DoD's $11.7M electric power contract to Virginia Electric & Power Co. awarded in 2002

Contract Overview

Contract Amount: $11,748,209 ($11.7M)

Contractor: Virginia Electric & Power CO

Awarding Agency: Department of Defense

Start Date: 2002-09-12

End Date: 2011-09-14

Contract Duration: 3,289 days

Daily Burn Rate: $3.6K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Place of Performance

Location: HAMPTON, HAMPTON (CITY) County, VIRGINIA, 23665

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $11.7 million to VIRGINIA ELECTRIC & POWER CO for work described as: Key points: 1. Contract awarded under a sole-source justification, raising questions about potential cost savings through competition. 2. Long contract duration of 3289 days suggests a need for stable, long-term utility services. 3. The contract's fixed-price nature provides cost certainty for the government, but may limit flexibility. 4. Awarded to a single vendor, Virginia Electric & Power Co., indicating a lack of broader market engagement. 5. The contract value of $11.7M over its life requires careful monitoring for performance and value. 6. Geographic location in Virginia (VA) is a key factor for this utility service contract.

Value Assessment

Rating: fair

Benchmarking the value of this specific electric power contract is challenging without comparable sole-source utility agreements. However, the $11.7 million total award over nearly nine years averages approximately $1.3 million annually. This figure needs to be assessed against prevailing commercial rates for similar utility services in Virginia during the contract period (2002-2011). The lack of competition inherently limits the ability to definitively assess if the government received the best possible price, making value for money a point of consideration.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under a 'NOT AVAILABLE FOR COMPETITION' justification, indicating that the government determined only one source, Virginia Electric & Power Co., could fulfill the requirement. This typically occurs for essential utility services where a single provider has exclusive rights or infrastructure in a specific geographic area. The lack of competition means there was no formal bidding process, and therefore, no direct price comparison among multiple vendors to drive down costs.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as the benefit of competitive bidding, which often results in lower prices, is absent. This necessitates robust internal oversight to ensure the awarded price is fair and reasonable.

Public Impact

The primary beneficiary is the Department of Defense, specifically the Air Force, which receives essential electric power services. The contract ensures the continuous operation of military facilities and infrastructure in Virginia. Geographic impact is concentrated in Virginia, where the electric power distribution services are provided. The contract supports the operational readiness and mission execution of the Air Force in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Long contract duration may not reflect evolving market conditions or technological advancements.
Lack of transparency in the sole-source justification process could obscure potential alternatives.

Positive Signals

Firm Fixed Price contract provides cost certainty for the government.
Awarded to a known utility provider, likely ensuring reliable service delivery.
Contract duration suggests a stable, long-term requirement met by the vendor.

Sector Analysis

This contract falls within the Utilities and Energy sector, specifically focusing on electric power distribution. The market for utility services is often characterized by natural monopolies or heavily regulated environments, particularly for distribution infrastructure. Contracts of this nature are common across government agencies requiring reliable power for facilities. The $11.7 million total value over its lifespan is moderate for a long-term utility service agreement, especially for a large entity like the Department of Defense.

Small Business Impact

There is no indication that this contract included small business set-asides. As a sole-source award for essential utility services, it is unlikely that subcontracting opportunities for small businesses were a primary consideration or requirement within the contract's structure. The focus was likely on securing the necessary utility provision from the incumbent or sole provider.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and financial management offices. Accountability measures would be tied to the terms of the Firm Fixed Price contract, ensuring service delivery meets the specified requirements. Transparency is limited due to the sole-source nature, but contract award data is publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Utility Contracts
Air Force Base Operations Support
Virginia State Utility Services
Federal Energy Procurement

Risk Flags

Sole-source award
Long contract duration
Lack of competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.7 million to VIRGINIA ELECTRIC & POWER CO. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is VIRGINIA ELECTRIC & POWER CO.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $11.7 million.

What is the period of performance?

Start: 2002-09-12. End: 2011-09-14.

What specific Air Force facilities or bases were served by this electric power contract?

The provided data indicates the contract was awarded by the Department of the Air Force to VIRGINIA ELECTRIC & POWER CO. (now part of Dominion Energy) and served locations within Virginia (ST: VA, SN: VIRGINIA). While the specific facilities are not detailed in the provided data, it is highly probable that the contract supported one or more Air Force installations located within the service territory of Virginia Electric & Power Co. during the period of 2002-2011. These could include major bases like Langley Air Force Base, Joint Base Langley-Eustis, or others in the region that relied on the utility's distribution network for their power needs.

What was the justification for awarding this contract as sole-source?

The contract was marked as 'NOT AVAILABLE FOR COMPETITION' (CT: NOT AVAILABLE FOR COMPETITION), which is a common designation for sole-source awards. For utility services like electric power distribution, sole-source justifications are typically based on the existence of a natural monopoly. In most regions, a single utility company controls the infrastructure (poles, wires, substations) necessary to deliver electricity to a specific geographic area. Therefore, the government has no alternative but to contract with that specific provider to ensure service continuity for its facilities located within that service territory. Virginia Electric & Power Co. would have been the sole provider of such services in the relevant area.

How does the average annual cost of this contract compare to commercial rates for similar services in Virginia during that period?

The contract's total value was $11,748,209.29 over 3289 days (approximately 9 years). This averages to about $1,316,651 annually. Comparing this to commercial rates during the 2002-2011 period is difficult without specific commercial rate data for Virginia Electric & Power Co. or its successors during that time. However, government contracts, especially sole-source ones, are often scrutinized to ensure they are 'fair and reasonable.' Without access to the specific pricing structure, rate schedules, and any potential government-specific discounts or surcharges applied, a precise comparison is not feasible. Generally, utility rates are regulated, and the government would aim to secure rates consistent with those available to large commercial customers.

What are the potential risks associated with a sole-source contract of this duration?

A significant risk with a long-term sole-source contract is the lack of competitive pressure, which can lead to suboptimal pricing for the government over the contract's life. The absence of competition means the contractor faces less incentive to offer the lowest possible price or to innovate. Furthermore, over a duration of nearly nine years (3289 days), market conditions, technology, and energy prices can change significantly. A fixed-price contract might become disadvantageous if market prices fall substantially, or conversely, if unforeseen cost increases occur for the contractor, potentially leading to requests for modification or impacting service quality if not managed carefully. The government also misses opportunities to leverage new vendors or technologies that may emerge during the contract period.

Were there any performance metrics or service level agreements (SLAs) associated with this contract?

The provided data does not explicitly detail performance metrics or Service Level Agreements (SLAs) for this contract. However, for essential utility services like electric power distribution, contracts typically include clauses related to reliability, uptime, response times for outages, and adherence to safety standards. The 'FIRM FIXED PRICE' (PT: FIRM FIXED PRICE) nature of the contract suggests that the price was set regardless of the quantity of electricity consumed, but the delivery of that electricity according to agreed-upon standards would still be a requirement. Performance would likely be monitored by the contracting officer's representative (COR) to ensure the utility met its obligations, with potential remedies for sustained failures, though specific SLAs are not itemized here.

What is the historical spending pattern for electric power distribution by the Department of Defense in Virginia?

The provided data only includes details for this single $11.7 million contract awarded in 2002. To analyze historical spending patterns for electric power distribution by the Department of Defense (DoD) in Virginia, a broader dataset encompassing multiple contracts over various years would be necessary. This would involve querying federal procurement databases for all relevant contracts awarded by DoD agencies (Army, Navy, Air Force, Marines) to utility providers in Virginia. Analyzing such data would reveal trends in contract values, types of services procured (distribution, generation, maintenance), average contract durations, and the prevalence of competitive versus sole-source awards within the state's utility sector.

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

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Parent Company: Dominion Energy, Inc. (UEI: 101715035)

Address: 171 ELDEN ST, HERNDON, VA, 11

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Parent Contract

Parent Award PIID: GS00P98BSD0086

IDV Type: IDC

Timeline