DoD awards $28.5M for 6-month gas turbine rental to APR Energy USA, LLC
Contract Overview
Contract Amount: $28,550,866 ($28.6M)
Contractor: APR Energy USA, LLC
Awarding Agency: Department of Defense
Start Date: 2017-02-10
End Date: 2019-02-28
Contract Duration: 748 days
Daily Burn Rate: $38.2K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: FIRM FIXED PRICE
Sector: Energy
Official Description: IGF::CT::IGF - SIX (6) MONTH RENTAL OF A GAS TURBINE POWER GENERATION SYSTEM - MONTH 1
Place of Performance
Location: PHILADELPHIA, PHILADELPHIA County, PENNSYLVANIA, 19112
Plain-Language Summary
Department of Defense obligated $28.6 million to APR ENERGY USA, LLC for work described as: IGF::CT::IGF - SIX (6) MONTH RENTAL OF A GAS TURBINE POWER GENERATION SYSTEM - MONTH 1 Key points: 1. Significant contract value for a short-term rental. 2. Competition method was 'Full and Open', suggesting potential for competitive pricing. 3. Risk of high operational costs for a temporary solution. 4. Sector: Energy/Defense support.
Value Assessment
Rating: fair
The contract value of $28.5M for a 6-month rental appears high for a temporary power solution. Benchmarking against similar short-term rental agreements for specialized equipment is needed to assess value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which typically drives better pricing. However, the specialized nature of gas turbine rentals might limit the number of truly competitive bids.
Taxpayer Impact: Taxpayer funds are being used for a critical but temporary power need, with the cost efficiency of rental versus purchase or alternative solutions being a key consideration.
Public Impact
Ensures operational readiness for naval facilities by providing essential power. Supports military operations in potentially power-scarce environments. Potential for cost overruns if rental period is extended or unforeseen issues arise.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- High cost for a short-term asset.
- Potential for extended reliance on rental.
- Limited long-term asset acquisition.
Positive Signals
- Ensures immediate power availability.
- Competitive bidding process utilized.
Sector Analysis
This contract falls within the energy sector, specifically related to power generation, supporting Department of Defense operations. Spending benchmarks for temporary power solutions vary greatly based on system size and duration.
Small Business Impact
The contract was awarded to APR ENERGY USA, LLC. Analysis of small business participation in this specific contract or within the broader gas turbine rental market is not provided in the data.
Oversight & Accountability
The contract type is Firm Fixed Price, which helps control costs. However, oversight is crucial to ensure the rental equipment meets performance standards and is returned on schedule without additional charges.
Related Government Programs
- Turbine and Turbine Generator Set Units Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- High rental cost for a temporary solution.
- Potential for unforeseen operational issues.
- Dependence on a single vendor for critical power.
- Lack of long-term asset ownership.
Tags
turbine-and-turbine-generator-set-units-, department-of-defense, pa, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $28.6 million to APR ENERGY USA, LLC. IGF::CT::IGF - SIX (6) MONTH RENTAL OF A GAS TURBINE POWER GENERATION SYSTEM - MONTH 1
Who is the contractor on this award?
The obligated recipient is APR ENERGY USA, LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Navy).
What is the total obligated amount?
The obligated amount is $28.6 million.
What is the period of performance?
Start: 2017-02-10. End: 2019-02-28.
What is the cost per megawatt hour for this rental compared to alternative power generation methods?
The provided data does not include the power output (megawatts) of the gas turbine system, making a direct cost per megawatt hour calculation impossible. Further analysis would require system specifications and operational data to compare against grid power, diesel generators, or other temporary solutions.
What are the risks associated with relying on a rented power system for critical military operations?
Risks include potential equipment failure, delays in deployment or maintenance, and the possibility of the rental period being extended due to unforeseen circumstances, leading to higher long-term costs. Dependence on a single rental provider could also pose a strategic risk if supply chains are disrupted.
How does the cost of this 6-month rental compare to the potential cost of purchasing or leasing a similar system long-term?
A direct comparison is difficult without knowing the purchase price or long-term lease rates for comparable gas turbine systems. However, short-term rentals are typically more expensive on a per-day or per-month basis than ownership or long-term leases due to the premium for flexibility and immediate availability.
Industry Classification
NAICS: Manufacturing › Engine, Turbine, and Power Transmission Equipment Manufacturing › Turbine and Turbine Generator Set Units Manufacturing
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: N6449817R0011
Offers Received: 2
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Power Rental Asset CO LLC (UEI: 079236065)
Address: 3600 PORT JACKSONVILLE PKWY, JACKSONVILLE, FL, 32226
Business Categories: Category Business, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Not Designated a Small Business, Special Designations
Financial Breakdown
Contract Ceiling: $42,337,566
Exercised Options: $28,550,866
Current Obligation: $28,550,866
Contract Characteristics
Commercial Item: COMMERCIAL ITEM
Cost or Pricing Data: NO
Timeline
Start Date: 2017-02-10
Current End Date: 2019-02-28
Potential End Date: 2019-12-31 00:00:00
Last Modified: 2019-03-21
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