DOT Awards $3.9M for Heavy-Duty Chain-Tiedown Railcar Design and Production to Ognagnus LLC

Contract Overview

Contract Amount: $3,891,696 ($3.9M)

Contractor: Ognagnus LLC

Awarding Agency: Department of Transportation

Start Date: 2024-03-07

End Date: 2026-03-06

Contract Duration: 729 days

Daily Burn Rate: $5.3K/day

Competition Type: COMPETED UNDER SAP

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Transportation

Official Description: DESIGN, ENGINEERING, ASSEMBLY DRAWING PACKAGES, AND INITIAL PRODUCTION OF HEAVY-DUTY CHAIN-TIEDOWN RAILCAR(S).

Place of Performance

Location: CAMBRIDGE, MIDDLESEX County, MASSACHUSETTS, 02142

State: Massachusetts Government Spending

Plain-Language Summary

Department of Transportation obligated $3.9 million to OGNAGNUS LLC for work described as: DESIGN, ENGINEERING, ASSEMBLY DRAWING PACKAGES, AND INITIAL PRODUCTION OF HEAVY-DUTY CHAIN-TIEDOWN RAILCAR(S). Key points: 1. The contract focuses on design, engineering, and initial production of specialized railcars. 2. Competition was conducted under Simplified Acquisition Procedures (SAP), suggesting a focus on smaller value procurements. 3. The award is a Firm Fixed Price (FFP) contract, providing cost certainty for the government. 4. The sector is Railroad Rolling Stock Manufacturing, a niche but critical area for transportation infrastructure.

Value Assessment

Rating: good

The $3.9M award for design and initial production appears reasonable for specialized railcar manufacturing. Benchmarking against similar, smaller-scale railcar development contracts would provide further validation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was competed under SAP, which typically involves simplified procedures and may limit the scope of competition compared to full and open solicitations. This method can expedite the process but might not always yield the lowest price.

Taxpayer Impact: The use of SAP suggests an effort to streamline procurement for this moderate value, potentially balancing speed with cost-effectiveness for taxpayers.

Public Impact

Enhances specialized railcar capabilities for the Department of Transportation. Supports domestic manufacturing within the railroad rolling stock sector. Ensures availability of critical infrastructure components for transportation needs. The fixed-price nature protects taxpayers from cost overruns during the design and initial production phases.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition under SAP may not have explored all potential cost savings.
Reliance on a single vendor for design and initial production could pose future supply chain risks.
The specific utility and long-term demand for these heavy-duty chain-tiedown railcars warrant ongoing assessment.

Positive Signals

Firm Fixed Price contract provides budget certainty.
Award supports a specific manufacturing capability within the transportation sector.
Clear delivery timeline established for design and initial production.

Sector Analysis

The Railroad Rolling Stock Manufacturing sector involves specialized engineering and production for rail vehicles. Spending in this area is often project-specific, driven by infrastructure upgrades or specialized transport needs, and can involve significant capital investment.

Small Business Impact

The contract was awarded to OGNAGNUS LLC. Further analysis is needed to determine if this entity qualifies as a small business and if subcontracting opportunities for small businesses were incorporated into the award.

Oversight & Accountability

The Department of Transportation's Immediate Office of the Secretary is overseeing this award. Standard procurement oversight processes should apply, focusing on adherence to contract terms, delivery schedules, and quality standards.

Related Government Programs

Railroad Rolling Stock Manufacturing
Department of Transportation Contracting
Immediate Office of the Secretary of Transportation Programs

Risk Flags

Potential for higher costs due to limited competition.
Dependency on a single supplier for specialized design and initial production.
Need for clear performance metrics to ensure quality and timely delivery.
Uncertainty regarding long-term demand and utilization of the railcars.

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $3.9 million to OGNAGNUS LLC. DESIGN, ENGINEERING, ASSEMBLY DRAWING PACKAGES, AND INITIAL PRODUCTION OF HEAVY-DUTY CHAIN-TIEDOWN RAILCAR(S).

Who is the contractor on this award?

The obligated recipient is OGNAGNUS LLC.

Which agency awarded this contract?

Awarding agency: Department of Transportation (Immediate Office of the Secretary of Transportation).

What is the total obligated amount?

The obligated amount is $3.9 million.

What is the period of performance?

Start: 2024-03-07. End: 2026-03-06.

What is the long-term strategic value of these heavy-duty chain-tiedown railcars beyond the initial production phase?

The long-term strategic value hinges on the Department of Transportation's evolving needs for specialized cargo transport. If these railcars address a persistent or growing requirement for securing heavy-duty items, their value is high. Conversely, if they are for a niche, short-term project, their strategic importance diminishes. Understanding the intended use cases and potential for future orders or modifications is key to assessing their lasting impact on national transportation infrastructure and logistics capabilities.

What are the potential risks associated with the limited competition under SAP for this specialized manufacturing contract?

Limited competition under Simplified Acquisition Procedures (SAP) carries risks of potentially higher prices due to reduced market pressure and a narrower pool of bidders. There's also a risk that innovative solutions or more cost-effective approaches from non-participating firms are missed. Furthermore, over-reliance on SAP for specialized items could inadvertently create dependencies on specific vendors, potentially impacting future sourcing flexibility and long-term cost management for the government.

How effectively will the firm fixed price contract ensure value for money given the design and initial production scope?

The firm fixed price (FFP) contract is designed to ensure value for money by transferring cost overrun risk to the contractor, Ognagnus LLC. This provides budget certainty for the Department of Transportation. However, the true value realization depends on the contractor's ability to manage design and production costs efficiently within the agreed price. If the initial scope is well-defined and the contractor possesses the necessary expertise, FFP is effective. If unforeseen complexities arise, the government might forgo potential savings from shared risk mitigation.

Industry Classification

NAICS: Manufacturing › Railroad Rolling Stock Manufacturing › Railroad Rolling Stock Manufacturing

Product/Service Code: RAILWAY EQUIPMENT

Competition & Pricing

Extent Competed: COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Solicitation ID: 6913G623Q300061

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 615 SOUTH SAGINAW ST, FLINT, MI, 48502

Business Categories: Black American Owned Business, Category Business, Limited Liability Corporation, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Sole Proprietorship, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $5,023,696

Exercised Options: $3,891,696

Current Obligation: $3,891,696

Actual Outlays: $706,200

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline