DOJ's $76K water service contract for 3 months shows high per-unit cost for domestic water supply

Contract Overview

Contract Amount: $76,072 ($76.1K)

Contractor: Herlong Public Utility District

Awarding Agency: Department of Justice

Start Date: 2026-04-01

End Date: 2026-06-30

Contract Duration: 90 days

Daily Burn Rate: $845/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: FY26 DOMESTIC WATER SERVICE 3RD QTR APRIL-JUNE FY26 $25357.42 EACH

Place of Performance

Location: HERLONG, LASSEN County, CALIFORNIA, 96113

State: California Government Spending

Plain-Language Summary

Department of Justice obligated $76,072.26 to HERLONG PUBLIC UTILITY DISTRICT for work described as: FY26 DOMESTIC WATER SERVICE 3RD QTR APRIL-JUNE FY26 $25357.42 EACH Key points: 1. The contract's value appears high relative to its short duration, suggesting potential inefficiencies. 2. Limited competition raises concerns about price discovery and potential overpayment. 3. The fixed-price contract type offers some cost certainty but may not reflect true market value. 4. Performance is tied to a specific quarter, indicating a need for timely and efficient service delivery. 5. The contract falls within the 'Water Supply and Irrigation Systems' NAICS code, a critical utility sector. 6. The geographic location in California may influence pricing due to regional market conditions.

Value Assessment

Rating: questionable

The contract awarded is for $76,072.26 for a 3-month period, with a per-unit cost of $25,357.42. This per-unit cost seems exceptionally high for domestic water service, even considering potential specialized needs of a federal prison. Benchmarking against similar contracts for utility services at federal facilities is crucial. Without comparable data, it's difficult to definitively assess value, but the initial figures suggest a potential lack of cost-effectiveness.

Cost Per Unit: $25,357.42 per unit (domestic water service for 3 months)

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. This lack of competition significantly limits the government's ability to ensure it is receiving the best possible price and value. Without bids from multiple vendors, there is no market pressure to drive down costs or encourage innovation. The justification for a sole-source award needs careful scrutiny to ensure it was truly necessary.

Taxpayer Impact: Sole-source awards mean taxpayers may be paying a premium, as the government did not leverage competitive forces to secure a lower price.

Public Impact

Inmates and staff at the Federal Prison System facility in California benefit from reliable domestic water service. The contract ensures the provision of essential water supply services, critical for sanitation and daily operations. The geographic impact is localized to the specific federal prison facility in California. Workforce implications are minimal, as this is a service contract likely utilizing existing utility infrastructure and personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

High per-unit cost for a basic utility service.
Lack of competition suggests potential for inflated pricing.
Short contract duration may lead to higher annualized costs if services are continuously needed.

Positive Signals

Ensures critical water supply for a federal facility.
Fixed-price contract provides some budget predictability.
Service is geographically specific to the facility's needs.

Sector Analysis

The water supply and irrigation systems sector is essential for public infrastructure and includes a wide range of services from municipal water provision to specialized industrial applications. Federal spending in this area often supports critical facilities like prisons, military bases, and research centers. While specific benchmarks for federal prison water services are not readily available, general utility costs can vary significantly based on location, infrastructure requirements, and service level agreements. This contract represents a small component of the broader federal spending on essential services.

Small Business Impact

The data indicates this contract was not set aside for small businesses, nor does it appear to involve significant subcontracting opportunities for them based on the limited information. The sole-source nature of the award further reduces the likelihood of small business participation. Analysis of the prime contractor's size and any subcontracting plans would be necessary for a complete assessment.

Oversight & Accountability

Oversight for this contract would typically fall under the Bureau of Prisons (BOP) contracting officers and program managers. Transparency is limited due to the sole-source nature and lack of publicly available justification. Accountability would be measured by the continuity and quality of water service provided. Inspector General jurisdiction may apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Federal Prison System Operations
Department of Justice Facilities Management
Public Utility Services Contracts
Domestic Water Supply Infrastructure

Risk Flags

High per-unit cost
Sole-source award
Lack of competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $76,072.26 to HERLONG PUBLIC UTILITY DISTRICT. FY26 DOMESTIC WATER SERVICE 3RD QTR APRIL-JUNE FY26 $25357.42 EACH

Who is the contractor on this award?

The obligated recipient is HERLONG PUBLIC UTILITY DISTRICT.

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 $76,072.26.

What is the period of performance?

Start: 2026-04-01. End: 2026-06-30.

What is the justification for awarding this domestic water service contract on a sole-source basis?

The provided data indicates the contract was awarded on a 'NOT AVAILABLE FOR COMPETITION' basis, which is synonymous with a sole-source award. The specific justification for this determination is not included in the data. Typically, sole-source awards are justified when only one responsible source is available or capable of providing the required service, or in cases of urgent and compelling need where competition is not feasible. For a service like domestic water, such justifications might include unique infrastructure dependencies, proprietary systems, or extreme geographic isolation. Without the official justification document, it is impossible to verify the validity of the sole-source determination and assess if it was truly in the government's best interest.

How does the per-unit cost of $25,357.42 compare to market rates for similar domestic water services?

The per-unit cost of $25,357.42 for domestic water service over a three-month period is exceptionally high and warrants further investigation. Standard domestic water costs for residential or even commercial properties are typically measured in hundreds or low thousands of dollars per month, not tens of thousands per unit for a quarter. While federal facilities, especially prisons, may have higher demands and require more robust infrastructure or specialized treatment, this figure suggests a significant premium. Benchmarking against contracts for similar federal facilities in comparable geographic regions, or against large municipal water providers' bulk rates, would be necessary. It is possible 'unit' refers to something other than a standard billing cycle or customer, or that the service includes significant infrastructure maintenance or specialized treatment beyond basic water delivery.

What are the potential risks associated with a sole-source award for essential utility services like water?

Sole-source awards for essential utility services like water carry several risks. Primarily, the lack of competition means the government cannot be assured it is obtaining the most favorable pricing, potentially leading to overpayment and inefficient use of taxpayer funds. It also reduces the incentive for the sole provider to innovate or improve service quality, as there is no competitive pressure. Furthermore, reliance on a single provider can create vulnerability; if that provider experiences operational issues, financial difficulties, or decides to cease service, the government facility could face a critical disruption. Robust contract management, performance monitoring, and contingency planning are essential to mitigate these risks.

What is the historical spending pattern for domestic water services at this specific Federal Prison System facility?

The provided data snippet focuses on a single contract for FY26, covering the third quarter (April-June). It does not offer historical spending data for this specific facility or for domestic water services more broadly within the Federal Prison System. To analyze historical spending patterns, one would need access to contract databases covering previous fiscal years, identifying all contracts related to water supply for this facility or similar facilities. This would allow for an assessment of trends in contract value, duration, pricing, and competition over time, helping to determine if the current award is an anomaly or part of a consistent spending trajectory.

Does the fixed-firm price contract structure adequately account for potential fluctuations in water usage or treatment costs?

A firm-fixed-price (FFP) contract structure, as indicated for this award, obligates the contractor to perform the work for a fixed price, regardless of the actual costs incurred. This provides budget certainty for the government. However, for services like water supply, where usage can fluctuate based on occupancy, seasonal demands, or unforeseen operational needs, an FFP contract might not be the most flexible. If usage significantly exceeds projections, the contractor might be incentivized to cut corners on quality or service to maintain profitability. Conversely, if usage is lower than anticipated, the government pays the full fixed price. The adequacy of this structure depends heavily on the accuracy of the initial usage and cost projections made by the government and contractor.

Industry Classification

NAICS: Utilities › Water, Sewage and Other Systems › Water Supply and Irrigation Systems

Product/Service Code: UTILITIES AND HOUSEKEEPING › UTILITIES

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: RFPP06191600003

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 448805 POLE LINE RD, HERLONG, CA, 96113

Business Categories: Category Business, Government, U.S. Local Government, U.S. National Government, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $76,072

Exercised Options: $76,072

Current Obligation: $76,072

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 15B61919D00000042

IDV Type: IDC

Timeline