DoD Awards $108.8M for Water Turbines, Competition Limited by Specialized Needs

Contract Overview

Contract Amount: $108,844,196 ($108.8M)

Contractor: Andritz Hydro Corp

Awarding Agency: Department of Defense

Start Date: 2005-05-03

End Date: 2018-09-15

Contract Duration: 4,883 days

Daily Burn Rate: $22.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Manufacturing

Official Description: 200508!500781!96CE!W9127S!USA ENGINEER DIST LITTLE ROCK !W9127S05C0013 !A!N! !N! ! !20050503!20120930!807792031!300989654!301716494!N!VA TECH VOEST MCE CORP !10715 DAVID TAYLOR DR !CHARLOTTE !NC!28262!00000! !AU!* !* !AUSTRIA !+000001500000!N!N!000117330595!2830!WATER TURBINES&WATER WHEELS&COMPS !C9E!ALL OTHER SUPPLIES AND EQUIPMENT !000 !* !333611!E! !3! ! ! ! ! !20200930!B! ! !A! !A!Y!K!2!006!B! !Z!N!F!B!AU!N!L!N! ! ! ! ! !A!A!000!A!B!N! ! ! ! ! ! !0001! !

Place of Performance

Location: OZARK, FRANKLIN County, ARKANSAS, 72949

State: Arkansas Government Spending

Plain-Language Summary

Department of Defense obligated $108.8 million to ANDRITZ HYDRO CORP for work described as: 200508!500781!96CE!W9127S!USA ENGINEER DIST LITTLE ROCK !W9127S05C0013 !A!N! !N! ! !20050503!20120930!807792031!300989654!301716494!N!VA TECH VOEST MCE CORP !10715 DAVID TAYLOR DR !CHARLOTTE !NC!28262!00000! !AU!* !* … Key points: 1. Significant investment in water turbine technology, indicating critical infrastructure needs. 2. Competition was full and open, but the specialized nature of the equipment may limit effective bidders. 3. Risk of cost overruns exists due to economic price adjustment clauses. 4. The sector is dominated by specialized manufacturers, impacting market dynamics.

Value Assessment

Rating: good

The contract value of $108.8M for water turbines appears substantial. Benchmarking against similar large-scale turbine procurements would be necessary for a precise assessment, but the scale suggests a significant project.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition. However, the specialized nature of water turbines and related manufacturing (NAICS 333611) likely means only a few firms possess the required technical capabilities, potentially limiting the breadth of effective competition.

Taxpayer Impact: The use of economic price adjustment clauses introduces a risk of increased costs for taxpayers if material or labor costs rise significantly over the contract duration.

Public Impact

Ensures operational capacity for water management and power generation infrastructure. Supports advanced manufacturing capabilities within the United States. Potential for job creation in specialized engineering and manufacturing roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Economic price adjustment clause may lead to cost increases.
Specialized nature of product could limit competition despite 'full and open' status.
Long contract duration (4883 days) increases exposure to market and economic fluctuations.

Positive Signals

Awarded under full and open competition.
Addresses critical infrastructure needs.
Contract supports advanced manufacturing.

Sector Analysis

The procurement falls within the manufacturing sector, specifically turbine and turbine generator set units. Spending in this area is often tied to infrastructure projects, energy production, and water management, with significant capital investment required for specialized equipment.

Small Business Impact

While the contract was awarded to ANDRITZ HYDRO CORP, a large entity, the specialized nature of turbine manufacturing often involves complex supply chains. It's possible that small businesses could be involved as subcontractors for specific components or services, though this is not explicitly detailed in the provided data.

Oversight & Accountability

The contract was awarded by the Department of the Army, Engineer District, Little Rock. Standard oversight mechanisms for large federal contracts would apply, including performance monitoring and financial accountability, to ensure the effective use of taxpayer funds.

Related Government Programs

Turbine and Turbine Generator Set Units Manufacturing
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Potential for cost overruns due to EPA.
Limited number of qualified bidders despite open competition.
Long contract duration increases exposure to unforeseen economic changes.
Dependence on specialized manufacturing capabilities.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $108.8 million to ANDRITZ HYDRO CORP. 200508!500781!96CE!W9127S!USA ENGINEER DIST LITTLE ROCK !W9127S05C0013 !A!N! !N! ! !20050503!20120930!807792031!300989654!301716494!N!VA TECH VOEST MCE CORP !10715 DAVID TAYLOR DR !CHARLOTTE !NC!28262!00000! !AU!* !* !AUSTRIA !+000001500000!N!N!000117330595!2830!WATER TURBINES&WATER WHEELS&COMPS !C9E!ALL OTHER SUPPLIES AND EQUIPMENT !000 !* !333611!E! !3! ! ! ! ! !2020093

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 $108.8 million.

What is the period of performance?

Start: 2005-05-03. End: 2018-09-15.

What is the expected operational lifespan and performance improvement from these new water turbines compared to existing ones?

The provided data does not specify the expected operational lifespan or performance improvements. This information would typically be detailed in the technical specifications and performance requirements of the contract. Further analysis would require access to the full contract documentation to assess the technological advancements and long-term value.

What are the specific risks associated with the economic price adjustment clause in this contract?

The primary risk of the economic price adjustment (EPA) clause is that it allows the contractor to pass on increased costs of labor, materials, or other specified factors to the government. This can lead to the final contract price exceeding initial estimates, potentially impacting the overall budget and taxpayer value if not carefully managed and monitored.

How effectively does 'full and open competition' ensure the best value for specialized equipment like water turbines?

While 'full and open competition' is the preferred method, its effectiveness for highly specialized equipment is contingent on the number of capable suppliers. For items like advanced water turbines, the market may be inherently limited to a few manufacturers. In such cases, ensuring robust technical evaluation and negotiation is crucial to achieving best value, even if the pool of bidders is small.

Industry Classification

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

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 6

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

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

Financial Breakdown

Contract Ceiling: $4,647,087

Exercised Options: $4,647,087

Current Obligation: $108,844,196

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline