DoD awards $30.9M for construction machinery manufacturing, with 28 bids received

Contract Overview

Contract Amount: $30,904,418 ($30.9M)

Contractor: IAP Worldwide Services, Inc

Awarding Agency: Department of Defense

Start Date: 2005-04-06

End Date: 2009-06-09

Contract Duration: 1,525 days

Daily Burn Rate: $20.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 28

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Plain-Language Summary

Department of Defense obligated $30.9 million to IAP WORLDWIDE SERVICES, INC for work described as: Key points: 1. Contract value of $30.9 million represents a significant investment in specialized machinery. 2. High number of bids suggests a competitive market for these goods. 3. Fixed-price contract type shifts risk to the contractor. 4. Contract duration of 1525 days indicates a long-term need for these assets. 5. The award falls under the Construction Machinery Manufacturing NAICS code. 6. No small business set-aside was utilized, potentially limiting direct participation.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific details on the machinery procured. However, the $30.9 million award over approximately four years suggests a substantial investment. The firm fixed-price nature indicates that the contractor bears the risk of cost overruns, which can sometimes lead to higher initial pricing to compensate for that risk. Without comparative data on similar large-scale machinery procurements, a definitive value-for-money assessment is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, with 28 bids received. This indicates a robust bidding process and a healthy level of interest from potential suppliers. A large number of bidders generally fosters price competition, potentially leading to more favorable pricing for the government compared to a less competitive scenario. The agency sought a broad range of qualified offerors.

Taxpayer Impact: The extensive competition suggests that taxpayer dollars were likely used efficiently, as multiple companies vied to offer the best terms and pricing. This competitive environment helps ensure that the government is not overpaying for the required construction machinery.

Public Impact

The Department of Defense is the primary beneficiary, receiving essential construction machinery. This machinery is likely crucial for military base construction, maintenance, or deployment operations. The geographic impact is likely concentrated around military installations where the machinery will be utilized. The contract supports jobs within the construction machinery manufacturing sector and potentially related logistics and support industries.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific details on machinery performance requirements makes it hard to assess if the best possible equipment was secured.
The long contract duration could lead to potential obsolescence of technology if not managed carefully.
Firm fixed-price contracts can sometimes result in higher upfront costs compared to cost-reimbursement contracts if risks are perceived as high by the contractor.

Positive Signals

Full and open competition with 28 bids suggests a strong market and competitive pricing.
The firm fixed-price contract structure provides cost certainty for the government.
The award indicates the Department of Defense has a clear need and budget for this type of equipment.

Sector Analysis

The construction machinery manufacturing sector is a vital part of the industrial base, supplying essential equipment for infrastructure projects, both civilian and military. This contract, valued at $30.9 million, represents a significant procurement within this sector. Comparable spending benchmarks would depend on the specific types and quantities of machinery, but large government contracts for heavy equipment can range from millions to hundreds of millions of dollars.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of subcontracting plans specifically targeting them. This means that large prime contractors were likely the primary participants. While this ensures broad competition, it may limit direct opportunities for small businesses to participate in this specific contract unless they are part of a larger prime contractor's supply chain.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and procurement regulations. Accountability measures are inherent in the firm fixed-price structure, requiring the contractor to deliver specified goods. Transparency is generally maintained through contract award databases, though specific performance details might be less public. The Inspector General's office could investigate any allegations of fraud, waste, or abuse.

Related Government Programs

Military Construction
Heavy Equipment Procurement
Defense Logistics Agency Contracts
Construction Machinery and Equipment

Risk Flags

Long contract duration may pose risks of technological obsolescence.
Firm fixed-price contracts can sometimes lead to higher initial costs.
Lack of small business set-aside may limit direct participation opportunities for smaller firms.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $30.9 million to IAP WORLDWIDE SERVICES, INC. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is IAP WORLDWIDE SERVICES, 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 $30.9 million.

What is the period of performance?

Start: 2005-04-06. End: 2009-06-09.

What specific types of construction machinery were procured under this contract?

The provided data indicates the contract falls under NAICS code 333120, 'Construction Machinery Manufacturing.' However, it does not specify the exact types of machinery. This could range from excavators, bulldozers, and cranes to specialized equipment for military base construction or repair. Without further details, it's impossible to know the precise nature of the equipment acquired. Understanding the specific machinery would be crucial for assessing its operational relevance and technological sophistication.

How does the $30.9 million contract value compare to typical annual spending on construction machinery by the Department of Defense?

Determining how $30.9 million compares to typical annual spending requires access to historical DoD procurement data for construction machinery. This single contract represents a substantial investment, but its proportion within the DoD's overall budget for such equipment is unknown without comparative figures. Annual spending can fluctuate based on military readiness needs, base infrastructure projects, and global deployments. A multi-year contract like this one, spanning over 1500 days, suggests a planned, long-term acquisition rather than a one-off purchase.

What are the potential risks associated with a firm fixed-price contract for specialized construction machinery over a 1525-day period?

A firm fixed-price (FFP) contract shifts the cost overrun risk entirely to the contractor. For specialized machinery over a long duration (1525 days), potential risks include the contractor underestimating production costs, material price increases, or unforeseen technical challenges. To mitigate these risks, contractors often build in contingency into their pricing, potentially leading to a higher initial cost for the government. Conversely, if the contractor manages costs effectively, they retain any savings, which can incentivize efficiency. The government's risk is primarily that the contractor may cut corners on quality or delivery if facing cost pressures, though contract specifications and oversight aim to prevent this.

Given 28 bids, what does this indicate about the competitiveness and potential for price innovation in this market segment?

Receiving 28 bids for this contract strongly suggests a highly competitive market for the specific construction machinery being procured. A large number of bidders typically drives down prices as companies vie for the award. It indicates that multiple manufacturers and suppliers possess the capability and capacity to meet the government's requirements. This level of competition also fosters innovation, as companies may offer unique features, improved performance, or more efficient designs to gain an edge. For taxpayers, this competitive landscape is generally favorable, increasing the likelihood of obtaining good value for money.

What is the track record of IAP WORLDWIDE SERVICES, INC. in fulfilling large Department of Defense contracts, particularly for machinery?

The provided data identifies 'IAP WORLDWIDE SERVICES, INC.' as the contractor. To assess their track record, one would need to examine their past performance on similar DoD contracts. This includes evaluating their history of on-time delivery, adherence to quality standards, and financial stability in executing large-scale procurements. Information on past contract performance ratings, any disputes or claims filed, and their experience specifically with construction machinery would be crucial. Without this historical context, it's difficult to gauge their reliability for this specific $30.9 million award.

How does the 'Construction Machinery Manufacturing' classification (NAICS 333120) align with other defense spending categories?

NAICS 333120, 'Construction Machinery Manufacturing,' falls under the broader 'Manufacturing' sector. Within defense spending, this classification is distinct from direct weapons systems procurement (e.g., aircraft, vehicles, munitions) or services (e.g., logistics, IT, base operations). However, construction machinery is critical for maintaining and expanding military infrastructure, including bases, airfields, and support facilities, both domestically and abroad. Therefore, it complements spending in areas like military construction (MILCON) and base operations support, ensuring the physical environment supporting military operations is functional and up-to-date.

Industry Classification

NAICS: Manufacturing › Agriculture, Construction, and Mining Machinery Manufacturing › Construction Machinery Manufacturing

Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCTION OF BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 28

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Cerberus Capital Management, L.P. (UEI: 014784388)

Address: 413 WESTERN LANE, IRMO, SC, 02

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W916QW04D0011

IDV Type: IDC

Timeline