Interior's $15.6M turbine contract awarded to Alstom Power Inc. for Shasta Dam upgrades

Contract Overview

Contract Amount: $15,578,382 ($15.6M)

Contractor: Alstom Power Inc

Awarding Agency: Department of the Interior

Start Date: 2005-09-30

End Date: 2008-11-02

Contract Duration: 1,129 days

Daily Burn Rate: $13.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: SHASTA UNIT 1 & 2 REWIND

Place of Performance

Location: REDDING, SHASTA County, CALIFORNIA, 96001

State: California Government Spending

Plain-Language Summary

Department of the Interior obligated $15.6 million to ALSTOM POWER INC for work described as: SHASTA UNIT 1 & 2 REWIND Key points: 1. Contract value appears reasonable given the scope of turbine and generator set manufacturing. 2. Full and open competition suggests a competitive bidding process was utilized. 3. Contract duration of over three years indicates a significant project timeline. 4. Fixed-price contract type may offer cost certainty but limits flexibility for scope changes. 5. The award to Alstom Power Inc. aligns with their specialization in power generation equipment. 6. Geographic focus on California for this infrastructure project.

Value Assessment

Rating: good

The contract value of approximately $15.6 million for turbine and generator set manufacturing is within a reasonable range for such specialized industrial equipment. Benchmarking against similar large-scale power generation component manufacturing contracts would provide a more precise value-for-money assessment. The firm fixed-price structure suggests that the initial pricing was deemed acceptable by both parties, though it may not fully account for unforeseen material cost fluctuations during the project's multi-year duration.

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. While the number of bidders is not specified, this procurement method generally fosters a competitive environment, which should lead to more favorable pricing and better value for the government. The open nature of the competition suggests that the Bureau of Reclamation sought the best available technology and pricing in the market for these critical power generation components.

Taxpayer Impact: A full and open competition process is beneficial for taxpayers as it maximizes the potential for cost savings through competitive bidding and ensures that the government is not limited to a single provider, potentially driving down prices.

Public Impact

The primary beneficiaries are the Department of the Interior and the Bureau of Reclamation, ensuring the operational integrity of the Shasta Dam's power generation facilities. The services delivered include the manufacturing of turbine and turbine generator set units, crucial for hydroelectric power production. The geographic impact is concentrated in California, where the Shasta Dam is located and provides power. This contract supports specialized manufacturing jobs within the power generation equipment sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if material prices increase significantly during the multi-year contract, despite the fixed-price nature.
Dependence on a single contractor for critical power generation components could pose supply chain risks.
The long duration might lead to technological obsolescence if not managed proactively.

Positive Signals

Awarded through full and open competition, suggesting a robust selection process.
Firm fixed-price contract provides cost certainty for the awarded scope.
Contractor specialization in turbine manufacturing indicates relevant expertise.

Sector Analysis

This contract falls within the industrial equipment manufacturing sector, specifically focusing on power generation components. The market for large-scale hydroelectric turbines and generators is specialized, with a limited number of global manufacturers capable of producing such complex machinery. Spending in this area is often tied to infrastructure upgrades, dam maintenance, and new renewable energy projects. Comparable spending benchmarks would typically involve other large federal or utility-scale power generation equipment procurements.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Given the specialized nature and significant value of manufacturing large turbine and generator sets, it is unlikely that small businesses would be primary bidders or awardees for the prime contract. Subcontracting opportunities for small businesses might exist in areas such as component parts, specialized services, or logistics, but these are not explicitly detailed in the provided data.

Oversight & Accountability

Oversight for this contract would primarily reside with the Bureau of Reclamation, a sub-agency of the Department of the Interior. Accountability measures are typically embedded within the contract terms, including performance milestones, quality control requirements, and payment schedules tied to deliverables. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected during the contract's lifecycle.

Related Government Programs

Bureau of Reclamation Power Program
Hydroelectric Power Generation Infrastructure
Department of the Interior Capital Investments
Energy Infrastructure Modernization

Risk Flags

Long contract duration increases exposure to market volatility.
Fixed-price contract may limit flexibility for necessary scope adjustments.
Dependence on specialized manufacturing could pose supply chain risks.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Interior awarded $15.6 million to ALSTOM POWER INC. SHASTA UNIT 1 & 2 REWIND

Who is the contractor on this award?

The obligated recipient is ALSTOM POWER 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 $15.6 million.

What is the period of performance?

Start: 2005-09-30. End: 2008-11-02.

What is Alstom Power Inc.'s track record with the Department of the Interior and similar federal agencies for turbine manufacturing contracts?

Alstom Power Inc. (now part of GE Vernova) has a significant history of supplying power generation equipment, including turbines and generators, to various federal agencies and utilities. For the Department of the Interior, specifically the Bureau of Reclamation, Alstom has been a key supplier for numerous dam and power plant upgrade projects. Their track record generally indicates a capacity to deliver complex, large-scale equipment. Analyzing past performance reviews and contract completion data for Alstom with the Bureau of Reclamation and other agencies like the Army Corps of Engineers would provide further insight into their reliability, quality of work, and adherence to schedules and budgets on similar projects. This specific contract (333611) was awarded in 2005, so its performance would be a key data point.

How does the awarded amount of $15.6 million compare to the market value of similar turbine and generator set manufacturing contracts?

The $15.6 million award for turbine and generator set units needs to be contextualized by the specific size, type, and complexity of the equipment. For large hydroelectric projects, this figure appears to be within a reasonable range, especially considering it covers manufacturing and potentially some installation support. However, without detailed specifications of the units (e.g., horsepower, specific model, technological features), a precise market comparison is challenging. Generally, large-scale turbine manufacturing can range from several million to tens of millions of dollars per unit or set, depending on the project's scale and technological requirements. Benchmarking against other Bureau of Reclamation or Army Corps of Engineers contracts for similar equipment would provide a more robust comparison of value for money.

What are the primary risks associated with a firm fixed-price contract for manufacturing complex power generation equipment over a multi-year period?

The primary risks with a firm fixed-price (FFP) contract for complex, multi-year manufacturing projects like turbine and generator sets revolve around cost escalation and scope creep. For the contractor (Alstom Power Inc.), the risk is that unforeseen increases in raw material costs, labor, or manufacturing complexities could erode profit margins or lead to losses if the contract price is fixed. For the government (Bureau of Reclamation), the risk is that the contractor might be incentivized to cut corners on quality to protect profits if costs rise unexpectedly, or that significant scope changes, if required, become very expensive to negotiate. The long duration (over 3 years) exacerbates these risks, as market conditions can change substantially over such a period. Robust quality assurance and change management processes are critical to mitigate these risks.

What is the expected impact of these turbine upgrades on the operational efficiency and power output of the Shasta Dam's hydroelectric facilities?

The specific impact on operational efficiency and power output from the 'SHASTA UNIT 1 & 2 REWIND' contract depends on whether this involved a full replacement, refurbishment, or upgrade of existing turbines and generators. Typically, rewinding or upgrading such equipment aims to restore or enhance performance, improve reliability, reduce maintenance needs, and potentially increase energy output or efficiency. Modernized components can operate more effectively across a wider range of water flow conditions and may incorporate technologies that capture more energy from the water. Quantifying the exact increase in efficiency or power output would require post-upgrade performance data and specific technical details of the upgrades performed under this contract.

How has federal spending on turbine and generator set manufacturing evolved since this contract was awarded in 2005?

Federal spending on turbine and generator set manufacturing has likely seen fluctuations influenced by infrastructure investment cycles, energy policy shifts (e.g., towards renewables), and the aging of existing power generation facilities. Since 2005, there has been a growing emphasis on modernizing aging infrastructure, including hydroelectric power plants, to improve efficiency and reliability. Concurrently, there has been significant investment in renewable energy sources like wind and solar, which utilize different types of generation equipment. Spending on traditional turbine manufacturing for large-scale projects like dams may have remained steady or seen moderate growth, driven by maintenance and upgrade needs, while the overall energy sector's manufacturing landscape has diversified considerably.

Industry Classification

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

Product/Service Code: ELECTRIC WIRE, POWER DISTRIB EQPT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Address: 7901 SOUTHPARK PLZ STE 110, LITTLETON, CO, 90

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

Financial Breakdown

Contract Ceiling: $15,578,382

Exercised Options: $15,578,382

Current Obligation: $15,578,382

Timeline