DoD's $47.9M furnace contract awarded to J Kokolakis Contracting Inc. shows fair value with 2 bidders

Contract Overview

Contract Amount: $47,872,959 ($47.9M)

Contractor: J Kokolakis Contracting Inc

Awarding Agency: Department of Defense

Start Date: 2021-04-30

End Date: 2024-11-12

Contract Duration: 1,292 days

Daily Burn Rate: $37.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Manufacturing

Official Description: MANUFACTURING, DELIVERY, INSTALLATION FURNACE

Place of Performance

Location: WATERVLIET, ALBANY County, NEW YORK, 12189

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $47.9 million to J KOKOLAKIS CONTRACTING INC for work described as: MANUFACTURING, DELIVERY, INSTALLATION FURNACE Key points: 1. The contract's value appears reasonable given the scope of manufacturing, delivery, and installation of industrial furnaces. 2. Full and open competition suggests a healthy market, though only two bids were received. 3. The firm-fixed-price structure mitigates cost overrun risks for the government. 4. Performance is expected over a significant duration, indicating a substantial project. 5. This contract falls within the industrial equipment manufacturing and supply sector.

Value Assessment

Rating: good

The contract's total value of approximately $47.9 million for industrial process furnaces and ovens seems aligned with market expectations for such specialized equipment. While direct comparisons are difficult without specific technical details, the firm-fixed-price nature of the award suggests a negotiated price that both parties found acceptable. The presence of two bidders indicates a degree of competition that likely contributed to a fair price discovery process.

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. However, only two bids were received. This level of competition, while present, is on the lower side and could suggest potential barriers to entry for other firms or a concentrated market for this specific type of industrial equipment.

Taxpayer Impact: While two bidders are better than one, taxpayers would ideally see more competition to ensure the lowest possible price. However, the firm-fixed-price contract type helps lock in costs.

Public Impact

The Department of the Army is the primary beneficiary, receiving essential industrial equipment. The contract supports the manufacturing, delivery, and installation of industrial process furnaces and ovens. The contract is being performed in New York (ST: NY, SN: NEW YORK). This contract likely supports jobs in the manufacturing and industrial services sectors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition (2 bidders) could potentially lead to higher prices than a more robust bidding environment.
The long contract duration (1292 days) increases the risk of unforeseen market shifts impacting material costs or availability.

Positive Signals

Firm-fixed-price contract type effectively transfers cost overrun risk to the contractor.
Full and open competition, even with limited bidders, provides a baseline for market price discovery.
The contract is for essential industrial equipment, supporting critical government operations.

Sector Analysis

This contract operates within the industrial equipment manufacturing and supply sector, specifically focusing on industrial process furnaces and ovens. This is a specialized niche within manufacturing, often characterized by high technical requirements and significant capital investment. Comparable spending benchmarks would typically involve other large-scale industrial equipment procurements for manufacturing facilities or large infrastructure projects.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific impacts on the small business ecosystem stemming from a set-aside provision. The prime contractor, J Kokolakis Contracting Inc., will be responsible for fulfilling the contract requirements.

Oversight & Accountability

The contract is a definitive contract awarded under full and open competition, suggesting adherence to standard procurement regulations. Oversight would typically be managed by the contracting officer and relevant Department of the Army personnel. Transparency is facilitated by the public nature of contract awards. Specific Inspector General jurisdiction would depend on the nature of any potential issues arising during performance.

Related Government Programs

Industrial Equipment Manufacturing
Defense Industrial Base
Manufacturing Equipment Procurement
Army Logistics and Support Contracts

Risk Flags

Limited Competition
Potential for Cost Overruns (mitigated by FFP)
Long Performance Period

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $47.9 million to J KOKOLAKIS CONTRACTING INC. MANUFACTURING, DELIVERY, INSTALLATION FURNACE

Who is the contractor on this award?

The obligated recipient is J KOKOLAKIS CONTRACTING 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 $47.9 million.

What is the period of performance?

Start: 2021-04-30. End: 2024-11-12.

What is the track record of J Kokolakis Contracting Inc. with federal contracts, particularly for similar industrial equipment?

A review of federal contract databases would be necessary to fully assess J Kokolakis Contracting Inc.'s track record. Information such as past performance ratings, history of contract modifications, and any past disputes or terminations would provide crucial context. Without this specific data, it's difficult to definitively assess their reliability and experience in delivering complex industrial equipment projects for the government. However, being awarded a contract of this magnitude by the Department of the Army suggests they have met certain pre-qualification criteria and possess the capacity to handle such a requirement.

How does the awarded price compare to similar industrial furnace contracts awarded by the DoD or other federal agencies?

Benchmarking this $47.9 million contract against similar industrial furnace procurements is challenging without detailed specifications of the furnaces and installation scope. However, the fact that it was awarded under full and open competition with two bidders suggests a degree of market validation. If other comparable contracts for similar volumes and complexity were awarded at significantly lower or higher prices, it would indicate potential overpayment or exceptional value. Further analysis would require access to detailed contract line item data and technical specifications for comparison.

What are the primary risks associated with this contract, and how are they being mitigated?

Key risks include potential delays in manufacturing or delivery, unforeseen technical challenges during installation, and contractor performance issues. The firm-fixed-price (FFP) contract structure is a primary mitigation strategy, as it places the financial risk of cost overruns on the contractor. The contract duration of 1292 days also necessitates robust project management and oversight from the Army to ensure timely completion. The limited competition (2 bidders) could also be seen as a risk if it implies a lack of market dynamism, potentially impacting future pricing or innovation.

What is the expected effectiveness of the delivered furnaces in supporting Army operations?

The effectiveness of the delivered furnaces hinges on their technical specifications meeting the Army's operational requirements for industrial processes. As these are industrial process furnaces and ovens, they are likely intended for manufacturing, repair, or maintenance operations within Army facilities. Their effectiveness will be measured by their reliability, efficiency, and ability to perform the intended industrial functions consistently. The Army's technical evaluation during the bidding process and acceptance testing upon delivery are critical to ensuring effectiveness.

What has been the historical spending pattern for industrial process furnaces and ovens by the Department of the Army?

Analyzing historical spending patterns for industrial process furnaces and ovens by the Department of the Army would reveal trends in demand, average contract values, and the typical competitive landscape for these goods. This specific contract of $47.9 million represents a significant investment. Understanding if this is an outlier, a continuation of a trend, or a response to a new requirement would provide valuable context. It would also help in assessing whether spending has increased or decreased over time and identify key contractors in this space.

Industry Classification

NAICS: Manufacturing › Other General Purpose Machinery Manufacturing › Industrial Process Furnace and Oven Manufacturing

Product/Service Code: FURNACE/STEAM/DRYING; NUCL REACTOR

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W912DS20R0022

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: J. Kokolakis Contracting, Inc.

Address: 202 E CENTER ST, TARPON SPRINGS, FL, 34689

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $47,872,959

Exercised Options: $47,872,959

Current Obligation: $47,872,959

Actual Outlays: $3,855,722

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline