DoD's $24.4M Turbine Hub Upgrade Contract with ANDRITZ HYDRO Faces Potential Cost Overruns
Contract Overview
Contract Amount: $24,423,354 ($24.4M)
Contractor: Andritz Hydro Corp
Awarding Agency: Department of Defense
Start Date: 2016-06-17
End Date: 2025-11-26
Contract Duration: 3,449 days
Daily Burn Rate: $7.1K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: FIRM FIXED PRICE
Sector: Construction
Official Description: IGF::OT::IGF JOHN DAY BLH TURBINE HUB UPGRADES
Place of Performance
Location: RUFUS, SHERMAN County, OREGON, 97050
State: Oregon Government Spending
Plain-Language Summary
Department of Defense obligated $24.4 million to ANDRITZ HYDRO CORP for work described as: IGF::OT::IGF JOHN DAY BLH TURBINE HUB UPGRADES Key points: 1. The contract value is substantial at $24.4 million, indicating a significant investment in infrastructure. 2. ANDRITZ HYDRO CORP is the sole awardee, raising questions about the extent of competition. 3. The project spans nearly a decade, increasing the risk of scope creep and cost escalation. 4. Construction is the relevant sector, often subject to unpredictable material costs and labor availability.
Value Assessment
Rating: questionable
The contract's base value is $24.4 million with a potential for modifications. Benchmarking against similar heavy civil engineering construction projects is difficult without more detailed cost breakdowns, but the duration and potential for changes warrant scrutiny.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
Despite being awarded under full and open competition, the contract has seen multiple modifications, suggesting potential scope changes or unforeseen issues. The long duration may have impacted the initial price discovery and competitiveness.
Taxpayer Impact: Taxpayer funds are committed to a long-term infrastructure project. The potential for cost increases due to contract modifications and extended duration needs careful monitoring to ensure value for money.
Public Impact
The upgrade impacts critical infrastructure, potentially affecting energy generation or water management. Long-term contracts can tie up significant public funds, impacting budget flexibility. The extended timeline raises concerns about the project's adaptability to future technological advancements or changing needs.
Waste & Efficiency Indicators
Waste Risk Score: 75 / 10
Warning Flags
- Long contract duration (9 years)
- Multiple modifications likely
- Sole awardee despite full and open competition
Positive Signals
- Essential infrastructure upgrade
- Firm Fixed Price contract type
Sector Analysis
This contract falls under heavy and civil engineering construction, a sector known for its large-scale projects and potential for cost volatility due to material prices and labor. Benchmarks for similar turbine upgrades are highly project-specific.
Small Business Impact
There is no indication of small business participation in this contract. The prime contractor, ANDRITZ HYDRO CORP, is likely a large entity, and subcontracting opportunities for small businesses are not specified.
Oversight & Accountability
The extended duration and potential for modifications necessitate robust oversight from the Department of the Army to ensure the project stays on track, within budget, and meets its objectives.
Related Government Programs
- Other Heavy and Civil Engineering Construction
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Long contract duration increases risk
- Potential for cost overruns due to modifications
- Limited visibility into specific upgrade details
- Unclear competitive landscape despite 'full and open' status
- Lack of specified small business participation
Tags
other-heavy-and-civil-engineering-constr, department-of-defense, or, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $24.4 million to ANDRITZ HYDRO CORP. IGF::OT::IGF JOHN DAY BLH TURBINE HUB UPGRADES
Who is the contractor on this award?
The obligated recipient is ANDRITZ HYDRO CORP.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $24.4 million.
What is the period of performance?
Start: 2016-06-17. End: 2025-11-26.
What specific components of the turbine hub are being upgraded, and what is the expected improvement in efficiency or lifespan?
The provided data lacks specifics on the exact components being upgraded or the quantifiable benefits expected. A detailed technical annex or project scope document would be necessary to assess the value proposition and expected performance improvements. Understanding the 'why' behind the upgrade is crucial for evaluating its necessity and potential return on investment for the taxpayer.
Given the contract's long duration and potential for modifications, what are the primary risks to cost and schedule, and how are they being mitigated?
The primary risks include scope creep, unforeseen site conditions, material price escalation, and potential delays in permitting or regulatory approvals. Mitigation strategies should involve stringent change control processes, contingency planning for known risks, regular progress reviews, and proactive engagement with stakeholders to address issues promptly.
How does the awarded price compare to independent cost estimates or historical data for similar turbine hub upgrade projects?
Without access to independent cost estimates or a database of comparable projects, a direct price comparison is not feasible. The 'br' field indicates a bid range of $7,081, which seems exceptionally low compared to the award value, suggesting it might represent a specific component or a misunderstanding of the data field. A thorough cost analysis against similar, large-scale infrastructure projects is needed.
Industry Classification
NAICS: Construction › Other Heavy and Civil Engineering Construction › Other Heavy and Civil Engineering Construction
Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR NONBUILDINGS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: W9127N16R0016
Offers Received: 3
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Andritz AG
Address: 10735 DAVID TAYLOR DR STE 500, CHARLOTTE, NC, 28262
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $32,164,254
Exercised Options: $24,423,354
Current Obligation: $24,423,354
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2016-06-17
Current End Date: 2025-11-26
Potential End Date: 2025-11-26 00:00:00
Last Modified: 2025-09-19
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