DoD awards $3.66M for 78 Cylinder Assemblies to Yates Industries Inc

Contract Overview

Contract Amount: $3,665,844 ($3.7M)

Contractor: Yates Industries Inc

Awarding Agency: Department of Defense

Start Date: 2025-09-24

End Date: 2026-07-21

Contract Duration: 300 days

Daily Burn Rate: $12.2K/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: CYLINDER ASSEMBLY, QTY 78 NSN: 3040-01-569-2598, MFR PART NUMBER: 12326805

Place of Performance

Location: SAINT CLAIR SHORES, MACOMB County, MICHIGAN, 48080

State: Michigan Government Spending

Plain-Language Summary

Department of Defense obligated $3.7 million to YATES INDUSTRIES INC for work described as: CYLINDER ASSEMBLY, QTY 78 NSN: 3040-01-569-2598, MFR PART NUMBER: 12326805 Key points: 1. The Department of Defense is procuring 78 cylinder assemblies, a critical component for fluid power systems. 2. Yates Industries Inc., a manufacturer in the fluid power cylinder and actuator sector, secured the contract. 3. The contract is a Firm Fixed Price Definitive Contract, indicating price certainty for the government. 4. The award was made under 'Full and Open Competition After Exclusion of Sources', suggesting a specific justification for limiting initial bidders.

Value Assessment

Rating: good

The contract value of $3.66 million for 78 units suggests a per-unit price of approximately $46,998. This price needs to be benchmarked against similar cylinder assemblies procured by the government or industry to assess its competitiveness.

Cost Per Unit: $46,998

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources'. This method implies that while competition was sought, certain sources were initially excluded, potentially impacting the breadth of price discovery and the final negotiated price.

Taxpayer Impact: The government aims for competitive pricing through this method, but the exclusion of sources warrants scrutiny to ensure the best value was achieved for taxpayers.

Public Impact

Ensures operational readiness of military equipment requiring fluid power systems. Supports a US-based manufacturer in the defense industrial base. Potential for follow-on contracts if performance is satisfactory. The specific NSN (3040-01-569-2598) indicates a standardized part, facilitating future procurement.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition justification needs review.
Potential for price escalation if market conditions change.
Dependence on a single manufacturer for this critical component.

Positive Signals

Firm Fixed Price contract provides cost certainty.
Award to a domestic manufacturer supports US industry.
Clear delivery schedule outlined in the contract.

Sector Analysis

This contract falls within the Fluid Power Cylinder and Actuator Manufacturing sector. Spending in this area is crucial for maintaining complex machinery across various defense platforms. Benchmarks for similar components vary widely based on size, pressure rating, and specialized features.

Small Business Impact

The award went to Yates Industries Inc., which is not identified as a small business in the provided data. Further analysis would be needed to determine if subcontracting opportunities exist for small businesses within this contract.

Oversight & Accountability

The contract's 'Full and Open Competition After Exclusion of Sources' clause requires careful oversight to ensure the justification for exclusion was valid and that the procurement process was fair and transparent, maximizing value for the government.

Related Government Programs

Fluid Power Cylinder and Actuator Manufacturing
Department of Defense Contracting
Defense Logistics Agency Programs

Risk Flags

Limited competition raises concerns about optimal pricing.
Potential single-source dependency for critical components.
Need to verify the justification for excluding sources.
Price benchmarking is essential to confirm value for money.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $3.7 million to YATES INDUSTRIES INC. CYLINDER ASSEMBLY, QTY 78 NSN: 3040-01-569-2598, MFR PART NUMBER: 12326805

Who is the contractor on this award?

The obligated recipient is YATES INDUSTRIES INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $3.7 million.

What is the period of performance?

Start: 2025-09-24. End: 2026-07-21.

What was the specific justification for excluding certain sources in this 'Full and Open Competition After Exclusion of Sources' award, and how did it impact the final price?

The justification for excluding sources typically relates to factors like proprietary technology, unique manufacturing capabilities, or urgent requirements where only specific vendors can meet the demand within the necessary timeframe. This exclusion can limit the number of competitive bids, potentially leading to a higher price than if broader competition were allowed. A thorough review of the contracting officer's justification is necessary to assess the impact on price discovery and overall value.

What are the potential risks associated with relying on Yates Industries Inc. for this critical cylinder assembly, particularly concerning supply chain disruptions or future availability?

Reliance on a single supplier for a critical component like a cylinder assembly carries inherent risks. Supply chain disruptions, manufacturing issues at Yates Industries, or future business decisions by the company could impact the availability of these parts. The government should consider strategies like maintaining strategic reserves, exploring alternative suppliers for future procurements, or ensuring robust contract clauses regarding supply chain continuity and performance.

How does the per-unit cost of $46,998 for these cylinder assemblies compare to industry benchmarks for similar components, and does it represent good value for the taxpayer?

The per-unit cost of $46,998 requires detailed comparison with industry benchmarks for cylinder assemblies of comparable specifications (size, pressure rating, material, complexity). Without this benchmark data, it's difficult to definitively state if it represents good value. If the price is significantly higher than comparable commercial or military items, it could indicate a lack of sufficient competition or inflated costs, warranting further investigation into the pricing structure and negotiation.

Industry Classification

NAICS: Manufacturing › Other General Purpose Machinery Manufacturing › Fluid Power Cylinder and Actuator Manufacturing

Product/Service Code: MECHANICAL POWER TRANSMISSION EQPT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: SPRDL125R0189

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 23050 E INDUSTRIAL DR, SAINT CLAIR SHORES, MI, 48080

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $7,331,688

Exercised Options: $3,665,844

Current Obligation: $3,665,844

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline