DoD's $6.47M Duke Energy contract for electric power distribution in SC faces limited competition

Contract Overview

Contract Amount: $6,469,099 ($6.5M)

Contractor: Duke Energy Progress, LLC

Awarding Agency: Department of Defense

Start Date: 2020-10-01

End Date: 2041-01-31

Contract Duration: 7,427 days

Daily Burn Rate: $871/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Energy

Official Description: DRA ENERGY SAVINGS PROGRAM DUKE ELECTRIC

Place of Performance

Location: SHAW AFB, SUMTER County, SOUTH CAROLINA, 29152

State: South Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $6.5 million to DUKE ENERGY PROGRESS, LLC for work described as: DRA ENERGY SAVINGS PROGRAM DUKE ELECTRIC Key points: 1. The contract is a delivery order under a larger contract, indicating potential for follow-on work. 2. Limited competition raises concerns about price discovery and potential overspending. 3. The long duration (over 20 years) suggests a critical, long-term need for these services. 4. The firm fixed price contract type offers some cost certainty but may not capture all efficiencies.

Value Assessment

Rating: fair

The contract is a delivery order, making direct price comparison difficult without knowing the base contract's terms. The firm fixed price suggests a negotiated rate, but the lack of competition limits benchmarking.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract is not available for competition, suggesting a sole-source or limited competition scenario. This limits the government's ability to leverage market forces for the best possible price.

Taxpayer Impact: Limited competition may lead to higher costs for taxpayers compared to a fully competitive procurement.

Public Impact

Ensures reliable electricity supply for military operations in South Carolina. Supports the Department of the Air Force's infrastructure needs. Long-term commitment impacts energy planning and budgeting for the DoD.

Waste & Efficiency Indicators

Waste Risk Score: 87 / 10

Warning Flags

Limited competition
Long contract duration
Potential for price escalation over time

Positive Signals

Firm fixed price contract
Essential service for military operations

Sector Analysis

This contract falls within the Utilities and Energy sector, specifically electric power distribution. Government spending in this area is typically driven by operational needs and infrastructure maintenance, with pricing influenced by regulated utility rates and long-term service agreements.

Small Business Impact

There is no indication that small businesses are involved in this contract, as it is with Duke Energy, a large utility provider.

Oversight & Accountability

The long-term nature of the contract warrants regular review to ensure continued fair pricing and service quality, especially given the limited competition.

Related Government Programs

Electric Power Distribution
Department of Defense Contracting
Department of the Air Force Programs

Risk Flags

Limited competition may lead to inflated prices.
Long contract duration increases exposure to market fluctuations.
Lack of transparency in pricing due to limited competition.
Potential for vendor lock-in.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $6.5 million to DUKE ENERGY PROGRESS, LLC. DRA ENERGY SAVINGS PROGRAM DUKE ELECTRIC

Who is the contractor on this award?

The obligated recipient is DUKE ENERGY PROGRESS, LLC.

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 $6.5 million.

What is the period of performance?

Start: 2020-10-01. End: 2041-01-31.

What is the justification for the limited competition on this electric power distribution contract?

The justification for limited competition is not explicitly stated in the provided data. Typically, such limitations might stem from the nature of utility services, where a single provider holds a franchise or infrastructure monopoly within a specific geographic area, making open competition impractical or impossible for essential services.

How does the firm fixed price contract mitigate risks associated with the long duration?

A firm fixed price contract provides a degree of cost certainty by locking in the price for the duration of the contract, protecting the government from unexpected price increases. However, it may not fully mitigate risks if market conditions change drastically, potentially leading to the government overpaying if rates fall significantly, or the contractor absorbing losses if costs rise unexpectedly.

What is the potential impact of this contract on energy resilience for the Air Force base?

This contract is crucial for ensuring the energy resilience of the Air Force base by providing a stable and reliable source of electric power. The long-term agreement suggests a strategic commitment to maintaining this essential service, which is vital for uninterrupted operations, mission readiness, and the overall security of the installation.

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

Parent Company: Duke Energy Corporation

Address: 410 S WILMINGTON ST, RALEIGH, NC, 27601

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

Financial Breakdown

Contract Ceiling: $47,692,475

Exercised Options: $47,692,475

Current Obligation: $6,469,099

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS00P14BSD1055

IDV Type: IDC

Timeline