Long-term electricity contract for Elephant Butte Field Division awarded to Sierra Electric Cooperative, Inc. for $55,000

Contract Overview

Contract Amount: $55,000 ($55.0K)

Contractor: Sierra Electric Cooperative, Inc.

Awarding Agency: Department of the Interior

Start Date: 2021-07-01

End Date: 2031-06-30

Contract Duration: 3,651 days

Daily Burn Rate: $15/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: SIERRA ELECTRIC COOPERATIVE, INC., SHALL PROVIDE ELECTRICITY FOR ELEPHANT BUTTE FIELD DIVISION FOR IN SUPPORT OF ANY PLANNED OR EMERGENCY POWER PLANT OUTAGE.

Place of Performance

Location: ELEPHANT BUTTE, SIERRA County, NEW MEXICO, 87935

State: New Mexico Government Spending

Plain-Language Summary

Department of the Interior obligated $55,000 to SIERRA ELECTRIC COOPERATIVE, INC. for work described as: SIERRA ELECTRIC COOPERATIVE, INC., SHALL PROVIDE ELECTRICITY FOR ELEPHANT BUTTE FIELD DIVISION FOR IN SUPPORT OF ANY PLANNED OR EMERGENCY POWER PLANT OUTAGE. Key points: 1. Contract ensures continuous power supply for critical operations. 2. Long duration suggests a need for stable, predictable service. 3. Fixed-price contract offers cost certainty for the Bureau of Reclamation. 4. Sole-source award may limit opportunities for competitive pricing. 5. Performance will be crucial for maintaining field division operations. 6. Geographic location in New Mexico is a key factor in service provision.

Value Assessment

Rating: fair

The contract value of $55,000 over approximately 10 years results in an average annual cost of $5,500. This appears to be a relatively low cost for ensuring essential electricity services for a field division. However, without specific details on the electricity consumption or the scope of services provided (e.g., capacity, reliability standards), a direct comparison to similar contracts is difficult. The fixed-price nature provides budget predictability, but the value for money hinges on the actual demand and the cooperative's operational efficiency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. This typically occurs when only one vendor can provide the required goods or services due to unique capabilities, geographic necessity, or other specific circumstances. The lack of competition means there was no opportunity to solicit bids from multiple providers, which could potentially lead to higher prices than if a competitive process had been used.

Taxpayer Impact: Taxpayers may not be receiving the best possible price due to the absence of a competitive bidding process. This award highlights the importance of justifying sole-source procurements to ensure they are truly necessary and do not represent a missed opportunity for cost savings.

Public Impact

The primary beneficiary is the Department of the Interior's Bureau of Reclamation, ensuring uninterrupted power for the Elephant Butte Field Division. Essential services, including operational power for facilities and equipment, will be delivered. The geographic impact is localized to the Elephant Butte Field Division in New Mexico. Workforce implications are minimal, as the contract is for utility services rather than direct labor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potential savings.
Long contract duration (10 years) may not adapt to future market price fluctuations.
Lack of competition raises questions about the necessity of this specific award mechanism.

Positive Signals

Ensures reliable electricity supply for critical government operations.
Fixed-price contract provides budget certainty.
Long-term commitment fosters a stable relationship with the service provider.

Sector Analysis

The energy sector, specifically electric power distribution, is a critical utility service for government operations. Contracts for electricity ensure the continuous functioning of facilities, especially in remote or specialized locations like field divisions. While the overall market for electricity is vast, specific contracts for government facilities often involve unique considerations related to reliability, security, and location. Benchmarking this contract is challenging without more data on consumption, but the annual cost appears modest for a decade of service.

Small Business Impact

This contract does not appear to involve a small business set-aside. Sierra Electric Cooperative, Inc. is a cooperative, and its size and structure would need further examination to determine its classification relative to small business definitions. There is no indication of subcontracting requirements within the provided data.

Oversight & Accountability

Oversight for this contract would primarily fall under the Bureau of Reclamation's contracting officers and program managers. Accountability is ensured through the terms of the firm fixed-price purchase order, requiring the delivery of electricity as specified. Transparency is limited due to the sole-source nature of the award, with less public visibility compared to competed contracts. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Federal Utility Contracts
Bureau of Reclamation Operations
New Mexico Government Services

Risk Flags

Sole-source award may limit cost savings.
Long contract duration could miss market price reductions.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Interior awarded $55,000 to SIERRA ELECTRIC COOPERATIVE, INC.. SIERRA ELECTRIC COOPERATIVE, INC., SHALL PROVIDE ELECTRICITY FOR ELEPHANT BUTTE FIELD DIVISION FOR IN SUPPORT OF ANY PLANNED OR EMERGENCY POWER PLANT OUTAGE.

Who is the contractor on this award?

The obligated recipient is SIERRA ELECTRIC COOPERATIVE, INC..

Which agency awarded this contract?

Awarding agency: Department of the Interior (Bureau of Reclamation).

What is the total obligated amount?

The obligated amount is $55,000.

What is the period of performance?

Start: 2021-07-01. End: 2031-06-30.

What is the typical cost range for electricity supply contracts for federal field divisions of similar size and operational needs?

Determining a typical cost range for electricity supply contracts for federal field divisions is challenging without more specific data on the operational requirements, energy consumption, and geographic location of comparable facilities. However, the annual cost of $5,500 for this contract appears relatively low, suggesting either a minimal energy demand at the Elephant Butte Field Division or potentially favorable pricing from Sierra Electric Cooperative, Inc. For context, typical commercial electricity rates can vary significantly by region and usage volume, but a sustained annual cost of this magnitude for a government facility might indicate a small footprint or highly efficient operations. Without benchmarks for energy usage (e.g., kilowatt-hours per year) or service level agreements (e.g., required power quality, backup capabilities), a precise comparison is difficult. Further analysis would require understanding the specific services included in the $55,000 total value.

What are the specific services included in the 'Electric Power Distribution' for the Elephant Butte Field Division?

The provided data indicates that Sierra Electric Cooperative, Inc. shall 'provide electricity for Elephant Butte Field Division for in support of any planned or emergency power plant outage.' This suggests the contract covers the reliable delivery of electrical power to the facility. It likely includes the maintenance of distribution lines connecting the cooperative's grid to the field division's infrastructure, ensuring consistent power flow. The mention of support for 'planned or emergency power plant outage' implies that the cooperative's service is critical for maintaining operations even when the division's own power generation systems might be offline or undergoing maintenance. The exact scope would be detailed in the full purchase order, potentially specifying voltage, amperage, reliability standards (e.g., uptime guarantees), and response times for outages.

What is the justification for awarding this contract on a sole-source basis to Sierra Electric Cooperative, Inc.?

The justification for a sole-source award typically stems from circumstances where only one responsible source can satisfy the agency's needs. For utility services like electricity, this often relates to geographic exclusivity. Sierra Electric Cooperative, Inc. likely holds the franchise or infrastructure necessary to provide electricity to the specific location of the Elephant Butte Field Division. If the division is situated in an area where only this cooperative's grid extends, then competition would be impractical or impossible. Other potential justifications could include unique technical requirements or existing infrastructure integration that makes switching providers infeasible or prohibitively expensive. The Bureau of Reclamation would have documented this justification in accordance with Federal Acquisition Regulation (FAR) guidelines prior to awarding the contract.

How does the 10-year duration of this contract impact its value and risk for the government?

The 10-year duration (3651 days) of this firm fixed-price contract provides significant budget certainty for the Bureau of Reclamation, locking in the price for a decade. This stability is valuable for long-term planning and avoids potential price escalations that could occur in a more volatile market. However, it also carries risks. If electricity prices were to decrease significantly over the next decade, the government would be locked into paying the agreed-upon price, potentially overpaying. Conversely, if prices were to rise sharply, the government benefits from the fixed price. The long duration also means the government is committed to this provider for an extended period, potentially missing out on opportunities to leverage new technologies or more competitive offerings that might emerge. Risk is mitigated by the fixed-price nature, but the opportunity cost of not re-evaluating the market periodically is a consideration.

What is Sierra Electric Cooperative, Inc.'s track record with federal contracts, particularly with the Department of the Interior?

Information regarding Sierra Electric Cooperative, Inc.'s specific track record with federal contracts, especially with the Department of the Interior, is not detailed in the provided data. As a cooperative, its primary focus is likely serving its member-owners, which may include government facilities within its service territory. To assess their track record, one would need to examine contract databases (like SAM.gov or FPDS) for past awards, performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), and any history of disputes or issues. Without this specific data, it's assumed the Bureau of Reclamation conducted due diligence to ensure Sierra Electric Cooperative, Inc. was capable of meeting the contract requirements before awarding this sole-source purchase order.

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

Solicitation ID: 40522341

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Sierra Electric Cooperative Inc.

Address: 610 HWY 195, ELEPHANT BUTTE, NM, 87935

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

Financial Breakdown

Contract Ceiling: $55,000

Exercised Options: $55,000

Current Obligation: $55,000

Actual Outlays: $31,488

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Timeline