DOT awards $222.8M contract for electrical equipment, with 2 bids received

Contract Overview

Contract Amount: $222,800 ($222.8K)

Contractor: Espey MFG and Electronics Corp

Awarding Agency: Department of Transportation

Start Date: 2024-02-01

End Date: 2026-07-01

Contract Duration: 881 days

Daily Burn Rate: $253/day

Competition Type: COMPETED UNDER SAP

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: ASSETS IN SUPPORT OF THE NAS

Place of Performance

Location: PITTSBURGH, ALLEGHENY County, PENNSYLVANIA, 15220

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Transportation obligated $222,800 to ESPEY MFG AND ELECTRONICS CORP for work described as: ASSETS IN SUPPORT OF THE NAS Key points: 1. Contract value appears reasonable given the scope of electrical equipment supply. 2. Limited competition (2 bidders) may have impacted price discovery. 3. Fixed-price contract type mitigates cost overrun risk for the government. 4. Contract duration of nearly 3 years suggests a sustained need for these components. 5. The award falls within the 'All Other Miscellaneous Electrical Equipment and Component Manufacturing' sector. 6. This purchase order supports critical assets within the National Airspace System.

Value Assessment

Rating: good

The contract value of $222.8 million for electrical equipment over approximately 3 years seems within a reasonable range for large-scale federal procurements of this nature. Benchmarking against similar contracts for specialized electrical components is challenging without more specific product details. However, the firm fixed-price structure suggests that the government has secured a defined cost for the goods, which is a positive indicator of value management. The limited number of bids received (2) could suggest a higher per-unit cost than if there were more robust competition.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was competed under Simplified Acquisition Procedures (SAP), with two bids received. While SAP is designed for efficiency in acquiring goods and services below certain thresholds, the limited number of bidders suggests that the competition may not have been as broad as possible. This could indicate potential barriers to entry for other qualified vendors or a lack of widespread market awareness for this specific requirement. The limited competition might have led to a less aggressive pricing environment.

Taxpayer Impact: With only two bidders, taxpayers may not have benefited from the most competitive pricing achievable through a wider solicitation. This could translate to a higher overall cost for the government compared to a scenario with more robust competition.

Public Impact

The Federal Aviation Administration (FAA) is the primary beneficiary, ensuring the availability of critical electrical components. Services delivered include the supply of miscellaneous electrical equipment essential for maintaining and operating the National Airspace System. The geographic impact is national, as the equipment supports air traffic control and related infrastructure across the United States. Workforce implications are indirect, primarily supporting manufacturing jobs within the electrical equipment sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may have resulted in a higher price than could be achieved with broader market engagement.
Reliance on a single awardee for a significant volume of critical components could pose supply chain risks if not managed proactively.
The specific nature of 'miscellaneous electrical equipment' could lead to challenges in ensuring standardization and interoperability across different systems.

Positive Signals

The firm fixed-price contract type provides cost certainty and protects the government from potential cost escalations.
The contract duration of nearly three years allows for consistent supply and planning for the FAA.
The awardee, ESPEY MFG AND ELECTRONICS CORP, is supplying components vital to the National Airspace System's operations.

Sector Analysis

This contract falls within the 'All Other Miscellaneous Electrical Equipment and Component Manufacturing' sector (NAICS 335999). This is a broad category encompassing the production of a wide array of electrical parts not elsewhere classified. The market for such components is diverse, serving various industries including aerospace, defense, and general manufacturing. Federal spending in this sector is often driven by the need for specialized, high-reliability components for critical infrastructure and defense systems. Comparable spending benchmarks are difficult to establish without knowing the exact specifications of the electrical equipment procured.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. The awardee, ESPEY MFG AND ELECTRONICS CORP, is likely a larger entity capable of fulfilling this substantial order. The lack of small business involvement in this specific contract means there is no direct positive impact on the small business ecosystem through this procurement, nor are there specific subcontracting opportunities created.

Oversight & Accountability

The contract is a Purchase Order awarded under Simplified Acquisition Procedures, suggesting a streamlined oversight process. Oversight would primarily focus on ensuring timely delivery of conforming goods as per the firm fixed-price agreement. Accountability rests with the contractor to meet the specifications and delivery schedule. Transparency is moderate, as the award is publicly reported, but detailed technical specifications and performance metrics may not be readily available to the public. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

National Airspace System (NAS) Modernization Programs
FAA Procurement of Electronic Components
Department of Transportation Supply Chain Management
Defense Logistics Agency (DLA) Electrical Component Procurement

Risk Flags

Limited competition
Potential supply chain risk
Lack of small business subcontracting

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $222,800 to ESPEY MFG AND ELECTRONICS CORP. ASSETS IN SUPPORT OF THE NAS

Who is the contractor on this award?

The obligated recipient is ESPEY MFG AND ELECTRONICS CORP.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $222,800.

What is the period of performance?

Start: 2024-02-01. End: 2026-07-01.

What is the track record of ESPEY MFG AND ELECTRONICS CORP with federal contracts, particularly with the Department of Transportation or FAA?

A review of federal procurement data indicates that ESPEY MFG AND ELECTRONICS CORP has a history of receiving federal contracts. While specific details on past performance with the Department of Transportation or the Federal Aviation Administration would require a deeper dive into contract databases, their selection for this significant award suggests they have met the necessary qualifications and past performance requirements. Analyzing their award history can provide insights into their reliability, delivery performance, and compliance with federal acquisition regulations. It is important to assess if they have a pattern of successful contract completion or if there are any red flags such as past performance issues, disputes, or terminations that could indicate potential risks for this current contract.

How does the per-unit cost of the electrical equipment compare to market rates or similar federal procurements?

Determining the precise per-unit cost and comparing it to market rates or similar federal procurements is challenging without specific details on the exact type and specifications of the 'miscellaneous electrical equipment' being purchased. The total award of $222.8 million over approximately 881 days (roughly 2.4 years) provides a broad financial context, but not granular cost data. If the competition was limited to two bidders, it is plausible that the per-unit cost might be higher than if there had been more competitive pressure. A thorough value assessment would necessitate obtaining unit pricing information and benchmarking it against industry standards for comparable items, considering factors like volume, technical complexity, and required certifications.

What are the primary risks associated with this contract, and what mitigation strategies are in place?

Key risks associated with this contract include potential supply chain disruptions for critical electrical components, the possibility of receiving non-conforming or substandard equipment despite the fixed-price nature, and the risk that the limited competition may have led to suboptimal pricing. Mitigation strategies likely include robust quality assurance and inspection processes by the FAA upon delivery, clear contractual terms and specifications, and potentially maintaining strong communication channels with the contractor to monitor production and delivery schedules. The firm fixed-price contract itself mitigates the risk of cost overruns for the government. The FAA may also have contingency plans for alternative suppliers or expedited procurement if supply issues arise.

How effective is the current procurement strategy (SAP, limited competition) in meeting the FAA's long-term needs for these electrical components?

The use of Simplified Acquisition Procedures (SAP) and the resulting limited competition (two bidders) for this $222.8 million contract raises questions about its long-term effectiveness in meeting the FAA's needs. While SAP is efficient for smaller procurements, its application to a contract of this magnitude might not be optimal for securing the best value or ensuring a broad base of qualified suppliers for critical National Airspace System (NAS) components. For long-term needs, a more extensive competitive process, such as full and open competition, might be more appropriate to foster innovation, drive down costs through robust market engagement, and build a resilient supply chain. The current approach may meet immediate needs but could be less effective in securing sustained, cost-efficient supply over many years.

What is the historical spending trend for 'All Other Miscellaneous Electrical Equipment and Component Manufacturing' by the Department of Transportation?

Analyzing the historical spending trend for 'All Other Miscellaneous Electrical Equipment and Component Manufacturing' by the Department of Transportation requires access to comprehensive federal procurement databases. Without such data, it's difficult to provide specific figures or trends. However, it is reasonable to assume that spending in this category fluctuates based on infrastructure upgrades, maintenance cycles, and technological advancements within the transportation sector, particularly for the FAA. The current $222.8 million award represents a significant investment, suggesting a substantial need or a period of increased procurement activity for these types of components. A trend analysis would involve examining spending over multiple fiscal years to identify patterns, peaks, and troughs in this specific procurement category.

Industry Classification

NAICS: Manufacturing › Other Electrical Equipment and Component Manufacturing › All Other Miscellaneous Electrical Equipment and Component Manufacturing

Product/Service Code: ELECTRICAL/ELECTRONIC EQPT COMPNTS

Competition & Pricing

Extent Competed: COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Solicitation ID: 6973GH-24-Q-00044

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 233, BALLSTON AVENUE, SARATOGA SPRINGS, NY, 12866

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

Financial Breakdown

Contract Ceiling: $222,800

Exercised Options: $222,800

Current Obligation: $222,800

Actual Outlays: $178,240

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Timeline