DoD's $28.4M turbine refurbishment contract with Voith Hydro Inc. awarded via full and open competition

Contract Overview

Contract Amount: $28,401,454 ($28.4M)

Contractor: Voith Hydro Inc

Awarding Agency: Department of Defense

Start Date: 2014-08-14

End Date: 2022-06-18

Contract Duration: 2,865 days

Daily Burn Rate: $9.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::OT::IGF REFURBISH TURBINES AT DENISON DAM, TX

Place of Performance

Location: DENISON, GRAYSON County, TEXAS, 75020

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $28.4 million to VOITH HYDRO INC for work described as: IGF::OT::IGF REFURBISH TURBINES AT DENISON DAM, TX Key points: 1. Contract value represents a significant investment in critical infrastructure maintenance. 2. Full and open competition suggests a potentially competitive bidding environment. 3. Long contract duration (2865 days) may indicate complex project scope or phased execution. 4. The award to a single contractor, Voith Hydro Inc., warrants scrutiny of market concentration. 5. Fixed-price contract type shifts performance risk to the contractor. 6. The North American Industry Classification System (NAICS) code 333611 points to specialized manufacturing capabilities.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific details on the scope of turbine refurbishment. However, a contract duration of nearly 8 years suggests a substantial undertaking. The firm fixed-price structure is generally favorable for the government, provided the initial pricing was competitive. Further analysis would require comparing the per-unit cost of refurbishment or the total cost against similar projects for comparable turbine types and ages.

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. With 5 bidders, the competition level appears moderate, suggesting that while multiple companies were interested, the market might not be exceptionally broad for this specific type of specialized refurbishment. This level of competition generally provides a reasonable basis for price discovery and can help ensure fair market pricing.

Taxpayer Impact: The use of full and open competition with multiple bidders is beneficial for taxpayers as it encourages competitive pricing and potentially leads to lower overall costs compared to sole-source or limited competition awards.

Public Impact

The primary beneficiaries are the Department of Defense and potentially the broader energy sector through the reliable operation of critical infrastructure. The contract delivers essential refurbishment services for turbines, ensuring their operational efficiency and longevity. The geographic impact is localized to Denison Dam, Texas, where the turbines are located. Workforce implications include employment for skilled labor in manufacturing, engineering, and project management related to turbine maintenance and repair.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration could lead to scope creep or cost overruns if not managed meticulously.
Reliance on a single contractor for an extended period may reduce leverage for future negotiations.
The specific nature of turbine refurbishment might involve specialized knowledge, potentially limiting the pool of qualified contractors in the future.

Positive Signals

Full and open competition with multiple bidders suggests a healthy initial market interest.
Firm fixed-price contract type provides cost certainty for the government.
The contract addresses critical infrastructure maintenance, ensuring operational readiness and reliability.

Sector Analysis

The contract falls within the industrial machinery manufacturing and repair sector, specifically related to power generation equipment. The market for turbine refurbishment is specialized, often dominated by original equipment manufacturers or firms with extensive engineering and manufacturing expertise. Spending in this area is crucial for maintaining the operational capacity of power generation facilities, whether for military or civilian use. Comparable spending benchmarks would typically involve analyzing other large-scale refurbishment projects for similar power generation assets.

Small Business Impact

The provided data does not indicate any small business set-aside provisions for this contract, nor does it specify subcontracting goals for small businesses. Without this information, it is difficult to assess the direct impact on the small business ecosystem. Typically, large-scale industrial contracts may have subcontracting requirements to ensure small business participation, but this is not evident here.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices. The firm fixed-price nature of the contract shifts some performance risk to the contractor, but government oversight would still be necessary to ensure adherence to specifications, quality standards, and delivery schedules. Transparency would be facilitated through contract award databases and reporting mechanisms. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Department of Defense Infrastructure Modernization Programs
Army Corps of Engineers Civil Works Projects
Power Generation Equipment Manufacturing and Maintenance Contracts
Critical Infrastructure Protection Initiatives

Risk Flags

Long contract duration may increase risk of cost escalation or scope creep if not managed effectively.
Reliance on a single contractor for an extended period could limit future competitive opportunities.
Specialized nature of turbine refurbishment may present challenges in finding alternative contractors if needed.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.4 million to VOITH HYDRO INC. IGF::OT::IGF REFURBISH TURBINES AT DENISON DAM, TX

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 $28.4 million.

What is the period of performance?

Start: 2014-08-14. End: 2022-06-18.

What is the specific scope of work for the turbine refurbishment at Denison Dam?

The provided data does not detail the specific scope of work for the turbine refurbishment. However, given the NAICS code 333611 (Turbine and Turbine Generator Set Units Manufacturing) and the contract award to Voith Hydro Inc., a known manufacturer of hydropower equipment, the scope likely involves comprehensive overhaul, repair, and potentially upgrade of existing turbine systems. This could include component replacement, balancing, alignment, testing, and ensuring compliance with current operational and safety standards. The long duration suggests a phased approach or extensive work on multiple units.

How does the total contract value of $28.4 million compare to similar turbine refurbishment projects?

Direct comparison of the $28.4 million contract value to similar projects is difficult without more specific data on the scope, type of turbines, and their condition. However, large-scale refurbishment of hydropower turbines can be a multi-million dollar undertaking. Factors influencing cost include the size and complexity of the turbines, the extent of wear and tear, the need for specialized components, and the duration of the project. The nearly 8-year duration suggests a significant scope, making the total value plausible for such an extensive refurbishment effort.

What are the key performance indicators (KPIs) or metrics used to assess the success of this contract?

The provided data does not specify the key performance indicators (KPIs) for this contract. However, for a turbine refurbishment project, typical KPIs would likely include adherence to schedule, completion within budget (especially relevant for fixed-price contracts), quality of workmanship, successful performance testing of refurbished turbines (e.g., efficiency, power output, vibration levels), and compliance with safety and environmental regulations. The long duration might also involve interim milestones and performance reviews.

What is Voith Hydro Inc.'s track record with similar government contracts, particularly for turbine refurbishment?

Voith Hydro Inc. is a major global player in hydropower technology, known for manufacturing, servicing, and refurbishing turbines and related equipment. While specific details of their track record with similar government contracts are not provided in this data snippet, their established presence in the industry suggests they possess the necessary expertise and capacity. Government agencies often contract with established industry leaders for critical infrastructure projects due to their proven capabilities and reliability.

What are the potential risks associated with a firm fixed-price contract for a long-duration project like this?

For a long-duration project, a firm fixed-price contract shifts significant risk to the contractor. Potential risks include underestimation of costs, unforeseen technical challenges, material price fluctuations, and labor availability issues. If Voith Hydro Inc. encounters these issues, they bear the financial burden, which could potentially impact their profitability or, in extreme cases, their ability to complete the contract. Conversely, if their cost estimates are highly accurate or they find efficiencies, they could realize higher profit margins. Government risk is primarily related to potential contractor default or quality issues if the contractor cuts corners to manage costs.

How has historical spending on turbine maintenance and refurbishment by the Department of Defense trended?

The provided data focuses on a single contract and does not offer historical spending trends for turbine maintenance and refurbishment by the Department of Defense. To analyze historical spending, one would need access to broader contract databases and budget information over several fiscal years. Such an analysis would reveal patterns in investment, identify major projects, and potentially highlight shifts in maintenance strategies or technology adoption within the DoD's infrastructure portfolio.

Industry Classification

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

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: W912BV13R0009

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Voith Hydro Inc.

Address: 760 E BERLIN RD, YORK, PA, 17408

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: $29,035,831

Exercised Options: $28,401,454

Current Obligation: $28,401,454

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline