DoD awards $91.5M contract for turbine and generator rehabilitation, with a 7-year performance period
Contract Overview
Contract Amount: $91,540,766 ($91.5M)
Contractor: Andritz Hydro Corp
Awarding Agency: Department of Defense
Start Date: 2021-09-10
End Date: 2029-05-27
Contract Duration: 2,816 days
Daily Burn Rate: $32.5K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: FIRM FIXED PRICE
Sector: Construction
Official Description: RS KERR TURBINE & GENERATOR REHABILITATION
Place of Performance
Location: SALLISAW, SEQUOYAH County, OKLAHOMA, 74955
State: Oklahoma Government Spending
Plain-Language Summary
Department of Defense obligated $91.5 million to ANDRITZ HYDRO CORP for work described as: RS KERR TURBINE & GENERATOR REHABILITATION Key points: 1. Contract value of $91.5 million for turbine and generator rehabilitation. 2. Performance period extends over seven years, indicating a long-term need. 3. The contract was awarded using full and open competition. 4. The contractor, ANDRITZ HYDRO CORP, has a significant role in this project. 5. The project is categorized under 'Other Heavy and Civil Engineering Construction'. 6. The contract type is Firm Fixed Price, providing cost certainty. 7. The award was made by the Department of the Army. 8. The project is located in Oklahoma.
Value Assessment
Rating: good
The contract value of $91.5 million for turbine and generator rehabilitation appears reasonable given the long performance period of nearly seven years. Without specific benchmarks for similar large-scale rehabilitation projects, a direct comparison is difficult. However, the firm fixed-price nature of the contract suggests that the pricing was assessed and agreed upon upfront, which can be a positive indicator of value if the scope is well-defined. The contractor's experience in this specialized field will be a key factor in determining the ultimate value for money.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded through full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of three bidders suggests a competitive environment, which generally leads to better price discovery and potentially more favorable terms for the government. The level of competition is a positive sign for ensuring that the selected contractor offers a competitive price and quality of service.
Taxpayer Impact: The use of full and open competition is beneficial for taxpayers as it encourages multiple companies to bid, driving down prices and ensuring the government receives the best possible value for its investment.
Public Impact
The Department of Defense benefits from the rehabilitation of critical infrastructure, ensuring operational readiness. Services delivered include the rehabilitation of turbine and generator systems, vital for power generation. The geographic impact is concentrated in Oklahoma, where the project is located. The project likely involves skilled labor in heavy engineering and construction, potentially creating or sustaining jobs in the sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns if unforeseen issues arise during rehabilitation, despite the fixed-price nature.
- Dependence on a single contractor for a long-duration project could pose risks if performance falters.
- The long performance period might lead to challenges in adapting to new technologies or evolving maintenance standards.
Positive Signals
- Firm fixed-price contract provides cost certainty and limits the government's exposure to cost increases.
- Full and open competition suggests a robust bidding process that likely secured a competitive price.
- The extended performance period allows for comprehensive rehabilitation and potential long-term maintenance planning.
- The contractor, ANDRITZ HYDRO CORP, is likely experienced in this specialized area, suggesting a higher probability of successful execution.
Sector Analysis
This contract falls within the heavy and civil engineering construction sector, specifically focusing on the rehabilitation of power generation equipment. This is a specialized niche requiring significant expertise. The market for such services is often characterized by a limited number of highly qualified firms. Comparable spending benchmarks would typically be found in large-scale infrastructure projects or upgrades to critical energy facilities, where costs can range significantly based on project complexity and scale.
Small Business Impact
There is no indication that this contract included a small business set-aside. Given the specialized nature and scale of turbine and generator rehabilitation, it is less likely that small businesses would be primary bidders or subcontractors unless they possess highly specific expertise. Further analysis would be needed to determine if subcontracting opportunities exist for small businesses within the broader scope of this project.
Oversight & Accountability
Oversight for this contract will likely be managed by the contracting officer and relevant technical representatives within the Department of the Army. Accountability measures are inherent in the firm fixed-price contract type, which penalizes the contractor for cost overruns. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arise.
Related Government Programs
- Army Corps of Engineers Construction Projects
- Department of Energy Power Infrastructure Modernization
- Federal Power System Maintenance Contracts
- Heavy Equipment Rehabilitation Contracts
Risk Flags
- Long contract duration increases risk of performance issues.
- Potential for unforeseen site conditions impacting fixed-price contract.
- Dependence on specialized contractor expertise.
Tags
department-of-defense, department-of-the-army, construction, heavy-and-civil-engineering, turbine-generator-rehabilitation, firm-fixed-price, full-and-open-competition, definitive-contract, oklahoma, long-term-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $91.5 million to ANDRITZ HYDRO CORP. RS KERR TURBINE & GENERATOR REHABILITATION
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 $91.5 million.
What is the period of performance?
Start: 2021-09-10. End: 2029-05-27.
What is the track record of ANDRITZ HYDRO CORP with the Department of Defense and similar rehabilitation projects?
ANDRITZ HYDRO CORP is a global supplier of hydro power equipment and services. While specific contract history with the Department of Defense for this exact type of rehabilitation may require deeper database searches, the company's extensive experience in hydro turbine and generator manufacturing and servicing suggests a strong technical capability. Their portfolio typically includes large-scale projects for power utilities and industrial clients worldwide. Assessing their past performance on similar government contracts, particularly regarding adherence to schedule, budget, and quality standards, would be crucial for a comprehensive risk assessment. Publicly available information often highlights their involvement in major infrastructure upgrades, indicating a capacity for handling complex, high-value projects.
How does the $91.5 million contract value compare to similar turbine and generator rehabilitation projects in the federal sector?
Directly comparing the $91.5 million contract value for this specific turbine and generator rehabilitation project to similar federal contracts is challenging without access to a comprehensive database of comparable projects. However, large-scale infrastructure rehabilitation, especially for critical power generation assets, can easily reach tens of millions of dollars. Factors influencing cost include the size and type of turbines/generators, the extent of the rehabilitation required (e.g., component replacement vs. refurbishment), site accessibility, and the duration of the project. Given the nearly seven-year performance period, the annual expenditure averages around $13 million, which seems plausible for a project of this nature. Benchmarking against projects managed by the Army Corps of Engineers or the Department of Energy for power plant upgrades would provide a more precise comparison.
What are the primary risks associated with a seven-year firm fixed-price contract for heavy engineering construction?
A seven-year firm fixed-price contract for heavy engineering construction, such as turbine and generator rehabilitation, presents several risks. Firstly, despite the fixed price, unforeseen site conditions or material price escalations beyond the contractor's control could lead to claims for equitable adjustments, potentially increasing the overall cost to the government. Secondly, the long duration increases the risk of contractor performance degradation, potential financial instability, or changes in key personnel, which could impact project timelines and quality. Thirdly, technological advancements during the seven-year period might render the rehabilitated equipment less efficient or compatible with future grid requirements. Finally, scope creep, if not rigorously managed, can strain the fixed-price agreement. Effective oversight, clear contract terms, and robust risk mitigation strategies are essential.
How effective is full and open competition in ensuring value for money for large-scale infrastructure rehabilitation contracts?
Full and open competition is generally considered the most effective method for ensuring value for money in large-scale infrastructure rehabilitation contracts. By allowing all responsible sources to compete, the government maximizes the pool of potential bidders, thereby increasing the likelihood of receiving competitive pricing and innovative solutions. The process encourages bidders to offer their best terms and pricing to win the contract. Furthermore, a competitive environment incentivizes contractors to perform efficiently and effectively to maintain profitability under a fixed-price agreement. While the initial bid evaluation is critical, the ongoing performance monitoring throughout the contract's lifecycle is equally important to realize the full value intended by the competitive award.
What are the historical spending patterns for turbine and generator rehabilitation within the Department of Defense?
Historical spending patterns for turbine and generator rehabilitation within the Department of Defense are likely substantial, given the military's extensive infrastructure, including bases, training facilities, and operational installations that rely on consistent power. While specific aggregate data for 'turbine and generator rehabilitation' might be embedded within broader categories like 'heavy and civil engineering construction' or 'facility maintenance and repair,' it's reasonable to assume consistent annual investments. These expenditures would fluctuate based on the aging of infrastructure, modernization initiatives, and specific operational needs. Analyzing past awards for similar projects, particularly those managed by the Army Corps of Engineers, would reveal trends in contract values, durations, and the types of rehabilitation undertaken.
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 BUILDINGS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: W912BV19R0042
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: $96,221,676
Exercised Options: $91,540,766
Current Obligation: $91,540,766
Actual Outlays: $2,088,156
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2021-09-10
Current End Date: 2029-05-27
Potential End Date: 2029-06-15 00:00:00
Last Modified: 2025-05-13
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