Army awards $13.9M for water services to City of Lawton, OK, with a 2-year extension

Contract Overview

Contract Amount: $13,967,601 ($14.0M)

Contractor: City of Lawton

Awarding Agency: Department of Defense

Start Date: 1999-10-27

End Date: 2021-10-29

Contract Duration: 8,038 days

Daily Burn Rate: $1.7K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Other

Official Description: 200008!2100!002080!BT39 !U.S. ARMY FIELD ARTILLERY CENTER!DABD0570C3505 !A!*!991129 !19991027!19991129!074272865!074272865!074272865!N!0C9E8!CITY OF LAWTON !103 SW 4TH ST !LAWTON !OK!73501!27300!031!40!FORT SILL !COMANCHE !OKLAHOMA !0001!+000000043276!N!N!000000000000!S114!WATER SERVICES !S1 !SERVICES !1000!NOT DISCERNABLE OR CLASSIFIED !4941!3!*!*!*!A!N!Z!B !N!J!0!000!*!* !Z!N!Z!* !* !N!C!*!Z!Z!A!A!A!A!* !*!N!A!A!N!*!*!*!*!*!

Place of Performance

Location: FORT SILL, COMANCHE County, OKLAHOMA, 73503

State: Oklahoma Government Spending

Plain-Language Summary

Department of Defense obligated $14.0 million to CITY OF LAWTON for work described as: 200008!2100!002080!BT39 !U.S. ARMY FIELD ARTILLERY CENTER!DABD0570C3505 !A!*!991129 !19991027!19991129!074272865!074272865!074272865!N!0C9E8!CITY OF LAWTON !103 SW 4TH ST !LAWTON !OK!73501!27300!031!40!FORT SILL !COM… Key points: 1. Contract value of $13.9M over its life, with a significant portion potentially allocated to extended periods. 2. Awarded to a single local government entity, raising questions about competition and potential for better pricing. 3. Contract type is Fixed Price with Economic Price Adjustment, which can lead to cost increases over time. 4. Performance period spans over 20 years, indicating a long-term need for these essential services. 5. The contract is for water services, a critical utility for base operations and personnel. 6. Located in Oklahoma, the contract supports Fort Sill, a major Army installation.

Value Assessment

Rating: fair

The contract's total value of $13.9 million over more than 20 years suggests a substantial investment in water services for Fort Sill. However, without comparable contracts for similar services to other Army bases or municipalities of similar size, it is difficult to definitively benchmark the value. The Fixed Price with Economic Price Adjustment (FPEPA) contract type introduces variability, as costs can increase due to economic factors, potentially impacting the overall value proposition for the government over the long term. The extended duration also means that the initial pricing may not reflect current market conditions.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis to the City of Lawton. This indicates that the Army did not conduct a competitive procurement process to solicit offers from multiple vendors. While sole-source awards can be justified for unique capabilities or essential services provided by a single entity, it limits the potential for price discovery through competition. The absence of multiple bids means the government may not have secured the most cost-effective solution available in the market.

Taxpayer Impact: Awarding contracts without competition can lead to higher prices for taxpayers, as the potential for cost savings through competitive bidding is forgone. This sole-source award means taxpayers may be paying a premium for these water services.

Public Impact

The City of Lawton, Oklahoma, is the direct beneficiary of this contract, receiving significant revenue for providing essential services. The contract ensures the continuous supply of water services to Fort Sill, a critical Army installation, supporting its daily operations and personnel. The geographic impact is localized to Lawton and the surrounding areas of Fort Sill, Oklahoma. This contract supports municipal water infrastructure and personnel within the City of Lawton.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing, potentially increasing costs for taxpayers.
Fixed Price with Economic Price Adjustment (FPEPA) allows for cost increases over the contract's long duration.
The extended performance period of over 20 years raises concerns about long-term cost management and potential for price escalation.
Lack of detailed cost breakdowns or performance metrics in the provided data makes a thorough value assessment challenging.

Positive Signals

Ensures a critical utility (water services) for a major military installation (Fort Sill).
Awarded to a local government entity, potentially fostering community relations and local economic support.
The contract provides long-term stability for essential services at Fort Sill.
The extended duration suggests a reliable and established service provider.

Sector Analysis

This contract falls within the Utilities and Public Works sector, specifically focusing on water supply and management. The market for municipal water services is often characterized by localized monopolies due to the extensive infrastructure required. Federal agencies, particularly military bases, are significant consumers of these services. Benchmarking this contract's value is challenging without specific data on per-gallon costs or infrastructure maintenance expenses for comparable federal facilities or large municipalities. The long-term nature of the award suggests a strategic decision to secure a stable and essential service.

Small Business Impact

This contract was awarded directly to the City of Lawton and does not appear to include specific small business set-aside provisions or subcontracting requirements for small businesses. As a sole-source award to a government entity, the typical mechanisms for promoting small business participation, such as set-asides or prime contractor subcontracting goals, are unlikely to be applicable. This means the direct economic benefit to the small business ecosystem from this specific contract is likely minimal.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and facility management divisions. Given the long duration and essential nature of the service, regular performance reviews and audits would be expected. Transparency is limited by the sole-source nature of the award and the lack of publicly available detailed performance metrics. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Fort Sill Operations and Maintenance
Army Base Utilities Contracts
Municipal Water Service Agreements
Federal Public Works Contracts

Risk Flags

Sole-source award may result in higher costs.
Economic Price Adjustment clause introduces cost uncertainty.
Long contract duration increases risk of price escalation.
Lack of competition limits transparency and potential for cost savings.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.0 million to CITY OF LAWTON. 200008!2100!002080!BT39 !U.S. ARMY FIELD ARTILLERY CENTER!DABD0570C3505 !A!*!991129 !19991027!19991129!074272865!074272865!074272865!N!0C9E8!CITY OF LAWTON !103 SW 4TH ST !LAWTON !OK!73501!27300!031!40!FORT SILL !COMANCHE !OKLAHOMA !0001!+000000043276!N!N!000000000000!S114!WATER SERVICES !S1 !SERVICES !1000!NOT DISCERNABLE OR CLASSIFIED !4941!3!*!*!*!A!N!Z!B !N!J!

Who is the contractor on this award?

The obligated recipient is CITY OF LAWTON.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $14.0 million.

What is the period of performance?

Start: 1999-10-27. End: 2021-10-29.

What is the historical spending pattern for water services at Fort Sill?

The provided data indicates a single definitive contract awarded in 1999 with an end date in 2021, totaling $13.9 million. This suggests that prior to this award, water services might have been provided under different contracts, potentially with different providers or through different mechanisms. Without access to historical contract databases or specific budget allocations for Fort Sill's water infrastructure and services prior to 1999, a comprehensive historical spending pattern cannot be fully reconstructed. However, the longevity and value of this single award point to a consistent and significant requirement for water services at the installation over a prolonged period.

How does the per-unit cost of water services under this contract compare to market rates or similar federal contracts?

Determining the precise per-unit cost of water services under this contract is challenging due to the 'Fixed Price with Economic Price Adjustment' (FPEPA) structure and the lack of specific volume data (e.g., gallons per year). The total award of $13.9 million over approximately 22 years (from 1999 to 2021) averages to roughly $631,818 per year. However, this figure does not account for economic price adjustments, which would increase the actual annual cost over time. Comparing this to market rates is difficult without knowing the specific services included (e.g., treatment, distribution, maintenance) and the volume consumed. Municipal water rates vary significantly by region and usage, and federal contracts often have unique pricing structures. A direct comparison would require detailed cost breakdowns and volume data, which are not publicly available for this contract.

What are the specific risks associated with a sole-source award for essential services like water?

The primary risk of a sole-source award for essential services like water is the lack of competitive pressure, which can lead to inflated prices and reduced incentives for the contractor to innovate or improve efficiency. Taxpayers may end up paying more than necessary. Another risk is vendor lock-in; if the sole provider faces operational issues, service disruptions, or decides to terminate the contract, finding and transitioning to a new provider for such a critical utility can be complex, costly, and time-consuming, potentially jeopardizing base operations. Furthermore, without competition, there's less transparency into the reasonableness of costs and the quality of services provided.

What is the City of Lawton's track record in providing water services, particularly to large institutional clients?

The City of Lawton has a long-standing responsibility for providing water services to its residents and businesses. As the local government entity, it operates and maintains the necessary water infrastructure. Awarding this contract to the City suggests a level of confidence from the Department of the Army in their capability to meet the demands of Fort Sill. While specific details on their performance metrics or past issues with large institutional clients are not provided in this data, municipal water utilities are generally expected to adhere to stringent quality and reliability standards set by regulatory bodies. Their track record would likely be assessed by the Army prior to awarding such a long-term, sole-source contract.

How might the economic price adjustment clause impact the total cost over the contract's duration?

The 'Economic Price Adjustment' (EPA) clause in this contract allows for adjustments to the contract price based on fluctuations in specific economic factors, such as labor costs, material costs, or inflation indices. Over the extended performance period of more than 20 years, these adjustments can significantly increase the total cost to the government. If inflation rates are high or specific input costs rise unexpectedly, the EPA clause would permit the City of Lawton to increase its charges accordingly. This mechanism protects the contractor from unforeseen cost increases but shifts the financial risk to the government, potentially leading to a total expenditure considerably higher than the initial $13.9 million estimate if economic conditions are unfavorable.

Industry Classification

NAICS: Utilities › Water, Sewage and Other Systems › Water Supply and Irrigation Systems

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: 103 SW 4TH ST, LAWTON, OK, 73501

Business Categories: Category Business, Government, U.S. Local Government, U.S. National Government, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $8,574,688

Exercised Options: $8,574,688

Current Obligation: $13,967,601

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline