DoD's $23M Post-Acceptance Performance Expenses for Electric Power Distribution in Washington State

Contract Overview

Contract Amount: $23,037,241 ($23.0M)

Contractor: Puget Sound Energy Inc

Awarding Agency: Department of Defense

Start Date: 2025-09-30

End Date: 2043-03-01

Contract Duration: 6,361 days

Daily Burn Rate: $3.6K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: POST-ACCEPTANCE PERFORMANCE EXPENSES

Place of Performance

Location: TACOMA, PIERCE County, WASHINGTON, 98433

State: Washington Government Spending

Plain-Language Summary

Department of Defense obligated $23.0 million to PUGET SOUND ENERGY INC for work described as: POST-ACCEPTANCE PERFORMANCE EXPENSES Key points: 1. Significant long-term commitment for essential utility services. 2. Sole-source award suggests limited market alternatives or specific requirements. 3. Extended contract duration may indicate stable, ongoing needs. 4. Performance expenses are a component of overall contract value, not the total. 5. Geographic concentration in Washington State for service delivery. 6. FIRM FIXED PRICE contract type provides cost certainty for the government.

Value Assessment

Rating: fair

The reported $23M represents post-acceptance performance expenses, which are distinct from the initial award value and may not reflect the total contract cost over its lifespan. Benchmarking is difficult without knowing the total contract value and the specific services covered. However, the long duration (over 15 years) for a utility service suggests a potentially substantial underlying contract. The FIRM FIXED PRICE nature offers predictability, but the absence of a clear total award value makes a direct value-for-money assessment challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, indicating that the Department of the Army identified Puget Sound Energy Inc. as the only responsible source capable of meeting the requirement. This could be due to the nature of the service (e.g., existing infrastructure, geographic monopoly) or specific technical requirements. The lack of competition means that price discovery through market forces was not utilized, potentially leading to higher costs than if multiple bids were solicited.

Taxpayer Impact: Sole-source awards limit opportunities for competitive bidding, which can reduce cost savings for taxpayers. The government must ensure fair and reasonable pricing through other means when competition is not feasible.

Public Impact

Military installations and personnel in Washington State benefit from reliable electric power. Ensures continuous operation of critical defense infrastructure. Supports the local economy in Washington State through service provision. Maintains operational readiness by securing essential utility services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing advantages for taxpayers.
Long contract duration (over 15 years) requires careful monitoring of performance and costs.
Post-acceptance performance expenses are a subset of total contract value, making full cost assessment difficult without more data.

Positive Signals

FIRM FIXED PRICE contract provides cost certainty for the government.
Award to an established utility provider likely ensures reliable service delivery.
Long-term contract indicates a stable and predictable need for essential services.

Sector Analysis

This contract falls within the Utilities sector, specifically focusing on electric power distribution. The market for utility services is often characterized by natural monopolies or heavily regulated entities, especially for large-scale distribution networks. The Department of Defense, like other large federal agencies, relies on utility providers to power its installations. Benchmarking this specific contract is challenging without knowing the total value and scope, but it represents a significant, long-term commitment to a critical infrastructure service.

Small Business Impact

The provided data indicates that small business participation (ss: false, sb: false) was not a primary consideration or requirement for this specific contract award. As a sole-source award to a large utility provider, there are likely no direct small business set-aside provisions. Subcontracting opportunities for small businesses would depend on Puget Sound Energy Inc.'s internal policies and the specific nature of the services required, but are not explicitly mandated by this contract's structure.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. As a sole-source award for essential services, the focus would be on ensuring the contractor meets performance standards and that pricing remains fair and reasonable throughout the contract's long duration. Transparency is limited by the sole-source nature, but contract modifications and performance reports would be subject to internal review and potentially public disclosure depending on federal regulations.

Related Government Programs

Federal Utility Contracts
Department of Defense Energy Procurement
Washington State Infrastructure Contracts
Long-Term Service Agreements

Risk Flags

Sole-source award
Long contract duration
Limited transparency on total contract value

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $23.0 million to PUGET SOUND ENERGY INC. POST-ACCEPTANCE PERFORMANCE EXPENSES

Who is the contractor on this award?

The obligated recipient is PUGET SOUND ENERGY INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $23.0 million.

What is the period of performance?

Start: 2025-09-30. End: 2043-03-01.

What is the total estimated value of this contract, including the post-acceptance performance expenses?

The provided data only specifies $23,037,241 in 'POST-ACCEPTANCE PERFORMANCE EXPENSES'. This figure represents costs incurred after the initial acceptance of goods or services, often related to warranties, maintenance, or ongoing support. It does not represent the total contract value, which would include the initial award amount for the electric power distribution services. Without the initial award value or a defined ceiling for the entire contract period (which extends to March 2043), the total estimated value cannot be determined from this data alone. The duration of over 15 years suggests the total value could be significantly higher than the reported performance expenses.

How does the pricing of this contract compare to similar electric power distribution contracts for federal agencies?

A direct comparison of pricing is difficult without knowing the total contract value, the specific services included (e.g., voltage levels, delivery points, demand management), and the exact geographic service area within Washington State. Furthermore, the 'POST-ACCEPTANCE PERFORMANCE EXPENSES' figure is not a direct measure of the unit cost of electricity or distribution services. As a sole-source award, there was no competitive bidding process to establish a market-driven price. To assess fairness, the Department of the Army would typically conduct a price analysis based on historical data, cost breakdowns from the contractor, or comparisons to commercial rates in the region, which are not publicly available here.

What are the primary risks associated with this long-term, sole-source contract for electric power?

The primary risks include potential cost escalation over the long contract term (over 15 years), even with a fixed-price structure, if unforeseen market changes occur or if the initial pricing did not adequately account for future conditions. The sole-source nature poses a risk of reduced incentive for the contractor to innovate or offer cost efficiencies, as there is no direct competition. There's also a risk of vendor lock-in, making it difficult to switch providers if performance issues arise or better alternatives become available. Finally, reliance on a single provider for a critical utility service creates a vulnerability if the contractor experiences financial distress or operational disruptions.

What is the historical spending pattern for electric power distribution by the Department of the Army in Washington State?

The provided data focuses on a single contract and does not offer historical spending patterns. To analyze historical spending, one would need to query federal procurement databases for all contracts related to electric power distribution awarded by the Department of the Army (and potentially other DoD components) within Washington State over several fiscal years. This would involve identifying relevant contract vehicles, award amounts, and contract durations to understand trends in spending, average contract values, and the prevalence of sole-source versus competitive awards in this category.

What specific performance metrics are likely being tracked for this electric power distribution contract?

For an electric power distribution contract, key performance metrics likely include reliability (e.g., frequency and duration of outages, measured by SAIDI/SAIFI indices), power quality (e.g., voltage stability, frequency consistency), response times for service calls or emergencies, adherence to safety standards, and potentially energy efficiency targets. The 'POST-ACCEPTANCE PERFORMANCE EXPENSES' might relate to specific maintenance schedules or warranty provisions that are tied to these performance metrics. The government would monitor these to ensure the contractor is meeting its obligations and providing the essential services required for military operations.

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

Address: 10885 NE 4TH ST STE 1200, BELLEVUE, WA, 98004

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

Financial Breakdown

Contract Ceiling: $71,321,459

Exercised Options: $71,321,459

Current Obligation: $23,037,241

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS00P15BSD1179

IDV Type: IDC

Timeline