DoD awards $21.9M for HVAC equipment, raising questions on value and competition
Contract Overview
Contract Amount: $21,990,842 ($22.0M)
Contractor: DRS Environmental Systems Inc
Awarding Agency: Department of Defense
Start Date: 2010-09-21
End Date: 2013-01-31
Contract Duration: 863 days
Daily Burn Rate: $25.5K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 5
Pricing Type: FIRM FIXED PRICE
Sector: Manufacturing
Official Description: MTRCS UNITS
Place of Performance
Location: FLORENCE, BOONE County, KENTUCKY, 41042
State: Kentucky Government Spending
Plain-Language Summary
Department of Defense obligated $22.0 million to DRS ENVIRONMENTAL SYSTEMS INC for work described as: MTRCS UNITS Key points: 1. Significant award value of $21.9 million for HVAC equipment. 2. Contract awarded to DRS ENVIRONMENTAL SYSTEMS INC. 3. Competition method was 'FULL AND OPEN COMPETITION'. 4. Contract duration was 863 days. 5. Awarded by the Department of the Army.
Value Assessment
Rating: questionable
The award value of $21.9 million for HVAC equipment needs further scrutiny. Without specific unit costs or comparison data, it's difficult to assess if this price is competitive or represents good value for the taxpayer.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under 'FULL AND OPEN COMPETITION', suggesting a broad solicitation. However, the lack of detailed pricing information makes it hard to determine if the price discovery mechanism was effective in securing the best possible price.
Taxpayer Impact: The total award of $21.9 million represents a significant taxpayer investment. Ensuring this investment yielded fair market value is crucial for fiscal responsibility.
Public Impact
Taxpayers funded a substantial contract for essential climate control equipment. The Department of Defense relies on such equipment for operational readiness. The award impacts the HVAC manufacturing sector, specifically in Kentucky.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of detailed cost breakdown
- Limited insight into price competitiveness
- No clear performance metrics provided
Positive Signals
- Awarded under full and open competition
- Contract awarded to a single entity, potentially simplifying management
Sector Analysis
The award falls within the manufacturing sector, specifically for air-conditioning and refrigeration equipment. Spending benchmarks for similar DoD contracts would be useful to contextualize this $21.9 million award.
Small Business Impact
The provided data does not indicate whether small businesses were involved as subcontractors or prime contractors in this award. Further analysis is needed to assess small business participation.
Oversight & Accountability
Oversight of this contract would involve monitoring performance, adherence to the firm fixed price, and ensuring the equipment meets specified requirements. The Department of the Army is responsible for this oversight.
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
- Lack of detailed cost breakdown
- Insufficient data for per-unit cost analysis
- Unclear competitive intensity despite 'full and open' status
- Potential for overpricing without comparative data
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 $22.0 million to DRS ENVIRONMENTAL SYSTEMS INC. MTRCS 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 $22.0 million.
What is the period of performance?
Start: 2010-09-21. End: 2013-01-31.
What was the average per-unit cost for the MTRCS units awarded under this contract, and how does it compare to industry benchmarks?
The provided data does not include the number of units or the per-unit cost, making a direct comparison impossible. To assess value, the contracting agency would need to provide the quantity of units and their associated pricing. Without this, we cannot determine if the $21.9 million award represents a fair price per unit compared to similar market offerings or previous government procurements.
Given the 'FULL AND OPEN COMPETITION' designation, what was the competitive landscape like, and were there significant price reductions achieved through the bidding process?
While the contract was advertised as 'FULL AND OPEN COMPETITION', the data doesn't reveal the number of bids received or the extent of price negotiation. A robust competition typically leads to multiple bids and potential price reductions from the initial offers. Further investigation into the bidding process and the final negotiated price against initial proposals is necessary to confirm effective price discovery.
How effectively did the firm fixed price contract structure ensure cost control and prevent potential cost overruns for the Department of the Army?
A firm fixed price (FFP) contract is generally designed to provide cost certainty and incentivize contractor efficiency. For this $21.9 million award, the FFP structure means the contractor assumes the risk of cost overruns. However, the effectiveness hinges on the initial price being fair and reasonable and the contractor's ability to manage their expenses within that budget. Oversight is key to ensuring the contractor meets obligations without compromising quality.
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: $21,990,842
Exercised Options: $21,990,842
Current Obligation: $21,990,842
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W911QY04D0004
IDV Type: IDC
Timeline
Start Date: 2010-09-21
Current End Date: 2013-01-31
Potential End Date: 2013-01-31 00:00:00
Last Modified: 2012-01-19
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