DoD's $26M turbine rehabilitation contract with Toshiba America Energy Systems Corporation awarded via full and open competition
Contract Overview
Contract Amount: $25,985,440 ($26.0M)
Contractor: Toshiba America Energy Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2007-07-02
End Date: 2016-12-31
Contract Duration: 3,470 days
Daily Burn Rate: $7.5K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: TURBINE REHABILITATION WHITNEY PWR HOUSE, TWO NEW TURBINE GENERATORS BEING INSTALLED AT WHITNEY POWER HOUSE. BASE PLUS FOUR OPTION PERIOD CONTRACT.
Place of Performance
Location: CLIFTON, BOSQUE County, TEXAS, 76634
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $26.0 million to TOSHIBA AMERICA ENERGY SYSTEMS CORPORATION for work described as: TURBINE REHABILITATION WHITNEY PWR HOUSE, TWO NEW TURBINE GENERATORS BEING INSTALLED AT WHITNEY POWER HOUSE. BASE PLUS FOUR OPTION PERIOD CONTRACT. Key points: 1. The contract's base value plus four option periods suggests a long-term need for turbine generator set units. 2. The firm-fixed-price structure aims to provide cost certainty for the Department of Defense. 3. The duration of the contract (3470 days) indicates a significant, multi-year project. 4. The North American Industry Classification System (NAICS) code 333611 points to specialized manufacturing within the energy sector. 5. The contract was awarded by the Department of the Army, a major component of the Department of Defense. 6. The absence of small business set-aside indicates the primary contractor is likely not a small business.
Value Assessment
Rating: fair
Benchmarking the value of this contract is challenging without specific details on the turbine specifications and the scope of rehabilitation. However, a $26 million contract over nearly a decade for turbine generators suggests a substantial investment. The firm-fixed-price nature provides some cost control, but the overall value for money depends heavily on the performance and longevity of the installed equipment. Further analysis would require comparing this price to similar turbine procurements with comparable technical requirements and market conditions.
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. This approach generally fosters a competitive environment, potentially leading to better pricing and innovation. The number of bidders is not specified, but the use of full and open competition suggests a deliberate effort to maximize market participation and secure the best possible outcome for the government.
Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it increases the likelihood of obtaining competitive pricing and high-quality goods or services.
Public Impact
The primary beneficiaries are the Department of Defense and potentially the public through reliable energy generation from the Whitney Power House. The contract delivers two new turbine generators, crucial for power generation infrastructure. The geographic impact is localized to Texas, where the Whitney Power House is located. The contract supports the manufacturing sector related to turbine and turbine generator set units.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns if unforeseen technical issues arise during rehabilitation, despite the firm-fixed-price structure.
- Dependence on a single contractor for a critical infrastructure component could pose supply chain risks.
- The long contract duration might lead to technology obsolescence if not managed proactively.
Positive Signals
- Firm-fixed-price contract provides budget certainty for the government.
- Full and open competition suggests a robust bidding process to secure value.
- Award to a known entity (Toshiba America Energy Systems Corporation) may indicate a track record of performance in this specialized field.
Sector Analysis
This contract falls within the manufacturing sector, specifically the production of turbine and turbine generator set units. This is a specialized area within industrial manufacturing, often characterized by high barriers to entry due to technical expertise and capital investment. The market size for such specialized equipment is significant, driven by energy infrastructure needs across various sectors, including defense, utilities, and heavy industry. This contract represents a specific procurement within that broader market.
Small Business Impact
The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the primary contract was awarded to a large business, Toshiba America Energy Systems Corporation. There is no explicit information on subcontracting plans for small businesses. Without this data, it's difficult to assess the direct impact on the small business ecosystem, though large prime contracts often involve subcontracting opportunities.
Oversight & Accountability
The contract is a definitive contract awarded by the Department of the Army. Oversight would typically involve contract administration by the procuring contracting office within the Army, performance monitoring, and adherence to the firm-fixed-price terms. Transparency is generally provided through contract databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.
Related Government Programs
- Department of Defense Energy Infrastructure Projects
- Power Generation Equipment Procurement
- Turbine Manufacturing Contracts
- Army Corps of Engineers Construction Projects
Risk Flags
- Long contract duration may increase risk of cost escalation or technology obsolescence.
- Firm-fixed-price contracts can lead to disputes if scope changes or unforeseen issues arise.
- Dependence on a single supplier for critical infrastructure components.
Tags
department-of-defense, department-of-the-army, turbine-manufacturing, energy-infrastructure, firm-fixed-price, full-and-open-competition, definitive-contract, texas, large-contract, long-duration
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $26.0 million to TOSHIBA AMERICA ENERGY SYSTEMS CORPORATION. TURBINE REHABILITATION WHITNEY PWR HOUSE, TWO NEW TURBINE GENERATORS BEING INSTALLED AT WHITNEY POWER HOUSE. BASE PLUS FOUR OPTION PERIOD CONTRACT.
Who is the contractor on this award?
The obligated recipient is TOSHIBA AMERICA ENERGY SYSTEMS CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $26.0 million.
What is the period of performance?
Start: 2007-07-02. End: 2016-12-31.
What is Toshiba America Energy Systems Corporation's track record with similar federal contracts?
Toshiba America Energy Systems Corporation has a history of engaging in contracts related to energy systems and power generation equipment. While specific details on past performance for turbine rehabilitation of this scale would require a deeper dive into contract databases, their involvement in this $26 million Department of Defense contract suggests they are a recognized player in the field. Analyzing past contract awards, completion records, and any reported disputes or performance issues associated with Toshiba America Energy Systems Corporation would provide a clearer picture of their reliability and expertise in fulfilling complex energy infrastructure requirements for the federal government.
How does the $26 million cost compare to similar turbine rehabilitation projects?
Directly comparing the $26 million cost without detailed specifications of the turbine rehabilitation and the scope of work (e.g., type of turbines, extent of repairs, new installations) is difficult. However, for context, major power plant component replacements or rehabilitations can range from several million to tens of millions of dollars, depending on the complexity and scale. The fact that this contract includes the installation of two new turbine generators suggests a significant capital investment. Benchmarking against similar procurements by the Department of Defense or other federal agencies for comparable turbine units would be necessary for a precise value-for-money assessment.
What are the primary risks associated with this long-term turbine rehabilitation contract?
The primary risks associated with this contract include potential cost overruns, despite the firm-fixed-price structure, if unforeseen technical challenges arise during the rehabilitation or installation process. There's also a risk related to the long duration (over 9 years) potentially leading to technology obsolescence or the contractor facing financial instability over such an extended period. Furthermore, reliance on a single contractor for critical power generation equipment could pose supply chain or operational continuity risks if the contractor fails to perform adequately or faces disruptions.
How effective is the firm-fixed-price contract type in managing costs for this project?
The firm-fixed-price (FFP) contract type is generally effective in managing costs for projects where the scope of work is well-defined and risks are understood. It shifts the risk of cost overruns to the contractor, providing the government with budget certainty. For a project involving the installation of new turbine generators and rehabilitation, an FFP contract incentivizes the contractor to control costs efficiently to maximize profit. However, if unforeseen technical complexities emerge that were not reasonably foreseeable during bidding, the contractor may seek change orders, potentially increasing the total cost.
What is the historical spending trend for turbine generator set units by the Department of Defense?
Analyzing historical spending trends for turbine generator set units by the Department of Defense would require examining procurement data over several fiscal years. This specific contract, awarded in 2007 and ending in 2016, represents a significant investment within that period. Broader trends might indicate increasing or decreasing reliance on such equipment, shifts in technology, or changes in procurement strategies. Understanding these trends can help contextualize the significance of this particular award and inform future budget allocations for similar critical infrastructure needs within the DoD.
Industry Classification
NAICS: Manufacturing › Engine, Turbine, and Power Transmission Equipment Manufacturing › Turbine and Turbine Generator Set Units Manufacturing
Product/Service Code: ENGINES AND TURBINES AND COMPONENT
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: W9126G06R0031
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Toshiba Corporation (UEI: 690543517)
Address: 3545 WHITEHALL PARK DR., SUITE 500, CHARLOTTE, NC, 28273
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $26,232,519
Exercised Options: $25,985,440
Current Obligation: $25,985,440
Contract Characteristics
Commercial Item: COMMERCIAL ITEM
Cost or Pricing Data: NO
Timeline
Start Date: 2007-07-02
Current End Date: 2016-12-31
Potential End Date: 2016-12-31 00:00:00
Last Modified: 2021-02-25
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