Army awards $17.4M for McNary Dam crane replacement, exceeding initial estimates

Contract Overview

Contract Amount: $17,445,623 ($17.4M)

Contractor: Reel COH Inc

Awarding Agency: Department of Defense

Start Date: 2020-01-08

End Date: 2023-10-30

Contract Duration: 1,391 days

Daily Burn Rate: $12.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: MCNARY DAM CRANES 4&5 REPLACEMENT

Place of Performance

Location: UMATILLA, UMATILLA County, OREGON, 97882

State: Oregon Government Spending

Plain-Language Summary

Department of Defense obligated $17.4 million to REEL COH INC for work described as: MCNARY DAM CRANES 4&5 REPLACEMENT Key points: 1. Value for money appears fair given the specialized nature of the equipment and the extended performance period. 2. Competition dynamics indicate a full and open process, likely contributing to price discovery. 3. Risk indicators are moderate, with a long performance duration and a firm-fixed-price contract type. 4. Performance context shows a significant duration for a replacement project, suggesting complexity. 5. Sector positioning places this within specialized industrial equipment contracting, a niche but essential service.

Value Assessment

Rating: fair

The contract value of $17.4 million for two crane replacements is substantial. Benchmarking against similar large-scale industrial equipment procurements is challenging due to the specific nature of dam infrastructure. However, the firm-fixed-price contract type suggests the government sought to control costs upfront. The duration of the contract (nearly four years) also implies significant project scope and potential for cost escalation if not managed tightly.

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 offers. The presence of two bidders suggests a moderate level of competition for this specialized requirement. While two bidders is better than a sole source, a higher number would typically provide stronger price pressure and potentially better value.

Taxpayer Impact: A full and open competition, even with a limited number of bidders, is generally favorable for taxpayers as it allows for a broader range of potential solutions and pricing strategies to be considered.

Public Impact

The primary beneficiaries are the U.S. Army Corps of Engineers and the operational integrity of the McNary Dam. Services delivered include the design, fabrication, delivery, and installation of two replacement cranes. The geographic impact is localized to the McNary Dam facility in Oregon, crucial for regional power generation and navigation. Workforce implications include skilled labor for manufacturing, installation, and project management, likely supporting specialized manufacturing and construction roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (1391 days) increases the risk of cost overruns and schedule delays.
Firm-fixed-price contract may not fully account for unforeseen complexities in specialized equipment installation.
Limited competition (2 bidders) could result in a less competitive price than a more robust bidding environment.

Positive Signals

Full and open competition provides a baseline for fair pricing and access to qualified contractors.
The contract is for essential infrastructure replacement, ensuring continued operational capability.
The award is to a single contractor, potentially streamlining management and coordination.

Sector Analysis

This contract falls within the industrial equipment manufacturing and installation sector, specifically serving critical infrastructure like dams. The market for such specialized heavy machinery is often characterized by a limited number of highly qualified manufacturers capable of meeting stringent engineering and safety requirements. Spending in this area is driven by the need for maintenance, repair, and replacement of aging government-owned assets.

Small Business Impact

There is no indication of small business set-asides for this contract, nor is there information on subcontracting plans. Given the specialized and high-value nature of replacing large industrial cranes, it is unlikely that small businesses would be primary contractors, though they may participate as subcontractors for specific components or services.

Oversight & Accountability

The contract is managed by the Department of the Army. Oversight would typically involve contract officers, technical representatives, and potentially quality assurance specialists to monitor progress, adherence to specifications, and timely delivery. Transparency is generally maintained through contract award databases, though detailed performance reports may not be publicly available.

Related Government Programs

Army Corps of Engineers Civil Works Projects
Federal Infrastructure Modernization Programs
Heavy Equipment Procurement
Dam Maintenance and Operations

Risk Flags

Long contract duration
Potential for scope creep
Limited competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.4 million to REEL COH INC. MCNARY DAM CRANES 4&5 REPLACEMENT

Who is the contractor on this award?

The obligated recipient is REEL COH 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 $17.4 million.

What is the period of performance?

Start: 2020-01-08. End: 2023-10-30.

What is the historical spending pattern for crane replacements at McNary Dam or similar Army Corps of Engineers facilities?

Analyzing historical spending for crane replacements at McNary Dam or comparable Army Corps of Engineers (USACE) facilities is crucial for context. Without specific historical data for McNary Dam, we can infer general trends. USACE facilities often have long lifecycles, requiring periodic replacement of major equipment like cranes. These procurements are typically infrequent but high-value due to the specialized engineering, manufacturing, and installation requirements. Factors influencing historical spending include inflation, technological advancements in crane design, and the specific operational needs of each dam. Contracts for such equipment are often awarded on a firm-fixed-price basis after full and open competition, though the number of bidders can vary significantly based on market availability and project complexity. Comparing this $17.4 million award to previous similar projects would reveal whether costs have increased or decreased relative to inflation and scope.

How does the contractor, REEL COH INC, perform on other federal contracts, particularly those involving heavy equipment or infrastructure?

Assessing the track record of REEL COH INC on other federal contracts provides insight into their reliability and performance capabilities. A review of federal procurement data (e.g., through FPDS or SAM.gov) would be necessary to identify past awards to REEL COH INC. Key metrics to examine would include contract values, types of goods or services provided, on-time delivery rates, and any instances of contract disputes, terminations, or performance issues. For a contract involving critical infrastructure like dam cranes, a history of successful completion of similar large-scale projects, adherence to safety standards, and effective project management would be positive indicators. Conversely, any past performance issues could represent a risk factor for this current award, suggesting potential delays or cost overruns.

What are the specific risks associated with replacing large cranes at an operational dam like McNary?

Replacing large cranes at an operational dam like McNary Dam presents several significant risks. Firstly, there's the risk of disrupting ongoing dam operations, which could impact power generation, flood control, and navigation. This necessitates careful scheduling and potentially phased replacements. Secondly, the physical environment of a dam is often challenging, involving working at heights, over water, and with heavy machinery, increasing safety risks for personnel. Thirdly, the integration of new cranes with existing dam infrastructure requires precise engineering and installation to ensure compatibility and functionality. Fourthly, unforeseen site conditions or technical challenges during installation can lead to schedule delays and cost increases, even under a firm-fixed-price contract if scope changes are necessary. Finally, ensuring the long-term reliability and maintainability of the new equipment is critical for future operational continuity.

How does the firm-fixed-price contract type mitigate or exacerbate risks for this specific crane replacement project?

The firm-fixed-price (FFP) contract type aims to provide cost certainty for the government by establishing a ceiling price that is not subject to adjustment based on the contractor's cost experience. For this McNary Dam crane replacement, an FFP contract is beneficial as it shifts the risk of cost overruns to the contractor, REEL COH INC. This encourages the contractor to manage their costs efficiently and accurately estimate all project expenses upfront. However, FFP contracts can also exacerbate risks if the initial cost estimates are inaccurate or if unforeseen technical challenges arise that necessitate significant changes to the scope of work. In such cases, the contractor may be less willing to absorb additional costs, potentially leading to disputes or requests for contract modifications, which can still impact the overall project cost and schedule. The long duration of this contract (1391 days) increases the likelihood of encountering such unforeseen issues.

What is the expected impact of these new cranes on the operational efficiency and safety of McNary Dam?

The replacement of the existing cranes at McNary Dam with new units is expected to significantly enhance operational efficiency and safety. Modern cranes typically offer improved lifting capacities, greater precision in movement, and enhanced control systems, allowing for more efficient handling of maintenance tasks, equipment deployment, and potentially emergency response operations. Upgraded safety features, such as advanced braking systems, load monitoring, and improved operator visibility, will reduce the risk of accidents during operation. Furthermore, newer equipment generally requires less frequent maintenance and is less prone to breakdowns than older machinery, leading to reduced downtime and increased reliability. This ultimately contributes to the consistent and safe operation of the dam, ensuring its critical functions in power generation, navigation, and flood control are maintained without interruption.

Industry Classification

NAICS: Construction › Building Equipment Contractors › Other Building Equipment Contractors

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 801 BOUL DU CURE-BOIVIN, BOISBRIAND

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $17,445,623

Exercised Options: $17,445,623

Current Obligation: $17,445,623

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W9128F19D0019

IDV Type: IDC

Timeline