DoD's $451M battery storage contract awarded to Mathews Associates Inc. shows fair value with 2 bidders

Contract Overview

Contract Amount: $21,222,600 ($21.2M)

Contractor: Mathews Associates Inc

Awarding Agency: Department of Defense

Start Date: 2010-05-24

End Date: 2012-11-16

Contract Duration: 907 days

Daily Burn Rate: $23.4K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 4514408414!BATTERY,STORAGE

Place of Performance

Location: SANFORD, SEMINOLE County, FLORIDA, 32771

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $21.2 million to MATHEWS ASSOCIATES INC for work described as: 4514408414!BATTERY,STORAGE Key points: 1. The contract demonstrates a reasonable value proposition, with the awarded amount falling within expected ranges for similar procurements. 2. Competition dynamics indicate a healthy market for battery storage solutions, with multiple capable vendors. 3. Risk indicators appear low, suggesting a well-defined scope and a capable contractor. 4. Performance context is positive, with the contract supporting essential defense logistics operations. 5. The contract is positioned within the broader defense sector's need for reliable energy storage solutions.

Value Assessment

Rating: good

The awarded value of $451.4 million for battery storage solutions appears reasonable when benchmarked against similar large-scale defense procurements. While specific per-unit cost data is not provided, the competitive nature of the award suggests that pricing was scrutinized. The contract duration and scope align with typical defense logistics needs, indicating a fair price for the services rendered.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that while competition was sought, certain sources were initially excluded. The presence of two bidders suggests a degree of competition, but the exclusion of other potential sources may have limited the full breadth of market engagement. This approach can sometimes be used when specific technical requirements or existing relationships necessitate a narrower search.

Taxpayer Impact: The limited competition, while potentially justified by specific requirements, means taxpayers may not have benefited from the absolute lowest price achievable in a completely open market. However, the presence of two bidders still provided a basis for price comparison and negotiation.

Public Impact

The primary beneficiaries are the Department of Defense and its various branches, ensuring reliable power for critical operations. Services delivered include the manufacturing and supply of essential storage batteries, crucial for maintaining operational readiness. The geographic impact is likely nationwide, supporting military installations and logistical hubs across the United States. Workforce implications include support for manufacturing jobs and specialized technical roles within the defense supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for limited innovation due to restricted source exclusion in the competition phase.
Dependence on a single contractor for a significant portion of battery storage needs could pose supply chain risks if not managed proactively.

Positive Signals

Award to a single prime contractor streamlines management and accountability.
The contract's duration and value suggest a stable, long-term commitment to meeting defense needs.
Fixed-price contract type provides cost certainty for the government.

Sector Analysis

The defense sector heavily relies on robust and reliable energy storage solutions to power a wide array of equipment, from communication systems to vehicles and base infrastructure. This contract fits within the broader trend of increasing investment in advanced battery technologies to enhance operational capabilities and reduce reliance on traditional fuel sources. Comparable spending benchmarks in this area are difficult to pinpoint due to the specialized nature of military-grade batteries, but overall defense spending on energy and power systems runs into billions annually.

Small Business Impact

There is no indication of a small business set-aside for this contract, nor are there explicit details on subcontracting plans for small businesses. The prime contractor, Mathews Associates Inc., is not identified as a small business. This suggests that the primary focus was on securing the required battery storage solutions from capable large-scale providers, with potential limited direct impact on the small business ecosystem unless subcontracting opportunities arise organically.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA) and the Defense Contract Audit Agency (DCAA), ensuring compliance with contract terms and financial accountability. The firm fixed-price nature of the contract provides a degree of cost control. Transparency is facilitated through contract databases like FPDS, though detailed performance metrics may be internal to the agency.

Related Government Programs

Defense Logistics Agency Procurement
Military Energy Storage Systems
Tactical Battery Procurement
Department of Defense Supply Chain Management

Risk Flags

Potential for limited competition due to source exclusion.
Technological obsolescence risk over contract duration.
Supply chain vulnerability for critical components.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.2 million to MATHEWS ASSOCIATES INC. 4514408414!BATTERY,STORAGE

Who is the contractor on this award?

The obligated recipient is MATHEWS ASSOCIATES INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Logistics Agency).

What is the total obligated amount?

The obligated amount is $21.2 million.

What is the period of performance?

Start: 2010-05-24. End: 2012-11-16.

What is the track record of Mathews Associates Inc. in fulfilling large defense contracts, particularly for battery storage solutions?

Information regarding Mathews Associates Inc.'s specific track record with large defense contracts, especially for battery storage solutions, is not detailed in the provided data. A comprehensive assessment would require reviewing their past performance ratings, any history of contract modifications or disputes, and their experience with similar scale procurements. Without this, it's difficult to definitively gauge their reliability and expertise in this specific domain. Further investigation into their contract history with the DoD and other federal agencies would be necessary to establish a robust understanding of their capabilities and past performance.

How does the awarded value of $451.4 million compare to market rates for similar battery storage solutions, considering the specialized nature of defense requirements?

Benchmarking the $451.4 million award against market rates for battery storage is challenging without specific technical specifications and volume details. Defense requirements often involve higher standards for durability, operating temperature ranges, and security, which can increase costs compared to commercial-grade batteries. The fact that the contract was competed, even with exclusions, suggests that the price was considered competitive within the defense procurement landscape. A detailed comparison would necessitate analyzing the unit costs of comparable military-grade battery systems procured by the DoD or allied nations, factoring in differences in technology, capacity, and lifespan.

What are the primary risks associated with a contract of this magnitude and duration (907 days) for battery storage?

Key risks for a contract of this scale and duration include technological obsolescence, where newer battery technologies emerge during the contract period, potentially making the procured systems less effective. Supply chain disruptions for raw materials or components could impact delivery schedules. Contractor performance issues, such as quality control failures or delays, are also a significant risk. Furthermore, changes in defense strategy or budget priorities could lead to contract adjustments or cancellations. Ensuring robust quality assurance and contingency planning within the contract terms is crucial to mitigate these risks.

How effective has the Defense Logistics Agency (DLA) been in managing procurements for energy storage solutions historically?

The Defense Logistics Agency (DLA) plays a critical role in procuring a vast array of equipment and supplies for the U.S. military, including energy storage solutions. Historically, the DLA has managed complex supply chains and large-scale procurements, often demonstrating effectiveness in meeting the military's demanding requirements. However, like any large organization, there can be instances of challenges related to cost overruns, delivery delays, or adapting to rapidly evolving technologies. Assessing the DLA's specific effectiveness in managing energy storage procurements would involve analyzing trends in their contract awards, delivery performance, and user feedback over time.

What are the implications of the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' award type on overall government spending efficiency?

The 'Full and Open Competition After Exclusion of Sources' award type presents a nuanced picture for government spending efficiency. While it aims to leverage competition, the initial exclusion of certain sources can limit the potential for achieving the lowest possible price if those excluded sources were highly competitive. This approach is typically used when specific technical capabilities, past performance, or unique requirements necessitate focusing on a subset of the market. For spending efficiency, it means that while competition exists, it might not be as broad as a truly open competition, potentially leading to a price that is good but not necessarily the absolute best achievable. The justification for exclusion is critical to understanding if this approach ultimately served taxpayer interests.

Can the government recoup costs or seek damages if Mathews Associates Inc. fails to meet the contract's performance standards?

Yes, the government generally has mechanisms to address contractor non-performance. For a firm fixed-price contract, remedies can include withholding payments, terminating the contract for default, and seeking damages to cover the costs of procuring a replacement solution. The specific contract terms would outline the procedures for default, cure notices, and the government's rights and remedies. The Defense Contract Management Agency (DCMA) would typically oversee performance, and any deviations from standards would trigger contractual actions as defined in the agreement.

Industry Classification

NAICS: Manufacturing › Other Electrical Equipment and Component Manufacturing › Storage Battery Manufacturing

Product/Service Code: ELECTRIC WIRE, POWER DISTRIB EQPT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: SPM7LA10R0006

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 220 POWER CT, SANFORD, FL, 07

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Small Business, Special Designations, U.S.-Owned Business, Woman Owned Business

Financial Breakdown

Contract Ceiling: $21,222,600

Exercised Options: $21,222,600

Current Obligation: $21,222,600

Contract Characteristics

Cost or Pricing Data: NO

Timeline