DoD's $22.4M contract for DPGDS prime power unit recapitalization awarded to PD Power Systems, LLC

Contract Overview

Contract Amount: $22,448,652 ($22.4M)

Contractor: PD Power Systems, LLC

Awarding Agency: Department of Defense

Start Date: 2017-04-24

End Date: 2022-11-30

Contract Duration: 2,046 days

Daily Burn Rate: $11.0K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIXED PRICE INCENTIVE

Sector: Defense

Official Description: THIS REQUIREMENT IS TO APPLY THE MODIFIED WORK ORDER TO THE CURRENT DPGDS PRIME POWER UNITS MODELS A AND B FOR RECAPITALIZATION TO MODELS C AND D. THE PERIOD OF PERFORMANCE IS 32 MONTHS FOR THIS FIRST ARTICLE TESTING PHASE.

Place of Performance

Location: SPRINGFIELD, FAIRFAX County, VIRGINIA, 22150

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $22.4 million to PD POWER SYSTEMS, LLC for work described as: THIS REQUIREMENT IS TO APPLY THE MODIFIED WORK ORDER TO THE CURRENT DPGDS PRIME POWER UNITS MODELS A AND B FOR RECAPITALIZATION TO MODELS C AND D. THE PERIOD OF PERFORMANCE IS 32 MONTHS FOR THIS FIRST ARTICLE TESTING PHASE. Key points: 1. Contract focuses on upgrading existing power units to newer models, indicating a need for modernization. 2. The fixed-price incentive contract structure aims to balance cost control with performance incentives. 3. A 32-month period of performance for first article testing suggests a complex and potentially lengthy development or validation process. 4. The award was made under full and open competition, implying a competitive bidding process. 5. The contract falls under the Motor and Generator Manufacturing industry, highlighting its role in industrial equipment supply. 6. The prime contractor, PD Power Systems, LLC, is responsible for a significant recapitalization effort.

Value Assessment

Rating: fair

The total contract value of $22.4 million for the recapitalization of DPGDS prime power units appears to be a significant investment. Benchmarking this against similar defense modernization contracts for specialized equipment is challenging without more specific details on the scope of work and the technological advancements involved in the C and D models. The fixed-price incentive (FPI) contract type suggests an effort to control costs while incentivizing performance, but the ultimate value-for-money will depend on the successful achievement of performance targets and the long-term reliability of the upgraded units. Further analysis would require comparing the per-unit cost of the upgraded models to the cost of new units or alternative solutions.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that the Department of Defense sought proposals from all responsible sources. The specific number of bidders is not provided, but this procurement method generally fosters a competitive environment, which can lead to better pricing and innovation. The open competition suggests that PD Power Systems, LLC was selected based on its ability to meet the government's requirements, potentially offering the best value among multiple qualified offerors.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it increases the likelihood of obtaining competitive pricing and ensures that government funds are used efficiently by selecting the most capable and cost-effective solution.

Public Impact

The Department of Defense benefits from modernized and potentially more reliable prime power units, crucial for operational readiness. Services delivered include the recapitalization of existing DPGDS prime power units, extending their service life and improving performance. The geographic impact is likely concentrated around military installations where these power units are deployed. Workforce implications may involve specialized manufacturing and technical support roles within PD Power Systems, LLC and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 32-month period for first article testing could indicate potential delays or unforeseen technical challenges in the recapitalization process.
The fixed-price incentive contract, while aiming for efficiency, carries risks if performance targets are not met or if costs escalate beyond initial projections.
The specific nature of 'recapitalization' might imply that the underlying technology is aging, raising questions about the long-term viability of the upgraded systems.
Lack of detailed public information on the specific improvements of models C and D makes it difficult to assess the true technological leap and its associated value.
The contract's duration and scope could be subject to changes in defense priorities or technological advancements during its performance period.

Positive Signals

Awarding under full and open competition suggests a robust selection process and potential for competitive pricing.
The focus on recapitalization indicates an effort to leverage existing assets, which can be more cost-effective than procuring entirely new systems.
The fixed-price incentive structure, if managed effectively, can drive contractor performance and cost control.
The contract supports the modernization of critical military equipment, contributing to national defense capabilities.
PD Power Systems, LLC's selection implies they possess the necessary technical expertise and capacity for this specialized work.

Sector Analysis

This contract falls within the Motor and Generator Manufacturing sector (NAICS 335312), a segment of the broader industrial manufacturing industry. This sector is characterized by the production of electrical equipment, including motors, generators, and related components. The market for defense-related industrial equipment is often driven by modernization programs, sustainment needs, and the demand for reliable power solutions in diverse operational environments. Comparable spending benchmarks would involve analyzing other contracts for the manufacturing, repair, or upgrade of heavy-duty power generation and distribution systems for military or critical infrastructure applications.

Small Business Impact

The data indicates that small business participation (SB set-aside and subcontracting) was not a primary focus for this specific contract, as 'sb' is listed as false. This suggests that the prime contract was not set aside for small businesses, and there is no explicit mention of mandatory small business subcontracting goals. Consequently, the direct impact on the small business ecosystem for this particular award may be limited, unless PD Power Systems, LLC voluntarily engages small businesses as subcontractors for specialized components or services.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army, a component of the Department of Defense. Mechanisms likely include contract administration by the relevant contracting officer and technical representatives who monitor performance against the contract's terms and conditions. Transparency is facilitated through contract databases like FPDS, which provide basic award details. Accountability measures are embedded in the fixed-price incentive structure, linking contractor payment to performance outcomes. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Department of Defense Prime Power Units
Military Generator Systems
Defense Logistics Agency (DLA) Equipment Sustainment
Army Materiel Command (AMC) Procurement
Tactical Power Systems Contracts

Risk Flags

Extended First Article Testing Period
Complexity of Recapitalization Process
Potential for Cost Overruns in FPI Contracts
Aging Technology Base Requiring Modernization
Dependence on Specialized Manufacturing Capabilities

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.4 million to PD POWER SYSTEMS, LLC. THIS REQUIREMENT IS TO APPLY THE MODIFIED WORK ORDER TO THE CURRENT DPGDS PRIME POWER UNITS MODELS A AND B FOR RECAPITALIZATION TO MODELS C AND D. THE PERIOD OF PERFORMANCE IS 32 MONTHS FOR THIS FIRST ARTICLE TESTING PHASE.

Who is the contractor on this award?

The obligated recipient is PD POWER SYSTEMS, LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $22.4 million.

What is the period of performance?

Start: 2017-04-24. End: 2022-11-30.

What is the historical spending pattern for DPGDS prime power unit recapitalization or similar upgrades by the Department of the Army?

Analyzing historical spending for DPGDS prime power unit recapitalization requires a deep dive into specific contract awards over several fiscal years. Without direct access to detailed procurement histories for this specific system, a comprehensive pattern is difficult to establish. However, defense agencies frequently engage in modernization and recapitalization efforts for aging equipment to maintain operational readiness and incorporate technological advancements. Spending in this area is often cyclical, driven by budget allocations, identified obsolescence, and strategic defense reviews. Contracts for such upgrades can range from millions to hundreds of millions of dollars, depending on the scale, complexity, and number of units involved. The Department of the Army, in particular, manages a vast inventory of equipment, necessitating continuous investment in sustainment and upgrades. Trends might show an increasing focus on energy efficiency, modularity, and enhanced reliability in power systems, reflecting broader technological shifts and operational demands.

How does the per-unit cost of this recapitalization compare to the cost of procuring new, equivalent prime power units?

Determining the precise per-unit cost for this recapitalization requires dividing the total contract value ($22.4 million) by the number of units being upgraded. This information is not explicitly provided in the award data. However, recapitalization is often pursued as a cost-saving measure compared to purchasing entirely new units. The cost-effectiveness hinges on the extent of the upgrade: if it involves significant component replacement and modernization, the per-unit cost might approach that of a new unit. Conversely, if it's primarily refurbishment and minor upgrades, it should be substantially less. Benchmarking against new unit procurements would involve researching current market prices or recent government contracts for similar capacity and capability prime power units. Without the quantity of units, a direct comparison is speculative, but the goal of recapitalization is typically to achieve a significant percentage of the performance of a new unit at a considerably lower price point.

What are the specific performance improvements or technological advancements offered by Models C and D compared to Models A and B?

The provided data indicates that the contract is for applying a 'modified work order to the current DPGDS prime power units models A and B for recapitalization to models C and D.' However, the specific details regarding the performance improvements or technological advancements inherent in Models C and D are not elaborated upon. Typically, recapitalization efforts aim to enhance reliability, increase power output efficiency, improve fuel economy, reduce emissions, incorporate advanced diagnostics, or extend the operational lifespan of the equipment. Without further documentation or technical specifications from the contract statement of work, it's impossible to quantify these advancements. These upgrades are crucial for ensuring that military power generation systems meet evolving operational requirements and environmental standards.

What is the track record of PD Power Systems, LLC in delivering similar defense-related power systems contracts?

Assessing the track record of PD Power Systems, LLC requires examining their past performance on government contracts, particularly those involving power systems, manufacturing, and defense applications. Publicly available data, such as contract award histories and performance reviews (if available), would provide insights into their reliability, quality of work, and ability to meet deadlines and budget constraints. A company's history with fixed-price incentive contracts is also relevant, as it indicates their experience in managing performance-based agreements. Without specific details on PD Power Systems, LLC's prior contracts, it's difficult to definitively gauge their expertise. However, being awarded a contract of this magnitude by the Department of the Army suggests they have met certain pre-qualification criteria and demonstrated capability. Further due diligence would involve searching contract databases for past awards, terminations, or disputes involving the company.

What are the potential risks associated with a 32-month period for first article testing in this contract?

A 32-month period dedicated to first article testing (FAT) for recapitalized prime power units suggests a high degree of complexity and potential for technical challenges. FAT is a critical phase where a sample unit is rigorously tested to ensure it meets all design and performance specifications before full-scale production or implementation. A lengthy FAT period can indicate that the modifications are substantial, the technology is novel or requires extensive validation, or there are significant integration challenges with existing systems. Potential risks include extended delays in the overall project timeline, increased costs if unforeseen issues require extensive redesign or rework, and the possibility that the tested article may not ultimately meet all requirements, leading to contract modifications or termination. This extended duration also ties up resources and capital for a prolonged period before the full benefits of the recapitalization are realized.

How does the 'Motor and Generator Manufacturing' classification (NAICS 335312) influence the assessment of this contract's value and risk?

The NAICS code 335312, 'Motor and Generator Manufacturing,' places this contract within a specific industrial sector. This classification suggests that the core of the work involves the production, modification, or repair of electrical motors and generators, which are fundamental components for power systems. Assessing value within this sector involves considering factors like the technological sophistication of the motors/generators, the scale of production, and the specialized nature of the manufacturing processes. Risks can be associated with supply chain disruptions for raw materials (e.g., copper, rare earth magnets), the need for highly skilled labor, adherence to stringent quality control standards (especially for defense applications), and the pace of technological innovation in electrical engineering. The value proposition is often tied to the efficiency, durability, and reliability of the manufactured components. For defense contracts, the risk profile is elevated due to the critical nature of the equipment and the potential consequences of failure.

Industry Classification

NAICS: Manufacturing › Electrical Equipment Manufacturing › Motor and Generator Manufacturing

Product/Service Code: ELECTRIC WIRE, POWER DISTRIB EQPT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIXED PRICE INCENTIVE (L)

Evaluated Preference: NONE

Contractor Details

Address: 6225 BRANDON AVE STE 460, SPRINGFIELD, VA, 22150

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Manufacturer of Goods, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $22,448,652

Exercised Options: $22,448,652

Current Obligation: $22,448,652

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W909MY17D0002

IDV Type: IDC

Timeline