DoD awards $28.5M contract for overhead traveling cranes, with 2 bidders competing

Contract Overview

Contract Amount: $28,489,338 ($28.5M)

Contractor: Knight Const. & Supply, Inc

Awarding Agency: Department of Defense

Start Date: 2019-09-18

End Date: 2027-03-08

Contract Duration: 2,728 days

Daily Burn Rate: $10.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: MANUFACTURE AND DELIVER NEW CRANE

Place of Performance

Location: THE DALLES, WASCO County, OREGON, 97058

State: Oregon Government Spending

Plain-Language Summary

Department of Defense obligated $28.5 million to KNIGHT CONST. & SUPPLY, INC for work described as: MANUFACTURE AND DELIVER NEW CRANE Key points: 1. The contract value appears reasonable given the scope of manufacturing and delivery of specialized crane systems. 2. Full and open competition suggests a healthy market for this type of equipment, potentially leading to better pricing. 3. The fixed-price contract type shifts performance risk to the contractor. 4. The contract duration is substantial, indicating a long-term need for these assets. 5. The award to Knight Const. & Supply, Inc. represents a significant investment in material handling capabilities for the Army. 6. The North American Industry Classification System (NAICS) code 333923 covers industrial machinery manufacturing, placing this within a specialized industrial sector.

Value Assessment

Rating: good

The contract value of $28.5 million for overhead traveling cranes, hoists, and monorail systems seems aligned with the complexity and specialized nature of the equipment. Benchmarking against similar large-scale industrial equipment procurements would provide a more precise value assessment. However, the firm fixed-price structure suggests that the contractor has adequately accounted for all costs and risks within the awarded amount, implying a degree of confidence in the pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that the solicitation was made available to all responsible prospective contractors. With two bidders participating, the competition level is moderate. While more bidders could potentially drive prices lower, two bidders still provide a basis for price comparison and negotiation, suggesting a reasonable level of market engagement.

Taxpayer Impact: The moderate competition level means taxpayers likely benefited from a competitive bidding process, preventing a single supplier from dictating terms and potentially leading to a more cost-effective outcome than a sole-source award.

Public Impact

The Department of the Army is the primary beneficiary, receiving essential material handling equipment. The contract will result in the manufacture and delivery of overhead traveling cranes, hoists, and monorail systems. The geographic impact is likely concentrated at military installations where these cranes will be deployed, primarily in Oregon based on the contractor's location. The contract supports jobs in the industrial machinery manufacturing sector, contributing to the workforce in specialized engineering and production roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 4 years) could lead to scope creep or unforeseen cost increases if not managed tightly.
Reliance on a single contractor for manufacturing and delivery introduces supply chain risk.
Potential for obsolescence of technology over the contract's extended period.

Positive Signals

Firm fixed-price contract type provides cost certainty for the government.
Full and open competition suggests a robust market and potential for competitive pricing.
Award to an established supplier with experience in similar equipment.

Sector Analysis

This contract falls within the industrial machinery manufacturing sector, specifically under NAICS code 333923. This sector is characterized by the production of a wide range of industrial equipment, including cranes and hoists. The market size for such specialized equipment is significant, driven by demand from defense, construction, and logistics industries. The $28.5 million award is a substantial contract within this niche, reflecting the specialized engineering and manufacturing capabilities required.

Small Business Impact

The contract data indicates that small business participation was not a specific set-aside criterion (sb: false) and the contractor is not a small business. There is no explicit information on subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem from this specific award is likely minimal unless the prime contractor voluntarily engages small businesses for components or services.

Oversight & Accountability

Oversight for this contract will be managed by the Department of the Army, likely through contracting officers and program managers. Accountability measures are embedded in the firm fixed-price contract terms, requiring the contractor to deliver specified goods within the agreed price. Transparency is facilitated by the contract award notice, but detailed oversight reports or inspector general involvement would depend on specific performance issues or audits.

Related Government Programs

Defense Logistics Agency (DLA) Equipment Procurement
Army Materiel Command (AMC) Sustainment Programs
Naval Sea Systems Command (NAVSEA) Shipyard Equipment
Air Force Materiel Command (AFMC) Base Infrastructure

Risk Flags

Potential for long-term supply chain disruption
Risk of technology obsolescence over contract duration
Moderate competition level may impact final price optimization

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.5 million to KNIGHT CONST. & SUPPLY, INC. MANUFACTURE AND DELIVER NEW CRANE

Who is the contractor on this award?

The obligated recipient is KNIGHT CONST. & SUPPLY, 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 $28.5 million.

What is the period of performance?

Start: 2019-09-18. End: 2027-03-08.

What is the track record of Knight Const. & Supply, Inc. with government contracts, particularly for similar equipment?

Knight Const. & Supply, Inc. has a history of performing government contracts. While specific details on past performance for overhead traveling cranes are not provided in this summary, their ability to win a $28.5 million definitive contract under full and open competition suggests they possess the necessary qualifications and experience. A deeper dive into their contract history, including past performance evaluations and any prior awards for similar material handling equipment, would be necessary for a comprehensive assessment of their track record. This would involve reviewing federal procurement databases and past performance information repositories.

How does the awarded price of $28.5 million compare to market rates for similar overhead traveling crane systems?

Without specific technical specifications and quantity details, a precise comparison of the $28.5 million award to market rates is challenging. However, the nature of overhead traveling cranes, especially those for military applications, often involves custom engineering, heavy-duty construction, and specialized safety features, which command higher prices than standard industrial cranes. The fact that the contract was competed suggests the price was deemed acceptable by the government based on the bids received. Further analysis would require benchmarking against publicly available pricing for comparable military-grade crane systems or consulting industry cost estimators.

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

The primary risks include potential delays in manufacturing and delivery, quality control issues with the specialized equipment, and price volatility for raw materials over the contract's extended duration. Mitigation strategies are primarily driven by the contract type: the firm fixed-price (FFP) structure places the financial risk of cost overruns on the contractor. Performance risk is managed through the contractor's obligation to meet specified technical requirements and delivery schedules. The government's mitigation also includes oversight by contracting officers and potentially quality assurance representatives at the manufacturing site.

How effective is the firm fixed-price contract type in ensuring value for money for this specific procurement?

The firm fixed-price (FFP) contract type is generally effective in ensuring value for money when the scope of work is well-defined and the risks are understood. For the manufacture and delivery of overhead traveling cranes, where technical specifications can be clearly articulated, FFP provides cost certainty to the government. This means the total cost is fixed, and the contractor bears the risk of cost increases. This structure incentivizes the contractor to manage costs efficiently and deliver the product within budget, thereby maximizing value for the taxpayer, assuming the initial price was competitive.

What is the historical spending pattern for overhead traveling cranes by the Department of Defense?

Historical spending on overhead traveling cranes by the Department of Defense (DoD) is likely substantial, given the widespread need for material handling equipment across various branches and installations. While this specific $28.5 million award is a significant single contract, the DoD procures such equipment regularly through various contract vehicles, including indefinite-delivery/indefinite-quantity (IDIQ) contracts and other competitive or sole-source awards. Analyzing historical spending would involve aggregating data across multiple fiscal years and agencies for similar equipment categories (e.g., cranes, hoists, material handling systems) to understand the overall investment trend and identify major suppliers.

What are the implications of having only two bidders for this contract?

Having only two bidders suggests a moderately competitive market for this specific type of specialized equipment. While competition is generally preferred to drive down prices and encourage innovation, two bidders still provide a basis for price comparison and negotiation. It indicates that the market is not a monopoly or oligopoly, but it also suggests that the number of firms capable of meeting the stringent requirements for military-grade cranes might be limited. This could potentially lead to a higher price than if there were, for example, five or more bidders, but it is still preferable to a sole-source situation.

Industry Classification

NAICS: Manufacturing › Other General Purpose Machinery Manufacturing › Overhead Traveling Crane, Hoist, and Monorail System Manufacturing

Product/Service Code: MATERIALS HANDLING EQPT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W9127N19R0004

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Knight Const. & Supply Inc

Address: 2601 E 6TH ST, DEER PARK, WA, 99006

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

Financial Breakdown

Contract Ceiling: $30,373,316

Exercised Options: $30,373,316

Current Obligation: $28,489,338

Subaward Activity

Number of Subawards: 7

Total Subaward Amount: $11,430,599

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline