DoD Awards $14.3M Contract for Stator Core Installation, Facing Potential Overruns
Contract Overview
Contract Amount: $14,278,766 ($14.3M)
Contractor: JR Merit, Inc.
Awarding Agency: Department of Defense
Start Date: 2022-10-01
End Date: 2026-06-24
Contract Duration: 1,362 days
Daily Burn Rate: $10.5K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: FIRM FIXED PRICE
Sector: Construction
Official Description: FURNISH AND INSTALL NEW STATOR CORE
Place of Performance
Location: BRIDGEPORT, DOUGLAS County, WASHINGTON, 98813
Plain-Language Summary
Department of Defense obligated $14.3 million to JR MERIT, INC. for work described as: FURNISH AND INSTALL NEW STATOR CORE Key points: 1. The contract value is $14.3 million for furnishing and installing a new stator core. 2. Competition was full and open, suggesting a competitive bidding process. 3. There is a potential risk of cost overruns, as indicated by the current burn rate. 4. The sector is Other Heavy and Civil Engineering Construction.
Value Assessment
Rating: questionable
The contract has a burn rate of $10,484 per day, which is high for a construction project of this nature. This suggests potential cost overruns or inefficiencies in execution.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which typically leads to better price discovery. However, the high burn rate raises questions about whether the initial pricing was adequate or if unforeseen issues are driving up costs.
Taxpayer Impact: The high burn rate and potential for cost overruns could lead to increased taxpayer expenditure beyond the initial contract value.
Public Impact
Taxpayers may face higher costs due to a rapid burn rate and potential contract overruns. The project's success hinges on efficient execution within the construction sector. The Department of Defense is investing in critical infrastructure upgrades.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- High daily burn rate suggests potential cost overruns.
- Contract duration is lengthy, increasing risk exposure.
- No indication of small business participation.
Positive Signals
- Awarded under full and open competition.
- Contract is firm fixed price, providing some cost certainty.
Sector Analysis
This contract falls within the Other Heavy and Civil Engineering Construction sector. Spending in this sector can vary widely based on infrastructure needs and project complexity. Benchmarks are difficult without specific project details, but the burn rate here is a key indicator.
Small Business Impact
There is no indication that small businesses were involved in this contract, either as prime contractors or subcontractors. Further analysis would be needed to determine if opportunities were missed for small business participation.
Oversight & Accountability
The contract is a definitive contract, suggesting a clear scope of work. However, the high burn rate warrants close oversight to ensure adherence to budget and timeline, and to identify any performance issues.
Related Government Programs
- Other Heavy and Civil Engineering Construction
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- High daily burn rate.
- Potential for cost overruns.
- Long contract duration.
- No small business participation identified.
Tags
other-heavy-and-civil-engineering-constr, department-of-defense, wa, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $14.3 million to JR MERIT, INC.. FURNISH AND INSTALL NEW STATOR CORE
Who is the contractor on this award?
The obligated recipient is JR MERIT, 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 $14.3 million.
What is the period of performance?
Start: 2022-10-01. End: 2026-06-24.
What factors are contributing to the high daily burn rate of $10,484, and what steps are being taken to mitigate potential cost overruns?
The high burn rate could be attributed to factors such as material costs, labor, unforeseen site conditions, or project complexity. The Department of Defense should be actively monitoring the project's progress, reviewing contractor performance reports, and implementing change control processes to manage scope and cost. Regular communication with the contractor is crucial to identify and address issues proactively.
Given the full and open competition, why might the project be experiencing a high burn rate, and does this indicate a flaw in the initial pricing or execution?
A high burn rate despite full and open competition could suggest that the initial cost estimates were too low, or that unexpected challenges arose during execution. It might also indicate inefficiencies in the contractor's operations. The contracting officer should investigate the root causes, which could range from market fluctuations to unforeseen technical difficulties, and assess whether the contractor's performance is meeting expectations.
What is the long-term impact of this stator core installation on the Department of Defense's operational capabilities, and is the current spending aligned with achieving those benefits effectively?
The new stator core is likely intended to improve or maintain critical infrastructure, potentially enhancing operational readiness or efficiency. The current spending trajectory, however, raises concerns about cost-effectiveness. Ensuring the project delivers its intended benefits within a reasonable budget is paramount. A thorough review of project milestones and value delivered against cost incurred is necessary to confirm alignment with strategic goals.
Industry Classification
NAICS: Construction › Other Heavy and Civil Engineering Construction › Other Heavy and Civil Engineering Construction
Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCTION OF BUILDINGS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: W912DW22R0001
Offers Received: 3
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 4505 NE 68TH DR, VANCOUVER, WA, 98661
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $14,622,382
Exercised Options: $14,278,766
Current Obligation: $14,278,766
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2022-10-01
Current End Date: 2026-06-24
Potential End Date: 2026-06-24 00:00:00
Last Modified: 2025-12-02
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)