DOD's $10.6M Alaska Electric Power Generation Contract Awarded to Municipality of Anchorage

Contract Overview

Contract Amount: $10,557,898 ($10.6M)

Contractor: Anchorage, Municipality of (INC)

Awarding Agency: Department of Defense

Start Date: 2003-10-01

End Date: 2010-08-31

Contract Duration: 2,526 days

Daily Burn Rate: $4.2K/day

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Energy

Place of Performance

Location: ANCHORAGE, ANCHORAGE County, ALASKA, 99501

State: Alaska Government Spending

Plain-Language Summary

Department of Defense obligated $10.6 million to ANCHORAGE, MUNICIPALITY OF (INC) for work described as: Key points: 1. Contract value represents a significant investment in regional infrastructure. 2. Limited competition may have impacted final pricing. 3. Long contract duration suggests a need for sustained service delivery. 4. Fixed-price contract shifts risk to the contractor. 5. Geographic location in Alaska presents unique logistical challenges. 6. Contract aligns with defense readiness needs in remote areas.

Value Assessment

Rating: fair

The contract value of approximately $10.6 million over its period of performance is substantial for electric power generation services. Benchmarking this against similar contracts is challenging due to the specific geographic location and the nature of the award to a municipal entity. The fixed-price nature of the contract suggests that the initial price was deemed acceptable, but without detailed cost breakdowns or comparisons to market rates for similar services in comparable regions, a definitive value-for-money assessment is difficult. The long duration could indicate potential for cost savings through economies of scale or, conversely, risks of cost escalation if not managed effectively.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The competition level for this contract is indicated as limited. While the specific details of the solicitation process are not provided, a limited competition suggests that fewer than the maximum number of potential offerors were solicited or permitted to submit proposals. This could be due to specific requirements, geographic constraints, or other factors limiting the pool of eligible contractors. The limited nature of the competition may have reduced the pressure on pricing and innovation compared to a full and open competition.

Taxpayer Impact: A limited competition can potentially lead to higher costs for taxpayers as it may reduce the number of competitive bids received, thereby limiting price discovery and potentially leading to less favorable pricing.

Public Impact

The primary beneficiary is the Department of Defense, ensuring reliable power for its operations in Alaska. Services delivered include electric power generation, crucial for military base functionality. Geographic impact is concentrated in Alaska, supporting regional defense infrastructure. Workforce implications may include local employment opportunities for power generation and maintenance.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if market conditions change significantly over the long contract term.
Dependence on a single municipal entity for critical infrastructure could pose supply chain risks.
Limited competition may have resulted in a higher-than-optimal price.
Logistical challenges in remote Alaska could impact service reliability and cost.

Positive Signals

Fixed-price contract provides cost certainty for the government.
Award to a municipal entity may foster local economic development and support.
Long contract duration indicates a stable, long-term requirement met.
Ensures critical power supply for defense operations in a challenging environment.

Sector Analysis

This contract falls within the Energy sector, specifically focusing on electric power generation. The market for defense-related power generation in remote or strategically important locations is often specialized, with fewer large-scale commercial providers willing or able to operate under the unique conditions and security requirements. The total federal spending on electric power generation services can vary significantly year-to-year, but contracts like this highlight the government's need for reliable energy infrastructure, often in areas where commercial grid access is limited or insufficient for military needs. Comparable spending benchmarks are difficult to establish without more granular data on the specific type of generation and location.

Small Business Impact

There is no indication that this contract was specifically set aside for small businesses, nor is there information regarding subcontracting plans. Given the nature and scale of electric power generation infrastructure, it is likely that the primary contractor is a larger entity or a government-supported municipal organization. The impact on the small business ecosystem would likely be indirect, potentially through opportunities for smaller firms to provide specialized maintenance, repair, or component supply services if subcontracting opportunities arise.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant Department of the Army contracting command. Accountability measures would be embedded within the contract terms, including performance standards, delivery schedules, and payment milestones. Transparency is generally facilitated through contract award databases like FPDS, though detailed performance reports and cost audits may not always be publicly available. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arise.

Related Government Programs

Defense Infrastructure Modernization Programs
Military Base Energy Security Initiatives
Regional Power Grid Support Contracts
Federal Energy Management Program

Risk Flags

Limited competition may lead to suboptimal pricing.
Long contract duration increases exposure to market volatility and technological obsolescence.
Geographic isolation in Alaska presents logistical and operational challenges.
Dependence on a single provider for critical infrastructure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $10.6 million to ANCHORAGE, MUNICIPALITY OF (INC). See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is ANCHORAGE, MUNICIPALITY OF (INC).

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $10.6 million.

What is the period of performance?

Start: 2003-10-01. End: 2010-08-31.

What is the specific type of electric power generation technology utilized under this contract?

The provided data indicates the North American Industry Classification System (NAICS) code as 221119, which covers 'Other Electric Power Generation.' This broad category encompasses facilities that generate electric energy from sources not specified elsewhere, such as biomass, geothermal, solar, wind, or other renewable or non-renewable sources. Without further details from the contract award documentation, it is not possible to definitively state the specific technology employed. However, given the location in Alaska and the long duration, it could involve a mix of generation types to ensure reliability, potentially including diesel generators as a backup or primary source, or possibly leveraging local renewable resources if feasible and cost-effective.

How does the awarded price compare to market rates for similar electric power generation services in remote Alaskan locations?

Directly comparing the awarded price of approximately $10.6 million to market rates for similar services in remote Alaskan locations is challenging without access to detailed cost breakdowns and specific market surveys conducted at the time of award. The Municipality of Anchorage, as the awardee, may operate under different cost structures than a private, for-profit entity. Furthermore, the unique logistical challenges, higher operating costs, and potentially limited number of qualified providers in remote Alaskan regions typically command premium pricing. The limited competition noted for this contract further complicates a straightforward market rate comparison, as it suggests a reduced ability to leverage competitive pressures to drive down costs. Therefore, while the price is substantial, its alignment with 'market rates' is difficult to ascertain without more specific comparative data.

What are the key performance indicators (KPIs) and service level agreements (SLAs) associated with this contract?

The provided data does not specify the key performance indicators (KPIs) or service level agreements (SLAs) for this contract. However, for an electric power generation contract, typical KPIs would likely include metrics related to power availability (uptime percentage), reliability (frequency and duration of outages), power quality (voltage and frequency stability), response time to outages or service requests, and adherence to safety and environmental standards. SLAs would define the minimum acceptable performance levels for these KPIs, often with associated penalties for non-compliance and potentially incentives for exceeding performance targets. These would be detailed within the contract's statement of work and performance clauses.

What is the historical spending pattern for electric power generation services by the Department of the Army in Alaska?

Historical spending data for electric power generation services by the Department of the Army in Alaska is not directly available from the provided snippet. To analyze this, one would need to query federal procurement databases (like FPDS or USASpending.gov) for contracts awarded by the Department of the Army (or DoD components operating in Alaska) under relevant NAICS codes (e.g., 221119, 221111, 221112) over several fiscal years. This analysis would reveal the total expenditure, the number and types of contracts awarded, the primary contractors, and trends in spending. Such a review could identify if this $10.6 million contract represents a typical investment or a significant deviation from historical patterns for power generation in the region.

What are the potential risks associated with the long duration (2526 days) of this contract?

The long duration of 2526 days (approximately 7 years) for this electric power generation contract presents several potential risks. Firstly, there is the risk of price escalation due to unforeseen changes in fuel costs, labor rates, or regulatory requirements over the contract period, especially if the fixed-price structure does not adequately account for inflation or market volatility. Secondly, technological advancements in power generation could render the current systems obsolete or less efficient, potentially leading to a need for costly upgrades or replacements not covered by the original contract. Thirdly, the long-term commitment might reduce flexibility for the government to adapt to changing energy policies, mission requirements, or to adopt newer, potentially more cost-effective or environmentally friendly technologies that emerge during the contract's life. Finally, maintaining equipment and ensuring operational readiness over such an extended period requires robust long-term planning and execution by the contractor.

Industry Classification

NAICS: Utilities › Electric Power Generation, Transmission and Distribution › Other Electric Power Generation

Product/Service Code: UTILITIES AND HOUSEKEEPING › UTILITIES

Contractor Details

Address: 1200 E 1ST AVE, ANCHORAGE, AK, 00

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline