Department of Defense awards $12.7M contract for steel to Algoma Steel Inc
Contract Overview
Contract Amount: $12,704,394 ($12.7M)
Contractor: Algoma Steel Inc
Awarding Agency: Department of Defense
Start Date: 2007-12-21
End Date: 2008-10-21
Contract Duration: 305 days
Daily Burn Rate: $41.7K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 7
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: ARMOR STEEL
Plain-Language Summary
Department of Defense obligated $12.7 million to ALGOMA STEEL INC for work described as: ARMOR STEEL Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract value of $12.7 million falls within a typical range for bulk material procurement. 3. Fixed-price contract type helps mitigate cost overrun risks for the government. 4. The duration of 305 days indicates a short-term supply need. 5. Steel mills (NAICS 331111) are a critical industrial base for defense manufacturing. 6. The award to Algoma Steel Inc. suggests a focus on established suppliers for essential materials.
Value Assessment
Rating: fair
The contract value of $12.7 million for steel is difficult to benchmark without specific grade and quantity details. However, the fixed-price nature of the contract provides cost certainty. The award amount appears reasonable for a bulk material purchase of this scale, assuming standard market conditions at the time of award. Further analysis would require comparison to similar steel procurements with detailed specifications.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 7 bidders (no) suggests a healthy level of competition for this requirement. This competitive environment is generally expected to drive prices towards market rates and encourage efficient service delivery.
Taxpayer Impact: A competitive bidding process ensures that taxpayer dollars are used efficiently by securing the best possible price for the required steel.
Public Impact
The primary beneficiaries are the Department of the Army and potentially other Department of Defense entities requiring steel for various applications. The service delivered is the provision of steel, a fundamental material for defense infrastructure, equipment, and manufacturing. The geographic impact is likely concentrated where the steel is manufactured and where it is utilized by the Army, potentially domestic or international locations. Workforce implications include employment at Algoma Steel Inc. and potentially in the logistics and transportation sectors involved in delivery.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for price fluctuations in the raw materials market impacting long-term availability or future contract costs.
- Dependence on a single supplier for a critical material could pose a risk if supply chains are disrupted.
Positive Signals
- Awarded under full and open competition, indicating a robust selection process.
- Fixed-price contract type provides cost predictability for the government.
- The existence of multiple bidders suggests market interest and potential for future competition.
Sector Analysis
The steel industry is a foundational sector for manufacturing and infrastructure, including defense applications. This contract falls within the Iron and Steel Mills subsector (NAICS 331111). The market for steel is global and subject to commodity price fluctuations, trade policies, and demand from various industries. Defense spending represents a significant, albeit not dominant, portion of overall steel consumption.
Small Business Impact
There is no indication that this contract was specifically set aside for small businesses. Given the nature of steel production, it is likely that the primary awardee is a large industrial entity. Subcontracting opportunities for small businesses may exist in areas such as logistics, transportation, or specialized processing, but these are not explicitly detailed in the provided data.
Oversight & Accountability
The contract is subject to standard federal procurement oversight. As a fixed-price contract, oversight would focus on delivery schedules and quality compliance. The Department of Defense's Inspector General would have jurisdiction over investigations of fraud, waste, or abuse related to this contract. Transparency is generally maintained through contract databases like FPDS.
Related Government Programs
- Defense Production Act Purchases
- Industrial Base Support Contracts
- Department of the Army Procurement
Risk Flags
- Potential supply chain disruption risk
- Dependence on specific commodity prices
Tags
defense, department-of-defense, department-of-the-army, full-and-open-competition, firm-fixed-price, steel-mills, materials-procurement, industrial-base, us-army, algoma-steel-inc
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $12.7 million to ALGOMA STEEL INC. ARMOR STEEL
Who is the contractor on this award?
The obligated recipient is ALGOMA STEEL INC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $12.7 million.
What is the period of performance?
Start: 2007-12-21. End: 2008-10-21.
What was the specific type and grade of steel procured under this contract?
The provided data does not specify the exact type or grade of steel procured. The NAICS code 331111 indicates 'Iron and Steel Mills,' which produce a wide range of steel products. Without further details, it is impossible to determine if the steel was for structural purposes, manufacturing components, or other specific defense applications. This information is crucial for a precise value assessment and comparison to market rates.
How does the awarded price compare to historical spending on similar steel procurements by the Department of Defense?
Direct comparison is challenging without knowing the specific steel specifications (grade, quantity, form) and the contract's award date relative to market conditions. The $12.7 million award for 305 days of supply suggests a significant volume. Historical data from FPDS or other procurement databases would be needed, filtered by similar steel types and quantities, to establish a benchmark. The fixed-price nature aims to control costs, but the initial price is set by the competitive bidding process.
What were the key performance metrics or quality standards required for the steel delivery?
The provided data does not detail the specific performance metrics or quality standards. For defense contracts, especially involving critical materials like steel, stringent quality control and adherence to specific industry or military standards (e.g., ASTM, MIL-SPEC) are typically mandated. These would be outlined in the contract's statement of work. Failure to meet these standards could lead to contract termination or penalties.
What is Algoma Steel Inc.'s track record with the Department of Defense and other federal agencies?
The data indicates Algoma Steel Inc. received this specific contract from the Department of the Army. To assess their track record, a broader search of federal procurement databases would be necessary to identify all contracts awarded to Algoma Steel Inc., their performance history (e.g., any past issues, on-time delivery rates), and the types of goods or services provided. A positive performance history on this contract would be a good indicator for future awards.
What is the potential impact of this contract on the domestic steel supply chain and industrial base?
Awarding a contract of this size to Algoma Steel Inc. contributes to the demand for domestic steel production, supporting jobs and operations within the company and its suppliers. It reinforces the importance of the steel industry as a critical component of the defense industrial base. The specific impact depends on whether Algoma Steel Inc. is a domestic producer and the extent to which its operations rely on domestic raw materials.
Industry Classification
NAICS: Manufacturing › Iron and Steel Mills and Ferroalloy Manufacturing › Iron and Steel Mills
Product/Service Code: METAL BARS, SHEETS, SHAPES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 7
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 5515 NORTH SERVICE RD, BURLINGTON
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $12,704,394
Exercised Options: $12,704,394
Current Obligation: $12,704,394
Contract Characteristics
Cost or Pricing Data: NO
Timeline
Start Date: 2007-12-21
Current End Date: 2008-10-21
Potential End Date: 2008-10-21 00:00:00
Last Modified: 2011-05-10
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