DoD's $23.4M Electricity Contract for Hunter Army Airfield Lacks Competition, Raises Cost Concerns
Contract Overview
Contract Amount: $23,416,250 ($23.4M)
Contractor: Georgia Power Company
Awarding Agency: Department of Defense
Start Date: 2008-01-15
End Date: 2018-12-31
Contract Duration: 4,003 days
Daily Burn Rate: $5.8K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Energy
Official Description: PROVIDE ELECTRICITY FOR MAIN POST HUNTER ARMY AIRFIED GA
Place of Performance
Location: FORT STEWART, LIBERTY County, GEORGIA, 31314, UNITED STATES OF AMERICA
State: Georgia Government Spending
Plain-Language Summary
Department of Defense obligated $23.4 million to GEORGIA POWER COMPANY for work described as: PROVIDE ELECTRICITY FOR MAIN POST HUNTER ARMY AIRFIED GA Key points: 1. Significant contract value of $23.4 million over 10 years. 2. Sole-source award limits competitive pricing and potential savings. 3. Long duration may not reflect current market rates. 4. Essential service for military operations, but cost-effectiveness is questionable.
Value Assessment
Rating: questionable
The contract's firm fixed price was set in 2008 and extended through 2018. Without competitive bidding, it's difficult to assess if the $23.4 million price reflects current market value for electricity services.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was awarded on a sole-source basis, meaning competition was not sought. This limits price discovery and may lead to higher costs for taxpayers.
Taxpayer Impact: The lack of competition for this essential service likely resulted in higher than necessary expenditures for the Department of Defense.
Public Impact
Ensures continuous power for critical military infrastructure at Hunter Army Airfield. Taxpayers may have overpaid due to the absence of competitive bidding. Reliability of electricity is paramount for national security operations.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Long contract duration
- Lack of price transparency
Positive Signals
- Ensures essential service delivery
- Fixed price contract mitigates some cost uncertainty
Sector Analysis
This contract falls under utility services, specifically electricity distribution, which is a critical but often less competitive sector for government procurement due to established infrastructure and service areas.
Small Business Impact
There is no indication that small businesses were involved in this contract, as it was awarded sole-source to a large utility provider.
Oversight & Accountability
The sole-source nature of this award warrants scrutiny to ensure the government obtained fair pricing and that competition was appropriately waived.
Related Government Programs
- Electric Power Distribution
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award limits competition
- Potential for overpayment due to lack of price discovery
- Long contract duration may not reflect current market rates
- Lack of transparency regarding justification for sole-source award
Tags
electric-power-distribution, department-of-defense, ga, dca, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $23.4 million to GEORGIA POWER COMPANY. PROVIDE ELECTRICITY FOR MAIN POST HUNTER ARMY AIRFIED GA
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 Army).
What is the total obligated amount?
The obligated amount is $23.4 million.
What is the period of performance?
Start: 2008-01-15. End: 2018-12-31.
What was the justification for awarding this contract sole-source, and was a market research conducted to determine if competition was truly not feasible?
The provided data indicates the contract was 'NOT AVAILABLE FOR COMPETITION'. A thorough review would be needed to understand the specific justification, such as the existence of a single provider with the necessary infrastructure or a critical, time-sensitive need that precluded a competitive process. Without this justification, the sole-source award raises concerns about potential missed savings.
How does the per-unit cost of electricity under this contract compare to similar contracts awarded competitively in the region or to other military installations?
Benchmarking the per-unit cost is challenging without knowing the exact consumption and rate structure. However, given the sole-source nature and the contract's age, it is probable that the rates are not as favorable as they could be if competition had been pursued. A comparative analysis with recent, competitively awarded utility contracts would be necessary to quantify potential overspending.
What measures were in place to ensure the fixed price remained fair throughout the contract's extended duration, especially considering potential fluctuations in energy markets?
A 'FIRM FIXED PRICE' contract aims to lock in costs. However, for a long-duration contract like this (2008-2018), the initial fixed price might not have accounted for significant market shifts. Without specific clauses for price adjustments or regular re-evaluations, the agency might have been locked into unfavorable rates if energy prices decreased, or conversely, benefited if prices rose significantly.
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
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Southern CO Services Inc (UEI: 006925341)
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: $23,446,259
Exercised Options: $23,446,250
Current Obligation: $23,416,250
Contract Characteristics
Cost or Pricing Data: NO
Timeline
Start Date: 2008-01-15
Current End Date: 2018-12-31
Potential End Date: 2018-12-31 00:00:00
Last Modified: 2015-09-25
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