Treasury's Mint awards $4.39M for furnace replacement, with 120 days for delivery

Contract Overview

Contract Amount: $4,393,890 ($4.4M)

Contractor: Consolidated Engineering Company, Inc.

Awarding Agency: Department of the Treasury

Start Date: 2020-09-30

End Date: 2030-09-30

Contract Duration: 3,652 days

Daily Burn Rate: $1.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: TASK ORDER 2031JG20D00017-2031JG20F00400-REPLACEMENT OF CIRCULATING ANNEALING FURNACES AT PHILADELPHIA AND DENVER

Place of Performance

Location: KENNESAW, COBB County, GEORGIA, 30144

State: Georgia Government Spending

Plain-Language Summary

Department of the Treasury obligated $4.4 million to CONSOLIDATED ENGINEERING COMPANY, INC. for work described as: TASK ORDER 2031JG20D00017-2031JG20F00400-REPLACEMENT OF CIRCULATING ANNEALING FURNACES AT PHILADELPHIA AND DENVER Key points: 1. The contract's value appears reasonable given the scope of replacing industrial furnaces. 2. Full and open competition suggests a competitive bidding process was utilized. 3. The long performance period (10 years) may introduce risks related to technology obsolescence or changing needs. 4. This contract supports critical infrastructure for the U.S. Mint's production capabilities. 5. The industrial process furnace and oven manufacturing sector is specialized and requires specific expertise. 6. The fixed-price contract type shifts cost overrun risk to the contractor.

Value Assessment

Rating: good

The contract value of $4.39 million for replacing circulating annealing furnaces at two Mint facilities appears to be within a reasonable range for specialized industrial equipment. Benchmarking against similar large-scale industrial equipment procurements would provide a more precise value-for-money assessment. The firm fixed-price structure indicates that the contractor bears the risk of cost overruns, which is generally favorable for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. The presence of 12 bids suggests a healthy level of competition for this specialized requirement. A higher number of bidders generally leads to more competitive pricing and a wider selection of qualified contractors, benefiting the government.

Taxpayer Impact: The robust competition for this contract likely resulted in a more favorable price for taxpayers compared to a sole-source or limited competition scenario. It ensures that the U.S. Mint received the best possible value through a market-driven process.

Public Impact

The primary beneficiaries are the United States Mint facilities in Philadelphia and Denver, which will receive upgraded, more efficient annealing furnaces. The contract delivers essential industrial equipment necessary for the production of coinage and medals. The geographic impact is limited to the specific Mint facilities in Philadelphia and Denver. The contract may have implications for specialized manufacturing and maintenance workforces within the industrial furnace sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (10 years) could lead to technology obsolescence or increased maintenance costs over time.
Reliance on a single contractor for a critical infrastructure replacement over an extended period could pose supply chain risks.
Potential for scope creep or change orders over the decade-long performance period, impacting the final cost.

Positive Signals

Firm fixed-price contract type protects the government from cost overruns.
Full and open competition with 12 bidders suggests a competitive market and likely fair pricing.
The contractor, Consolidated Engineering Company, Inc., has experience in industrial process furnace manufacturing.

Sector Analysis

This contract falls within the industrial process furnace and oven manufacturing sector, a niche but critical part of the manufacturing industry. This sector supplies essential equipment for various industrial processes, including metal treatment. Spending in this area is often project-specific and tied to infrastructure upgrades or new production line installations. Comparable spending benchmarks would typically be found within large capital equipment procurements for manufacturing facilities.

Small Business Impact

The contract was awarded under full and open competition and does not indicate any specific small business set-aside. While the primary awardee is Consolidated Engineering Company, Inc., there is no explicit information on subcontracting plans for small businesses. The impact on the small business ecosystem is likely indirect, depending on whether the prime contractor utilizes small businesses for any part of the manufacturing or installation process.

Oversight & Accountability

The contract is a firm fixed-price delivery order, which inherently includes defined deliverables and pricing. Oversight would typically be managed by the U.S. Mint contracting officers and program managers responsible for the facilities. Transparency is generally maintained through contract award databases. Specific Inspector General jurisdiction would depend on the nature of any potential fraud, waste, or abuse identified during the contract performance period.

Related Government Programs

Industrial Equipment Procurement
Manufacturing Infrastructure
Capital Equipment for Government Facilities
U.S. Mint Operations Support

Risk Flags

Long contract duration
Potential for technological obsolescence
Reliance on specialized manufacturing sector

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $4.4 million to CONSOLIDATED ENGINEERING COMPANY, INC.. TASK ORDER 2031JG20D00017-2031JG20F00400-REPLACEMENT OF CIRCULATING ANNEALING FURNACES AT PHILADELPHIA AND DENVER

Who is the contractor on this award?

The obligated recipient is CONSOLIDATED ENGINEERING COMPANY, INC..

Which agency awarded this contract?

Awarding agency: Department of the Treasury (United States Mint).

What is the total obligated amount?

The obligated amount is $4.4 million.

What is the period of performance?

Start: 2020-09-30. End: 2030-09-30.

What is the track record of Consolidated Engineering Company, Inc. with federal contracts, particularly for similar industrial equipment?

Consolidated Engineering Company, Inc. has a history of federal contracting, primarily within the industrial equipment and construction sectors. While specific details on past performance for circulating annealing furnaces are not provided in this summary, their experience in industrial process furnace and oven manufacturing suggests a relevant capability. A deeper dive into their contract history, including past performance evaluations and any disputes or terminations, would be necessary for a comprehensive assessment of their reliability and expertise for this specific task order. Reviewing their prior work with agencies like the Department of Defense or other manufacturing-focused entities could offer further insights into their capacity to deliver complex industrial solutions.

How does the awarded price of $4.39 million compare to market rates for similar furnace replacement projects?

The awarded price of $4.39 million for the replacement of circulating annealing furnaces is difficult to benchmark precisely without detailed specifications of the furnaces and the scope of work (e.g., installation, commissioning, training). However, given that this is a specialized industrial process requiring significant engineering and manufacturing, the cost appears plausible for a project of this nature. To conduct a thorough value-for-money assessment, one would compare this price against quotes received from other vendors during the competitive bidding process (if available), historical data for similar procurements by the U.S. Mint or other federal agencies, and industry cost guides for large industrial equipment. The firm fixed-price nature suggests the government has secured a ceiling price, but the actual value depends on the contractor's efficiency.

What are the primary risks associated with the 10-year performance period for this contract?

The 10-year performance period for the circulating annealing furnaces presents several potential risks. Firstly, technological advancements in furnace design and efficiency could render the newly installed equipment outdated before the end of its service life, leading to suboptimal operational performance or higher energy consumption compared to newer technologies. Secondly, the extended duration increases the likelihood of component wear and the need for specialized maintenance, potentially leading to unforeseen repair costs or downtime if not adequately planned for. Thirdly, changes in the U.S. Mint's production requirements or operational strategies over a decade could necessitate modifications or upgrades to the furnaces, potentially leading to change orders and increased costs. Finally, contractor performance stability over such a long period can be a concern, although the firm fixed-price nature mitigates some financial risks.

What is the expected impact of these new furnaces on the U.S. Mint's operational efficiency and production capacity?

The replacement of aging circulating annealing furnaces with new units is expected to significantly enhance the U.S. Mint's operational efficiency and production capacity. Modern annealing furnaces typically offer improved temperature control, faster heating and cooling cycles, and greater energy efficiency compared to older models. This translates to more consistent product quality, reduced energy consumption, and potentially higher throughput. By ensuring the reliability and performance of this critical equipment, the Mint can minimize production disruptions and maintain its capacity to meet national demand for coinage and medals. The specific gains in efficiency and capacity would depend on the technological specifications of the new furnaces chosen.

How does this contract fit into the broader context of U.S. Mint infrastructure modernization efforts?

This contract for replacing circulating annealing furnaces is a component of the U.S. Mint's ongoing efforts to modernize its production infrastructure. Maintaining state-of-the-art equipment is crucial for ensuring the quality, security, and efficiency of coinage and medal production. Aging machinery can lead to increased maintenance costs, production delays, and potential quality issues. By investing in new, advanced furnaces, the Mint demonstrates a commitment to upgrading its capital assets, aligning its operational capabilities with current industry standards, and ensuring long-term production viability. Such modernization projects are essential for agencies reliant on physical manufacturing processes to remain competitive and effective.

Given the 12 bids received, what does this suggest about the market for industrial process furnace manufacturing?

The receipt of 12 bids for this contract indicates a reasonably competitive market for industrial process furnace manufacturing, at least for the specific requirements of the U.S. Mint. This suggests that there are multiple qualified companies capable of producing and potentially installing such specialized equipment. A healthy number of bidders generally benefits the procuring agency by fostering price competition, encouraging innovation, and providing a wider pool of expertise to choose from. It implies that the market is not overly concentrated and that smaller or mid-sized specialized manufacturers can compete alongside larger players for significant government contracts.

Industry Classification

NAICS: Manufacturing › Other General Purpose Machinery Manufacturing › Industrial Process Furnace and Oven Manufacturing

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1971 MCCOLLUM PKWY, KENNESAW, GA, 30144

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $4,393,890

Exercised Options: $4,393,890

Current Obligation: $4,393,890

Actual Outlays: $4,393,889

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 2031JG20D00017

IDV Type: IDC

Timeline