DoD Awards $893M Electric Services Contract to Georgia Power for 28 Years

Contract Overview

Contract Amount: $89,319,457 ($89.3M)

Contractor: Georgia Power Company

Awarding Agency: Department of Defense

Start Date: 2006-09-22

End Date: 2057-02-04

Contract Duration: 18,398 days

Daily Burn Rate: $4.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Energy

Official Description: 200612!009621!97AS!SP0600!DEFENSE ENERGY SUPPORT CENTER !SP060006C8250 !A!N! !N! ! !20060922!20060922!006924989!006924989!006925341!N!GEORGIA POWER COMPANY !241 RALPH MCGILL BLVD NE !ATLANTA !GA!30308!30844!073!13!FORT GORDON !COLUMBIA !GEORGIA !+000004491000!N!N!000000000000!S112!ELECTRIC SERVICES !S1 !SERVICES !000 !NOT DISCERNABLE !221122!E! !3! ! ! ! ! !99990909!B! ! !A! !A!U!J!2!002!B! !Z!N!Z! ! !Y!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! ! ! ! !0001! !

Place of Performance

Location: FORT GORDON, RICHMOND County, GEORGIA, 30905

State: Georgia Government Spending

Plain-Language Summary

Department of Defense obligated $89.3 million to GEORGIA POWER COMPANY for work described as: 200612!009621!97AS!SP0600!DEFENSE ENERGY SUPPORT CENTER !SP060006C8250 !A!N! !N! ! !20060922!20060922!006924989!006924989!006925341!N!GEORGIA POWER COMPANY !241 RALPH MCGILL BLVD NE !ATLANTA !GA!30308!30844!073!13!FORT GORDON !COLU… Key points: 1. Significant long-term contract for essential utility services. 2. Georgia Power Company is the sole awardee, raising questions about competition. 3. High contract value and extended duration present potential risks. 4. Sector: Energy (Utilities) - critical infrastructure support.

Value Assessment

Rating: questionable

The contract value of $893M over nearly 29 years averages to approximately $30.8M annually. Without specific unit cost data or benchmarks for similar large-scale utility contracts, it's difficult to definitively assess pricing fairness.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

Despite being listed as 'FULL AND OPEN COMPETITION', the award to a single entity, Georgia Power Company, suggests potential limitations or a specific market structure. The price discovery mechanism is not detailed, but a long-term fixed-price contract could lead to overpayment if market conditions change significantly.

Taxpayer Impact: Taxpayers are committed to a substantial expenditure over a long period. The fixed-price nature offers budget predictability but may forgo potential savings if energy prices decrease.

Public Impact

Ensures reliable electricity for Fort Gordon, a critical military installation. Long-term commitment provides stability for both the government and the contractor. Potential for price fluctuations over the contract's extensive duration. Impact on local energy market dynamics and competition.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (28 years)
Sole awardee despite 'full and open' designation
High total contract value
Fixed price contract in a potentially volatile market

Positive Signals

Ensures critical infrastructure support
Potential for economies of scale
Stable pricing for budgeting

Sector Analysis

This contract falls within the Energy sector, specifically focusing on utility services. Utility contracts, especially for large federal installations, often involve long durations due to the nature of infrastructure investment and service provision. Benchmarks for such long-term, high-value utility contracts are scarce, making direct comparison challenging.

Small Business Impact

The data does not indicate any specific provisions or participation by small businesses in this contract. The nature of large-scale utility provision often involves established major providers, potentially limiting opportunities for smaller entities.

Oversight & Accountability

The long duration and significant value of this contract warrant robust oversight to ensure continued fair pricing and service delivery. Mechanisms for contract review and adjustment, if any, should be clearly defined and monitored.

Related Government Programs

Electric Power Distribution
Department of Defense Contracting
Defense Logistics Agency Programs

Risk Flags

Long-term commitment may not reflect future market conditions.
Potential for overpayment due to fixed price in a volatile market.
Lack of demonstrated competition despite 'full and open' status.
Reliance on a single provider for critical infrastructure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $89.3 million to GEORGIA POWER COMPANY. 200612!009621!97AS!SP0600!DEFENSE ENERGY SUPPORT CENTER !SP060006C8250 !A!N! !N! ! !20060922!20060922!006924989!006924989!006925341!N!GEORGIA POWER COMPANY !241 RALPH MCGILL BLVD NE !ATLANTA !GA!30308!30844!073!13!FORT GORDON !COLUMBIA !GEORGIA !+000004491000!N!N!000000000000!S112!ELECTRIC SERVICES !S1 !SERVICES !000 !NOT DISCERNABLE !221122!E! !3! ! ! ! ! !999

Who is the contractor on this award?

The obligated recipient is GEORGIA POWER COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Logistics Agency).

What is the total obligated amount?

The obligated amount is $89.3 million.

What is the period of performance?

Start: 2006-09-22. End: 2057-02-04.

What specific factors justified the 'full and open competition' designation if only one award was made?

The designation of 'full and open competition' typically means the solicitation was advertised broadly, allowing any qualified vendor to bid. However, market realities, specific technical requirements, or the nature of utility infrastructure might lead to only one viable bidder or offer. Further investigation into the solicitation details and bidder pool would clarify why only Georgia Power Company was awarded the contract.

How does the fixed price compare to market rates for electricity over the contract's 28-year term?

Assessing the fixed price against future market rates over 28 years is inherently speculative. While the current fixed price might seem reasonable based on today's rates, unforeseen shifts in energy production costs, regulatory changes, or technological advancements could make it either highly advantageous or disadvantageous for the government. Periodic reviews or price adjustment clauses would be crucial for risk mitigation.

What are the potential risks associated with a sole-source award for a critical utility service?

A sole-source award, even if initially competed, can create risks such as reduced incentive for the contractor to innovate or offer cost savings over time. It also limits the government's leverage in future negotiations. For critical services like electricity, reliance on a single provider could pose a vulnerability if the provider faces financial distress or operational issues.

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: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Southern CO Services Inc

Address: 241 RALPH MCGILL BLVD NE, ATLANTA, GA, 30308

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

Financial Breakdown

Contract Ceiling: $211,237,851

Exercised Options: $211,237,851

Current Obligation: $89,319,457

Actual Outlays: $4,918,137

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline