State Department awards $19.7M contract for generator systems, highlighting motor and generator manufacturing needs

Contract Overview

Contract Amount: $19,674,629 ($19.7M)

Contractor: Arkel International, L.L.C.

Awarding Agency: Department of State

Start Date: 2024-09-29

End Date: 2027-03-30

Contract Duration: 912 days

Daily Burn Rate: $21.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 7

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: GENERATOR SYSTEMS REPLACEMENT

Place of Performance

Location: CHILLICOTHE, PEORIA County, ILLINOIS, 61523

State: Illinois Government Spending

Plain-Language Summary

Department of State obligated $19.7 million to ARKEL INTERNATIONAL, L.L.C. for work described as: GENERATOR SYSTEMS REPLACEMENT Key points: 1. Contract value of $19.7 million for generator systems replacement. 2. Awarded to ARKEL INTERNATIONAL, L.L.C. under a firm-fixed-price definitive contract. 3. Competition was full and open, with 7 bidders indicating a competitive market. 4. Contract duration is 912 days, spanning from late 2024 to early 2027. 5. The North American Industry Classification System (NAICS) code 335312 points to motor and generator manufacturing. 6. The contract is for generator systems replacement, crucial for operational continuity. 7. Small business set-asides were not utilized for this procurement.

Value Assessment

Rating: good

The contract value of $19.7 million for generator systems replacement appears reasonable given the scope and duration. Without specific details on the number and type of generators, a precise per-unit cost benchmark is difficult. However, the firm-fixed-price structure suggests that the contractor bears the risk of cost overruns, which can be favorable for the government. Further analysis would involve comparing this award to similar procurements for generator systems by other federal agencies.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, with seven bidders participating. This indicates a healthy level of competition for this requirement, suggesting that multiple vendors were capable of meeting the government's needs. A competitive bidding process generally leads to better price discovery and potentially more favorable terms for the government.

Taxpayer Impact: The full and open competition ensures that taxpayers benefit from a market-driven price, as multiple companies vied for the contract, driving down costs through competitive proposals.

Public Impact

The Department of State benefits from the replacement of essential generator systems, ensuring operational continuity for its facilities. This contract supports the maintenance and upgrade of critical infrastructure necessary for government functions. The geographic impact is primarily in Illinois (ST='IL', SN='ILLINOIS'), where the contractor is based, but the ultimate benefit is to the operational readiness of the State Department. Workforce implications may include employment opportunities within ARKEL INTERNATIONAL, L.L.C. and its supply chain, particularly in the motor and generator manufacturing sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the firm-fixed-price contract does not adequately account for all potential expenses.
Dependence on a single contractor for a critical infrastructure component could pose a risk if performance issues arise.
Ensuring the long-term reliability and maintenance support for the new generator systems will be crucial post-award.

Positive Signals

The firm-fixed-price contract shifts cost risk to the contractor, potentially leading to better budget predictability.
Full and open competition suggests a robust selection process and likely competitive pricing.
The award to ARKEL INTERNATIONAL, L.L.C. provides a clear vendor for this specific requirement, streamlining the acquisition process.

Sector Analysis

The contract falls within the Motor and Generator Manufacturing sector (NAICS 335312), a critical component of the broader electrical equipment manufacturing industry. This sector is vital for providing power generation and distribution solutions across various industries, including government operations. Comparable spending benchmarks would involve analyzing other federal procurements for similar generator systems, power generation equipment, and related maintenance services, which can range from hundreds of thousands to tens of millions of dollars depending on scale and complexity.

Small Business Impact

This contract was not awarded as a small business set-aside, nor does it appear to have specific subcontracting requirements for small businesses mandated within the award details provided. This means that opportunities for small businesses to participate in this contract are likely through direct subcontracting by the prime contractor, ARKEL INTERNATIONAL, L.L.C., if they choose to engage them. The impact on the small business ecosystem is therefore indirect and dependent on the prime contractor's subcontracting strategy.

Oversight & Accountability

Oversight for this contract will primarily reside with the Department of State's contracting officers and program managers. Accountability measures are embedded within the firm-fixed-price contract terms, which stipulate deliverables and performance standards. Transparency is facilitated through federal procurement databases where contract awards are published. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to this contract were suspected.

Related Government Programs

Federal Energy Management Program
Department of Defense Facilities Maintenance
General Services Administration (GSA) Schedules for Equipment

Risk Flags

Potential for performance issues impacting critical operations.
Risk of cost overruns if scope is not fully defined.
Dependency on contractor for essential infrastructure.

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $19.7 million to ARKEL INTERNATIONAL, L.L.C.. GENERATOR SYSTEMS REPLACEMENT

Who is the contractor on this award?

The obligated recipient is ARKEL INTERNATIONAL, L.L.C..

Which agency awarded this contract?

Awarding agency: Department of State (Department of State).

What is the total obligated amount?

The obligated amount is $19.7 million.

What is the period of performance?

Start: 2024-09-29. End: 2027-03-30.

What is the track record of ARKEL INTERNATIONAL, L.L.C. with the Department of State and other federal agencies?

A comprehensive review of ARKEL INTERNATIONAL, L.L.C.'s track record would involve examining their past performance on federal contracts, particularly those with the Department of State. This includes assessing their history of on-time delivery, quality of work, and adherence to contract terms. Data from contract databases like the Federal Procurement Data System (FPDS) or the Contractor Performance Assessment Reporting System (CPARS) would be crucial for identifying any past performance issues or commendations. Understanding their experience with similar generator system replacements or critical infrastructure projects would provide further insight into their capability to successfully execute this $19.7 million award.

How does the awarded price of $19.7 million compare to similar generator system replacement contracts?

Benchmarking the $19.7 million award requires comparing it to similar procurements for generator systems by federal agencies. Factors such as the number of units, their power capacity (kVA), expected lifespan, installation complexity, and warranty terms significantly influence pricing. Without these specifics, a direct comparison is challenging. However, a general market assessment for large-scale generator system replacements for critical facilities can range from several hundred thousand to millions of dollars per system. The total value of $19.7 million suggests a substantial project, potentially involving multiple units or complex integration, and its value-for-money should be assessed against the detailed scope of work and the number of competitive bids received.

What are the primary risks associated with this generator systems replacement contract?

Key risks for this contract include potential delays in delivery or installation, which could impact the operational continuity of the Department of State facilities. There's also a risk related to the long-term reliability and maintenance of the new generator systems; ensuring adequate support and spare parts availability post-installation is critical. Given it's a firm-fixed-price contract, the risk of cost overruns is primarily on the contractor, ARKEL INTERNATIONAL, L.L.C., but unforeseen site conditions or scope creep could still lead to change orders. Furthermore, the dependency on a single vendor for such critical equipment introduces a performance risk if the contractor fails to meet contractual obligations.

How effective is the firm-fixed-price contract type in ensuring value for the government in this scenario?

The firm-fixed-price (FFP) contract type is generally considered effective for ensuring value in procurements where the scope of work is well-defined, as is often the case with equipment replacement. For this $19.7 million generator systems replacement contract, FFP places the primary risk of cost overruns on the contractor, ARKEL INTERNATIONAL, L.L.C. This incentivizes the contractor to manage costs efficiently and deliver the project within the agreed-upon budget. The government benefits from budget certainty, as the price is fixed. However, the effectiveness relies on the initial price being fair and competitive, which is supported by the full and open competition with seven bidders. The government's primary role becomes ensuring the contractor meets the specified quality and delivery requirements.

What is the historical spending pattern for generator systems replacement by the Department of State?

Analyzing historical spending patterns for generator systems replacement by the Department of State would involve reviewing past contract awards for similar equipment and services. This would reveal trends in contract values, durations, and the types of contractors utilized. Understanding whether spending has been consistent, increasing, or decreasing, and whether it has primarily been through competitive or sole-source awards, provides context for the current $19.7 million contract. For instance, if historical spending shows a pattern of frequent, smaller awards, this larger, single award might indicate a consolidation of requirements or a shift in procurement strategy. It also helps in assessing if the current award represents a significant deviation from past investment levels in critical infrastructure.

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

Solicitation ID: 19AQMM24R0128

Offers Received: 7

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1055 CONVENTION ST, BATON ROUGE, LA, 70802

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $19,674,629

Exercised Options: $19,674,629

Current Obligation: $19,674,629

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline