DoD Awards $65.7M Utility Contract to Duke Energy for Camp Lejeune, NC

Contract Overview

Contract Amount: $65,749,586 ($65.7M)

Contractor: Duke Energy Progress, LLC

Awarding Agency: Department of Defense

Start Date: 2019-05-14

End Date: 2026-03-31

Contract Duration: 2,513 days

Daily Burn Rate: $26.2K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Energy

Official Description: UTILITY ENERGY SERVICE CONTRACT (UESC) CAMP LEJEUNE, NC

Place of Performance

Location: CAMP LEJEUNE, ONSLOW County, NORTH CAROLINA, 28547

State: North Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $65.7 million to DUKE ENERGY PROGRESS, LLC for work described as: UTILITY ENERGY SERVICE CONTRACT (UESC) CAMP LEJEUNE, NC Key points: 1. Significant contract value of $65.7 million awarded to a single provider. 2. Limited competition raises questions about potential overpricing and value for money. 3. Long contract duration (2026) may limit flexibility and future cost savings. 4. Focus on essential utility services highlights critical infrastructure needs.

Value Assessment

Rating: questionable

The contract value of $65.7 million for a utility service contract is substantial. Without comparable contract data or a competitive bidding process, it is difficult to assess if this price is reasonable compared to similar services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract is listed as 'NOT AVAILABLE FOR COMPETITION', indicating a limited or sole-source procurement. This lack of competition restricts price discovery and may lead to higher costs for taxpayers.

Taxpayer Impact: The absence of competitive bidding for a contract of this magnitude limits the potential for cost savings, potentially resulting in higher taxpayer expenditure.

Public Impact

Ensures reliable energy infrastructure for a major military installation. Potential for higher costs due to limited competition impacts taxpayer funds. Long-term commitment may not reflect evolving energy technologies or market prices.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of Competition
Long Contract Duration
Potential for Price Escalation

Positive Signals

Essential Service Provision
Supports Military Operations

Sector Analysis

This contract falls within the utility and energy sector, specifically focusing on electric power distribution for a federal facility. Utility contracts can be substantial, and benchmarks vary widely based on service scope and location.

Small Business Impact

There is no indication that small businesses were involved in this contract award, as it appears to be a direct award to a large utility provider.

Oversight & Accountability

The contract's limited competition status warrants close oversight to ensure fair pricing and performance. Accountability for service delivery and cost management is crucial over the contract's lifespan.

Related Government Programs

Electric Power Distribution
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Limited competition may lead to inflated costs.
Long contract duration could result in missed opportunities for savings.
Lack of transparency in procurement process.
Potential for vendor lock-in.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $65.7 million to DUKE ENERGY PROGRESS, LLC. UTILITY ENERGY SERVICE CONTRACT (UESC) CAMP LEJEUNE, NC

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 Navy).

What is the total obligated amount?

The obligated amount is $65.7 million.

What is the period of performance?

Start: 2019-05-14. End: 2026-03-31.

What specific factors justified the 'NOT AVAILABLE FOR COMPETITION' designation for this significant utility contract?

The justification for a 'NOT AVAILABLE FOR COMPETITION' status typically involves unique circumstances, such as a sole provider with exclusive rights, critical infrastructure dependencies, or urgent national security needs that preclude a competitive process. Detailed documentation from the Department of the Navy would be required to understand the specific rationale.

How will the Department of Defense ensure cost-effectiveness and value for money given the lack of competitive bidding?

Ensuring cost-effectiveness without competition relies heavily on robust contract management, including performance monitoring, regular price reviews against market indices, and potentially incorporating cost-saving incentives or options into the contract. Strong oversight is essential to prevent potential overpricing and ensure the government receives fair value.

What is the potential impact of the long contract duration (ending 2026) on the government's ability to leverage future technological advancements or lower market prices?

A long contract duration, especially in a rapidly evolving sector like energy, can limit the government's ability to adopt newer, more efficient technologies or benefit from potential decreases in market prices. This necessitates careful consideration of contract clauses that allow for adjustments or renegotiations based on technological shifts or market fluctuations.

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: $74,107,065

Exercised Options: $74,107,065

Current Obligation: $65,749,586

Actual Outlays: $20,738,243

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $2,134,137

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