Department of Defense awards $19.7M contract for air conditioning and refrigeration components

Contract Overview

Contract Amount: $19,666,426 ($19.7M)

Contractor: ND Defense LLC

Awarding Agency: Department of Defense

Start Date: 2008-06-25

End Date: 2009-02-26

Contract Duration: 246 days

Daily Burn Rate: $79.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: AIR CONDITIONER, COMPRESSOR; CONDENSER, REFRIGERATION; AIR CONDITIONER, BLOWER.

Place of Performance

Location: WARRENVILLE, DUPAGE County, ILLINOIS, 60555

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $19.7 million to ND DEFENSE LLC for work described as: AIR CONDITIONER, COMPRESSOR; CONDENSER, REFRIGERATION; AIR CONDITIONER, BLOWER. Key points: 1. Contract awarded to ND Defense LLC for essential climate control and refrigeration parts. 2. The contract value represents a significant investment in maintaining critical equipment. 3. Awarded on a firm fixed-price basis, indicating clear cost expectations. 4. The duration of the contract suggests a need for sustained supply. 5. The specific North American Industry Classification System (NAICS) code points to specialized manufacturing. 6. This award falls under the broader category of motor vehicle parts manufacturing.

Value Assessment

Rating: fair

The contract value of $19.7 million for air conditioning and refrigeration components appears substantial. Benchmarking this against similar contracts is challenging without more specific details on the exact components and quantities. However, the firm fixed-price structure suggests an attempt to control costs upfront. The awarded amount relative to the contract duration and the nature of the goods will be key to assessing value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor was solicited. This approach bypasses the typical competitive bidding process, which can limit price discovery and potentially lead to higher costs for the government. The justification for a sole-source award would need to be thoroughly reviewed to understand why full and open competition was not feasible.

Taxpayer Impact: Sole-source awards can mean taxpayers may not be getting the best possible price, as competition is a key driver for cost savings.

Public Impact

The Department of Defense benefits from the reliable supply of critical climate control and refrigeration parts. Ensures operational readiness and equipment longevity within military installations and vehicles. Supports the maintenance of essential services that rely on temperature-controlled environments. The contract impacts the manufacturing sector, specifically those involved in producing specialized vehicle parts.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpayment.
Sole-source awards can indicate a lack of market research or a failure to identify potential bidders.
The specific components and their criticality are not detailed, making a full risk assessment difficult.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
The award is for essential components, suggesting a critical need.
The contractor, ND Defense LLC, is fulfilling a specific government requirement.

Sector Analysis

This contract falls within the broader manufacturing sector, specifically related to motor vehicle parts. The market for specialized refrigeration and climate control components is driven by demand from various industries, including defense, automotive, and industrial applications. The Department of Defense is a significant consumer of such goods, often requiring robust and specialized equipment that meets stringent performance standards. Benchmarking this spending would involve comparing it to other defense contracts for similar equipment or to the broader market prices for industrial-grade HVAC and refrigeration units.

Small Business Impact

This contract does not appear to have a small business set-aside. There is no indication of subcontracting plans specifically targeting small businesses. The impact on the small business ecosystem is likely minimal unless ND Defense LLC engages small businesses as subcontractors, which is not explicitly stated.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and financial management offices. Accountability measures are inherent in the firm fixed-price contract type, which obligates the contractor to deliver specified goods at an agreed-upon price. Transparency regarding the justification for the sole-source award and the performance metrics would be crucial for a comprehensive oversight assessment.

Related Government Programs

Defense Logistics Agency (DLA) procurement
Military vehicle maintenance contracts
HVAC and refrigeration equipment procurement
Specialized parts manufacturing contracts

Risk Flags

Sole-source award lacks competitive pricing.
Potential for cost overruns due to lack of competition.
Insufficient detail on components and specifications for full value assessment.
Contractor performance history not readily available.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.7 million to ND DEFENSE LLC. AIR CONDITIONER, COMPRESSOR; CONDENSER, REFRIGERATION; AIR CONDITIONER, BLOWER.

Who is the contractor on this award?

The obligated recipient is ND DEFENSE 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 $19.7 million.

What is the period of performance?

Start: 2008-06-25. End: 2009-02-26.

What is the specific justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was awarded as 'NOT COMPETED,' which is synonymous with a sole-source award. The specific justification for this determination is not included in the data. Typically, sole-source awards are made when only one responsible source is available, or when there is a compelling urgency, or when it is in the public interest. Without the official justification document (often a Justification and Approval or J&A), it's impossible to ascertain the precise reasons. This lack of competition is a key area for further investigation, as it limits the government's ability to secure the best possible pricing and terms through a competitive process.

How does the awarded amount of $19.7 million compare to market rates for similar air conditioning and refrigeration components?

Directly comparing the $19.7 million award to market rates is difficult without knowing the exact specifications, quantities, and types of air conditioning and refrigeration components procured. The data only provides broad categories. However, given the sole-source nature of the award, there is a risk that the price may not be fully optimized compared to what could be achieved through a competitive bidding process. To perform a robust comparison, one would need to identify comparable commercial or government contracts for similar items, analyze the unit costs, and factor in any specialized requirements dictated by military use, such as ruggedization or specific performance standards.

What is the track record of ND Defense LLC in fulfilling government contracts, particularly for the Department of Defense?

Information regarding ND Defense LLC's specific track record with government contracts, especially for the Department of Defense, is not provided in the data. A thorough assessment would require reviewing past performance evaluations, contract completion history, and any instances of contract disputes or terminations. Understanding their experience with similar types of procurements (e.g., climate control systems, vehicle parts) and their ability to meet delivery schedules and quality standards would be crucial. Without this historical data, it's challenging to gauge their reliability and past performance effectiveness.

What are the potential risks associated with a sole-source award of this magnitude?

The primary risk associated with a sole-source award of $19.7 million is the potential for inflated pricing due to the absence of competition. Without competing bids, the government may not be achieving the most cost-effective solution. Other risks include a lack of innovation that competition might foster, and a potential over-reliance on a single supplier, which could create vulnerabilities in the supply chain. Furthermore, the justification for the sole-source award itself needs scrutiny to ensure it was appropriate and not a result of inadequate market research or planning.

How does this contract fit into the broader spending patterns for military vehicle parts or climate control systems within the Department of Defense?

This $19.7 million contract for air conditioning and refrigeration components represents a specific procurement within the Department of Defense's vast budget. To understand its place in broader spending patterns, one would need to analyze historical data on similar procurements. This includes looking at the total annual spending on vehicle parts, HVAC systems, and refrigeration units across different military branches and over several fiscal years. Comparing this contract's value to the overall budget allocated for maintenance, repair, and operations (MRO) for military assets would provide context on its relative significance.

Industry Classification

NAICS: Manufacturing › Motor Vehicle Parts Manufacturing › All Other Motor Vehicle Parts Manufacturing

Product/Service Code: REFRIG, AIR CONDIT/CIRCULAT EQPT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W56HZV08R0593

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Navistar International Corporation (UEI: 161984646)

Address: 4201 WINFIELD RD, WARRENVILLE, IL, 90

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Manufacturer of Goods, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $19,666,426

Exercised Options: $19,666,426

Current Obligation: $19,666,426

Timeline