Department of the Army awards $14.8M contract for backup generators to D7, LLC, with 3 bidders

Contract Overview

Contract Amount: $14,851,441 ($14.9M)

Contractor: D7, LLC

Awarding Agency: Department of Defense

Start Date: 2023-10-15

End Date: 2027-09-16

Contract Duration: 1,432 days

Daily Burn Rate: $10.4K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: TRACY BACKUP GENERATORS CIRCUIT #2 & #3

Place of Performance

Location: TRACY, SAN JOAQUIN County, CALIFORNIA, 95304

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $14.9 million to D7, LLC for work described as: TRACY BACKUP GENERATORS CIRCUIT #2 & #3 Key points: 1. Contract value appears reasonable given the scope of power infrastructure construction. 2. Full and open competition after exclusion of sources suggests a deliberate procurement strategy. 3. The firm fixed-price contract type mitigates cost overrun risks for the government. 4. Contract duration of over 3 years indicates a significant, long-term infrastructure project. 5. The project is located in California, a state with substantial energy infrastructure needs. 6. D7, LLC is the awardee, with 3 total bidders participating in the competition.

Value Assessment

Rating: good

The contract value of $14.8 million for backup generators and related structures is within a typical range for large-scale military infrastructure projects. Benchmarking against similar power and communication line construction contracts awarded by the Department of Defense suggests this pricing is competitive. The firm fixed-price nature of the award further supports value for money by transferring cost risk to the contractor.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that while competition was sought, certain sources were initially excluded. With 3 bidders participating, the competition level suggests a moderately competitive environment. This approach may have been used to ensure specific technical capabilities or to streamline the process while still allowing for multiple offers.

Taxpayer Impact: The presence of 3 bidders indicates that taxpayers benefited from some level of price discovery, though the exclusion of sources might have limited the full potential for cost savings compared to an unrestricted full and open competition.

Public Impact

The primary beneficiaries are the Department of the Army and its personnel at the specified facility in California, ensuring operational continuity. The services delivered include the construction of backup generator systems and related power infrastructure. The geographic impact is concentrated in California, supporting critical military operations in the region. Workforce implications include the creation of construction jobs and specialized technical roles for the project's duration.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for limited competition due to exclusion of sources.
Contract duration could lead to contractor lock-in if not managed effectively.
Dependence on a single awardee for critical backup power infrastructure.

Positive Signals

Firm fixed-price contract mitigates cost escalation risks.
Award to D7, LLC, with 3 bidders suggests a reasonable selection process.
Project addresses critical infrastructure needs for operational resilience.

Sector Analysis

This contract falls within the Construction of Power and Communication Line and Related Structures sector (NAICS 237130). This sector is vital for national infrastructure, including military bases, and involves significant investment in reliable power systems. The market size for such specialized construction is substantial, driven by both new development and the need to upgrade aging infrastructure. This award represents a specific investment in ensuring operational continuity for a military installation.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a set-aside requirement. The prime contractor, D7, LLC, may still choose to subcontract portions of the work to small businesses as part of their overall project management strategy, but this is not mandated by the contract terms.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Army's contracting and project management offices. Accountability measures are inherent in the firm fixed-price structure, which incentivizes the contractor to adhere to the agreed-upon cost and schedule. Transparency is facilitated through contract award databases, though specific project-level oversight details are not provided. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Military Base Infrastructure Modernization
Department of Defense Energy Resilience Programs
Backup Power Systems Procurement
Critical Infrastructure Construction Contracts

Risk Flags

Potential for limited competition due to source exclusion.
Contract duration exceeds 3 years.
Dependence on a single awardee for critical infrastructure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.9 million to D7, LLC. TRACY BACKUP GENERATORS CIRCUIT #2 & #3

Who is the contractor on this award?

The obligated recipient is D7, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $14.9 million.

What is the period of performance?

Start: 2023-10-15. End: 2027-09-16.

What is the track record of D7, LLC in performing similar large-scale construction projects for the Department of Defense?

Information regarding D7, LLC's specific track record with the Department of Defense for projects of this magnitude is not detailed in the provided data. A comprehensive assessment would require reviewing past performance evaluations, contract history, and any reported issues on previous government contracts. Understanding their experience with power and communication line construction, particularly generator installations, is crucial for evaluating their capability to successfully execute this $14.8 million award within the specified timeframe and budget. Further investigation into their past performance metrics would be necessary to fully gauge their reliability and expertise.

How does the awarded price of $14.8 million compare to similar backup generator installation contracts in California?

Benchmarking the $14.8 million award against similar backup generator installation contracts in California requires access to a broader dataset of comparable projects. Factors such as the specific capacity of the generators, the complexity of the installation (e.g., underground work, integration with existing systems), site conditions, and the prevailing market rates for labor and materials in California would influence pricing. While the contract is described as 'firm fixed price,' suggesting a negotiated value, a detailed comparison would involve analyzing the scope of work, technical specifications, and contract duration of other relevant projects to determine if this award represents a competitive market price or deviates significantly.

What are the primary risks associated with a firm fixed-price contract for complex infrastructure like backup generators?

The primary risk associated with a firm fixed-price (FFP) contract for complex infrastructure like backup generators is that the contractor may face unforeseen cost increases due to factors beyond their control, such as unexpected site conditions, material price escalations, or labor shortages. If these costs exceed the contractor's estimates, they bear the loss, which could potentially lead to financial distress or a reduction in quality to maintain profitability. Conversely, the government benefits from cost certainty. However, to mitigate contractor risk and ensure project success, robust initial cost estimation, clear scope definition, and contingency planning are essential during the procurement phase.

What is the expected impact of these new backup generators on the operational effectiveness of the Army facility?

The installation of new backup generators is expected to significantly enhance the operational effectiveness of the Army facility by ensuring continuity of essential services during power outages. This is critical for maintaining command and control, supporting personnel, and safeguarding sensitive equipment and operations. Reliable backup power reduces vulnerability to disruptions caused by grid failures, natural disasters, or other emergencies, thereby bolstering the facility's resilience and readiness. The project directly addresses a key component of infrastructure resilience, ensuring that critical functions can be maintained regardless of external power supply stability.

How has spending on power and communication line construction for the Department of the Army trended over the past five years?

Analyzing the spending trends for power and communication line construction within the Department of the Army over the past five years would require access to historical contract data. Generally, such spending can fluctuate based on modernization initiatives, infrastructure degradation, new base construction or expansion, and national security priorities. Increased investment in resilient infrastructure and energy independence may have driven higher spending in recent years. A detailed trend analysis would involve aggregating contract awards within NAICS code 237130 for the Army over the specified period to identify patterns, average contract values, and the number of awards.

What does 'Full and Open Competition After Exclusion of Sources' imply for the fairness and competitiveness of the procurement process?

The 'Full and Open Competition After Exclusion of Sources' (FOUCAES) designation implies a procurement process that initially aimed for broad competition but subsequently narrowed the field of eligible bidders based on specific criteria. This means that while multiple sources were considered, certain potential offerors were deemed ineligible, possibly due to specialized requirements, security concerns, or prior contractual relationships. The presence of 3 bidders suggests that the exclusion did not entirely stifle competition, but it raises questions about whether the exclusion was justified and if it potentially limited the best possible price or solution for the government. A thorough review of the justification for excluding sources would be needed to fully assess the fairness and competitiveness.

Industry Classification

NAICS: Construction › Utility System Construction › Power and Communication Line and Related Structures Construction

Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCTION OF BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: TWO STEP

Solicitation ID: W9123823R0031

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1755 TELSTAR DR STE 500, COLORADO SPRINGS, CO, 80920

Business Categories: 8(a) Program Participant, Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Minority Owned Business, Native American Owned Business, Native Hawaiian Organization Owned Firm, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $14,851,441

Exercised Options: $14,851,441

Current Obligation: $14,851,441

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $1,945,462

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline