DoD's $252M Bechtel Contract: Long Duration, Limited Competition Raises Cost Concerns

Contract Overview

Contract Amount: $252,769,000 ($252.8M)

Contractor: Bechtel Plant Machinery, Inc.

Awarding Agency: Department of Defense

Start Date: 1984-10-15

End Date: 1998-09-30

Contract Duration: 5,098 days

Daily Burn Rate: $49.6K/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

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $252.8 million to BECHTEL PLANT MACHINERY, INC. for work described as: Key points: 1. Significant contract value of $252.77 million. 2. Awarded to Bechtel Plant Machinery, Inc., indicating potential concentration. 3. Long contract duration (1984-1998) may obscure current market value. 4. Lack of competition is a key risk factor for pricing. 5. Contract type (Cost Plus Fixed Fee) can incentivize cost overruns.

Value Assessment

Rating: questionable

The contract's extensive duration and cost-plus structure make direct pricing comparisons difficult. Without competitive bidding, it's hard to ascertain if the fixed fee adequately reflects market rates for the services provided over such a long period.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, suggesting a sole-source or limited competition award. This significantly limits price discovery and potentially leads to higher costs for the government compared to a competitive environment.

Taxpayer Impact: The lack of competition and potentially inflated costs over a 14-year period represent a significant drain on taxpayer funds.

Public Impact

Taxpayers funded a substantial contract over 14 years without competitive pricing. Long-term sole-source contracts can set precedents for future non-competitive awards. The absence of competition raises questions about the efficiency and value for money achieved.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration
Not competed
Cost Plus Fixed Fee contract type
High dollar value

Positive Signals

Established contractor relationship (potentially)

Sector Analysis

This contract falls under general industrial equipment and services. Without specific PSC details, it's hard to benchmark against sector-specific spending, but large, long-duration sole-source awards are generally scrutinized for efficiency.

Small Business Impact

The data does not indicate any specific involvement or benefit for small businesses in this contract.

Oversight & Accountability

The long duration and lack of competition suggest potential oversight gaps. Regular reviews and justifications for non-competition are crucial for accountability.

Related Government Programs

Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Lack of competition
Long contract duration
Cost Plus Fixed Fee contract type
Potential for cost overruns
Limited transparency on pricing justification

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $252.8 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 $252.8 million.

What is the period of performance?

Start: 1984-10-15. End: 1998-09-30.

What specific goods or services were procured under this contract, and how did their nature necessitate a non-competitive award?

The provided data lacks the specific product or service code (PSC) and detailed description. Understanding the unique requirements, specialized nature, or proprietary technology involved would be crucial to justifying a non-competitive award and assessing its necessity. Without this, the 'not competed' status remains a significant concern regarding potential value.

How was the 'fixed fee' determined in this Cost Plus Fixed Fee contract, and what mechanisms were in place to ensure it remained reasonable over 14 years?

The determination of the fixed fee in a Cost Plus Fixed Fee (CPFF) contract typically involves negotiation based on estimated costs and desired profit margin. For a contract spanning 14 years, the initial fee determination might not reflect evolving market conditions or efficiencies. Robust oversight mechanisms, including periodic re-evaluations or incentive structures tied to cost savings, would be essential to ensure the fee remained fair and taxpayers received good value.

What was the total cost growth or variance from the initial estimated cost to the final awarded amount, and how did the 'not competed' status influence this?

The data provided does not include initial estimated costs or final awarded amounts, only the total award value. For a CPFF contract, especially one that was not competed, tracking cost growth is vital. The absence of competition removes a key pressure point that typically drives cost efficiency, potentially allowing costs to rise more significantly than in a competitive scenario.

Competition & Pricing

Extent Competed: NOT COMPETED

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Contractor Details

Parent Company: Bechtel Group, Inc.

Address: 3500 TECHNOLOGY DR, MONROEVILLE, PA, 15146

Business Categories: Category Business, Corporate Entity Tax Exempt, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Timeline