Army awards $24M for electric services, highlighting long-term infrastructure needs

Contract Overview

Contract Amount: $24,050,124 ($24.1M)

Contractor: Plumas-Sierra Rural Electric Co-Operative

Awarding Agency: Department of Defense

Start Date: 2004-02-26

End Date: 2015-03-16

Contract Duration: 4,036 days

Daily Burn Rate: $6.0K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: 200410!000075!2100!W912GY!SIERRA ARMY DEPOT !W912GY04C0001 !A!N! !N! ! !20040226!20040301!007783400!007783400!007783400!N!PLUMAS-SIERRA RURAL ELECTRIC C!73233 STATE RTE 70 STE A !PORTOLA !CA!96122!58352!063!06!PORTOLA !PLUMAS !CALIFORNIA!+000001500000!N!N!000001500000!S112!ELECTRIC SERVICES !S1 !SERVICES !000 !* !221122!E! !3! ! ! ! ! !99990909!B! ! !A! !B!U!J!1!001!N!1E!Z!N!Z! ! !Y!B!N!N! ! !A! !A!A!00 !A!B!N! ! ! ! ! ! !0001! !

Place of Performance

Location: HERLONG, LASSEN County, CALIFORNIA, 96113

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $24.1 million to PLUMAS-SIERRA RURAL ELECTRIC CO-OPERATIVE for work described as: 200410!000075!2100!W912GY!SIERRA ARMY DEPOT !W912GY04C0001 !A!N! !N! ! !20040226!20040301!007783400!007783400!007783400!N!PLUMAS-SIERRA RURAL ELECTRIC C!73233 STATE RTE 70 STE A !PORTOLA !CA!96122!58352!063!06!PORTOLA !PLUM… Key points: 1. Contract awarded for electric services to support a critical Army depot. 2. Long contract duration suggests a need for sustained, reliable utility provision. 3. Sole-source award raises questions about potential cost efficiencies and market alternatives. 4. The contract's value is significant for the specific geographic region and utility provider. 5. Focus on infrastructure highlights the importance of base operational support.

Value Assessment

Rating: fair

The contract value of approximately $24 million over its extended period is substantial for a single utility provider. Without comparable sole-source contracts for similar facilities, it is difficult to definitively benchmark value. However, the duration of the contract (over 10 years) suggests a stable, long-term need for these services. The fixed price nature of the contract provides some cost certainty, but the lack of competition limits opportunities for price discovery and potential savings.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not openly competed. This typically occurs when only one vendor can provide the required goods or services, or in situations deemed urgent or necessary for national security. The lack of competition means that potential alternative providers were not considered, and the pricing may not reflect the most competitive market rates.

Taxpayer Impact: For taxpayers, a sole-source award means there is a reduced likelihood of achieving the lowest possible price through competitive bidding. This can lead to higher overall costs for the government compared to a fully competed contract.

Public Impact

The Sierra Army Depot in California benefits from reliable electric power distribution. Essential services are maintained for military operations and personnel at the depot. The local economy in Plumas County, California, benefits from the sustained business with a local utility cooperative. Ensures the operational readiness of a key military installation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential taxpayer savings.
Long contract duration may obscure opportunities for renegotiation or market-based adjustments.
Lack of transparency in the sole-source justification could hide inefficiencies.

Positive Signals

Ensures critical infrastructure support for a military installation.
Provides stable, long-term revenue for the awarded utility cooperative.
Fixed-price contract offers budget predictability for the Army.

Sector Analysis

This contract falls within the Utilities and Energy Services sector, specifically focusing on electric power distribution. The market for utility services is often characterized by natural monopolies or highly regulated environments, especially in remote areas. The value of this contract, while significant for the provider, represents a portion of the broader federal spending on essential base operations and infrastructure maintenance, which includes a wide array of services and supplies.

Small Business Impact

There is no indication that this contract involved small business set-asides or subcontracting opportunities. The award was made to a rural electric cooperative, which may have its own membership structure but is not typically classified as a small business in the context of federal contracting set-asides. The focus appears to be on securing essential utility services rather than stimulating small business participation.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and financial management divisions. The Inspector General's office may conduct audits or investigations if specific concerns regarding waste, fraud, or abuse arise. Transparency is limited due to the sole-source nature, but contract performance metrics and payment records would be subject to internal review and potential audits.

Related Government Programs

Military Base Operations Support
Utility Services Contracts
Federal Infrastructure Spending
Army Logistics and Readiness

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 $24.1 million to PLUMAS-SIERRA RURAL ELECTRIC CO-OPERATIVE. 200410!000075!2100!W912GY!SIERRA ARMY DEPOT !W912GY04C0001 !A!N! !N! ! !20040226!20040301!007783400!007783400!007783400!N!PLUMAS-SIERRA RURAL ELECTRIC C!73233 STATE RTE 70 STE A !PORTOLA !CA!96122!58352!063!06!PORTOLA !PLUMAS !CALIFORNIA!+000001500000!N!N!000001500000!S112!ELECTRIC SERVICES !S1 !SERVICES !000 !* !221122!E! !3! ! ! ! ! !999

Who is the contractor on this award?

The obligated recipient is PLUMAS-SIERRA RURAL ELECTRIC CO-OPERATIVE.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $24.1 million.

What is the period of performance?

Start: 2004-02-26. End: 2015-03-16.

What is the track record of Plumas-Sierra Rural Electric Cooperative in serving government contracts?

Information on Plumas-Sierra Rural Electric Cooperative's specific track record with government contracts, beyond this award, is not readily available in the provided data. As a rural electric cooperative, its primary mission is to serve its member-owners, which may include government facilities within its service territory. While cooperatives can be reliable service providers, their experience with the nuances of federal contracting, such as compliance, reporting, and competitive bidding processes for other agencies, would require further investigation. This specific contract's sole-source nature suggests that either their unique position or a specific justification led to the award, rather than a history of competitive success across multiple government solicitations.

How does the $24 million contract value compare to similar electric utility contracts for military installations?

Benchmarking this $24 million contract against similar electric utility contracts for military installations is challenging due to the sole-source nature and the specific geographic and operational context of the Sierra Army Depot. Utility costs can vary significantly based on location, demand, infrastructure age, and the specific services included (e.g., generation, transmission, distribution, maintenance). Larger bases or those in high-cost areas might have higher utility expenditures. However, without data on comparable sole-source awards or detailed cost breakdowns for other bases, it's difficult to ascertain if $24 million over approximately 10 years represents a premium, a fair market price, or a bargain. The lack of competition inherently limits direct price comparison.

What are the primary risks associated with a sole-source award for essential utility services?

The primary risks associated with a sole-source award for essential utility services include potential overpayment due to the absence of competitive pressure, reduced incentive for the contractor to innovate or improve efficiency, and a lack of transparency in pricing. Taxpayers may bear a higher cost than if the contract had been competed. Furthermore, reliance on a single provider can create vulnerability if that provider experiences financial difficulties, operational issues, or changes its business strategy. Ensuring robust contract oversight and performance management becomes even more critical in sole-source situations to mitigate these risks and ensure the government receives fair value.

How does the extended duration (over 10 years) impact the overall value and risk of this contract?

The extended duration of this contract, spanning over 10 years (from initial award in 2004 to 2015), provides stability and predictability for both the Army and the utility provider. For the Army, it ensures a consistent supply of essential electric services, reducing the administrative burden of frequent re-procurement. For Plumas-Sierra Rural Electric Cooperative, it offers a guaranteed revenue stream, potentially enabling long-term infrastructure investments. However, a long duration also carries risks: the fixed price may become uncompetitive if market rates decrease significantly over time, and it limits the government's ability to adapt to changing energy technologies or needs. Renegotiation clauses or price adjustment mechanisms, if included, would be crucial for mitigating these long-term risks.

What is the significance of awarding electric services to a rural electric cooperative for a military depot?

Awarding electric services to a rural electric cooperative like Plumas-Sierra Rural Electric Cooperative for a military depot often signifies a strategic decision to leverage existing, localized infrastructure and community-based service models. Rural electric cooperatives are member-owned utilities typically focused on serving less densely populated areas, often possessing established distribution networks within their territories. For the Sierra Army Depot, this likely means the cooperative already had the necessary grid infrastructure in place to reliably serve the facility. This arrangement can foster local economic ties and ensure service continuity, particularly if the cooperative is the sole or primary provider in that specific region, justifying the sole-source award.

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

Address: 73233 STATE RTE 70 STE A, PORTOLA, CA, 96122

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline