DoD awards $11.9M Iron and Steel Mills license fee to Power Contracting, Inc. via sole-source purchase order

Contract Overview

Contract Amount: $11,895,450 ($11.9M)

Contractor: Power Contracting, Inc.

Awarding Agency: Department of Defense

Start Date: 2006-10-04

End Date: 2008-12-30

Contract Duration: 818 days

Daily Burn Rate: $14.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: LICENSE FEE

Place of Performance

Location: PITTSBURGH, ALLEGHENY County, PENNSYLVANIA, 15201

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $11.9 million to POWER CONTRACTING, INC. for work described as: LICENSE FEE Key points: 1. Significant contract value of $11.9 million for a license fee. 2. Sole-source award raises questions about competition and potential price overruns. 3. Contract duration of 818 days suggests a substantial, ongoing need. 4. Lack of small business participation noted.

Value Assessment

Rating: questionable

The contract value of $11.9 million for a license fee is substantial. Without comparable contracts or detailed cost breakdowns, it's difficult to assess if this price is competitive. The sole-source nature further complicates value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was awarded on a sole-source basis, indicating a lack of competition. This method may lead to higher prices and reduced innovation compared to a fully competed process. The impact on price discovery is likely negative.

Taxpayer Impact: The sole-source award of $11.9 million without competitive bidding could result in taxpayers paying more than necessary for this license fee.

Public Impact

Taxpayers may be overpaying due to the lack of competitive bidding. The specific nature of the license fee and its necessity warrants scrutiny. Future contract awards in this category should prioritize competitive processes.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
No small business participation
Lack of transparency in pricing

Positive Signals

Contract awarded to a specific company, potentially indicating specialized expertise.

Sector Analysis

The contract falls under the Iron and Steel Mills sector (NAICS 331111). Spending benchmarks for license fees in this specific industrial sector are not readily available, but the value is significant for a single fee.

Small Business Impact

The contract explicitly states no small business participation (sb: false). This indicates that opportunities for small businesses were not considered or pursued in this procurement, potentially limiting economic inclusion.

Oversight & Accountability

The sole-source award and lack of small business participation suggest potential gaps in oversight. Further review is needed to ensure the Department of the Army received fair value and followed appropriate procurement regulations.

Related Government Programs

Iron and Steel Mills
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Sole-source award lacks competition.
No small business participation.
Potential for overpayment due to lack of price discovery.
Limited transparency on the nature of the license fee.
Contract duration is substantial.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.9 million to POWER CONTRACTING, INC.. LICENSE FEE

Who is the contractor on this award?

The obligated recipient is POWER CONTRACTING, 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 $11.9 million.

What is the period of performance?

Start: 2006-10-04. End: 2008-12-30.

What is the specific nature of this license fee and why was it deemed necessary to procure on a sole-source basis?

The provided data does not specify the exact nature of the 'LICENSE FEE'. However, sole-source procurement typically occurs when only one responsible source is available or when the public exigency requires immediate action. For a license fee, this could relate to proprietary technology, unique data access, or specific regulatory compliance that only one entity can provide.

What is the risk associated with a sole-source award for a license fee of this magnitude?

The primary risk is the potential for inflated pricing, as there is no competitive pressure to ensure cost-effectiveness. Taxpayers may overpay. Additionally, a sole-source award can limit innovation and prevent the government from benefiting from alternative solutions or better terms that a competitive process might uncover.

How effective is this contract in ensuring the Department of the Army receives value for its investment?

The effectiveness is questionable due to the sole-source nature. While the contract was awarded, the lack of competition makes it difficult to ascertain if the $11.9 million fee represents fair market value. The fixed-price structure provides some cost certainty, but the overall value realization depends heavily on the necessity and utility of the licensed item.

Industry Classification

NAICS: Manufacturing › Iron and Steel Mills and Ferroalloy Manufacturing › Iron and Steel Mills

Product/Service Code: CONSTRUCT/MINE/EXCAVATE/HIGHWY EQPT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2200 SPRING GARDEN AVE, 2 FL, PITTSBURGH, PA, 15212

Business Categories: Category Business, Emerging Small Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations

Financial Breakdown

Contract Ceiling: $11,895,450

Exercised Options: $11,895,450

Current Obligation: $11,895,450

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Timeline