DoD's $7.38M electric power contract with Georgia Power Company extends over a decade
Contract Overview
Contract Amount: $7,380,825 ($7.4M)
Contractor: Georgia Power Company
Awarding Agency: Department of Defense
Start Date: 2004-02-06
End Date: 2034-09-30
Contract Duration: 11,194 days
Daily Burn Rate: $659/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: FIRM FIXED PRICE
Sector: Energy
Place of Performance
Location: MARIETTA, COBB County, GEORGIA, 30069
State: Georgia Government Spending
Plain-Language Summary
Department of Defense obligated $7.4 million to GEORGIA POWER COMPANY for work described as: Key points: 1. The contract's long duration suggests a need for stable, long-term energy provision. 2. Fixed-price terms offer cost certainty for the government, shifting risk to the contractor. 3. The award was made under full and open competition, indicating a competitive market. 4. The contract's value is spread over 11 years, implying moderate annual spending. 5. Performance is geographically concentrated in Georgia, aligning with the utility's service area. 6. The absence of small business set-asides may limit opportunities for smaller energy providers.
Value Assessment
Rating: good
The contract's value of approximately $7.38 million over 11 years translates to an average annual cost of roughly $670,000. This appears reasonable for a large-scale electric power distribution service provided by a major utility company. Benchmarking against similar long-term utility contracts for federal facilities would provide a more precise assessment, but the fixed-price nature suggests predictable costs. The duration indicates a strategic decision to secure reliable power over an extended period.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded through full and open competition, suggesting that multiple qualified vendors had the opportunity to bid. The presence of two bids indicates a degree of competition, which generally benefits price discovery and can lead to more favorable terms for the government. The specific details of the bidding process and the number of bidders are not fully elaborated, but the competition type is a positive signal for value.
Taxpayer Impact: Full and open competition typically leads to better pricing for taxpayers by encouraging multiple vendors to offer their best terms. This process helps ensure that the government is not overpaying for essential services like electricity.
Public Impact
The Department of the Air Force benefits from a reliable and consistent supply of electric power for its operations in Georgia. This contract ensures the continuous functioning of critical infrastructure and facilities managed by the DoD. The geographic impact is localized to the areas served by Georgia Power Company within the state of Georgia. The contract supports the utility sector workforce employed by Georgia Power Company.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration could lead to potential price increases if market rates rise significantly over the 11+ years.
- Reliance on a single utility provider for essential services presents a concentration risk.
- Lack of specific performance metrics or service level agreements in the provided data makes assessing performance quality challenging.
Positive Signals
- Awarded under full and open competition, indicating a competitive bidding process.
- Firm Fixed Price contract type provides cost certainty and budget predictability for the government.
- Long-term nature of the contract suggests a stable and reliable energy source for DoD facilities.
Sector Analysis
The energy sector, particularly electric power distribution, is a critical component of national infrastructure. Federal agencies are significant consumers of electricity, often requiring reliable and secure power sources for their operations. This contract fits within the broader landscape of utility services procured by the government, which can range from large-scale distribution agreements to specialized renewable energy projects. The market is typically dominated by established utility companies with extensive service territories.
Small Business Impact
The provided data indicates that this contract was not set aside for small businesses, nor does it explicitly mention subcontracting requirements for small businesses. This suggests that the primary award went to a large utility provider, and opportunities for small businesses in this specific procurement may be limited unless they are subcontractors to Georgia Power Company. Further investigation into subcontracting plans would be needed to fully assess the impact on the small business ecosystem.
Oversight & Accountability
Oversight for this contract would typically fall under the purview of the Department of the Air Force contracting and financial management offices. The firm fixed-price nature of the contract provides a degree of accountability by locking in costs. Transparency is generally maintained through contract databases, though specific performance monitoring details are not provided. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- Department of Defense Utility Contracts
- Federal Energy Procurement
- Electric Power Services
- Long-Term Government Contracts
Risk Flags
- Long-term contract duration
- Potential for market price fluctuations
- Reliance on a single provider
Tags
energy, electric-power-distribution, department-of-defense, department-of-the-air-force, definitive-contract, firm-fixed-price, full-and-open-competition, georgia, long-term-contract, utility-services
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $7.4 million to GEORGIA POWER COMPANY. See the official description on USAspending.
Who is the contractor on this award?
The obligated recipient is GEORGIA POWER COMPANY.
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 $7.4 million.
What is the period of performance?
Start: 2004-02-06. End: 2034-09-30.
What is the historical spending pattern for electric power services by the Department of the Air Force in Georgia?
Analyzing historical spending for electric power by the Department of the Air Force in Georgia would require accessing detailed procurement data over several years. This contract, valued at approximately $7.38 million over 11 years (ending in 2034), represents an average annual expenditure of roughly $670,000. To understand the pattern, one would compare this average to previous years' spending on similar services in the region. If previous contracts were shorter-term, more expensive annually, or awarded to different providers, it would indicate a shift in procurement strategy. Conversely, consistent spending with the same provider might suggest a stable, long-term relationship. Without access to prior contract data, it's difficult to establish a definitive historical pattern, but the current contract's scale suggests a significant and ongoing need for power services.
How does the pricing of this contract compare to similar utility contracts awarded by other federal agencies?
Benchmarking the pricing of this $7.38 million, 11-year electric power contract against similar federal utility contracts requires access to a broader dataset of government procurements. Key comparison points would include the price per kilowatt-hour (kWh) or the cost per facility served, adjusted for geographic location and service level. Given that this is a firm-fixed-price contract with Georgia Power Company, a major utility, the pricing is likely competitive within its service area. However, without specific unit costs or details on the volume of electricity consumed, a direct comparison is challenging. Contracts awarded through full and open competition generally yield better prices. If other agencies are securing power at significantly lower rates per unit, it might indicate an opportunity for the Air Force to renegotiate or seek alternative providers in future procurements, assuming market conditions allow.
What are the potential risks associated with a long-term (11+ year) contract for electric power?
Long-term contracts for essential services like electric power carry several potential risks. Firstly, market prices for electricity can be volatile; if wholesale energy prices decrease significantly over the contract's duration, the government might be locked into paying a higher rate than currently available, representing a potential loss of value. Conversely, if prices spike unexpectedly, the firm-fixed-price nature protects the government from increases but might reflect a contractor's risk premium built into the initial price. Secondly, technological advancements in energy generation or distribution could render the current service less efficient or desirable over time. Thirdly, there's a risk of contractor underperformance or financial instability, although this is mitigated by the contractor being a large, established utility. Finally, the long commitment reduces flexibility to adapt to changing energy needs or policy directives.
What is the track record of Georgia Power Company in fulfilling federal contracts?
Georgia Power Company, as a major utility provider, likely has a substantial history of serving federal facilities within its service territory. Assessing its track record specifically for federal contracts would involve reviewing past performance evaluations, any documented disputes or contract terminations, and the timeliness and reliability of its service delivery. While the provided data doesn't detail past performance, large, established utilities generally have robust operational capabilities. Federal agencies often rely on such established providers for critical infrastructure services due to their scale and experience. A thorough review would involve checking contract databases for past awards, performance ratings (if publicly available), and any significant issues reported by agencies like the DoD or others that have contracted with them for similar services.
How does the competition level (2 bidders) impact the value received by the government?
Having two bidders in a full and open competition suggests a moderate level of competition. While more bidders generally lead to greater price pressure and potentially better value, two bidders still provide a basis for comparison and negotiation. It indicates that the market is not a monopoly or duopoly where the government has very limited options. The government can leverage the quotes from the two bidders against each other to secure a more favorable price and terms. However, a higher number of bidders (e.g., 3-5 or more) could potentially drive prices down further and encourage more innovative solutions. The specific details of the bids, such as price points and proposed services, would be crucial in determining the actual value realized from this level of competition.
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
Offers Received: 2
Pricing Type: FIRM FIXED PRICE (J)
Contractor Details
Parent Company: Southern CO Services Inc
Address: 241 RALPH MCGILL BLVD, ATLANTA, GA, 30308
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $454,900
Exercised Options: $1,294,900
Current Obligation: $7,380,825
Actual Outlays: $72,114
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Timeline
Start Date: 2004-02-06
Current End Date: 2034-09-30
Potential End Date: 2034-09-30 00:00:00
Last Modified: 2025-12-17
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