Justice Department's $100K electric service contract for Kentucky prison awarded to American Electric Power

Contract Overview

Contract Amount: $100,000 ($100.0K)

Contractor: American Electric Power Company, Inc.

Awarding Agency: Department of Justice

Start Date: 2026-06-01

End Date: 2026-06-30

Contract Duration: 29 days

Daily Burn Rate: $3.4K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: FY26 P4 AEP ELECTRIC SERVICE JUNE 2026

Place of Performance

Location: INEZ, MARTIN County, KENTUCKY, 41224

State: Kentucky Government Spending

Plain-Language Summary

Department of Justice obligated $100,000 to AMERICAN ELECTRIC POWER COMPANY, INC. for work described as: FY26 P4 AEP ELECTRIC SERVICE JUNE 2026 Key points: 1. Contract value appears reasonable for a one-month electric service period. 2. Limited competition due to the nature of utility services. 3. Risk indicators are low given the essential service provided. 4. Performance context is a short-term, essential utility service. 5. Sector positioning is within the essential services category for government facilities.

Value Assessment

Rating: good

The contract value of $100,000 for a one-month period of electric service is within a reasonable range for a federal facility of this nature. Without specific usage data or historical benchmarks for this particular prison, a direct per-unit cost comparison is difficult. However, the price appears to be a standard rate for utility provision in the region.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, which is typical for essential utility services like electricity. As a regulated utility, American Electric Power is likely the only provider capable of supplying power to the Federal Prison System facility in Kentucky. The lack of competition is inherent to the nature of the service, not a reflection of procurement strategy.

Taxpayer Impact: For taxpayers, sole-source awards for essential utilities mean that the price is determined by regulated rates rather than market competition. While this ensures service continuity, it limits opportunities for cost savings through competitive bidding.

Public Impact

The primary beneficiary is the Federal Prison System / Bureau of Prisons, ensuring continuous operation of its facility. The service delivered is essential electric power distribution. The geographic impact is localized to the facility in Kentucky. Workforce implications are minimal, as this is a service provision contract rather than a labor-intensive one.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases in future contract periods if not closely monitored against regional utility rate changes.

Positive Signals

Ensures uninterrupted essential services for a critical government function.
Awarded to a known and established utility provider, reducing performance risk.

Sector Analysis

Electric power distribution is a critical infrastructure sector. Government contracts for utilities are common and essential for maintaining operations. The market is typically dominated by regulated utility companies, leading to limited competition for direct service provision to specific locations. Benchmarking would involve comparing rates to other government facilities in similar service territories or to commercial rates in Kentucky.

Small Business Impact

This contract does not appear to have a small business set-aside. Given the nature of utility provision, it is unlikely that small businesses would be involved as primary contractors. Subcontracting opportunities for small businesses are not explicitly mentioned and are unlikely in this specific service delivery.

Oversight & Accountability

Oversight for this contract would fall under the Federal Prison System / Bureau of Prisons. Accountability measures are tied to the reliable delivery of electricity. Transparency is generally maintained through standard federal procurement reporting, though the sole-source nature limits public insight into price negotiation.

Related Government Programs

Federal Energy Management Program
Utility Services Contracts
Bureau of Prisons Operations

Risk Flags

Sole-source award for essential service
Lack of direct price competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $100,000 to AMERICAN ELECTRIC POWER COMPANY, INC.. FY26 P4 AEP ELECTRIC SERVICE JUNE 2026

Who is the contractor on this award?

The obligated recipient is AMERICAN ELECTRIC POWER COMPANY, INC..

Which agency awarded this contract?

Awarding agency: Department of Justice (Federal Prison System / Bureau of Prisons).

What is the total obligated amount?

The obligated amount is $100,000.

What is the period of performance?

Start: 2026-06-01. End: 2026-06-30.

What is the historical spending pattern for electric services at this specific federal facility?

Historical spending data for electric services at this specific federal facility is not readily available in the provided data. However, the current contract is for a short duration (one month) with a value of $100,000. To assess historical patterns, one would need to access past contract awards or utility bills for the facility over several fiscal years. This would reveal trends in energy consumption, cost per kilowatt-hour, and any significant price fluctuations. Without this historical context, it is difficult to determine if the current award represents an increase, decrease, or stable cost compared to previous periods.

How does the cost of this contract compare to similar electric service contracts for federal facilities in Kentucky?

Comparing this $100,000, one-month electric service contract to similar federal facilities in Kentucky is challenging without access to a comprehensive database of comparable contracts. Utility rates are influenced by numerous factors, including facility size, energy consumption patterns, specific location within the state, and the regulated rate structure of the serving utility. American Electric Power is a major utility provider in Kentucky, and its rates are regulated. To perform a robust comparison, one would need to identify federal facilities of similar size and energy demand within AEP's service territory and analyze their electric service costs over comparable periods. The current contract's value suggests a significant energy demand, but a precise benchmark requires more granular data.

What are the specific risks associated with a sole-source award for electric utility services?

The primary risk associated with a sole-source award for electric utility services is the lack of price competition, which can potentially lead to higher costs for the government compared to a competitively bid scenario. However, for essential utilities like electricity, the 'sole-source' nature is often dictated by the existence of a regulated monopoly provider in a given geographic area. The risk is mitigated by regulatory oversight of utility rates, which are intended to ensure fair pricing. Other risks include potential service disruptions if the sole provider faces operational issues, though utilities typically have robust contingency plans. The government's risk is primarily financial, ensuring that the regulated rates are reasonable and that consumption is managed efficiently.

What is the expected energy consumption based on the contract value and duration?

Based on the contract value of $100,000 for a one-month period of electric service, one can infer a significant energy consumption. To estimate consumption, we would need the average cost per kilowatt-hour (kWh) from American Electric Power for commercial or government customers in that region. If, for example, the average rate was $0.15 per kWh, then $100,000 would equate to approximately 666,667 kWh consumed over the month. This level of consumption suggests a large facility with substantial energy needs, likely a correctional institution with continuous power requirements for lighting, climate control, security systems, and other operational functions.

Does the Federal Prison System have specific energy efficiency targets that this contract must adhere to?

The provided data does not specify whether this particular contract for electric service has explicit energy efficiency targets. However, federal agencies are generally mandated by executive orders and legislation (such as the Energy Policy Act) to improve energy efficiency and reduce energy consumption. While the contract itself is for the provision of electricity, the Federal Prison System likely has internal policies and goals related to energy management. These might include monitoring consumption, implementing energy-saving measures within the facility, and reporting on energy usage. The utility provider, American Electric Power, may also offer energy efficiency programs or consultations that the facility could leverage.

Industry Classification

NAICS: Utilities › Electric Power Generation, Transmission and Distribution › Electric Power Distribution

Product/Service Code: UTILITIES AND HOUSEKEEPING › UTILITIES

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1, RIVERSIDE PLAZA, COLUMBUS, OH, 43215

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

Financial Breakdown

Contract Ceiling: $100,000

Exercised Options: $100,000

Current Obligation: $100,000

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 47PA0422D0063

IDV Type: IDC

Timeline