DoD's $22.1M turbine generator contract awarded to APR Energy USA, LLC, lacked competition

Contract Overview

Contract Amount: $22,145,839 ($22.1M)

Contractor: APR Energy USA, LLC

Awarding Agency: Department of Defense

Start Date: 2019-02-26

End Date: 2023-04-03

Contract Duration: 1,497 days

Daily Burn Rate: $14.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: TM2500 GAS TURBINE GENERATOR&SERVICES

Place of Performance

Location: PHILADELPHIA, PHILADELPHIA County, PENNSYLVANIA, 19112

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $22.1 million to APR ENERGY USA, LLC for work described as: TM2500 GAS TURBINE GENERATOR&SERVICES Key points: 1. The contract's value of $22.1 million for turbine generator services raises questions about cost-effectiveness due to the absence of competitive bidding. 2. Limited competition for this contract may have led to suboptimal pricing and reduced opportunities for innovative solutions. 3. The duration of the contract (1497 days) suggests a long-term need, highlighting the importance of ensuring value over its lifecycle. 4. The 'PA' (Production/Assembly) status code indicates a focus on manufacturing or assembly, which should be benchmarked against industry standards. 5. The sole-source nature of this award warrants scrutiny to ensure fair market value was obtained. 6. The lack of small business set-aside or subcontracting goals may limit opportunities for smaller enterprises in this procurement.

Value Assessment

Rating: questionable

The total contract value of $22.1 million for turbine generator services is significant. Without competitive bids, it is difficult to benchmark the pricing against market rates or similar contracts. The absence of competition suggests that the government may not have secured the best possible value. Further analysis would be needed to compare the services and equipment provided to industry standards and identify potential cost savings.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. This approach is typically used when only one source is capable of meeting the requirement, or in urgent situations. The lack of competition means there were no other bidders to compare against, potentially impacting price discovery and the government's ability to negotiate the most favorable terms.

Taxpayer Impact: Taxpayers may have paid a premium for this contract due to the absence of competitive pressure. The lack of multiple bids limits the government's leverage in securing the lowest possible price.

Public Impact

The Department of the Navy benefits from the provision of turbine generator services, likely for power generation needs. The services delivered are essential for maintaining operational capabilities where reliable power is critical. The contract's geographic impact is not specified but likely relates to a specific military installation or operational area. The workforce implications are tied to the contractor's personnel involved in the provision and maintenance of the turbine generators.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Sole-source awards can reduce transparency and accountability.
Absence of competitive bidding might limit access to innovative technologies or solutions.
Contract duration without competition warrants scrutiny for ongoing value.
No clear indication of small business participation or subcontracting goals.

Positive Signals

Contract awarded to a specific company, indicating a potential capability to meet a specialized need.
The contract addresses a critical infrastructure requirement (power generation).
Firm Fixed Price contract type can provide cost certainty for the government.

Sector Analysis

The manufacturing of turbine and turbine generator set units falls under the industrial machinery sector, specifically NAICS code 333611. This sector involves the production of engines, turbines, and power transmission equipment. The market for such equipment is often characterized by high barriers to entry due to specialized knowledge, capital investment, and regulatory requirements. This contract represents a specific procurement within this sector, likely for a critical power generation need.

Small Business Impact

This contract does not appear to have included small business set-aside provisions, nor is there explicit information regarding subcontracting goals for small businesses. The sole-source nature of the award further limits opportunities for small businesses to participate directly or indirectly. This could mean that the benefits of this significant federal spending did not flow to the small business ecosystem.

Oversight & Accountability

The oversight mechanisms for this contract are not detailed in the provided data. As a sole-source award, it may have undergone specific justification and approval processes. Transparency could be limited due to the lack of competitive bidding. Accountability would typically be managed through contract performance monitoring and reporting requirements, but the extent of this oversight is not specified. Inspector General jurisdiction would apply if fraud, waste, or abuse were suspected.

Related Government Programs

Defense Power Generation Equipment
Industrial Machinery Manufacturing
Emergency Power Systems
Turbine Generator Services

Risk Flags

Sole-source award
Lack of competition
Potential for overpricing
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.1 million to APR ENERGY USA, LLC. TM2500 GAS TURBINE GENERATOR&SERVICES

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 $22.1 million.

What is the period of performance?

Start: 2019-02-26. End: 2023-04-03.

What is the track record of APR Energy USA, LLC in providing turbine generator services to the federal government?

Information regarding APR Energy USA, LLC's specific track record with the federal government for turbine generator services is not detailed in the provided data snippet. However, the company is known in the energy sector for providing temporary power solutions. A comprehensive assessment would require reviewing past performance evaluations, contract history, and any reported issues or successes on similar government contracts. Understanding their experience with large-scale turbine generator deployments and their ability to meet stringent military requirements would be crucial for evaluating their suitability and performance on this specific contract.

How does the value of this contract compare to similar turbine generator procurements by the Department of Defense?

Direct comparison of this $22.1 million contract to similar turbine generator procurements by the Department of Defense is challenging without access to a broader dataset of comparable contracts. The value is influenced by factors such as the specific type and capacity of the turbine generators, the duration of the contract, and the scope of services (e.g., installation, maintenance, fuel). Given that this contract was sole-sourced, it is difficult to ascertain if the price reflects competitive market rates. Benchmarking against other sole-source awards or against publicly available market data for similar equipment and services would be necessary for a robust comparison.

What are the primary risks associated with a sole-source award for critical power generation equipment?

The primary risks associated with a sole-source award for critical power generation equipment include potential overpricing due to lack of competition, reduced incentive for the contractor to innovate or provide superior service, and a lack of transparency in the procurement process. There's also a risk that the chosen vendor may not be the most capable or cost-effective option available in the market. Furthermore, reliance on a single supplier can create vulnerabilities in the supply chain or in the event of contractor default. Ensuring robust contract management and performance oversight becomes even more critical in sole-source situations to mitigate these risks.

What is the expected effectiveness of the TM2500 GAS TURBINE GENERATOR & SERVICES for the Department of Defense?

The TM2500 gas turbine generator is a mobile, versatile power generation unit often used in military and disaster relief scenarios due to its rapid deployment capabilities. Its effectiveness for the Department of Defense likely lies in providing reliable, on-demand power for bases, forward operating locations, or during emergencies where grid power is unavailable or compromised. The 'services' component of the contract is crucial for ensuring the generator's operational readiness, including maintenance, repair, and potentially fuel supply. The effectiveness hinges on the contractor's ability to deliver these services reliably throughout the contract period.

What has been the historical spending pattern for turbine generator services by the Department of the Navy?

The provided data snippet does not include historical spending patterns for turbine generator services by the Department of the Navy. To analyze this, one would need to examine procurement data over several fiscal years, identifying all contracts related to turbine generators, their values, durations, and award types. This would reveal trends in spending, whether reliance on sole-source awards is common for this type of equipment, and the typical price ranges. Such historical analysis is vital for contextualizing the current $22.1 million contract and identifying any anomalies or consistent patterns in procurement behavior.

What is the significance of the 'PA' status code in this contract?

The 'PA' status code typically indicates 'Production/Assembly' within federal procurement systems. In the context of this contract for a TM2500 Gas Turbine Generator & Services, it suggests that a significant portion of the contract value or effort is related to the manufacturing, assembly, or production of the turbine generator units themselves, rather than solely services or off-the-shelf equipment. This implies that the contractor is either manufacturing these units or assembling them, which has implications for assessing the value, lead times, and quality control associated with the procurement.

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: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N6449818R4013

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Power Rental Asset CO LLC

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: $29,019,200

Exercised Options: $22,145,839

Current Obligation: $22,145,839

Actual Outlays: $2,159,428

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline