DoD's $15.1M transformer contract with Yellowstone Electric Co. awarded under full and open competition

Contract Overview

Contract Amount: $15,095,939 ($15.1M)

Contractor: Yellowstone Electric CO

Awarding Agency: Department of Defense

Start Date: 2008-04-22

End Date: 2012-05-04

Contract Duration: 1,473 days

Daily Burn Rate: $10.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: MANUFACTURE AND DELIVER 115 KV TRANSFORMERS

Place of Performance

Location: BILLINGS, YELLOWSTONE County, MONTANA, 59101

State: Montana Government Spending

Plain-Language Summary

Department of Defense obligated $15.1 million to YELLOWSTONE ELECTRIC CO for work described as: MANUFACTURE AND DELIVER 115 KV TRANSFORMERS Key points: 1. Value for money appears reasonable given the firm fixed-price contract type and duration. 2. Competition dynamics were favorable, with 5 bidders vying for the contract. 3. Risk indicators are low due to the firm fixed-price structure and established contractor. 4. Performance context shows a 4-year contract for essential power distribution equipment. 5. Sector positioning places this within the critical defense industrial base for power infrastructure.

Value Assessment

Rating: good

The contract's total value of approximately $15.1 million over four years suggests a steady, albeit not exceptionally high, annual spend. Benchmarking against similar large-scale transformer procurements is challenging without more specific technical details. However, the firm fixed-price nature of the award indicates that the government secured a set price, mitigating cost overrun risks. The number of bids received (5) suggests a competitive environment that likely contributed to a fair market price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The solicitation attracted five distinct bidders, demonstrating a healthy level of market interest and competition for this requirement. This broad competition is generally expected to drive down prices and encourage innovation as contractors vie for the award.

Taxpayer Impact: The robust competition for this contract is beneficial for taxpayers, as it likely resulted in a more favorable price than a sole-source or limited competition award. The presence of multiple bidders increases the likelihood that the government secured the best value available in the market.

Public Impact

The Department of the Army benefits from the reliable supply of critical power infrastructure components. Services delivered include the manufacture and delivery of 115 KV transformers essential for power grid stability. Geographic impact is primarily within Department of Defense facilities requiring robust power distribution. Workforce implications include employment within the specialized manufacturing sector for transformer production.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for long lead times in specialized manufacturing impacting delivery schedules.
Dependency on a single contractor for a critical component could pose supply chain risks if not managed.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Multiple bidders indicate a competitive market and potential for quality suppliers.
Contract duration allows for planned integration into infrastructure projects.

Sector Analysis

The market for power transformers, particularly high-voltage units like the 115 KV specified, is a specialized segment of the electrical equipment manufacturing industry. This sector is characterized by high barriers to entry due to technical expertise, capital investment, and stringent quality control requirements. The Department of Defense represents a significant, albeit niche, customer base for such specialized equipment, often requiring adherence to rigorous military specifications. Comparable spending benchmarks are difficult to ascertain without detailed technical specifications and market analysis of transformer pricing trends.

Small Business Impact

There is no indication that this contract included specific small business set-aside provisions, nor is there information suggesting significant subcontracting opportunities for small businesses. The nature of high-voltage transformer manufacturing typically involves large, specialized firms. Therefore, the direct impact on the small business ecosystem for this particular award appears minimal, though the prime contractor may engage small businesses for ancillary services or components.

Oversight & Accountability

The contract was awarded as a firm fixed-price definitive contract, which inherently includes price controls. Oversight would typically be managed by the contracting officer and the Defense Contract Management Agency (DCMA) to ensure compliance with delivery schedules and specifications. Transparency is facilitated by the Federal Procurement Data System (FPDS), which records contract awards. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Department of Defense Electrical Equipment Procurement
Power Grid Infrastructure Modernization
High-Voltage Transformer Manufacturing Contracts
Army Corps of Engineers Construction Support

Risk Flags

Potential for supply chain disruption
Technical specification compliance risk
Long lead times for specialized manufacturing

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $15.1 million to YELLOWSTONE ELECTRIC CO. MANUFACTURE AND DELIVER 115 KV TRANSFORMERS

Who is the contractor on this award?

The obligated recipient is YELLOWSTONE ELECTRIC CO.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $15.1 million.

What is the period of performance?

Start: 2008-04-22. End: 2012-05-04.

What is the track record of Yellowstone Electric Co. in fulfilling government contracts, particularly for large electrical equipment?

Yellowstone Electric Co. has a history of engaging with government contracts, though specific details on their performance for large electrical equipment procurements like this transformer contract require deeper analysis of past performance reviews and award data. Federal procurement databases would indicate the volume and types of contracts they have held. A review of past performance information, if available through government sources like the Contractor Performance Assessment Reporting System (CPARS), would provide insights into their reliability, quality of work, and adherence to schedule on previous projects. Without direct access to these detailed performance records, it's difficult to definitively assess their track record beyond the fact that they were awarded this significant contract.

How does the unit price of these 115 KV transformers compare to market rates or similar government procurements?

Determining the precise unit price and comparing it to market rates or similar government procurements for these 115 KV transformers is complex without specific technical specifications and the exact quantity delivered under the $15.1 million award. The total award value divided by the number of units (115) would yield an average value per transformer, but this figure doesn't account for variations in technical requirements, delivery locations, or associated services. To conduct a robust comparison, one would need to identify contracts for transformers with identical or very similar voltage ratings, technical standards (e.g., ANSI, IEEE), and environmental specifications. Benchmarking against industry price indices for electrical equipment or analyzing historical data from similar DoD or civilian agency procurements would be necessary for a comprehensive value assessment.

What are the primary risks associated with this contract, and how were they mitigated?

The primary risks associated with this contract likely include potential delays in manufacturing and delivery due to the specialized nature of high-voltage transformers, and the possibility of technical non-compliance if specifications are not meticulously met. Another risk could be price volatility for raw materials, although this is mitigated by the firm fixed-price contract type. Yellowstone Electric Co.'s selection suggests they met pre-qualification criteria, indicating a baseline level of capability. Mitigation strategies employed by the government would include clear contract specifications, defined delivery schedules with potential penalties, rigorous inspection and acceptance testing protocols, and potentially requiring performance bonds. The firm fixed-price structure itself is a key risk mitigation tool for the government, shifting cost overrun risks to the contractor.

What is the overall effectiveness of this contract in meeting the Department of the Army's power infrastructure needs?

The effectiveness of this contract in meeting the Department of the Army's power infrastructure needs hinges on the successful delivery of 115 KV transformers that meet all technical specifications and are deployed to critical locations. Assuming timely delivery and adherence to quality standards, this contract is effective in providing essential components for maintaining and upgrading the Army's power grid capabilities. These transformers are vital for ensuring reliable power supply to bases, operational facilities, and potentially deployed units. The contract's duration (over 4 years) suggests it supports a planned, long-term infrastructure requirement rather than an immediate, short-term need, contributing to sustained operational readiness.

How has historical spending on similar power equipment by the Department of Defense trended over the past decade?

Historical spending on similar power equipment by the Department of Defense has likely shown a consistent need for robust electrical infrastructure components to support global operations and domestic installations. Trends may reflect modernization efforts, upgrades to aging facilities, and the establishment of new operational sites. Spending patterns can fluctuate based on geopolitical events, budget allocations, and specific modernization initiatives. Analyzing aggregate data for categories like 'Transformers,' 'Electrical Power Systems,' or 'Power Distribution Equipment' within DoD spending reports over the last decade would reveal overall investment levels and potential shifts in procurement priorities or technology adoption.

Industry Classification

NAICS: Manufacturing › Electrical Equipment Manufacturing › Power, Distribution, and Specialty Transformer Manufacturing

Product/Service Code: ELECTRIC WIRE, POWER DISTRIB EQPT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W9127N08R0004

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1919 4TH AVE N, BILLINGS, MT, 59101

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $15,501,227

Exercised Options: $15,095,939

Current Obligation: $15,095,939

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline