DoD awards $161.8M for HVAC equipment to DRS Environmental Systems Inc
Contract Overview
Contract Amount: $16,185,900 ($16.2M)
Contractor: DRS Environmental Systems Inc
Awarding Agency: Department of Defense
Start Date: 2008-04-09
End Date: 2010-04-30
Contract Duration: 751 days
Daily Burn Rate: $21.6K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 5
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: MMTRCS UNITS
Place of Performance
Location: FLORENCE, BOONE County, KENTUCKY, 41042
State: Kentucky Government Spending
Plain-Language Summary
Department of Defense obligated $16.2 million to DRS ENVIRONMENTAL SYSTEMS INC for work described as: MMTRCS UNITS Key points: 1. Significant contract value for HVAC equipment. 2. Competition method was full and open, suggesting potential for competitive pricing. 3. Contract awarded to DRS Environmental Systems Inc., a key player in the sector. 4. Sector focus is on manufacturing of commercial and industrial refrigeration and HVAC equipment.
Value Assessment
Rating: fair
The award amount of $161.8 million for 5 units over approximately 25 months appears high on a per-unit basis. Benchmarking against similar large-scale HVAC procurements is necessary to confirm value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which generally promotes competitive pricing. However, the specific number of bids received and the price negotiation details are not provided, making a definitive assessment of price discovery difficult.
Taxpayer Impact: Taxpayer funds are being used for this procurement. The effectiveness of the competition in securing the best possible price will determine the ultimate taxpayer impact.
Public Impact
Ensures operational readiness for military facilities by providing essential climate control systems. Supports a specific manufacturing sector, potentially impacting jobs and economic activity in that area. The long duration of the contract (751 days) suggests a need for sustained supply and potentially complex integration.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- High per-unit cost potential
- Limited transparency on bid details
Positive Signals
- Full and open competition utilized
- Award to established company
Sector Analysis
The contract falls within the manufacturing sector for commercial and industrial refrigeration and HVAC equipment. Spending benchmarks for similar large-scale government procurements of specialized HVAC systems would provide further context for value assessment.
Small Business Impact
The data does not indicate any specific set-asides for small businesses. The prime contractor, DRS Environmental Systems Inc., is likely a large business, and the extent of small business subcontracting is not detailed.
Oversight & Accountability
The contract was awarded by the Department of the Army. Oversight would typically involve contract management by the agency to ensure timely delivery, quality, and adherence to terms. The 'AW' award action type requires further clarification.
Related Government Programs
- Air-Conditioning and Warm Air Heating Equipment and Commercial and Industrial Refrigeration Equipment Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- High potential per-unit cost
- Lack of detailed bid information
- Potential for vendor lock-in
- Unclear 'AW' award action type
Tags
air-conditioning-and-warm-air-heating-eq, department-of-defense, ky, do, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $16.2 million to DRS ENVIRONMENTAL SYSTEMS INC. MMTRCS UNITS
Who is the contractor on this award?
The obligated recipient is DRS ENVIRONMENTAL SYSTEMS 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 $16.2 million.
What is the period of performance?
Start: 2008-04-09. End: 2010-04-30.
What was the average per-unit price compared to industry benchmarks for similar government contracts?
Without specific per-unit pricing data or access to detailed bid information, it's challenging to establish a precise benchmark. However, given the total award of $161.8 million for 5 units, the implied average per-unit cost is over $32 million. This figure appears exceptionally high for standard HVAC units and warrants a deep dive into the specific capabilities and customization required for these 'MMTRCS UNITS' to justify such a cost.
What specific risks are associated with awarding a large contract for HVAC equipment to a single vendor, even under full and open competition?
Even with full and open competition, risks include potential vendor lock-in for future maintenance or upgrades, reliance on a single source for critical parts, and the possibility that the initial competitive pricing may not reflect long-term value. If DRS Environmental Systems Inc. faces production issues or financial instability, it could significantly disrupt the supply chain for these essential climate control systems.
How effectively does this contract ensure the long-term operational effectiveness of military facilities requiring climate control?
The contract's effectiveness hinges on the reliability and durability of the 'MMTRCS UNITS' provided by DRS Environmental Systems Inc. and the successful execution of the delivery schedule. While the award aims to meet a critical need, the high potential per-unit cost raises questions about whether the most cost-effective solution for long-term operational effectiveness was secured. Ongoing performance monitoring and post-delivery evaluation are crucial.
Industry Classification
NAICS: Manufacturing › Ventilation, Heating, Air-Conditioning, and Commercial Refrigeration Equipment Manufacturing › Air-Conditioning and Warm Air Heating Equipment and Commercial and Industrial Refrigeration Equipment Manufacturing
Product/Service Code: REFRIG, AIR CONDIT/CIRCULAT EQPT
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 5
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Leonardo SPA (UEI: 428869465)
Address: 7375 INDUSTRIAL RD, FLORENCE, KY, 04
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $16,185,900
Exercised Options: $16,185,900
Current Obligation: $16,185,900
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W911QY04D0004
IDV Type: IDC
Timeline
Start Date: 2008-04-09
Current End Date: 2010-04-30
Potential End Date: 2010-04-30 00:00:00
Last Modified: 2012-01-19
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