DoD's $18.8M Air Purification Equipment Contract Awarded to Rockwell Automation, Inc

Contract Overview

Contract Amount: $18,859,364 ($18.9M)

Contractor: Rockwell Automation, Inc

Awarding Agency: Department of Defense

Start Date: 2002-04-02

End Date: 2014-07-24

Contract Duration: 4,496 days

Daily Burn Rate: $4.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Other

Place of Performance

Location: THOUSAND OAKS, VENTURA County, CALIFORNIA, 91360, UNITED STATES OF AMERICA

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $18.9 million to ROCKWELL AUTOMATION, INC for work described as: Key points: 1. The contract value of $18.8 million over its life cycle suggests a significant investment in air purification capabilities. 2. Awarded under full and open competition, this contract likely benefited from a competitive bidding process to ensure fair pricing. 3. The 'Cost Plus Incentive Fee' contract type indicates a focus on performance incentives, potentially driving efficiency and cost savings. 4. The duration of the contract (over 12 years) points to a long-term need for these air purification systems. 5. The specific North American Industry Classification System (NAICS) code 333411 for Air Purification Equipment Manufacturing highlights the specialized nature of the procurement. 6. The contract was managed by the Defense Contract Management Agency, suggesting robust oversight for this significant award.

Value Assessment

Rating: good

Benchmarking the value of this $18.8 million contract requires detailed analysis of the specific air purification equipment procured and its intended use. However, the duration of over 12 years suggests that the annual spending was relatively modest, averaging around $1.5 million per year. The 'Cost Plus Incentive Fee' structure implies that the government aimed to achieve value by incentivizing the contractor to meet performance targets while managing costs effectively. Without specific unit cost data or comparisons to similar large-scale air purification systems for military applications, a precise value-for-money assessment is challenging, but the competitive award process is a positive indicator.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit bids. The presence of two bids suggests a moderate level of competition for this specialized equipment. While two bidders are better than one, a higher number of bidders could potentially lead to more aggressive pricing and a wider range of technical solutions. The government's decision to proceed with this award implies that the received proposals met the evaluation criteria satisfactorily.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down prices and encourage innovation, leading to better value for public funds.

Public Impact

The primary beneficiaries of this contract are likely military personnel and facilities requiring enhanced air quality and purification, particularly in environments where air contaminants may be present. The services delivered include the manufacturing and potentially the maintenance or upgrade of air purification equipment, crucial for operational readiness and health. The geographic impact is likely concentrated within Department of Defense facilities, potentially domestic or overseas, depending on the deployment of the equipment. Workforce implications may include employment opportunities within Rockwell Automation, Inc. and its supply chain related to the manufacturing and support of air purification systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'Cost Plus Incentive Fee' contract type can sometimes lead to cost overruns if not managed meticulously, as the contractor is reimbursed for costs plus a fee that can increase with performance.
The long contract duration (over 12 years) might present challenges in adapting to rapidly evolving air purification technologies or changing military requirements.
Limited competition (two bidders) could mean less pressure on pricing compared to procurements with a larger number of offers.

Positive Signals

Awarded under full and open competition, suggesting a fair and transparent procurement process.
The use of an incentive fee structure encourages contractor performance and potentially cost efficiency.
The contract is managed by the Defense Contract Management Agency, indicating established oversight mechanisms.
The specific NAICS code suggests procurement of specialized, potentially high-quality equipment tailored to defense needs.

Sector Analysis

The procurement falls within the broader industrial equipment manufacturing sector, specifically focusing on air purification systems. This sector is critical for maintaining healthy and safe environments, with applications ranging from commercial buildings to specialized industrial and military settings. The market for air purification technology is driven by increasing awareness of air quality issues, regulatory standards, and the need for specialized solutions in various environments. This contract represents a significant, albeit niche, government investment within this sector, likely for specialized defense applications where standard commercial products may not suffice.

Small Business Impact

The provided data indicates that small business participation was not a specific set-aside for this contract (sb: false). There is no explicit information on subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem is not detailed, but it suggests that the primary contract was awarded to a large business, and any small business involvement would likely be through subcontracting opportunities that are not specified here.

Oversight & Accountability

The contract is managed by the Defense Contract Management Agency (DCMA), which is responsible for overseeing contract performance, ensuring compliance with terms and conditions, and verifying costs. The 'Cost Plus Incentive Fee' (CPIF) structure itself includes oversight mechanisms by tying the contractor's fee to performance metrics, encouraging adherence to quality and cost objectives. Transparency is generally maintained through contract reporting requirements, though specific public access to detailed performance data may be limited.

Related Government Programs

Defense Health Program
Military Construction
Base Realignment and Closure (BRAC) Facilities
Environmental Remediation Services

Risk Flags

Long contract duration may lead to technological obsolescence.
Potential for cost overruns inherent in CPIF contracts if not managed closely.
Limited competition (two bidders) could impact price discovery.
Lack of explicit small business subcontracting details.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.9 million to ROCKWELL AUTOMATION, INC. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is ROCKWELL AUTOMATION, INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $18.9 million.

What is the period of performance?

Start: 2002-04-02. End: 2014-07-24.

What is the historical spending trend for air purification equipment by the Department of Defense?

Analyzing historical spending trends for air purification equipment by the Department of Defense requires access to comprehensive procurement databases and specific categorization of expenditures. While this individual contract represents $18.8 million over its lifecycle, it is one component of a larger defense budget. DoD spending on environmental control and life support systems, which would include air purification, can fluctuate based on operational needs, new facility construction or upgrades, and technological advancements. Without specific historical data for this exact equipment category, it's difficult to establish a precise trend. However, sustained investment in such equipment is likely driven by the ongoing need to maintain healthy and safe operational environments for military personnel across various global locations and conditions.

How does the 'Cost Plus Incentive Fee' (CPIF) structure typically impact contractor performance and cost control for defense contracts?

The 'Cost Plus Incentive Fee' (CPIF) contract type is designed to encourage contractor efficiency and cost savings by linking a portion of the contractor's profit (the fee) to the achievement of specific performance targets, often related to cost, schedule, or technical performance. In this structure, the government reimburses the contractor for allowable costs incurred and pays a target fee. However, the final fee is adjusted based on whether the contractor meets or exceeds predetermined targets. If the contractor performs better than expected (e.g., comes in under budget or ahead of schedule), they receive a higher fee, up to a ceiling. Conversely, if performance falls short, the fee is reduced, potentially below the target. This incentivizes the contractor to actively manage costs and optimize performance to maximize their profit, while also providing the government with a mechanism to achieve better value than a simple cost-plus contract.

What are the potential risks associated with a long-duration contract like this one (over 12 years)?

Long-duration contracts, such as this over 12-year agreement for air purification equipment, present several potential risks. Firstly, technological obsolescence is a significant concern; the technology underpinning the air purification systems could advance rapidly, rendering the contracted equipment outdated or less effective before the contract expires. Secondly, changing operational requirements or strategic priorities within the Department of Defense might necessitate different types of equipment or capabilities, making the existing contract inflexible. Thirdly, economic volatility over such an extended period could impact the contractor's cost structure, potentially leading to requests for equitable adjustments or disputes if not adequately addressed in the contract's terms. Finally, maintaining consistent oversight and ensuring continued value for money over more than a decade requires sustained attention and resources from the contracting agency.

What does the NAICS code 333411 specifically encompass, and how does it relate to defense procurement?

The North American Industry Classification System (NAICS) code 333411 specifically covers establishments primarily engaged in manufacturing air purification equipment. This includes a wide range of products such as air filters, air conditioners, humidifiers, dehumidifiers, and other devices designed to control or improve air quality. For defense procurement, this NAICS code signifies that the Department of Defense is acquiring specialized equipment critical for maintaining environmental control and life support within military installations, vehicles, or operational theaters. Such equipment might be needed to ensure the health and safety of personnel in diverse environments, protect sensitive equipment from airborne contaminants, or meet specific operational requirements where air quality is paramount.

How does the Defense Contract Management Agency (DCMA) typically oversee contracts of this nature?

The Defense Contract Management Agency (DCMA) plays a crucial role in overseeing defense contracts to ensure they are performed in accordance with their terms and conditions. For a contract like this, involving the manufacturing of air purification equipment under a CPIF structure, DCMA's responsibilities would likely include monitoring the contractor's cost accounting system, verifying incurred costs, ensuring compliance with quality assurance standards, tracking progress against schedule, and assessing performance against the incentive targets. DCMA personnel would conduct site visits, review documentation, and communicate regularly with the contractor and the contracting officer to identify and resolve potential issues proactively. Their oversight aims to protect the government's investment and ensure the timely delivery of effective equipment.

Industry Classification

NAICS: Manufacturing › Ventilation, Heating, Air-Conditioning, and Commercial Refrigeration Equipment Manufacturing › Air Purification Equipment Manufacturing

Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 2

Pricing Type: COST PLUS INCENTIVE FEE (V)

Contractor Details

Address: 1049 CAMINO DOS RIOS, THOUSAND OAKS, CA, 91360

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline