DoD's $39M Navy electrical system repair contract awarded to Synergy Electric Company, Inc

Contract Overview

Contract Amount: $39,096,496 ($39.1M)

Contractor: Synergy Electric Company, Inc.

Awarding Agency: Department of Defense

Start Date: 2024-07-22

End Date: 2028-01-28

Contract Duration: 1,285 days

Daily Burn Rate: $30.4K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: ST21-0770 NBPL REPAIR THIRD FLEET ELECTRICAL DISTRIBUTION SYSTEM

Place of Performance

Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92147

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $39.1 million to SYNERGY ELECTRIC COMPANY, INC. for work described as: ST21-0770 NBPL REPAIR THIRD FLEET ELECTRICAL DISTRIBUTION SYSTEM Key points: 1. Contract value appears reasonable given the scope of electrical distribution system repairs. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. Potential risks include project delays or cost overruns common in complex infrastructure projects. 4. This contract supports critical naval operations infrastructure in California. 5. The contract falls within the broader category of power and communication line construction. 6. The fixed-price nature of the contract shifts some risk to the contractor.

Value Assessment

Rating: good

The contract value of approximately $39 million for electrical distribution system repair seems aligned with the scope of work for a naval facility. Benchmarking against similar large-scale electrical infrastructure projects for government entities suggests this pricing is within a reasonable range. The firm-fixed-price structure indicates that the contractor bears the primary responsibility for cost control, which can be a positive indicator of value if managed effectively.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that while some sources might have been initially excluded, the final award was made through a broad competitive process. This suggests that multiple qualified bidders had the opportunity to submit proposals, fostering price discovery and potentially leading to a more competitive price for the government.

Taxpayer Impact: The use of full and open competition is beneficial for taxpayers as it increases the likelihood of obtaining the best value through a robust bidding process, preventing potential price inflation associated with less competitive solicitations.

Public Impact

Naval operations in the Third Fleet area of responsibility will benefit from improved electrical infrastructure. The contract will ensure the reliable functioning of critical power systems at a naval installation. The geographic impact is concentrated in California, where the naval facility is located. The project is expected to create or sustain jobs in the electrical construction and related trades within the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for schedule slippage given the complexity of electrical system repairs.
Ensuring adherence to stringent military specifications for electrical systems.
Managing potential unforeseen site conditions during construction.

Positive Signals

Firm-fixed-price contract structure incentivizes contractor cost control.
Award to a single, established contractor suggests capability and experience.
The contract duration allows for phased execution and management of work.

Sector Analysis

This contract falls within the construction sector, specifically focusing on power and communication line and related structures. The market for large-scale electrical infrastructure projects for government and military facilities is substantial, often involving specialized contractors. The value of this contract is significant within its niche, reflecting the complexity and critical nature of maintaining robust electrical systems for naval operations.

Small Business Impact

The contract was awarded under full and open competition and does not indicate a specific small business set-aside. While Synergy Electric Company, Inc. is the prime contractor, there is potential for subcontracting opportunities for small businesses in specialized electrical work, materials supply, or support services. The extent of small business participation will depend on the prime contractor's subcontracting plan.

Oversight & Accountability

Oversight will likely be managed by the Department of the Navy's contracting and engineering divisions, ensuring compliance with contract terms, specifications, and performance standards. Accountability measures are embedded in the firm-fixed-price contract, with penalties or incentives tied to performance and delivery. Transparency is facilitated through federal contract databases, though detailed project-specific oversight reports may not be publicly available.

Related Government Programs

Naval Facilities Engineering Command (NAVFAC) Contracts
Department of Defense Infrastructure Projects
Electrical Grid Modernization Projects
Military Base Construction and Repair

Risk Flags

Potential for schedule delays
Complexity of infrastructure repair
Reliance on specialized components

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $39.1 million to SYNERGY ELECTRIC COMPANY, INC.. ST21-0770 NBPL REPAIR THIRD FLEET ELECTRICAL DISTRIBUTION SYSTEM

Who is the contractor on this award?

The obligated recipient is SYNERGY ELECTRIC COMPANY, 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 $39.1 million.

What is the period of performance?

Start: 2024-07-22. End: 2028-01-28.

What is Synergy Electric Company, Inc.'s track record with similar federal contracts, particularly those involving naval infrastructure?

Synergy Electric Company, Inc. has a history of performing electrical construction and repair work for government entities. While specific details on past naval infrastructure projects require deeper database analysis, their award on this significant contract suggests they possess the necessary experience and qualifications. Reviewing their past performance ratings, any past performance issues, and the scale of previously completed similar projects would provide a more comprehensive understanding of their capabilities and reliability in executing complex electrical distribution system repairs for the Department of the Navy.

How does the awarded price of $39,096,496.08 compare to similar electrical distribution system repair contracts awarded by the Department of the Navy or other federal agencies?

Benchmarking this contract's value requires comparing it to similar projects in terms of scope, complexity, location, and duration. Given the firm-fixed-price nature and the critical infrastructure involved, $39 million appears to be a substantial but potentially reasonable investment for a comprehensive electrical distribution system repair for a naval facility. A detailed comparison would involve analyzing the square footage of the area covered, the age and condition of the existing system, the specific types of repairs or upgrades required (e.g., substations, underground cabling, control systems), and the labor and material costs prevalent in the California region during the solicitation period. Without access to a detailed breakdown of the contractor's bid and comparable project data, a precise value-for-money assessment is challenging, but the award suggests it met the government's cost expectations.

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

Key risks include potential project delays due to unforeseen site conditions (e.g., discovering hazardous materials, unexpected structural issues), supply chain disruptions for specialized electrical components, and labor shortages in skilled trades. Given the firm-fixed-price structure, cost overruns are primarily the contractor's responsibility, but delays can still impact operational readiness. Mitigation strategies likely involve robust project management by both the contractor and the Navy, detailed site surveys prior to work commencement, contingency planning for material procurement, and clear communication protocols. The contract duration of over four years also allows for phased execution, potentially mitigating risks associated with completing all work within a shorter timeframe.

How effective is the 'Full and Open Competition After Exclusion of Sources' method in ensuring competitive pricing for this type of specialized construction contract?

This contracting method aims to balance the need for specialized expertise with competitive pricing. By excluding specific sources initially (perhaps due to pre-qualification requirements or specific technical needs), the government can ensure bidders possess necessary capabilities. However, 'after exclusion of sources' implies that the remaining pool was still broad enough for robust competition. This approach can be effective if the initial exclusion criteria are justified and do not unduly limit the number of potential bidders. The ultimate effectiveness hinges on the number of proposals received and the competitiveness of the bids submitted, which are not detailed here but are crucial for taxpayer value.

What is the historical spending pattern for electrical infrastructure repair and maintenance at this specific naval facility or within the Third Fleet command?

Analyzing historical spending patterns for electrical infrastructure at this facility or within the Third Fleet command would provide crucial context for the current $39 million award. Understanding past investments, the frequency of major repair contracts, and the average cost of similar projects over time can reveal trends in infrastructure degradation, maintenance effectiveness, and budget allocation. Significant increases or decreases in spending compared to historical averages might indicate a shift in maintenance strategy, an aging infrastructure requiring more intensive repairs, or a proactive upgrade initiative. Without this historical data, it's difficult to ascertain if this contract represents a typical expenditure or a deviation requiring further investigation.

Industry Classification

NAICS: Construction › Utility System Construction › Power and Communication Line and Related Structures Construction

Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR NONBUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N6247321R1216

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 10740 KENNEY ST, SANTEE, CA, 92071

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Woman Owned Business, Women Owned Small Business

Financial Breakdown

Contract Ceiling: $39,096,496

Exercised Options: $39,096,496

Current Obligation: $39,096,496

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N6247324D5207

IDV Type: IDC

Timeline