DOJ's $15.6M sewage treatment contract with Herlong Public Utility District shows long duration and limited competition

Contract Overview

Contract Amount: $15,622,242 ($15.6M)

Contractor: Herlong Public Utility District

Awarding Agency: Department of Justice

Start Date: 2001-09-15

End Date: 2012-12-31

Contract Duration: 4,125 days

Daily Burn Rate: $3.8K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Other

Official Description: 151060 WATER/WASTEWATER SERVICES

Place of Performance

Location: HERLONG, LASSEN County, CALIFORNIA, 96113

State: California Government Spending

Plain-Language Summary

Department of Justice obligated $15.6 million to HERLONG PUBLIC UTILITY DISTRICT for work described as: 151060 WATER/WASTEWATER SERVICES Key points: 1. The contract's extended duration of over 11 years suggests a long-term need for these essential services. 2. Limited competition for this contract may have impacted pricing and value for money. 3. The fixed-price with economic price adjustment structure carries some risk of cost escalation. 4. Performance context is limited due to the nature of the service, focusing on operational continuity. 5. This contract falls within the 'Other' sector, specifically supporting federal correctional facilities. 6. The lack of small business set-aside indicates no specific focus on small business participation. 7. The contract's value, while substantial, needs to be benchmarked against similar utility service contracts.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without comparable public utility service agreements for federal facilities. The fixed-price with economic price adjustment (FPEPA) contract type introduces potential for cost increases over its long duration, which could impact overall value. The raw dollar amount of $15.6 million over 11 years averages to approximately $1.4 million annually, a figure that requires comparison to similar municipal or private utility service costs to assess efficiency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under a 'NOT AVAILABLE FOR COMPETITION' basis, indicating a sole-source procurement. This suggests that Herlong Public Utility District was likely the only viable provider or that specific circumstances prevented a competitive bidding process. The lack of competition means there was no opportunity to solicit multiple offers, potentially leading to higher prices than might be achieved in a competitive environment.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure to drive down costs. The sole-source nature limits transparency in price discovery.

Public Impact

The primary beneficiaries are the inmates and staff at the federal correctional facility served by the Bureau of Prisons, ensuring essential sanitation services. The service delivered is critical for public health and environmental protection, specifically sewage treatment. The geographic impact is localized to the area surrounding the Herlong Public Utility District and the federal prison it serves in California. Workforce implications are primarily within the Herlong Public Utility District, maintaining operational staff for the treatment facility.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs for taxpayers.
Long contract duration (over 11 years) increases exposure to economic price adjustments and potential cost overruns.
Lack of transparency in the 'NOT AVAILABLE FOR COMPETITION' justification requires scrutiny.
Absence of small business participation or subcontracting goals may limit opportunities for smaller enterprises.

Positive Signals

Ensures essential and continuous operation of critical wastewater treatment services for a federal facility.
The long-term nature of the contract provides stability and predictability for service delivery.
Herlong Public Utility District likely possesses specialized knowledge or infrastructure necessary for this specific location.

Sector Analysis

This contract falls under the 'Other' sector, specifically related to public utilities and essential services. The market for municipal wastewater treatment services is often localized, with established districts serving specific geographic areas. Federal agencies often rely on these local providers, especially in remote locations or where existing infrastructure is already in place. The contract value of $15.6 million over its duration is moderate for a long-term utility service agreement, but its sole-source nature is a key characteristic.

Small Business Impact

This contract did not include any small business set-aside provisions, nor is there an indication of subcontracting goals for small businesses. The award to a public utility district suggests a focus on service provision rather than a typical commercial contracting model where small business participation is often encouraged or mandated. This means opportunities for small businesses within the supply chain or as direct service providers were likely not a consideration in this procurement.

Oversight & Accountability

Oversight for this contract would primarily fall under the Bureau of Prisons (BOP) within the Department of Justice. Accountability measures would focus on the consistent delivery of contracted sewage treatment services as per the agreement's terms and performance standards. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected in the procurement or execution of the contract.

Related Government Programs

Federal Prison System Facilities Management
Bureau of Prisons Operations Support
Public Utility Services Contracts
Environmental Services for Federal Agencies
Water and Wastewater Management Contracts

Risk Flags

Sole-source award
Long contract duration
Economic price adjustment clause
Lack of competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $15.6 million to HERLONG PUBLIC UTILITY DISTRICT. 151060 WATER/WASTEWATER SERVICES

Who is the contractor on this award?

The obligated recipient is HERLONG PUBLIC UTILITY DISTRICT.

Which agency awarded this contract?

Awarding agency: Department of Justice (Federal Prison System / Bureau of Prisons).

What is the total obligated amount?

The obligated amount is $15.6 million.

What is the period of performance?

Start: 2001-09-15. End: 2012-12-31.

What specific justification was provided for the sole-source award of this contract?

The provided data indicates the contract was awarded under 'NOT AVAILABLE FOR COMPETITION,' which is synonymous with a sole-source justification. While the specific rationale is not detailed in the provided data, common reasons for sole-source awards include the unique capability of the contractor, the urgency of the requirement where competition is not feasible, or the unavailability of other sources. For a public utility district, it often implies that the district is the sole provider of such services within the geographic area of the federal facility, making competition impractical or impossible.

How does the annual cost of this contract compare to similar wastewater treatment services for federal facilities?

The contract's total value is $15.6 million over a duration of 4125 days (approximately 11.3 years), averaging about $1.38 million per year. Direct comparison to similar wastewater treatment contracts for federal facilities is difficult without access to a broader dataset of comparable contracts. However, the cost per year needs to be evaluated against the volume of sewage treated, the complexity of the treatment process, and the specific regulatory requirements applicable to the facility. Benchmarking against municipal utility rates in similar regions could provide a partial comparison, but federal facilities may have unique operational demands.

What are the potential risks associated with the 'FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT' contract type over an 11-year period?

The 'Fixed Price with Economic Price Adjustment' (FPEPA) contract type aims to provide price stability while allowing for adjustments due to fluctuations in specific economic factors, such as labor or material costs. Over an 11-year period, the primary risk is significant cost escalation if the economic factors used for adjustment increase substantially. This can lead to the contract exceeding initial budget expectations. While it protects the contractor from unforeseen cost increases, it transfers some of that risk to the government, potentially increasing the total expenditure beyond what a firm fixed-price contract might have cost if prices remained stable.

What is the historical spending pattern for wastewater services at this specific federal facility?

The provided data only details this single contract awarded on September 15, 2001, and ending on December 31, 2012. It does not offer historical spending patterns prior to this contract or subsequent contracts for wastewater services at the same facility. To understand historical spending, one would need to access procurement records for the facility covering periods before and after this contract's term. This would reveal if spending has been consistent, increasing, or decreasing over time and whether previous contracts were also sole-source or competed.

What performance metrics or service level agreements are typically included in such wastewater treatment contracts?

While specific performance metrics are not detailed in the provided data, typical wastewater treatment contracts include stringent performance standards related to effluent quality (meeting EPA and state discharge limits), operational reliability (uptime of treatment processes), response times for emergencies, and adherence to safety protocols. Service Level Agreements (SLAs) often define key performance indicators (KPIs) such as the percentage of time the facility is operational, compliance rates with discharge permits, and timely reporting. Failure to meet these metrics usually results in penalties or corrective action plans.

Does the long duration of this contract suggest a lack of viable alternatives or a stable, long-term need?

The contract's duration of over 11 years (4125 days) strongly suggests a stable, long-term need for wastewater treatment services at the federal facility. It also implies that either viable alternatives were not readily available or were not pursued due to the nature of the service provision. Public utility districts often operate as monopolies within their service areas. The extended period indicates that the government relied on Herlong Public Utility District for consistent service delivery, potentially due to established infrastructure, proximity, or specialized operational requirements that made switching providers impractical or costly.

Industry Classification

NAICS: Utilities › Water, Sewage and Other Systems › Sewage Treatment Facilities

Product/Service Code: UTILITIES AND HOUSEKEEPING › UTILITIES

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Offers Received: 1

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

Contractor Details

Address: YUBA ST BLDG 2067, HERLONG, CA, 01

Business Categories: Category Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $1,017,663

Exercised Options: $1,017,663

Current Obligation: $15,622,242

Timeline