DoD Awards $164M for Electric Power Distribution to Virginia Electric and Power Company
Contract Overview
Contract Amount: $164,064,986 ($164.1M)
Contractor: Virginia Electric and Power Company
Awarding Agency: Department of Defense
Start Date: 2004-06-24
End Date: 2026-09-30
Contract Duration: 8,133 days
Daily Burn Rate: $20.2K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: FIXED PRICE REDETERMINATION
Sector: Energy
Place of Performance
Location: FORT LEE, PRINCE GEORGE County, VIRGINIA, 23801
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $164.1 million to VIRGINIA ELECTRIC AND POWER COMPANY for work described as: Key points: 1. Contract awarded to a single, established utility provider. 2. Long-term contract duration suggests ongoing need for services. 3. Fixed Price Redetermination pricing structure requires careful monitoring. 4. No small business participation noted.
Value Assessment
Rating: fair
The contract's fixed price redetermination structure allows for adjustments, but requires close oversight to ensure fair pricing over the contract's lifespan. Benchmarking against similar utility contracts is difficult due to unique service areas and regulatory environments.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating a competitive bidding process. However, the nature of utility services often leads to a limited number of qualified bidders.
Taxpayer Impact: Taxpayer funds are being used for essential utility services. The fixed price redetermination clause aims to balance cost control with the need for price adjustments based on actual costs.
Public Impact
Ensures reliable electricity supply for military installations. Supports operational readiness and infrastructure maintenance. Potential for price fluctuations impacting budget predictability.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of small business participation.
- Fixed Price Redetermination pricing requires vigilance.
- Long contract duration may not reflect current market rates.
Positive Signals
- Ensures essential utility services.
- Awarded through full and open competition.
Sector Analysis
This contract falls within the Utilities sector, specifically electric power distribution. Spending in this sector is generally stable and driven by essential service needs, with pricing often influenced by regulatory frameworks and fuel costs.
Small Business Impact
No small business participation was noted in this contract award. This is common for large-scale utility service contracts where established providers dominate the market.
Oversight & Accountability
The long duration and fixed price redetermination clause necessitate robust oversight to ensure cost-effectiveness and prevent potential price gouging. Regular reviews of actual costs against initial estimates are crucial.
Related Government Programs
- Electric Power Distribution
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Potential for cost overruns due to price redetermination.
- Long contract duration may not reflect current market efficiencies.
- Lack of small business involvement.
- Dependence on a single utility provider for critical infrastructure.
Tags
electric-power-distribution, department-of-defense, va, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $164.1 million to VIRGINIA ELECTRIC AND POWER COMPANY. See the official description on USAspending.
Who is the contractor on this award?
The obligated recipient is VIRGINIA ELECTRIC AND POWER COMPANY.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $164.1 million.
What is the period of performance?
Start: 2004-06-24. End: 2026-09-30.
How does the fixed price redetermination clause compare to standard utility contracts, and what mechanisms are in place to ensure fair pricing for taxpayers?
Fixed price redetermination allows the price to be adjusted based on actual costs incurred, plus a fixed fee. This differs from firm-fixed-price contracts. The Department of Defense likely has specific clauses and review processes to audit the contractor's cost data and ensure the redetermined price remains fair and reasonable, preventing excessive profit margins.
What are the primary risks associated with a long-term (8+ years) electric power distribution contract, and how are they mitigated?
Risks include potential for outdated technology, fluctuating energy market prices, and the contractor becoming complacent. Mitigation strategies may involve performance incentives, regular contract reviews, and clauses allowing for renegotiation or termination under specific conditions to adapt to changing needs and market dynamics.
Given the full and open competition, why was only one primary awardee identified, and what does this suggest about the market for this specific service?
The market for large-scale electric power distribution to military bases is often dominated by established utility companies due to infrastructure requirements, regulatory hurdles, and service area exclusivity. Full and open competition ensures that all capable entities have the opportunity to bid, but the nature of the service may naturally limit the number of viable contenders.
Industry Classification
NAICS: Utilities › Electric Power Generation, Transmission and Distribution › Electric Power Distribution
Product/Service Code: UTILITIES AND HOUSEKEEPING › UTILITIES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 3
Pricing Type: FIXED PRICE REDETERMINATION (A)
Evaluated Preference: NONE
Contractor Details
Parent Company: Dominion Energy, Inc.
Address: 120 TREDEGAR ST, RICHMOND, VA, 23219
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $148,050,009
Exercised Options: $148,050,009
Current Obligation: $164,064,986
Actual Outlays: $3,207,574
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2004-06-24
Current End Date: 2026-09-30
Potential End Date: 2026-09-30 00:00:00
Last Modified: 2025-09-30
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