DoD awards $32M for 5MW generation plant in California, with 3 bidders competing

Contract Overview

Contract Amount: $32,016,426 ($32.0M)

Contractor: Hsgs-Ameresco, LLC

Awarding Agency: Department of Defense

Start Date: 2023-08-30

End Date: 2025-10-24

Contract Duration: 786 days

Daily Burn Rate: $40.7K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Energy

Official Description: 5MW GENERATION PLANT

Place of Performance

Location: CONCORD, CONTRA COSTA County, CALIFORNIA, 94520

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $32.0 million to HSGS-AMERESCO, LLC for work described as: 5MW GENERATION PLANT Key points: 1. Contract value appears reasonable given the scale of a 5MW generation plant. 2. Full and open competition suggests potential for competitive pricing. 3. Definitive contract type indicates a long-term relationship for services. 4. Project duration of 786 days aligns with typical construction timelines. 5. Location in California may influence costs due to local labor and material prices. 6. Fixed-price contract shifts cost overrun risk to the contractor.

Value Assessment

Rating: good

The contract value of $32 million for a 5MW generation plant is within a reasonable range for such infrastructure projects. Benchmarking against similar Department of Defense (DoD) or other federal energy projects of comparable size and complexity would provide a more precise value-for-money assessment. The fixed-price nature of the contract suggests that the initial price was determined to be fair and reasonable based on the scope of work.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' which is a less common method than standard full and open competition. This suggests that while multiple sources were considered, there might have been specific reasons for excluding certain potential bidders, possibly related to specialized capabilities or prior relationships. With 3 bidders, the competition level is moderate, which generally allows for price discovery but may not be as robust as a larger pool of offerors.

Taxpayer Impact: A moderate level of competition with 3 bidders is generally favorable for taxpayers, as it encourages contractors to offer competitive pricing to secure the award. However, the 'after exclusion of sources' aspect warrants further scrutiny to ensure no potential cost savings were foregone.

Public Impact

The primary beneficiary is the Department of Defense, which will receive a 5MW generation plant to support its operations. The services delivered include the construction of a power generation facility and associated infrastructure. The geographic impact is localized to the specific military installation in California where the plant will be built. Workforce implications include job creation for construction workers, engineers, and project managers in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions arise, despite the firm fixed-price contract.
Dependency on the contractor's ability to meet the project timeline and quality standards.
Risk associated with the 'after exclusion of sources' competition method if it limited the bidder pool significantly.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Moderate competition among 3 bidders suggests a reasonable price was likely negotiated.
Project duration is clearly defined, allowing for planning and oversight.

Sector Analysis

The energy infrastructure sector, particularly for government facilities, involves significant investment in reliable power generation. This contract for a 5MW plant fits within the broader market for renewable or conventional power solutions for military bases, which often require robust and secure energy sources. Comparable spending benchmarks would involve looking at other DoD or federal agency contracts for similar-sized power plants or energy resilience projects.

Small Business Impact

The data indicates that small business participation was not a primary focus for this contract, as the 'small business' flag is false. There is no explicit mention of small business set-asides or subcontracting requirements in the provided data. This suggests that the prime contractor, HSGS-AMERESCO, LLC, is likely a large business, and the subcontracting opportunities for small businesses would depend on the contractor's own procurement practices.

Oversight & Accountability

Oversight for this definitive contract will likely be managed by the contracting officer and the relevant Department of the Army contracting office. Accountability measures are embedded in the firm fixed-price contract terms, requiring the contractor to deliver the specified generation plant. Transparency is generally facilitated through contract award databases, though specific project milestones and performance details may not be publicly disclosed. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense Energy Resilience Programs
Military Base Infrastructure Modernization
Renewable Energy Projects for Federal Agencies
Power Generation Construction Contracts

Risk Flags

Potential for reduced competition due to source exclusion.
Risk of cost overruns if unforeseen site conditions arise.
Dependency on contractor performance for timely and quality delivery.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $32.0 million to HSGS-AMERESCO, LLC. 5MW GENERATION PLANT

Who is the contractor on this award?

The obligated recipient is HSGS-AMERESCO, 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 $32.0 million.

What is the period of performance?

Start: 2023-08-30. End: 2025-10-24.

What is the track record of HSGS-AMERESCO, LLC with Department of Defense contracts, particularly for energy infrastructure?

HSGS-AMERESCO, LLC has a history of performing work for the Department of Defense and other federal agencies, often focusing on energy efficiency, renewable energy, and infrastructure projects. Their experience typically includes designing, building, and operating energy-related facilities. A detailed review of their past performance on similar-sized generation plant projects would be necessary to fully assess their capability and reliability for this specific contract. Analyzing past contract awards, completion records, and any reported performance issues would provide further insight into their track record.

How does the $32 million cost compare to similar 5MW generation plant projects awarded by the federal government?

Benchmarking the $32 million cost against similar 5MW generation plant projects requires access to a broader dataset of federal contract awards. Factors such as location (labor and material costs), technology used (e.g., solar, natural gas, battery storage), and site preparation complexity significantly influence project costs. While $32 million for a 5MW plant is a substantial investment, its reasonableness depends heavily on these variables. A preliminary assessment suggests it is within a plausible range, but a detailed comparison with projects in similar geographic and technological contexts is needed for a definitive conclusion on value for money.

What are the specific risks associated with the 'Full and Open Competition After Exclusion of Sources' award method for this contract?

The 'Full and Open Competition After Exclusion of Sources' method implies that while the competition was intended to be open, certain potential sources were deliberately excluded. This could be due to reasons such as national security, proprietary technology, or the need for highly specialized capabilities that only a limited number of firms possess. The primary risk for taxpayers is that this exclusion might have inadvertently reduced the competitive pressure, potentially leading to a higher price than if all capable sources had been allowed to bid. It also raises questions about the justification for the exclusions and whether they were truly necessary and in the government's best interest.

What is the expected effectiveness of this 5MW generation plant in meeting the Department of Defense's energy needs?

The effectiveness of the 5MW generation plant will depend on its intended purpose within the Department of Defense's energy strategy. If designed for base load power, peak shaving, or as a renewable energy supplement, its effectiveness can be measured by its reliability, output consistency, and contribution to energy resilience and cost savings. The fixed-price contract structure incentivizes the contractor to deliver a functional plant, but ongoing operational performance and maintenance will be critical factors in its long-term effectiveness. Detailed specifications within the contract regarding performance metrics and uptime guarantees are essential for assessing this.

How does historical spending on similar power generation projects by the Department of the Army compare to this award?

Analyzing historical spending by the Department of the Army on similar power generation projects is crucial for context. This involves examining past contract values, project scopes, and timelines for facilities of comparable size and function. If historical data shows a trend of higher costs for similar projects, this $32 million award might represent good value. Conversely, if past projects were completed at a significantly lower cost, it could indicate potential overpricing or scope creep. Without specific historical data points, it's difficult to definitively assess this contract's alignment with past spending patterns.

What are the potential long-term operational and maintenance costs associated with this 5MW generation plant?

The initial contract value of $32 million covers the construction of the 5MW generation plant. However, the long-term operational and maintenance (O&M) costs are a separate consideration and are not detailed in the provided award data. These costs will depend on the type of generation technology employed, the frequency and scope of maintenance required, spare parts, and labor. The Department of Defense will incur these ongoing O&M expenses throughout the plant's lifespan, which could significantly exceed the initial capital investment. Understanding the projected O&M budget and any associated service contracts is vital for a complete financial picture.

Industry Classification

NAICS: Construction › Utility System Construction › Power and Communication Line and Related Structures Construction

Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCTION OF BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W9123823R0034

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 217 CEMBER WAY, SUMMERVILLE, SC, 29483

Business Categories: Category Business, Limited Liability Corporation, Self-Certified Small Disadvantaged Business, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $32,016,426

Exercised Options: $32,016,426

Current Obligation: $32,016,426

Actual Outlays: $212,753

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline