Transportation awards $4.3M contract for motor and generator manufacturing to Discovery Energy, LLC

Contract Overview

Contract Amount: $4,365,645 ($4.4M)

Contractor: Discovery Energy, LLC

Awarding Agency: Department of Transportation

Start Date: 2022-08-18

End Date: 2027-09-30

Contract Duration: 1,869 days

Daily Burn Rate: $2.3K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: CLOSELY ASSOCIATED TO INHERENTLY GOVERNMENTAL FUNCTIONS

Place of Performance

Location: FARMINGTON, DAKOTA County, MINNESOTA, 55024

State: Minnesota Government Spending

Plain-Language Summary

Department of Transportation obligated $4.4 million to DISCOVERY ENERGY, LLC for work described as: CLOSELY ASSOCIATED TO INHERENTLY GOVERNMENTAL FUNCTIONS Key points: 1. Contract value of $4.3 million over approximately 5 years suggests a moderate investment in specialized manufacturing. 2. The award to Discovery Energy, LLC indicates a specific market focus within motor and generator production. 3. Fixed-price contract type may offer cost certainty but could limit flexibility for unforeseen issues. 4. The contract duration of nearly 5 years allows for sustained production and potential for long-term supplier relationships. 5. The absence of small business set-asides or subcontracting requirements warrants further investigation into broader economic impact.

Value Assessment

Rating: fair

The contract value of $4.3 million for motor and generator manufacturing appears to be within a reasonable range for specialized industrial equipment over a multi-year period. Benchmarking against similar contracts for motor and generator production would provide a clearer picture of value for money. Without specific details on the scope of work and unit quantities, a precise per-unit cost comparison is difficult. However, the fixed-price nature suggests an expectation of predictable costs from the contractor.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. This process is generally expected to yield competitive pricing and a wider selection of qualified suppliers. The specific number of bidders is not provided, which limits the assessment of the intensity of competition. However, the fact that it was fully competed is a positive indicator for price discovery and taxpayer value.

Taxpayer Impact: Full and open competition generally leads to better price discovery, meaning taxpayers are more likely to benefit from competitive pricing and efficient allocation of resources.

Public Impact

The Federal Aviation Administration (FAA) benefits from the acquisition of essential motor and generator components. This contract supports the manufacturing sector, specifically within the domain of motor and generator production. The contract's impact is primarily within Minnesota, where the contractor is located, potentially supporting local jobs and the regional economy. The services delivered are critical for the operational readiness and maintenance of FAA equipment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of transparency on the number of bidders limits the assessment of competitive intensity.
Absence of small business subcontracting requirements may limit broader economic participation.
Fixed-price contract could pose risks if scope changes or unforeseen technical challenges arise.

Positive Signals

Awarded through full and open competition, indicating a robust bidding process.
Contract duration of nearly 5 years suggests a stable and predictable demand for the products.
Fixed-price contract provides cost certainty for the government.

Sector Analysis

The motor and generator manufacturing sector is a critical component of the broader industrial and defense supply chains. This contract falls within the North American Industry Classification System (NAICS) code 335312, which covers establishments primarily engaged in manufacturing motors, generators, and transformers. The market for these components is driven by demand from various sectors, including transportation, energy, and defense. Spending in this area is often characterized by long production cycles and the need for specialized technical expertise. Comparable spending benchmarks would typically be assessed based on the specific type and volume of motors and generators required.

Small Business Impact

This contract does not appear to have a small business set-aside, nor is there information indicating specific subcontracting goals for small businesses. This suggests that the primary focus was on securing the required goods through the most competitive means available, rather than prioritizing small business participation. The impact on the small business ecosystem is therefore likely minimal unless Discovery Energy, LLC voluntarily engages small businesses in its supply chain.

Oversight & Accountability

Oversight for this contract would primarily reside with the Federal Aviation Administration (FAA), a component of the Department of Transportation. The contract's fixed-price nature implies that financial oversight will focus on ensuring the contractor meets the defined scope and quality standards within the agreed-upon price. Accountability measures are inherent in the contract terms, with potential remedies for non-performance. Transparency is facilitated by the contract's award under full and open competition, with public contract databases providing basic award information. Specific Inspector General jurisdiction would depend on the broader FAA oversight framework.

Related Government Programs

Federal Aviation Administration Procurement
Department of Transportation Contracts
Motor and Generator Manufacturing Services
Industrial Equipment Procurement

Risk Flags

Potential for cost overruns if fixed price does not account for material/labor fluctuations.
Limited visibility into specific technical requirements and performance metrics.
Lack of small business subcontracting requirements may limit broader economic impact.

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $4.4 million to DISCOVERY ENERGY, LLC. CLOSELY ASSOCIATED TO INHERENTLY GOVERNMENTAL FUNCTIONS

Who is the contractor on this award?

The obligated recipient is DISCOVERY ENERGY, LLC.

Which agency awarded this contract?

Awarding agency: Department of Transportation (Federal Aviation Administration).

What is the total obligated amount?

The obligated amount is $4.4 million.

What is the period of performance?

Start: 2022-08-18. End: 2027-09-30.

What is the specific type and quantity of motors and generators being procured under this contract, and how do these specifications align with typical FAA operational needs?

The provided data indicates the contract is for 'Motor and Generator Manufacturing' under NAICS code 335312. However, the specific types, technical specifications, and quantities of motors and generators are not detailed in the summary. To assess alignment with FAA operational needs, a review of the contract's Statement of Work (SOW) or Performance Work Statement (PWS) would be necessary. This would clarify whether the procured items are for new installations, replacements, or upgrades of existing systems within air traffic control, airport infrastructure, or other FAA operational domains. Understanding the technical requirements (e.g., power output, efficiency ratings, environmental resilience) is crucial for evaluating the suitability and necessity of this procurement.

How does the unit cost, if derivable, compare to industry benchmarks for similar motor and generator manufacturing contracts awarded by government agencies?

Deriving a precise unit cost is challenging without knowing the exact quantities and specifications of the motors and generators. The total contract value is $4.3 million over approximately 1869 days (roughly 5 years). If we assume a consistent delivery schedule, the average annual value is around $860,000. However, this does not translate directly to unit cost. To compare with industry benchmarks, one would need to identify comparable government contracts for similar equipment (e.g., generators for radar systems, motors for airport lighting) and analyze their unit prices. Publicly available contract databases (like FPDS or SAM.gov) could be queried for similar procurements, looking at the price per unit or price per kilowatt/horsepower, adjusted for inflation and contract duration. Without this granular data, a definitive benchmark comparison is not possible from the provided summary.

What is the track record of Discovery Energy, LLC in fulfilling government contracts, particularly those involving motor and generator manufacturing?

Information on Discovery Energy, LLC's specific track record with government contracts, especially in motor and generator manufacturing, is not provided in the summary. A thorough assessment would require examining their past performance on similar federal contracts. This includes reviewing contract completion history, any instances of contract modifications, performance ratings, and any past disputes or terminations. Databases such as the Federal Procurement Data System (FPDS) or the Contractor Performance Assessment Reporting System (CPARS) would be essential resources to evaluate their reliability, quality of work, and adherence to schedules and budgets on previous government engagements. Without this data, their suitability and past performance remain unknown.

What are the potential risks associated with a fixed-price contract for motor and generator manufacturing, given the duration and complexity of such products?

A fixed-price contract for motor and generator manufacturing, especially over a nearly five-year period, carries inherent risks. The primary risk is that the contractor may incur costs exceeding the agreed-upon price due to unforeseen technical challenges, material cost escalations, or changes in scope. If the contractor underestimates the complexity or cost of production, they might face financial losses, potentially impacting quality or delivery. Conversely, if the initial price was set too high, taxpayers may overpay. The long duration increases the likelihood of market fluctuations in raw material prices or labor costs, which are typically borne by the contractor under a fixed-price agreement. Robust contract management and clear specifications are crucial to mitigate these risks.

How does the $4.3 million spending on motor and generator manufacturing by the FAA compare to historical spending patterns for similar equipment or services?

To compare this $4.3 million contract to historical spending patterns, one would need to analyze the FAA's (or broader DOT's) procurement history for motors and generators over previous fiscal years. This analysis should identify trends in contract values, types of equipment procured, and the number of contracts awarded annually. For instance, has the FAA historically awarded similar-sized contracts for this type of equipment? Is $4.3 million a typical annual spend, or does it represent a significant increase or decrease? Examining data from FPDS for relevant NAICS codes (like 335312) and Product Service Codes (PSCs) related to motors and generators would reveal whether this award is an outlier or part of a consistent procurement strategy. Without historical data, it's difficult to contextualize this specific award.

Industry Classification

NAICS: Manufacturing › Electrical Equipment Manufacturing › Motor and Generator Manufacturing

Product/Service Code: INSTRUMENTS AND LABORATORY EQPT

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: 200 TWIN OAKS RD, KOHLER, WI, 53044

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: $4,365,645

Exercised Options: $4,365,645

Current Obligation: $4,365,645

Actual Outlays: $1,475,078

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: DTFAWA12D00020

IDV Type: IDC

Timeline