DoD's $11.99M Electric Power Distribution contract for Texas shows limited competition and potential value concerns

Contract Overview

Contract Amount: $11,992,272 ($12.0M)

Contractor: Texamericas Center

Awarding Agency: Department of Defense

Start Date: 2002-02-13

End Date: 2026-09-30

Contract Duration: 8,995 days

Daily Burn Rate: $1.3K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Place of Performance

Location: TEXARKANA, BOWIE County, TEXAS, 75501

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $12.0 million to TEXAMERICAS CENTER for work described as: Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. Long contract duration (8995 days) may not reflect current market needs or technological advancements. 3. Lack of competition raises questions about whether the government secured the best possible value. 4. Performance is tied to a specific geographic location (Texas), indicating localized service delivery. 5. The contract type (Firm Fixed Price) shifts risk to the contractor but requires careful initial pricing. 6. No small business set-aside was utilized, suggesting limited opportunities for smaller enterprises in this award.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the lack of publicly available comparable data for sole-source electric power distribution services of this scale. The firm fixed-price nature suggests an attempt to control costs, but without competitive bids, it's difficult to ascertain if the $11.99 million represents a fair market price. The extended duration further complicates value assessment, as market conditions and technology can change significantly over nearly 25 years.

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 among multiple vendors. This approach is typically used when only one vendor can provide the required goods or services, or in specific emergency situations. The absence of competition means there was no opportunity for multiple companies to bid, which can limit the government's ability to negotiate the lowest possible price and may indicate a lack of market availability or a strategic decision to use a specific provider.

Taxpayer Impact: Sole-source awards mean taxpayers may not benefit from the cost savings typically achieved through competitive bidding processes. This can lead to higher overall expenditure for the government compared to a competed contract.

Public Impact

The primary beneficiaries are the Department of Defense facilities in Texas requiring reliable electric power distribution. The contract ensures the continuous operation and maintenance of essential electrical infrastructure. Geographic impact is concentrated within Texas, specifically at the locations served by TEXAMERICAS CENTER. Workforce implications include potential employment opportunities for skilled electricians and technicians in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially leading to higher costs for taxpayers.
Extended contract duration raises concerns about adaptability to future technological changes and market shifts.
Lack of transparency in the justification for sole-source award makes it difficult to assess necessity.
Absence of small business participation may limit opportunities for smaller, innovative firms in this sector.

Positive Signals

Firm Fixed Price contract structure transfers some cost overrun risk to the contractor.
Long-term award provides stability and predictability for essential utility services.
Award to a specific entity (TEXAMERICAS CENTER) may indicate a strategic partnership or specialized capability.

Sector Analysis

Electric power distribution is a critical infrastructure sector essential for military operations and national security. This contract falls within the broader utilities and facilities maintenance market. While specific market size data for sole-source military electric power distribution is scarce, the overall U.S. electric power industry is valued in the hundreds of billions. This contract represents a significant, albeit localized, investment in maintaining operational readiness for defense facilities.

Small Business Impact

This contract does not appear to have a small business set-aside component, nor is there information indicating subcontracting opportunities for small businesses. The award to TEXAMERICAS CENTER suggests a focus on a larger, potentially established entity. This lack of explicit small business inclusion means that the direct economic benefits to the small business ecosystem from this specific contract are likely minimal, unless the prime contractor voluntarily engages small businesses for subcontracting.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Accountability measures are inherent in the firm fixed-price contract type, requiring the contractor to meet specified performance standards. Transparency is limited due to the sole-source nature of the award, with justifications for such awards often being internal. Inspector General jurisdiction would apply if performance issues or allegations of fraud arise.

Related Government Programs

Department of Defense Facilities Maintenance Contracts
Utility Services Contracts
Infrastructure Support Services
Base Operations Support Contracts

Risk Flags

Sole-source award
Long contract duration
Lack of competition
Potential for cost inefficiency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.0 million to TEXAMERICAS CENTER. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is TEXAMERICAS CENTER.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $12.0 million.

What is the period of performance?

Start: 2002-02-13. End: 2026-09-30.

What is the specific justification for awarding this electric power distribution contract on a sole-source basis?

The provided data indicates the contract was awarded under 'NOT AVAILABLE FOR COMPETITION,' which is a designation for sole-source procurements. Specific justifications for sole-source awards typically include factors such as the unique capability of a single source, urgent and compelling needs where competition is not feasible, or specific national security requirements. Without further documentation or details from the Department of the Army, the precise reason for this sole-source designation remains undisclosed in the provided data. Such justifications are crucial for understanding why competitive processes were bypassed and are often subject to review by oversight bodies to ensure proper use of taxpayer funds.

How does the $11.99 million total contract value compare to similar electric power distribution contracts awarded by the DoD?

Directly comparing the $11.99 million value of this sole-source contract to similar electric power distribution contracts is difficult without more specific data on contract scope, duration, and location. Sole-source awards inherently lack the price discovery mechanism of competitive bidding, making direct value comparisons less reliable. However, for context, large-scale utility and infrastructure support contracts for military bases can range from millions to hundreds of millions of dollars annually. The extended duration of this contract (nearly 25 years) means the annual average value is relatively modest (approx. $1.33 million/year), but the total commitment is substantial. A competitive award might have yielded a lower total price or more favorable terms.

What are the primary risks associated with a sole-source contract of this duration for electric power distribution?

The primary risks associated with a sole-source contract of this duration (8995 days, approx. 24.6 years) for electric power distribution include potential cost inefficiencies, technological obsolescence, and reduced flexibility. Since the contract was not competed, the government may be paying a premium compared to what could have been achieved through competitive bidding. Over such a long period, the technology and standards for electric power distribution are likely to evolve, and a fixed, sole-source contract may not easily accommodate these advancements or allow for the adoption of more efficient or modern solutions. Furthermore, the government's leverage to negotiate changes or improvements is diminished without the threat of competition.

What performance metrics or oversight mechanisms are in place to ensure the effectiveness of this electric power distribution contract?

While the provided data specifies the contract type (Firm Fixed Price) and award details, it does not explicitly outline the performance metrics or specific oversight mechanisms. Typically, for such essential services, contracts include Performance Work Statements (PWS) detailing required service levels, reliability standards, maintenance schedules, and response times. Oversight would likely involve government quality assurance personnel monitoring contractor performance against the PWS. The Firm Fixed Price structure incentivizes the contractor to meet these requirements to avoid penalties or non-payment. However, the effectiveness of oversight heavily relies on the diligence of the contracting officer's representatives (CORs) and quality assurance specialists assigned to the contract.

How has historical spending on electric power distribution by the Department of the Army in Texas trended, and does this contract align with those patterns?

Analyzing historical spending trends for electric power distribution by the Department of the Army in Texas requires access to extensive historical contract databases. The provided data snippet focuses solely on this one contract. Generally, military branches aim for cost-effective solutions for base support, including utilities. A long-term, sole-source award like this might suggest a specific, long-standing need or a unique situation at the TEXAMERICAS CENTER. Without broader historical data, it's difficult to definitively state if this contract aligns with general spending patterns. However, the trend across the DoD is often towards optimizing costs through competition where feasible, making sole-source awards for such a long duration noteworthy and potentially an outlier if not strongly justified.

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: 107 CHAPEL LANE, NEW BOSTON, TX, 75570

Business Categories: Category Business, Government, Not Designated a Small Business, U.S. Regional/State Government

Financial Breakdown

Contract Ceiling: $4,654,339

Exercised Options: $4,654,339

Current Obligation: $11,992,272

Actual Outlays: $968,288

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline