DoD awards $18.7M contract for power plant transformer installation in Tennessee

Contract Overview

Contract Amount: $18,676,745 ($18.7M)

Contractor: Koontz Electric Company, Incorporated

Awarding Agency: Department of Defense

Start Date: 2023-11-01

End Date: 2026-05-30

Contract Duration: 941 days

Daily Burn Rate: $19.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: OLD HICKORY POWER PLANT GSU TRANSFORMER INSTALLATION IN HENDERSONVILLE, TENNESSEE

Place of Performance

Location: HENDERSONVILLE, SUMNER County, TENNESSEE, 37075

State: Tennessee Government Spending

Plain-Language Summary

Department of Defense obligated $18.7 million to KOONTZ ELECTRIC COMPANY, INCORPORATED for work described as: OLD HICKORY POWER PLANT GSU TRANSFORMER INSTALLATION IN HENDERSONVILLE, TENNESSEE Key points: 1. Contract awarded to Koontz Electric Company, Inc. for power infrastructure. 2. Project duration spans over 900 days, indicating a significant undertaking. 3. The contract type is Firm Fixed Price, offering cost certainty. 4. Competition was full and open, suggesting a potentially competitive bidding process. 5. The North American Industry Classification System (NAICS) code 237130 points to specialized construction services. 6. The award value is substantial for a single project of this nature.

Value Assessment

Rating: good

The contract value of $18.7 million for the installation of a GSU transformer at the Old Hickory Power Plant appears reasonable given the scope and duration. While direct comparisons are difficult without specific project details, similar large-scale power infrastructure projects can range from tens to hundreds of millions of dollars. The firm fixed-price nature of the contract helps manage cost risks for the government. Benchmarking the per-unit cost of transformer installation is challenging without detailed specifications, but the overall award suggests a competitive pricing environment for specialized electrical construction services.

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 a bid. The presence of three bidders suggests a moderate level of competition for this specialized construction service. A higher number of bidders typically leads to more aggressive pricing and better value for the government. However, the specialized nature of power plant infrastructure may limit the pool of qualified contractors.

Taxpayer Impact: Full and open competition, with three bidders, suggests that taxpayers likely received a fair price, though more bidders could have potentially driven prices lower.

Public Impact

The Department of Defense benefits from enhanced power infrastructure at the Old Hickory Power Plant. The project ensures the reliable operation of critical power generation facilities. The workforce in Tennessee will see employment opportunities in specialized construction trades. The project's geographic impact is localized to Hendersonville, Tennessee.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for schedule delays given the long contract duration.
Risk of cost overruns if unforeseen site conditions arise, despite fixed-price contract.
Dependence on a single contractor for a critical infrastructure component.

Positive Signals

Firm fixed-price contract provides budget certainty.
Full and open competition suggests a competitive bidding process.
Experienced contractor likely selected through a rigorous evaluation.

Sector Analysis

This contract falls within the construction sector, specifically focusing on power and communication line and related structures. The market for specialized electrical infrastructure construction is significant, driven by the need to maintain and upgrade aging power grids and build new generation facilities. Comparable spending benchmarks for similar transformer installations can vary widely based on plant size, transformer capacity, and site complexity, but projects in the multi-million dollar range are common for utility-scale power infrastructure.

Small Business Impact

The contract was awarded under full and open competition and does not indicate any specific small business set-aside. There is no explicit information regarding subcontracting plans for small businesses. The impact on the small business ecosystem is likely minimal unless Koontz Electric Company, Inc. actively engages small businesses for specialized support services.

Oversight & Accountability

Oversight for this contract will be managed by the Department of the Army, likely through contracting officers and technical representatives. Accountability measures are inherent in the firm fixed-price contract, requiring the contractor to deliver the specified work within the agreed-upon price. Transparency is facilitated by the public nature of federal contract awards, though detailed project-specific oversight reports are not publicly available.

Related Government Programs

Army Corps of Engineers Construction Projects
Department of Energy Power Infrastructure Grants
Defense Base Realignment and Closure (BRAC) Facilities

Risk Flags

Potential for schedule overruns
Risk of unforeseen site conditions
Dependence on specialized contractor expertise

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.7 million to KOONTZ ELECTRIC COMPANY, INCORPORATED. OLD HICKORY POWER PLANT GSU TRANSFORMER INSTALLATION IN HENDERSONVILLE, TENNESSEE

Who is the contractor on this award?

The obligated recipient is KOONTZ ELECTRIC COMPANY, INCORPORATED.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $18.7 million.

What is the period of performance?

Start: 2023-11-01. End: 2026-05-30.

What is the track record of Koontz Electric Company, Inc. with Department of Defense contracts?

Koontz Electric Company, Inc. has a history of performing work for the Department of Defense, as evidenced by this award. While this specific contract is for a significant amount, further analysis would require examining their past performance on similar projects, including any history of contract modifications, performance issues, or timely completion. A review of their contract history with the DoD and other federal agencies would provide a clearer picture of their reliability and expertise in executing large-scale electrical infrastructure projects.

How does the $18.7 million award compare to similar GSU transformer installation projects?

Benchmarking the $18.7 million award for a GSU transformer installation requires detailed project specifications, such as transformer capacity (MVA), voltage levels, site preparation complexity, and the scope of associated electrical work. However, for utility-scale power plants, multi-million dollar awards for major component installations like GSU transformers are typical. Projects involving new installations or significant upgrades at existing facilities can easily reach this value. Without specific technical details of the Old Hickory project, a precise comparison is difficult, but the award falls within the expected range for such critical infrastructure work.

What are the primary risks associated with this type of power plant construction contract?

The primary risks associated with this power plant construction contract include potential schedule delays due to unforeseen site conditions, weather, or supply chain disruptions for specialized equipment. Although it's a firm fixed-price contract, scope creep or change orders could lead to cost increases if not managed carefully. There's also a risk related to the availability of specialized labor and the contractor's ability to meet stringent safety and quality standards inherent in power plant operations. Ensuring the long-term reliability of the installed transformer and associated systems is also a key performance risk.

How effective is full and open competition in ensuring value for money for specialized construction like this?

Full and open competition is generally the most effective method for ensuring value for money, as it allows the widest possible pool of qualified contractors to bid, fostering price competition. For specialized construction like power plant infrastructure, the effectiveness depends on the number of capable bidders. If only a few companies possess the necessary expertise and certifications, the competition may be limited despite being 'full and open.' In this case, with three bidders, the government likely achieved a competitive price, but a larger pool could have potentially yielded even better value. The firm fixed-price structure further enhances value by capping the government's financial exposure.

What is the historical spending trend for power infrastructure construction by the Department of Defense?

Historical spending by the Department of Defense on power infrastructure construction has been substantial and fluctuates based on modernization needs, base realignments, and energy resilience initiatives. The DoD invests heavily in maintaining and upgrading electrical grids, substations, and generation facilities across its global installations. While specific aggregate data for 'power plant transformer installation' is not readily available, overall spending on construction and facilities maintenance within the DoD runs into billions of dollars annually. This contract represents a specific investment within that broader category, driven by the operational needs of the Old Hickory Power Plant.

Are there any specific performance metrics or KPIs tied to this contract?

Specific performance metrics or Key Performance Indicators (KPIs) are not detailed in the publicly available award notice. However, for a contract of this nature, typical performance expectations would include adherence to the project schedule, completion of installation according to technical specifications and industry standards, successful testing and commissioning of the transformer, and compliance with all safety regulations. The firm fixed-price nature implies that meeting these performance requirements within the agreed budget is paramount. The contracting officer's representative (COR) would likely monitor progress and quality throughout the contract duration.

Industry Classification

NAICS: Construction › Utility System Construction › Power and Communication Line and Related Structures Construction

Product/Service Code: INSTALLATION OF EQUIPMENT › INSTALLATION OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W912P522R0008

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1223 E BROADWAY ST, MORRILTON, AR, 72110

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

Financial Breakdown

Contract Ceiling: $18,676,745

Exercised Options: $18,676,745

Current Obligation: $18,676,745

Actual Outlays: $462,368

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $6,474,696

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline