ANDRITZ HYDRO CORP awarded $74.5M for McNary Dam generator winding replacement, a significant investment in hydroelectric infrastructure

Contract Overview

Contract Amount: $74,498,530 ($74.5M)

Contractor: Andritz Hydro Corp

Awarding Agency: Department of Defense

Start Date: 2009-09-28

End Date: 2017-07-31

Contract Duration: 2,863 days

Daily Burn Rate: $26.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: MCNARY DAM HYDROELECTRIC GENERATOR WINDING REPLACEMENT

Place of Performance

Location: UMATILLA, UMATILLA County, OREGON, 97882

State: Oregon Government Spending

Plain-Language Summary

Department of Defense obligated $74.5 million to ANDRITZ HYDRO CORP for work described as: MCNARY DAM HYDROELECTRIC GENERATOR WINDING REPLACEMENT Key points: 1. The contract value represents a substantial commitment to maintaining critical energy generation assets. 2. The use of firm-fixed-price terms suggests a clear understanding of project scope and cost expectations. 3. The long duration of the contract (2863 days) indicates a complex, multi-year project. 4. The award was made under full and open competition, implying a robust bidding process. 5. The project falls under 'Other Heavy and Civil Engineering Construction,' a broad category encompassing significant infrastructure work. 6. The absence of small business set-asides suggests the prime contractor is a large entity, with potential subcontracting opportunities.

Value Assessment

Rating: good

The $74.5 million award for the McNary Dam generator winding replacement appears to be a significant but potentially reasonable investment for a project of this scale and complexity. Without specific benchmarks for hydroelectric generator winding replacements, direct cost comparison is difficult. However, the firm-fixed-price nature of the contract suggests that the government sought to lock in costs, which can be advantageous if the scope is well-defined. The long duration implies a substantial undertaking, and the final cost should be evaluated against the project's successful completion and the extended operational life of the generators.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified vendors were likely solicited and allowed to bid. The presence of four bidders (no) suggests a competitive environment, which generally benefits price discovery and can lead to more favorable pricing for the government. The specific details of the bidding process, such as the number of proposals received and the evaluation criteria, would provide further insight into the effectiveness of the competition.

Taxpayer Impact: Full and open competition typically results in better value for taxpayers by fostering a competitive environment that drives down prices and encourages innovation among bidders.

Public Impact

The primary beneficiaries are the U.S. Army Corps of Engineers and the nation's power grid, ensuring continued hydroelectric power generation. The services delivered include the critical replacement of generator windings, essential for the operational integrity of the McNary Dam. The geographic impact is concentrated in Oregon, where the McNary Dam is located, supporting regional energy needs. Workforce implications include skilled labor for specialized electrical and mechanical engineering tasks, potentially supporting local and regional employment in the construction and engineering sectors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen technical challenges arise during the multi-year replacement process.
Risk of schedule delays impacting power generation continuity.
Dependence on a single contractor for a critical infrastructure component.
Ensuring long-term performance and reliability of the new windings.
Potential for supply chain disruptions affecting specialized components.

Positive Signals

Firm-fixed-price contract structure helps mitigate cost uncertainty.
Full and open competition suggests a thorough vetting of potential contractors.
The long contract duration allows for phased implementation and reduces immediate pressure.
The project addresses a critical need for infrastructure maintenance, ensuring long-term energy security.
The contractor, ANDRITZ HYDRO CORP, is a known entity in the hydropower sector.

Sector Analysis

The hydroelectric power sector is a vital component of the U.S. energy infrastructure, contributing significantly to renewable energy generation. The McNary Dam is part of the U.S. Army Corps of Engineers' extensive network of water resource development projects. Spending in this sector often involves large, complex contracts for maintenance, upgrades, and new construction of dams, turbines, and associated electrical systems. Comparable spending benchmarks would typically be found within large-scale civil engineering and energy infrastructure projects, often in the tens to hundreds of millions of dollars, depending on the scope and complexity.

Small Business Impact

The contract was not awarded as a small business set-aside, and the 'sb' field indicates 'false'. This suggests that the prime contract was likely awarded to a large business entity. While there is no direct set-aside for small businesses, there may be opportunities for small businesses to participate as subcontractors to ANDRITZ HYDRO CORP. The extent of small business subcontracting would depend on the prime contractor's strategy and the specific requirements outlined in the contract, if any.

Oversight & Accountability

Oversight for this contract would primarily fall under the U.S. Army Corps of Engineers, which manages the McNary Dam. Accountability measures are embedded in the firm-fixed-price contract terms, requiring the contractor to deliver specified work within the agreed-upon price. Transparency is generally maintained through contract award databases and public reporting. The Inspector General's office for the Department of Defense would have jurisdiction to investigate any allegations of fraud, waste, or abuse related to this contract.

Related Government Programs

Army Corps of Engineers Civil Works Program
Bonneville Power Administration
Federal Power Marketing Administrations
Hydroelectric Power Generation Infrastructure
Major Equipment Replacement Contracts
Critical Infrastructure Maintenance

Risk Flags

Potential for schedule slippage impacting energy production.
Risk of cost escalation if unforeseen technical issues arise.
Dependency on contractor's specialized expertise.
Ensuring long-term reliability and performance of replaced components.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $74.5 million to ANDRITZ HYDRO CORP. MCNARY DAM HYDROELECTRIC GENERATOR WINDING REPLACEMENT

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 $74.5 million.

What is the period of performance?

Start: 2009-09-28. End: 2017-07-31.

What is the track record of ANDRITZ HYDRO CORP with similar federal contracts, particularly in hydroelectric generator maintenance?

ANDRITZ HYDRO CORP is a well-established global supplier of equipment and services for hydropower plants. Within the federal contracting space, they have a history of securing significant awards related to turbine and generator upgrades, maintenance, and replacements. For instance, they have been involved in projects with the U.S. Army Corps of Engineers and the Bureau of Reclamation on various dams across the United States. Their experience typically encompasses large-scale projects requiring specialized engineering, manufacturing, and installation capabilities. A detailed review of their contract history would reveal the volume and value of similar projects, their performance ratings on past contracts (if available), and any instances of disputes or contract modifications. This specific contract for the McNary Dam winding replacement aligns with their core competencies and historical project types.

How does the awarded amount of $74.5 million compare to the estimated value or budget for similar generator winding replacement projects?

Directly comparing the $74.5 million award to specific benchmarks for hydroelectric generator winding replacements is challenging without access to detailed project scopes, generator sizes, and market conditions at the time of bidding for comparable projects. However, the value suggests a substantial undertaking, likely involving multiple large generators or particularly complex winding designs and replacement procedures. Large-scale infrastructure projects of this nature, especially those involving critical power generation assets, often run into tens of millions of dollars. The firm-fixed-price nature of this contract implies that the government sought to establish a definitive cost, which can be advantageous if the scope was well-defined. Further analysis would require benchmarking against other Army Corps of Engineers or Bureau of Reclamation projects of similar scale and technical complexity, considering factors like inflation and the specific technological requirements of the McNary Dam generators.

What are the primary risks associated with a multi-year contract for generator winding replacement, and how are they mitigated?

The primary risks associated with a multi-year contract for generator winding replacement include potential cost overruns due to unforeseen technical challenges, schedule delays impacting power generation, and the risk of equipment failure during the transition. Mitigation strategies are typically embedded within the contract. The firm-fixed-price structure aims to cap costs for the government, placing the risk of cost overruns on the contractor. Performance bonds and liquidated damages clauses can incentivize timely completion and penalize delays. The contract likely includes detailed specifications, quality assurance plans, and phased delivery schedules to manage complexity. Furthermore, the contractor's technical expertise and experience, as demonstrated through the bidding process, are crucial in mitigating technical risks. Regular progress reviews and clear communication channels between the contractor and the Army Corps of Engineers are also vital for proactive risk management.

How effective is full and open competition in ensuring value for money for large infrastructure projects like this generator replacement?

Full and open competition is generally considered the most effective method for ensuring value for money in large federal procurements. By allowing all responsible sources to submit bids, it fosters a competitive environment that drives down prices and encourages innovation. For a project like the McNary Dam generator winding replacement, this means that multiple specialized contractors had the opportunity to propose their solutions and pricing. The presence of four bidders indicates a degree of competition. The government's evaluation process, which typically considers both price and technical factors, then selects the offer that represents the best value. While full and open competition provides a strong foundation for value, the effectiveness also depends on the clarity of the solicitation, the rigor of the evaluation criteria, and the government's ability to accurately define the project's requirements to elicit comparable bids.

What is the historical spending trend for generator maintenance and replacement at the McNary Dam or similar Army Corps of Engineers facilities?

Analyzing historical spending trends for generator maintenance and replacement at the McNary Dam or similar Army Corps of Engineers (USACE) facilities provides crucial context for the $74.5 million award. USACE manages numerous hydroelectric projects, and periodic major overhauls, including winding replacements, are essential for maintaining operational efficiency and extending asset life. Historical data would likely show a pattern of significant capital investments for such major component replacements, often occurring every few decades. Spending can fluctuate based on the age of the facilities, the condition of the equipment, and the availability of appropriated funds. A review of past contracts awarded by USACE for similar work at other dams (e.g., The Dalles, John Day) would reveal typical contract values, durations, and the frequency of such major repair or replacement efforts, helping to contextualize the current award's magnitude and timing.

What are the implications of the 'Other Heavy and Civil Engineering Construction' NAICS code for this contract?

The North American Industry Classification System (NAICS) code 237990, 'Other Heavy and Civil Engineering Construction,' signifies that this contract falls into a broad category encompassing the construction of infrastructure projects not elsewhere classified. This includes projects like dams, waterways, bridges, tunnels, and other large-scale civil engineering works. For this specific contract, it indicates that the work involves significant construction and engineering expertise related to the physical infrastructure of the McNary Dam and its power generation facilities. This classification suggests that the contractor must possess capabilities in heavy construction, electrical systems integration, and potentially environmental compliance related to large civil projects. It also implies that the project's scale and complexity align with the typical characteristics of heavy civil engineering endeavors, often involving substantial capital investment and long project timelines.

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 NONBUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W912EF09R0018

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Andritz AG (UEI: 300197993)

Address: 10735 DAVID TAYLOR DR STE 500, CHARLOTTE, NC, 28262

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

Financial Breakdown

Contract Ceiling: $82,517,539

Exercised Options: $74,498,530

Current Obligation: $74,498,530

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline