DoD's $23.17M steel sheet piling contract awarded to L.B. Foster Company shows fair value

Contract Overview

Contract Amount: $23,174,439 ($23.2M)

Contractor: L.B. Foster Company

Awarding Agency: Department of Defense

Start Date: 2009-06-22

End Date: 2011-08-19

Contract Duration: 788 days

Daily Burn Rate: $29.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: FURNISHING PILING, STEEL SHEET

Place of Performance

Location: NEW ORLEANS, ORLEANS County, LOUISIANA, 70118

State: Louisiana Government Spending

Plain-Language Summary

Department of Defense obligated $23.2 million to L.B. FOSTER COMPANY for work described as: FURNISHING PILING, STEEL SHEET Key points: 1. Contract value of $23.17 million for steel sheet piling. 2. Awarded by the Department of Defense to L.B. Foster Company. 3. Contract type is Firm Fixed Price, indicating price certainty. 4. Competition was full and open, suggesting market-driven pricing. 5. Contract duration was 788 days. 6. Small business participation was not a stated requirement. 7. The contract falls under the Iron and Steel Mills NAICS code.

Value Assessment

Rating: good

The contract's value of $23.17 million for steel sheet piling appears reasonable given the scope and duration. While specific benchmarks for this exact product are difficult to ascertain without more granular data, the firm fixed-price nature suggests that the contractor assumed the risk of cost fluctuations. The award amount is within a typical range for large-scale infrastructure or construction materials procurement by the Department of Defense.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. This typically leads to a more competitive pricing environment as multiple companies vie for the award. The presence of 3 bids suggests a moderate level of competition for this specific requirement.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down prices through market forces, ensuring the government receives the best possible value for its expenditure.

Public Impact

The Department of Defense is the primary beneficiary, securing necessary materials for its operations or infrastructure projects. Steel sheet piling is a critical component for various construction and civil engineering applications, potentially including port facilities, flood control, or earth retention systems. The contract's geographic impact is tied to Louisiana (ST: LA, SN: LOUISIANA), where the materials may have been delivered or utilized. The contract supports the steel manufacturing and distribution workforce within the Iron and Steel Mills sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases if market conditions for steel fluctuate significantly during the contract period, though mitigated by fixed-price terms.
Dependence on a single supplier (L.B. Foster Company) for the duration of the contract could limit flexibility if issues arise.
Limited transparency on the specific end-use of the steel sheet piling without further project details.

Positive Signals

Awarded under full and open competition, suggesting competitive pricing.
Firm Fixed Price contract structure provides cost certainty for the government.
The contract duration of 788 days allows for planned procurement and integration into larger projects.
The award to a known entity like L.B. Foster Company may indicate a reliable supplier.

Sector Analysis

The procurement of steel sheet piling falls within the broader construction and heavy manufacturing sectors. The Iron and Steel Mills (NAICS 331111) industry is characterized by large-scale production and significant capital investment. This contract represents a substantial procurement within this sector, likely supporting infrastructure development or maintenance. Comparable spending benchmarks would depend on the specific type and quantity of piling, but multi-million dollar contracts are common for government infrastructure needs.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. There is also no explicit mention of subcontracting goals for small businesses. This suggests that the primary focus was on securing the materials through the most competitive means available, rather than specifically targeting small business participation. The impact on the small business ecosystem is likely minimal unless L.B. Foster Company voluntarily engages small businesses in its supply chain.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and financial management oversight mechanisms. As a definitive contract, it is subject to standard auditing and compliance checks. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected. Transparency is generally maintained through contract databases, though specific project details and performance metrics may not always be publicly disclosed.

Related Government Programs

Department of Defense Construction Contracts
Steel and Metal Product Procurements
Infrastructure Development Projects
Army Corps of Engineers Material Needs

Risk Flags

Potential for commodity price volatility impacting contractor profitability.
Contract duration extends over two years, increasing exposure to market changes.
Limited information on specific project requirements and end-use.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $23.2 million to L.B. FOSTER COMPANY. FURNISHING PILING, STEEL SHEET

Who is the contractor on this award?

The obligated recipient is L.B. FOSTER COMPANY.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $23.2 million.

What is the period of performance?

Start: 2009-06-22. End: 2011-08-19.

What is the historical spending pattern for steel sheet piling by the Department of Defense?

Analyzing historical spending for steel sheet piling by the Department of Defense requires access to detailed procurement databases beyond this single contract. However, general trends indicate that the DoD, particularly entities like the Army Corps of Engineers, frequently procures such materials for infrastructure projects, including port facilities, flood control, and base construction. Spending can fluctuate significantly year-to-year based on infrastructure investment cycles, geopolitical needs, and specific project requirements. The $23.17 million awarded to L.B. Foster Company represents a notable, but not necessarily unprecedented, expenditure for a single contract of this nature. Broader analysis would involve aggregating data across multiple contracts, agencies, and fiscal years to identify patterns, average contract values, and the prevalence of different contract types and competition levels.

How does the price of this contract compare to similar procurements for steel sheet piling?

Direct price comparison for this $23.17 million contract is challenging without knowing the exact specifications, quantity, and delivery terms of the steel sheet piling. Market prices for steel products are subject to global commodity fluctuations, manufacturing costs, and transportation expenses. However, the contract being awarded under 'full and open competition' with 3 bidders suggests that the pricing achieved was likely competitive within the market at the time of award (June 2009). To perform a robust comparison, one would need to identify other DoD or federal contracts for similar quantities and types of steel sheet piling awarded around the same period, adjusting for any known differences in material grade, dimensions, or delivery locations. Benchmarking against industry price indices for steel products could also provide a general sense of value.

What is L.B. Foster Company's track record with federal government contracts, particularly for steel products?

L.B. Foster Company has a significant history of contracting with the U.S. federal government, including the Department of Defense. Their portfolio often includes infrastructure-related materials and services. Records indicate they have been awarded numerous contracts over the years for various steel products, including piling, trackwork, and bridge components. Their experience suggests a familiarity with government procurement processes and requirements. A detailed review of their contract history would reveal the volume and types of awards, performance ratings (if available), and any instances of contract disputes or challenges. This particular $23.17 million contract for steel sheet piling is one example of their engagement with the DoD, likely leveraging their established manufacturing and supply chain capabilities.

What are the potential risks associated with a firm fixed-price contract for bulk steel materials?

The primary risk associated with a firm fixed-price (FFP) contract for bulk steel materials lies in potential price volatility of the underlying commodity. Steel prices can fluctuate significantly due to global supply and demand, raw material costs (like iron ore and coking coal), and geopolitical events. If L.B. Foster Company secured this contract based on steel prices that later increased substantially before or during production and delivery, their profit margins could be squeezed, potentially impacting their ability or willingness to fulfill the contract efficiently. Conversely, if prices decreased, the government would benefit. While FFP shifts cost overrun risk to the contractor, extreme market shifts could still lead to performance issues or requests for contract modification if the contractor faces severe financial distress. The contract duration of 788 days (over two years) increases the exposure to market fluctuations.

How does the geographic location of the award (Louisiana) influence the contract's logistics and cost?

The award of this contract to L.B. Foster Company, with its specified location in Louisiana (ST: LA, SN: LOUISIANA), has several implications for logistics and cost. Louisiana possesses significant port infrastructure and is a hub for heavy industry and manufacturing, potentially facilitating both the sourcing of raw materials and the distribution of finished steel sheet piling. If the materials are manufactured or sourced within or near Louisiana, transportation costs to potential deployment sites within the Gulf Coast region or for export could be minimized. However, if the ultimate use of the piling is far from Louisiana, the initial transportation from the manufacturing point to a distribution hub, and then to the final site, could add considerable expense. The presence of a strong industrial base in the state may also indicate a competitive local market for such materials, potentially contributing to the favorable pricing achieved through competition.

Industry Classification

NAICS: Manufacturing › Iron and Steel Mills and Ferroalloy Manufacturing › Iron and Steel Mills

Product/Service Code: METAL BARS, SHEETS, SHAPES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SEALED BID

Solicitation ID: W912P809B0050

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 415 HOLIDAY DR, PITTSBURGH, PA, 15220

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

Financial Breakdown

Contract Ceiling: $23,174,439

Exercised Options: $23,174,439

Current Obligation: $23,174,439

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline