DoD's $231.8M Engineering Services Contract Awarded to Bechtel Plant Machinery, Inc. in 2003

Contract Overview

Contract Amount: $231,827,824 ($231.8M)

Contractor: Bechtel Plant Machinery, Inc.

Awarding Agency: Department of Defense

Start Date: 2003-10-15

End Date: 2018-09-30

Contract Duration: 5,464 days

Daily Burn Rate: $42.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Place of Performance

Location: SCHENECTADY, SCHENECTADY County, NEW YORK, 12305, UNITED STATES OF AMERICA

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $231.8 million to BECHTEL PLANT MACHINERY, INC. for work described as: Key points: 1. Contract awarded on a cost-plus-fixed-fee basis, which can incentivize cost overruns. 2. The contract was not competed, raising questions about potential price efficiencies. 3. Long duration of over 14 years suggests a sustained need for these engineering services. 4. The contract's value of over $231 million indicates a significant investment in engineering support. 5. The specific engineering services provided are not detailed, making performance assessment difficult. 6. The lack of competition may limit opportunities for innovative solutions from other firms.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the lack of specific service details and competitive bidding. Awarded in 2003 and ending in 2018, the $231.8 million total obligation represents a substantial investment. Without comparable sole-source contracts or detailed performance metrics, it's difficult to definitively assess if the government received excellent value for money. The cost-plus-fixed-fee structure, while common for complex projects, can sometimes lead to higher costs than fixed-price contracts if not managed tightly.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not open to competition from other qualified vendors. This approach is typically used when only one vendor possesses the necessary capabilities, or in urgent situations. The lack of competition means that the government did not benefit from the price discovery mechanisms inherent in a competitive bidding process, potentially leading to higher costs than if multiple bids were solicited.

Taxpayer Impact: Taxpayers may have paid a premium for these services due to the absence of competitive pressure to offer the lowest possible price.

Public Impact

The Department of the Navy benefits from specialized engineering services essential for its operations. The contract supports critical infrastructure or systems requiring long-term engineering expertise. The geographic impact is likely concentrated around naval facilities where Bechtel Plant Machinery, Inc. provides its services. The contract may have implications for the specialized engineering workforce, potentially creating or sustaining jobs in this sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpricing and limited innovation.
Cost-plus-fixed-fee contract type can incentivize higher costs if not rigorously overseen.
The long contract duration without clear performance metrics makes value assessment difficult.
Absence of specific service details hinders understanding of the exact nature of the engineering support provided.

Positive Signals

Bechtel Plant Machinery, Inc. likely possesses specialized expertise required by the Department of the Navy.
The sustained award over 14 years suggests a consistent need and potentially satisfactory performance.
The significant contract value indicates the importance of the services rendered to national defense.

Sector Analysis

This contract falls within the Engineering Services sector, a critical component of the broader professional, scientific, and technical services industry. This sector is characterized by high barriers to entry, requiring specialized knowledge, certifications, and a proven track record. The market size for federal engineering services is substantial, supporting various government agencies in areas ranging from infrastructure development to complex system design. This specific contract's value of over $231 million places it among significant federal procurements within this domain.

Small Business Impact

The data indicates that this contract was not awarded to a small business, nor does it appear to have a specific small business set-aside component. Consequently, there are no direct subcontracting implications for small businesses stemming from this particular award. The focus was likely on securing specialized capabilities from a large, established firm, potentially bypassing opportunities for smaller, niche engineering companies.

Oversight & Accountability

Oversight for this contract would have been managed by the Department of the Navy. As a sole-source, cost-plus-fixed-fee contract, rigorous oversight would be crucial to ensure that costs were reasonable and allocable, and that the fixed fee was justified. Transparency would depend on the reporting requirements stipulated in the contract and the agency's internal review processes. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Engineering Support Contracts
Naval Facilities and Infrastructure Support
Cost-Plus-Fixed-Fee Service Contracts
Sole-Source Professional Services Procurements

Risk Flags

Sole-source award lacks competitive pricing.
Cost-plus-fixed-fee structure may incentivize higher costs.
Lack of detailed service description hinders performance evaluation.
Long contract duration requires sustained oversight.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $231.8 million to BECHTEL PLANT MACHINERY, INC.. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is BECHTEL PLANT MACHINERY, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $231.8 million.

What is the period of performance?

Start: 2003-10-15. End: 2018-09-30.

What specific engineering services were provided under this contract?

The provided data does not specify the exact nature of the engineering services rendered under this contract. The North American Industry Classification System (NAICS) code 541330, 'Engineering Services,' is broad and encompasses a wide range of activities, including design, consulting, and project management across various disciplines. Without further details, it is impossible to ascertain whether the services involved architectural design, structural engineering, systems engineering, or other specialized fields critical to the Department of the Navy's mission. This lack of specificity makes it challenging to evaluate the contract's effectiveness and value.

How does the $231.8 million total obligation compare to similar engineering service contracts awarded by the Department of the Navy?

Comparing this $231.8 million contract to similar Department of the Navy (DoN) engineering service contracts requires access to a broader dataset of DoN procurements, ideally within the same timeframe (2003-2018) and for comparable service types (NAICS 541330). However, a total obligation of over $231 million over a 14-year period suggests a significant and long-term requirement. Many engineering contracts, especially those supporting major platforms or infrastructure, can reach these figures. The sole-source nature of this award, however, makes direct value comparisons with competed contracts less meaningful, as competitive pressures typically drive down prices.

What are the primary risks associated with a sole-source, cost-plus-fixed-fee contract of this magnitude?

The primary risks associated with a sole-source, cost-plus-fixed-fee (CPFF) contract of this magnitude ($231.8 million) are twofold. Firstly, the sole-source nature eliminates competitive pressure, potentially leading to inflated pricing as the contractor faces no market alternatives. The government relies heavily on the contractor's good faith in pricing. Secondly, the CPFF structure, while providing flexibility for unforeseen costs, can incentivize the contractor to incur higher costs to increase their fee, which is a percentage of the costs. Effective oversight, robust negotiation, and clear performance metrics are crucial to mitigate these risks and ensure value for taxpayer money.

What was Bechtel Plant Machinery, Inc.'s track record with the federal government prior to or during this contract?

The provided data does not include information on Bechtel Plant Machinery, Inc.'s prior federal contracting history or performance during this specific contract. A comprehensive assessment would require examining federal procurement databases (like FPDS or USASpending) for other contracts awarded to this entity, including their value, type, agency, and any performance evaluations or disputes. Without this context, it's difficult to gauge the contractor's reliability, past performance quality, and overall suitability for such a large and long-duration sole-source award.

How has federal spending on engineering services (NAICS 541330) evolved since this contract was awarded?

Federal spending on engineering services (NAICS 541330) has generally seen fluctuations but has remained a significant category of government expenditure since 2003. Post-9/11 security concerns, infrastructure investments, and ongoing defense modernization efforts have driven demand. While specific year-over-year trends depend on economic conditions and administration priorities, the overall need for engineering expertise across agencies like Defense, Transportation, and Energy has persisted. The increasing complexity of technological systems and infrastructure projects suggests a continued reliance on specialized engineering firms, making this contract's value representative of substantial, long-term government needs.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: NUCLEAR ORDNANCE

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Bechtel Group, Inc. (UEI: 094878980)

Address: 3500 TECHNOLOGY DR, MONROEVILLE, PA, 15146

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

Contract Characteristics

Cost or Pricing Data: YES

Timeline