DoD awards $13.4M for natural gas boilers at Iowa facility, with competition and oversight

Contract Overview

Contract Amount: $13,451,511 ($13.5M)

Contractor: American Ordnance LLC

Awarding Agency: Department of Defense

Start Date: 2020-07-30

End Date: 2026-04-30

Contract Duration: 2,100 days

Daily Burn Rate: $6.4K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: NATURAL GAS BOILERS PHASE 2 AT IAAAP

Place of Performance

Location: MIDDLETOWN, DES MOINES County, IOWA, 52638

State: Iowa Government Spending

Plain-Language Summary

Department of Defense obligated $13.5 million to AMERICAN ORDNANCE LLC for work described as: NATURAL GAS BOILERS PHASE 2 AT IAAAP Key points: 1. Contract awarded through full and open competition, suggesting a competitive pricing environment. 2. The contract duration of 2100 days indicates a long-term need for these services. 3. The facility is located in Iowa, potentially impacting local workforce and economy. 4. The contract type is Cost Plus Fixed Fee, which can incentivize cost control but requires robust oversight. 5. The contractor, American Ordnance LLC, is a key player in defense logistics. 6. This award represents a significant investment in facility modernization and operational efficiency.

Value Assessment

Rating: good

Benchmarking the value of this specific contract is challenging without detailed cost breakdowns and comparable project data. However, the fixed fee component within a Cost Plus Fixed Fee structure suggests an attempt to control overall costs. The duration and scope imply a substantial project, and the competitive award process is a positive indicator for value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely considered. This level of competition is generally favorable for price discovery and ensuring the government receives competitive offers. The absence of specific bidder numbers prevents a deeper analysis of the competitive intensity.

Taxpayer Impact: Full and open competition typically leads to better pricing for taxpayers by fostering a market-driven selection process.

Public Impact

The primary beneficiaries are the Department of Defense and its personnel at the Iowa Army Ammunition Plant (IAAAP). The services delivered involve the installation and maintenance of natural gas boilers, crucial for facility heating and operations. The geographic impact is concentrated in Iowa, specifically at the IAAAP. The project may have implications for the local skilled labor market in Iowa, requiring expertise in HVAC and industrial maintenance.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts require diligent oversight to ensure costs remain reasonable and the fixed fee is justified.
Long contract durations can sometimes lead to scope creep or price adjustments if not managed carefully.

Positive Signals

Awarded through full and open competition, indicating a robust bidding process.
The contractor is an established entity with experience in defense-related operations.
The project addresses critical infrastructure needs for a significant defense facility.

Sector Analysis

This contract falls within the Facilities Support Services sector, a broad category encompassing maintenance, repair, and operational support for government facilities. The market for such services is substantial, driven by the government's extensive real estate portfolio. This specific award focuses on energy infrastructure upgrades, aligning with broader trends towards modernization and efficiency in federal installations.

Small Business Impact

The data indicates that small business participation was not a specific set-aside for this contract (ss: false, sb: false). Therefore, the direct impact on small businesses is likely limited unless they are involved as subcontractors to the prime contractor, American Ordnance LLC. Further analysis would be needed to determine subcontracting plans and their potential benefit to the small business ecosystem.

Oversight & Accountability

The Cost Plus Fixed Fee contract type necessitates strong oversight from the Department of the Army to monitor costs, ensure adherence to the fixed fee, and verify the necessity and reasonableness of all expenditures. Transparency is expected through regular reporting and audits. The specific oversight mechanisms and inspector general jurisdiction would be detailed in the contract's terms and conditions.

Related Government Programs

Federal Facilities Maintenance
Defense Infrastructure Modernization
Energy Efficiency Programs
Industrial Plant Services

Risk Flags

Cost Plus Fixed Fee contract type requires diligent oversight.
Long contract duration may introduce risks of price escalation or obsolescence.
Need for detailed cost analysis to benchmark value effectively.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $13.5 million to AMERICAN ORDNANCE LLC. NATURAL GAS BOILERS PHASE 2 AT IAAAP

Who is the contractor on this award?

The obligated recipient is AMERICAN ORDNANCE LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $13.5 million.

What is the period of performance?

Start: 2020-07-30. End: 2026-04-30.

What is the track record of American Ordnance LLC in performing similar facility support services for the Department of Defense?

American Ordnance LLC has a significant history of supporting Department of Defense operations, particularly at government-owned, contractor-operated facilities like the Iowa Army Ammunition Plant (IAAAP). Their expertise often lies in ordnance manufacturing and logistics, but this extends to the comprehensive management and maintenance of the facilities where these operations occur. While specific data on their performance for boiler replacement projects is not detailed here, their long-standing relationship with the Army suggests a proven capability in managing complex industrial environments. Performance metrics and past performance reviews would be crucial for a complete assessment, but their role as a major contractor at IAAAP indicates a substantial level of trust and demonstrated competence in facility operations.

How does the awarded amount of $13.4 million compare to similar natural gas boiler replacement projects in federal facilities?

Directly comparing the $13.4 million award for natural gas boilers at IAAAP to similar federal projects is challenging without more granular data on the scope, scale, and specific components included. Federal facility modernization projects vary widely in cost based on the size of the facility, the complexity of the existing infrastructure, the type and number of boilers, and the required integration with existing systems. However, for a large-scale industrial facility like IAAAP, an investment in the tens of millions for critical infrastructure upgrades like boiler replacement is not uncommon. Factors such as the age of the existing system, energy efficiency requirements, and compliance with environmental regulations can significantly influence the final cost. A comprehensive benchmark would require analyzing contracts for similar-sized facilities and boiler systems across different agencies.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for this type of project?

The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for natural gas boiler replacement revolve around cost control and contractor incentive. While the fixed fee provides a ceiling for the contractor's profit, the 'cost plus' portion means the government reimburses the contractor for allowable costs incurred. If not managed diligently, this can lead to cost overruns if the contractor is less motivated to control expenses compared to a fixed-price contract. Risks include potential for scope creep, where additional work is added without adequate justification or price adjustment, and the possibility of less stringent cost management by the contractor. Robust government oversight, detailed cost accounting, and clear definition of allowable costs are critical to mitigate these risks and ensure the government receives good value.

What is the expected impact of this contract on the operational efficiency and energy consumption at IAAAP?

The installation of new natural gas boilers is expected to significantly enhance operational efficiency and potentially reduce energy consumption at the Iowa Army Ammunition Plant (IAAAP). Modern natural gas boilers are typically more energy-efficient than older systems, leading to lower fuel costs and reduced greenhouse gas emissions. Improved efficiency translates to more reliable heating and steam generation, crucial for maintaining optimal operating conditions within the facility, especially during colder months. This upgrade addresses potential issues related to aging infrastructure, reducing the risk of breakdowns and costly emergency repairs, thereby ensuring consistent operational readiness and potentially lowering overall maintenance expenditures over the life of the new system.

How does the duration of the contract (2100 days) influence the assessment of its value and risk?

The contract duration of 2100 days (approximately 5.75 years) indicates a long-term commitment to maintaining and potentially operating the new natural gas boiler system. This extended period allows for the amortization of initial installation costs over a longer timeframe, potentially improving the long-term value proposition. However, it also introduces risks associated with long-term price stability, potential for technological obsolescence, and the need for ongoing contract management. For the government, it signifies a sustained need for reliable heating and steam services. For the contractor, it provides a stable revenue stream. The risk lies in ensuring that the pricing remains competitive throughout the duration and that the technology chosen remains relevant and efficient.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Facilities Support Services › Facilities Support Services

Product/Service Code: OPERATION OF GOVT OWNED FACILITY › OPERATE GOVT OWNED BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 17575 HIGHWAY 79, MIDDLETOWN, IA, 52638

Business Categories: Category Business, Manufacturer of Goods, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $13,451,511

Exercised Options: $13,451,511

Current Obligation: $13,451,511

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W52P1J09G0001

IDV Type: IDC

Timeline