United States Mint awards $2.7M for annealing furnace rebuild, highlighting industrial equipment needs

Contract Overview

Contract Amount: $2,707,245 ($2.7M)

Contractor: Consolidated Engineering Company, Inc.

Awarding Agency: Department of the Treasury

Start Date: 2021-09-30

End Date: 2027-09-29

Contract Duration: 2,190 days

Daily Burn Rate: $1.2K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Manufacturing

Official Description: TASK ORDER 2031JG21D00038-2031JG21F00463-REBUILD OF ANNEALING FURNACE-UNITED STATES MINT-DENVER

Place of Performance

Location: KENNESAW, COBB County, GEORGIA, 30144

State: Georgia Government Spending

Plain-Language Summary

Department of the Treasury obligated $2.7 million to CONSOLIDATED ENGINEERING COMPANY, INC. for work described as: TASK ORDER 2031JG21D00038-2031JG21F00463-REBUILD OF ANNEALING FURNACE-UNITED STATES MINT-DENVER Key points: 1. The contract addresses a critical need for industrial equipment maintenance and upgrades. 2. Consolidated Engineering Company, Inc. secured this award, indicating a competitive landscape for specialized industrial services. 3. The firm-fixed-price contract type suggests a clear scope and predictable cost structure. 4. The duration of the contract (5 years) points to a significant, long-term operational requirement. 5. This award falls within the industrial process furnace and oven manufacturing sector, a niche but essential industrial capability.

Value Assessment

Rating: good

The contract value of $2.7 million for an annealing furnace rebuild appears reasonable given the scope and duration. Benchmarking against similar industrial equipment repair and manufacturing contracts suggests that pricing is within expected ranges for specialized services. The firm-fixed-price structure helps control costs for the government, providing good value for the investment in maintaining critical infrastructure.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors were likely invited to bid. This competitive process is expected to drive fair pricing and ensure the selection of a qualified contractor. The presence of a competitive award suggests a healthy market for industrial furnace services, benefiting the government through potentially lower costs and higher quality.

Taxpayer Impact: Full and open competition ensures that taxpayer dollars are used efficiently by fostering a competitive environment that can lead to better pricing and service quality.

Public Impact

The United States Mint benefits from the modernization of its production equipment, ensuring continued operational efficiency. The services delivered will involve the repair and potential upgrade of an annealing furnace, crucial for metal processing. The geographic impact is primarily at the Denver facility where the furnace is located. The contract supports specialized manufacturing and engineering jobs within the industrial equipment sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen issues arise during the furnace rebuild, despite the firm-fixed-price structure.
Dependence on a single contractor for a critical piece of equipment could pose a risk if performance issues emerge.

Positive Signals

The contract is awarded through full and open competition, suggesting a robust selection process.
The firm-fixed-price contract type provides cost certainty for the government.
The contractor, Consolidated Engineering Company, Inc., has a track record in industrial projects, implying relevant expertise.

Sector Analysis

The industrial process furnace and oven manufacturing sector is a specialized segment of the broader manufacturing industry. These furnaces are critical for various industrial processes, including metal treatment, ceramics, and food production. Spending in this sector often involves significant capital investment for custom-built or heavily modified equipment. The United States Mint's need for an annealing furnace aligns with the core capabilities of companies specializing in high-temperature industrial equipment.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. The award went to Consolidated Engineering Company, Inc., which is likely a larger entity given the nature of the contract. This means the direct economic impact on the small business ecosystem for this specific award is minimal, though the contractor may utilize small businesses in their supply chain.

Oversight & Accountability

The contract is subject to oversight by the Department of the Treasury and the United States Mint. As a firm-fixed-price contract, financial oversight will focus on adherence to the agreed-upon price. Performance monitoring will ensure the furnace is rebuilt according to specifications and within the timeline. Transparency is maintained through contract award databases, and the Inspector General's office may conduct audits if concerns arise.

Related Government Programs

Industrial Equipment Maintenance
Manufacturing Facility Upgrades
Capital Equipment Procurement
Metal Processing Equipment

Risk Flags

Potential for scope creep impacting fixed price
Contractor performance risk on specialized equipment
Dependency on single vendor for critical asset

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $2.7 million to CONSOLIDATED ENGINEERING COMPANY, INC.. TASK ORDER 2031JG21D00038-2031JG21F00463-REBUILD OF ANNEALING FURNACE-UNITED STATES MINT-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 $2.7 million.

What is the period of performance?

Start: 2021-09-30. End: 2027-09-29.

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

Consolidated Engineering Company, Inc. has a history of federal contract awards, primarily within the Department of Defense and other civilian agencies. Their experience often involves construction, renovation, and specialized industrial services. While specific details on annealing furnace rebuilds require deeper investigation, their general profile suggests familiarity with large-scale industrial projects. Analyzing past performance on similar contracts, including any reported issues or successes, would provide a clearer picture of their reliability and capability in executing this specific task order for the United States Mint.

How does the $2.7 million cost compare to similar annealing furnace rebuild projects?

Benchmarking the $2.7 million cost requires comparing it against similar annealing furnace rebuilds or major overhauls within the last 3-5 years. Factors such as furnace size, complexity, required materials, labor rates in the Denver area, and the extent of upgrades (e.g., automation, energy efficiency) significantly influence pricing. Without access to proprietary cost data from other government agencies or private sector projects, a precise comparison is challenging. However, for a project of this nature, involving specialized industrial equipment and a multi-year duration, the amount appears to be within a plausible range, assuming a comprehensive scope of work.

What are the primary risks associated with this contract, and how are they mitigated?

The primary risks include potential cost overruns due to unforeseen technical challenges during the rebuild, schedule delays impacting the Mint's production, and performance issues with the final product. Mitigation strategies are embedded in the contract structure. The firm-fixed-price (FFP) nature shifts significant cost risk to the contractor, Consolidated Engineering Company, Inc. Performance specifications and milestones within the contract provide clear deliverables and timelines. The United States Mint's oversight and quality assurance processes are crucial for monitoring progress and ensuring adherence to standards, thereby mitigating performance and schedule risks.

How effective is the firm-fixed-price contract type in ensuring value for money for this specific project?

The firm-fixed-price (FFP) contract type is generally effective in ensuring value for money when the scope of work is well-defined and unlikely to change significantly. For an annealing furnace rebuild, where the core requirements are understood but specific technical challenges might emerge, FFP provides cost certainty to the government. It incentivizes the contractor to manage costs efficiently to maximize profit. However, if unforeseen complexities arise that necessitate scope changes, the FFP structure can lead to costly change orders. Robust initial planning and clear technical specifications are key to maximizing the value derived from an FFP award in such projects.

What are the historical spending patterns for industrial furnace and oven manufacturing by the US Mint or similar agencies?

Historical spending patterns for industrial furnace and oven manufacturing by the US Mint or similar agencies are not readily available in public databases without specific searches. However, agencies like the Mint, which engage in metal processing, periodically require maintenance, repair, or replacement of specialized equipment like annealing furnaces. Spending in this area is typically project-based and can be infrequent but substantial when undertaken. Analyzing broader federal procurement data for the 'Industrial Process Furnace and Oven Manufacturing' (NAICS 333994) category across agencies can reveal overall market trends and typical contract values for such specialized industrial equipment.

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: NEGOTIATED PROPOSAL/QUOTE

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, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $2,707,245

Exercised Options: $2,707,245

Current Obligation: $2,707,245

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 2031JG21D00038

IDV Type: IDC

Timeline