DoD's $30M contract for machinery repair at Stockton Lake shows fair value, but limited competition raises concerns

Contract Overview

Contract Amount: $29,952,775 ($30.0M)

Contractor: Voith Hydro Inc

Awarding Agency: Department of Defense

Start Date: 2010-04-08

End Date: 2014-09-23

Contract Duration: 1,629 days

Daily Burn Rate: $18.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: TAS::96 3135::TAS RECOVERYPROJECT#::17560::RP# STOCKTON LAKE, MO

Place of Performance

Location: YORK, YORK County, PENNSYLVANIA, 17408

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $30.0 million to VOITH HYDRO INC for work described as: TAS::96 3135::TAS RECOVERYPROJECT#::17560::RP# STOCKTON LAKE, MO Key points: 1. The contract's value appears reasonable when benchmarked against similar repair and maintenance services. 2. Competition was limited, with only three bids received, potentially impacting price discovery. 3. The fixed-price contract type mitigates some cost overrun risks. 4. Performance occurred over a significant duration, suggesting a substantial scope of work. 5. The contract falls within the industrial machinery repair sector, a common area for federal procurement. 6. The absence of small business set-asides indicates a focus on larger, specialized contractors.

Value Assessment

Rating: good

The $30 million contract for machinery repair and maintenance at Stockton Lake appears to represent good value. Benchmarking against similar industrial equipment repair contracts suggests the pricing was competitive, especially considering the specialized nature of the work. The firm fixed-price structure further supports value by capping potential cost increases for the government. While specific performance metrics are not detailed here, the duration of the contract implies a comprehensive and sustained service delivery.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, which is a positive indicator for price discovery. However, only three bids were received, suggesting that the pool of qualified and interested contractors may have been limited for this specific requirement. While competition was present, the low number of bidders could mean that the government did not achieve the most aggressive pricing possible.

Taxpayer Impact: The limited number of bidders means taxpayers may not have benefited from the lowest possible prices that a more robust competition might have yielded.

Public Impact

The primary beneficiaries are the Department of the Army and the Army Corps of Engineers, ensuring the operational readiness of equipment at Stockton Lake. Services delivered include essential repair and maintenance for commercial and industrial machinery, crucial for infrastructure upkeep. The geographic impact is localized to Stockton Lake, Missouri, supporting regional infrastructure maintenance. Workforce implications include employment for skilled technicians and mechanics involved in industrial equipment repair.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition (3 bidders) may have resulted in higher costs for taxpayers.
Lack of specific performance metrics makes it difficult to fully assess efficiency and effectiveness.
The contract's duration (over 4 years) could mask potential inefficiencies if not actively managed.

Positive Signals

Awarded under full and open competition, maximizing potential bidder pool.
Firm fixed-price contract type helps control costs and provides budget certainty.
Contractor (Voith Hydro Inc.) likely possesses specialized expertise for this type of machinery.

Sector Analysis

This contract falls within the Industrial Machinery and Equipment Repair and Maintenance sector. This sector is critical for maintaining the operational capacity of various federal assets, from infrastructure projects like dams to specialized equipment. Spending in this area is often driven by the need for specialized technical skills and parts, making it a market where established players with proven track records tend to dominate. Comparable spending benchmarks would involve analyzing other large-scale repair contracts for heavy industrial equipment across different federal agencies.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. This suggests that the scope and technical requirements of the work were likely beyond the typical capabilities or capacity of small businesses in this specialized repair field, or that the competition strategy prioritized large, experienced firms.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Accountability measures are inherent in the firm fixed-price contract type, which obligates the contractor to deliver specified services at an agreed-upon price. Transparency is generally maintained through contract award databases, though detailed performance reviews are often internal. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Army Corps of Engineers Civil Works Projects
Federal Infrastructure Maintenance Contracts
Industrial Equipment Repair Services
Heavy Machinery Maintenance

Risk Flags

Limited competition may lead to higher prices.
Lack of detailed performance metrics hinders full value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $30.0 million to VOITH HYDRO INC. TAS::96 3135::TAS RECOVERYPROJECT#::17560::RP# STOCKTON LAKE, MO

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 $30.0 million.

What is the period of performance?

Start: 2010-04-08. End: 2014-09-23.

What is the track record of Voith Hydro Inc. in performing similar federal contracts?

Voith Hydro Inc. is a well-established company specializing in hydropower equipment and services. While this specific contract focused on general machinery repair, Voith's core business involves complex electromechanical systems often found in large infrastructure projects. Reviewing their past performance on similar federal contracts, particularly those involving maintenance and repair of large-scale equipment for agencies like the Army Corps of Engineers or the Bureau of Reclamation, would provide insight into their reliability, quality of work, and ability to manage large projects. Data on past contract awards, completion timeliness, and any reported issues or disputes would be crucial for a comprehensive assessment of their track record.

How does the awarded amount compare to the estimated value or budget for this requirement?

The awarded amount of approximately $30 million provides a clear picture of the government's expenditure. However, without access to the government's initial cost estimates or budget allocations for this specific requirement, a direct comparison is difficult. Typically, contracting officers establish an independent government cost estimate (IGCE) before soliciting bids. If the awarded price was significantly below the IGCE, it could indicate strong competition or effective negotiation. Conversely, if it was close to or exceeded the estimate, it might warrant further scrutiny, especially given the limited number of bidders. Analyzing the relationship between the award and the estimated value is key to understanding if the government secured a favorable price.

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

Specific Key Performance Indicators (KPIs) for this contract are not detailed in the provided data. However, for machinery repair and maintenance contracts, typical KPIs often include: timeliness of repairs (e.g., mean time to repair - MTTR), equipment uptime/availability rates post-maintenance, adherence to maintenance schedules, quality of workmanship (e.g., defect rates, rework required), and compliance with safety and environmental regulations. The firm fixed-price nature of the contract implies that the contractor is incentivized to meet performance standards to avoid penalties or ensure profitability. A thorough assessment would require access to performance reports and quality assurance evaluations conducted during the contract's life.

What is the historical spending trend for machinery repair and maintenance at Stockton Lake or similar Army Corps of Engineers facilities?

Analyzing historical spending trends for machinery repair and maintenance at Stockton Lake and comparable Army Corps of Engineers (USACE) facilities is essential for context. This contract, awarded in 2010 for approximately $30 million over roughly four years, represents a significant investment. Understanding whether this spending level is consistent with previous years, or if it represents an increase or decrease, helps identify potential shifts in maintenance needs, asset condition, or contracting strategies. Examining USACE's overall budget allocation for operations and maintenance (O&M) and specifically for equipment repair across its portfolio can reveal patterns and inform whether this particular contract's value is within expected norms for similar-sized projects or facilities.

Were there any contract modifications or change orders issued during the performance period, and what was their impact?

The provided data does not specify whether any contract modifications or change orders were issued for this contract. However, for a contract spanning over four years (1629 days), modifications are not uncommon. They can arise due to changes in scope, unforeseen technical challenges, adjustments in delivery schedules, or escalation clauses. If significant modifications occurred, especially those increasing the contract value or extending the period of performance, it would be crucial to analyze their justification, necessity, and impact on the overall cost and timeline. Such analysis helps determine if the contract remained within its original intent and budget, or if scope creep or unforeseen issues led to substantial deviations.

Industry Classification

NAICS: Other Services (except Public Administration) › Commercial and Industrial Machinery and Equipment (except Automotive and Electronic) Repair and Maintenance › Commercial and Industrial Machinery and Equipment (except Automotive and Electronic) Repair and Maintenance

Product/Service Code: ENGINES AND TURBINES AND COMPONENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W912DQ09R1032

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Voith Familien Verwaltung Gmbh (UEI: 312557518)

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: $29,952,775

Exercised Options: $29,952,775

Current Obligation: $29,952,775

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline