The Army awarded a $26M firm-fixed-price contract for The Dalles Station services, completed in 2014

Contract Overview

Contract Amount: $26,004,691 ($26.0M)

Contractor: Olsson Industrial Electric, Inc

Awarding Agency: Department of Defense

Start Date: 2008-09-30

End Date: 2014-06-30

Contract Duration: 2,099 days

Daily Burn Rate: $12.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Energy

Official Description: THE DALLES STATION SERVICE CONTRACT

Place of Performance

Location: DALLESPORT, KLICKITAT County, WASHINGTON, 98617

State: Washington Government Spending

Plain-Language Summary

Department of Defense obligated $26.0 million to OLSSON INDUSTRIAL ELECTRIC, INC for work described as: THE DALLES STATION SERVICE CONTRACT Key points: 1. The contract's value of $26 million over its duration suggests a significant investment in maintaining critical infrastructure. 2. Full and open competition was utilized, indicating a potentially competitive bidding process that could drive favorable pricing. 3. The contract duration of approximately 6 years (2008-2014) allowed for long-term service provision and planning. 4. The fixed-price nature of the contract shifts cost risk to the contractor, potentially leading to more predictable expenses for the government. 5. The specific service, Electric Bulk Power Transmission and Control, points to a critical operational need within the Department of the Army. 6. The award to OLSSON INDUSTRIAL ELECTRIC, INC. represents a single contractor's role in fulfilling this essential service.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without more specific details on the scope of 'The Dalles Station Service Contract'. However, a $26 million award over six years averages to approximately $4.3 million annually. This figure needs to be compared against the cost of similar electrical infrastructure maintenance contracts for facilities of comparable size and complexity. The firm-fixed-price structure suggests that the government aimed for cost certainty, but the ultimate value for money depends on the quality of services rendered and whether the price was indeed competitive given the market rates for such specialized electrical services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'full and open competition,' meaning all responsible sources were permitted to submit bids. The presence of 3 bidders suggests a moderate level of competition for this contract. While more than a sole-source or limited competition, a higher number of bidders would typically be preferred to ensure the most competitive pricing and best value. The fact that it was competed openly is a positive indicator for price discovery and potential savings.

Taxpayer Impact: A fully and openly competed contract, even with a moderate number of bidders, generally provides better assurance to taxpayers that the government is obtaining services at a reasonable price compared to less competitive procurement methods.

Public Impact

The primary beneficiaries are the Department of the Army and its operational readiness, ensuring the reliable functioning of electrical power systems at The Dalles Station. The services delivered likely involved the maintenance, repair, and potentially upgrade of electric bulk power transmission and control systems. The geographic impact is localized to The Dalles Station, Washington, a critical military or operational facility. Workforce implications would include employment opportunities for electricians, technicians, and project managers employed by OLSSON INDUSTRIAL ELECTRIC, INC. and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of detailed performance metrics makes it difficult to assess the contractor's execution beyond contract completion.
The specific nature of 'The Dalles Station Service Contract' is not fully elaborated, leaving room for interpretation regarding the full scope of work.
Without data on the number of bidders relative to the market, it's hard to definitively say if competition was robust.
The fixed-price contract, while offering cost certainty, could incentivize the contractor to minimize costs, potentially impacting service quality if not closely monitored.

Positive Signals

The contract was awarded through full and open competition, indicating an effort to maximize the pool of potential offerors.
The firm-fixed-price contract type transfers significant cost risk to the contractor, which can be beneficial for budget predictability.
The contract was successfully completed, suggesting that the required services were delivered within the agreed-upon timeframe and terms.
The duration of the contract allowed for sustained service delivery, potentially leading to greater efficiency and expertise development by the contractor.

Sector Analysis

The contract falls within the broader energy and utilities sector, specifically focusing on electric power transmission and control infrastructure. This is a critical component for national security and operational continuity for military installations. The market for such specialized services is often characterized by a limited number of highly qualified firms capable of undertaking complex projects. Comparable spending benchmarks would involve analyzing other contracts for similar infrastructure maintenance at large federal facilities, considering factors like system complexity, geographic location, and service requirements.

Small Business Impact

The contract details indicate that small business participation was not a specific set-aside (ss: false) nor was there a stated subcontracting goal (sb: false). This suggests that the primary focus of the procurement was on obtaining the best value through open competition, rather than specifically targeting small business engagement. Consequently, the direct impact on the small business ecosystem for this particular contract appears minimal, although the prime contractor may have utilized small businesses as subcontractors without a formal requirement.

Oversight & Accountability

Oversight for this contract would have been managed by the Department of the Army, likely through contracting officers and technical representatives responsible for monitoring performance and ensuring compliance with the contract terms. As a completed contract, the primary accountability measures would have been tied to final acceptance of services and payment. Transparency is generally facilitated by the Federal Procurement Data System (FPDS), which records contract awards. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected during the contract's lifecycle.

Related Government Programs

Army Base Operations Support Contracts
Department of Defense Electrical Infrastructure Maintenance
Federal Energy Management Program Contracts
Utility Privatization Projects
Critical Infrastructure Protection Contracts

Risk Flags

Contract Duration
Competition Level
Scope Definition
Performance Metrics

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.0 million to OLSSON INDUSTRIAL ELECTRIC, INC. THE DALLES STATION SERVICE CONTRACT

Who is the contractor on this award?

The obligated recipient is OLSSON INDUSTRIAL ELECTRIC, 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 $26.0 million.

What is the period of performance?

Start: 2008-09-30. End: 2014-06-30.

What was the specific nature of 'The Dalles Station Service Contract' and its criticality to Army operations?

While the provided data identifies the contract as 'THE DALLES STATION SERVICE CONTRACT' with a Product Service Code (PSC) related to Electric Bulk Power Transmission and Control, the exact scope of services is not detailed. It is reasonable to infer that this contract involved the maintenance, repair, operation, and possibly upgrade of the electrical power transmission and distribution systems at a facility known as The Dalles Station. Such systems are critical for ensuring the continuous and reliable power supply necessary for the functioning of any military installation, supporting everything from command and control systems to essential life support and operational equipment. The criticality would depend on the specific function of The Dalles Station, which could range from a communications hub to a logistical support facility or even a power generation/distribution point itself.

How does the $26 million contract value compare to similar electrical infrastructure contracts for federal facilities?

A $26 million contract awarded over approximately six years (September 2008 to June 2014) equates to an average annual expenditure of roughly $4.3 million. To benchmark this, one would need to compare it against contracts for similar electrical bulk power transmission and control services at federal facilities of comparable size, operational complexity, and geographic location. For instance, contracts for maintaining electrical grids at large Army bases or other federal installations with significant power demands could serve as benchmarks. Without access to a database of such comparable contracts, it's difficult to definitively state if $4.3 million annually is high or low. However, given the specialized nature of bulk power systems, this figure suggests a substantial and ongoing requirement.

What were the key risks associated with this firm-fixed-price contract, and how might they have been mitigated?

The primary risk with a firm-fixed-price (FFP) contract is that the contractor may cut corners on quality or service to maximize profit, especially if the initial price was set too low or if unforeseen issues arise. For 'The Dalles Station Service Contract,' risks could include inadequate maintenance leading to system failures, use of substandard parts, or delays in response to emergencies. Mitigation strategies employed by the Army would typically involve robust contract oversight, including regular inspections, performance monitoring by technical representatives, clear performance standards and deliverables, and potentially liquidated damages clauses for failures. The government also benefits from the contractor bearing the risk of cost overruns, which provides budget certainty.

Given the 'full and open competition' and 3 bidders, what does this imply about the contractor's pricing and the government's value for money?

Awarding a contract under 'full and open competition' with 3 bidders suggests a moderately competitive environment. While more bidders generally lead to better price discovery, three offerors indicate that the opportunity was known and accessible to multiple qualified companies. This level of competition likely pressured OLSSON INDUSTRIAL ELECTRIC, INC. to submit a competitive bid to win the contract. The firm-fixed-price nature further solidifies the government's position by locking in the price. The value for money is thus reasonably assured by the competitive process and the fixed-price structure, assuming the scope of work was well-defined and the contractor met all performance requirements.

What is the historical spending pattern for electric bulk power transmission and control services by the Department of the Army?

Analyzing the historical spending pattern for electric bulk power transmission and control services by the Department of the Army requires access to comprehensive federal procurement data over an extended period. This specific contract, awarded in 2008 and ending in 2014 for $26 million, represents one data point. To understand the broader pattern, one would need to aggregate spending across numerous similar contracts awarded by the Army nationwide for maintaining and operating its electrical infrastructure. Factors influencing spending include the number of facilities, the age and condition of existing infrastructure, modernization initiatives, and overall defense budgets. Without broader data, it's impossible to characterize the Army's historical spending in this category beyond this single contract's context.

Industry Classification

NAICS: Utilities › Electric Power Generation, Transmission and Distribution › Electric Bulk Power Transmission and Control

Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR NONBUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SEALED BID

Solicitation ID: W9127N07R0038

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1919 LAURA ST, SPRINGFIELD, OR, 97477

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

Financial Breakdown

Contract Ceiling: $26,004,691

Exercised Options: $26,004,691

Current Obligation: $26,004,691

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline