or requests for contract modifications, especially if the contract isn't structured to adequately account for such volatility. Thirdly, long-term projects increase the likelihood of encountering unforeseen site conditions or changes in regulatory requirements related to environmental impact or operational standards, which could necessitate design changes or delays. Finally, maintaining consistent quality control and project management oversight over an extended period requires sustained effort and can be challenging.

What is the historical spending pattern for water turbines and related components by the Department of the Army?

Historical spending by the Department of the Army on water turbines and related components, particularly through the Army Corps of Engineers, is tied to its mission of managing water resources, maintaining navigation, and supporting infrastructure. This includes the construction, upgrade, and maintenance of hydropower facilities at various Army installations and civil works projects. Spending in this category can be cyclical, often driven by major infrastructure modernization initiatives, dam safety requirements, or the need to replace aging equipment. While specific aggregate historical spending figures require detailed database analysis, it's understood that the Army has consistently invested in hydropower capabilities, making procurements like this a recurring, albeit potentially infrequent due to the high cost and long lead times of such major equipment.

How does the 'full and open competition' for this contract potentially impact price discovery and taxpayer value?

The 'full and open competition' designation for this contract is a positive indicator for price discovery and taxpayer value. It signifies that the government actively sought bids from all qualified sources, thereby maximizing the pool of potential suppliers. This broad competition generally encourages bidders to offer their most competitive pricing to secure the contract. A higher number of bids, even if only two were received in this instance, typically leads to a more robust price discovery process, where the market effectively signals the fair value of the goods or services. This competitive pressure can help prevent overpayment and ensure that taxpayer funds are used more efficiently, leading to better overall value compared to sole-source or limited competition scenarios.

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

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Parent Company: Voith Gmbh (UEI: 315540203)

Address: E BERLIN RD, YORK, PA, 17404

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline