DoD's $20.4M electric power contract with Georgia Power Company awarded via sole-source vehicle

Contract Overview

Contract Amount: $20,458,134 ($20.5M)

Contractor: Georgia Power Company

Awarding Agency: Department of Defense

Start Date: 2018-09-28

End Date: 2039-08-31

Contract Duration: 7,642 days

Daily Burn Rate: $2.7K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::OT::IGF ECMS FOR BUILDING 229

Place of Performance

Location: WARNER ROBINS, HOUSTON County, GEORGIA, 31098

State: Georgia Government Spending

Plain-Language Summary

Department of Defense obligated $20.5 million to GEORGIA POWER COMPANY for work described as: IGF::OT::IGF ECMS FOR BUILDING 229 Key points: 1. Contract awarded on a sole-source basis, limiting competitive pricing benefits. 2. Long-term contract duration (18 years) may not reflect current market conditions. 3. Fixed-price contract type shifts performance risk to the contractor. 4. Electric power distribution is a critical utility service for military installations. 5. Contract value represents a significant, long-term commitment for energy services.

Value Assessment

Rating: fair

The contract's value of $20.4 million over 18 years for electric power distribution is difficult to benchmark without specific service details and geographic context. Given the sole-source nature, a direct comparison to competitively bid contracts is not feasible. The fixed-price structure provides cost certainty but may not capture potential savings from market fluctuations or efficiency gains. The long duration suggests a stable, essential service requirement.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning it was not openly competed. This approach is typically used when only one responsible source can provide the required services. The lack of competition means that the government did not benefit from a range of proposals and potentially lower prices that could arise from a competitive bidding process.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure. The government's ability to negotiate the best possible price was constrained by the sole-source award.

Public Impact

Provides essential electric power distribution services to Department of Defense installations. Ensures continuous operations and readiness for military personnel and equipment. Supports the infrastructure necessary for national defense. Benefits military communities by maintaining reliable utility services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential taxpayer savings.
Long contract duration (18 years) may not align with evolving energy market prices.
Lack of detailed performance metrics makes value assessment challenging.

Positive Signals

Fixed-price contract shifts performance risk to the contractor.
Long-term award provides stability for critical utility services.
Essential service for national defense operations.

Sector Analysis

The electric power distribution sector is a critical utility service, essential for the functioning of all organizations, including government agencies. For the Department of Defense, reliable power is paramount for operational readiness. While specific market size data for military-specific electric power contracts is not readily available, the overall utility sector is vast and highly regulated. This contract represents a long-term commitment to a fundamental service, ensuring the continuous operation of military facilities.

Small Business Impact

There is no indication that this contract included small business set-asides. As a sole-source award to a large utility provider, it is unlikely to involve significant subcontracting opportunities for small businesses unless specifically mandated or if the primary contractor chooses to engage them for specific tasks.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Transparency is limited due to the sole-source nature. Accountability measures would be defined within the contract's terms and conditions, focusing on service delivery and reliability. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Defense Infrastructure Contracts
Utility Services Contracts
Base Operations Support Contracts

Risk Flags

Sole-source award
Long contract duration
Lack of competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.5 million to GEORGIA POWER COMPANY. IGF::OT::IGF ECMS FOR BUILDING 229

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 $20.5 million.

What is the period of performance?

Start: 2018-09-28. End: 2039-08-31.

What is the historical spending pattern for electric power distribution services by the Department of Defense, particularly in Georgia?

Analyzing historical spending for electric power distribution by the Department of Defense (DoD) in Georgia requires access to detailed contract databases. However, general trends indicate that the DoD is a significant consumer of utility services across its numerous installations nationwide. Spending on electricity is influenced by factors such as installation size, energy consumption rates, and prevailing utility rates. Contracts for such essential services are often long-term to ensure stability and can be awarded through various mechanisms, including competitive bids, sole-source justifications, and utility rate structures. Without specific data for Georgia Power Company contracts with the DoD, it's challenging to provide precise historical figures. However, the $20.4 million awarded over 18 years suggests an average annual expenditure of approximately $1.13 million, which would need to be contextualized against the specific energy demands of the supported military facilities and compared to other utility contracts within the DoD portfolio.

How does the pricing of this contract compare to similar electric power distribution contracts awarded competitively?

Direct price comparison is challenging due to the sole-source nature of this contract. Competitively awarded contracts for electric power distribution typically involve multiple bidders vying for the contract, which generally leads to more favorable pricing for the government. The absence of competition here means that the government did not have the opportunity to leverage market forces to drive down costs. To assess value, one would need to compare the per-kilowatt-hour rate or other unit pricing metrics against prevailing market rates for similar services in the same geographic region, adjusted for any unique service requirements or infrastructure investments stipulated in the contract. Without such granular data, it's difficult to definitively state whether the pricing is advantageous or disadvantageous compared to competitive alternatives.

What are the key performance indicators (KPIs) and service level agreements (SLAs) associated with this contract?

The provided data does not specify the key performance indicators (KPIs) or service level agreements (SLAs) for this contract. Typically, contracts for essential services like electric power distribution would include detailed SLAs related to reliability (e.g., uptime percentages, maximum allowable outage durations), response times for outages or service requests, power quality standards (e.g., voltage and frequency stability), and potentially energy efficiency targets. The effectiveness of the contractor's performance would be measured against these agreed-upon metrics. The absence of this information in the summary data limits a thorough assessment of service delivery and value for money.

What is the risk assessment associated with a sole-source award for a critical utility service like electric power?

A sole-source award for a critical utility service like electric power carries specific risks. The primary risk is the potential for inflated pricing due to the lack of competitive pressure, meaning the government may not be obtaining the best possible value. Another risk is reduced incentive for the contractor to innovate or improve efficiency, as there is no direct competition to spur such actions. Furthermore, reliance on a single provider can create vulnerabilities if that provider experiences financial difficulties, operational disruptions, or changes in its own service capabilities. Mitigating these risks often involves robust contract management, clear performance standards, and potentially periodic reviews or renegotiations, especially given the long duration of this contract.

What is the total contract value and duration, and how does this compare to typical utility contracts for federal agencies?

This contract has a total value of $20,458,133.83 and a duration spanning from September 28, 2018, to August 31, 2039, totaling approximately 18 years. This is a substantial long-term commitment. Utility contracts for federal agencies can vary widely in value and duration depending on the size and needs of the facility. Long-term contracts, often exceeding 10 years, are common for essential services like electricity, water, and gas to ensure stable pricing and reliable service delivery. The value of $20.4 million over 18 years averages roughly $1.13 million per year. This figure needs to be assessed against the specific energy consumption of the supported DoD installations to determine if it aligns with industry benchmarks for similar-sized facilities or military bases.

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: 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: $31,974,625

Exercised Options: $31,974,625

Current Obligation: $20,458,134

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS00P15BSD1134

IDV Type: IDC

Timeline