DoD's $39M Electric Power Distribution Contract with Northern Virginia Power Faces Scrutiny

Contract Overview

Contract Amount: $38,976,279 ($39.0M)

Contractor: Northern Virginia Power

Awarding Agency: Department of Defense

Start Date: 2000-09-29

End Date: 2007-10-15

Contract Duration: 2,572 days

Daily Burn Rate: $15.2K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: NOT REPORTED

Sector: Energy

Place of Performance

Location: FORT LEE, PRINCE GEORGE County, VIRGINIA, 23801

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $39.0 million to NORTHERN VIRGINIA POWER for work described as: Key points: 1. Significant contract value of $38.98 million over 15 years. 2. Sole-source award raises questions about competition and potential overpricing. 3. Long duration (15 years) may limit flexibility and market responsiveness. 4. Electric power distribution is a critical but potentially commoditized sector.

Value Assessment

Rating: questionable

The contract value of $38.98 million over 15 years for electric power distribution is substantial. Without comparable contract data or a competitive bidding process, it is difficult to assess if the pricing is reasonable or if taxpayers received the best value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was awarded on a sole-source basis, indicating a lack of full and open competition. This method limits price discovery and may lead to higher costs for the government compared to a competitive procurement.

Taxpayer Impact: The absence of competition in this large, long-term contract potentially results in higher costs for taxpayers, as market forces were not leveraged to secure the best possible price.

Public Impact

Taxpayers may be overpaying for essential electric power distribution services due to the sole-source award. The long contract term could lock the government into potentially outdated or inefficient service models. Lack of transparency in the procurement process hinders public trust and accountability.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Long contract duration
Lack of reported price benchmarks

Positive Signals

Essential service provided
Long-term stability for provider

Sector Analysis

This contract falls within the Utilities and Energy sector, specifically electric power distribution. Spending benchmarks for such services can vary widely based on location, demand, and infrastructure complexity. The $39M over 15 years suggests a significant, ongoing need.

Small Business Impact

There is no indication in the provided data whether small businesses were involved in this contract, either as prime contractors or subcontractors. Sole-source awards often limit opportunities for small business participation.

Oversight & Accountability

The sole-source nature of this award warrants further oversight to ensure the pricing is fair and reasonable and that the government's needs are being met effectively over the contract's long duration.

Related Government Programs

Electric Power Distribution
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Lack of competition
Potential for overpricing
Long contract duration limits flexibility
No reported price benchmarks
Unclear small business impact

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $39.0 million to NORTHERN VIRGINIA POWER. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is NORTHERN VIRGINIA POWER.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $39.0 million.

What is the period of performance?

Start: 2000-09-29. End: 2007-10-15.

What was the justification for the sole-source award, and were alternative competitive strategies considered?

The justification for a sole-source award is critical for understanding why competition was bypassed. Agencies typically cite reasons such as urgency, unique capabilities, or lack of other responsible sources. Without this justification, it's impossible to assess if the government truly exhausted competitive options or if this represented a missed opportunity to leverage market forces for better pricing and innovation.

How does the per-unit cost of electricity or distribution services under this contract compare to market rates or other government contracts?

Benchmarking the per-unit cost against market rates and similar government contracts is essential for value assessment. If this contract's pricing is significantly higher, it indicates potential overpayment and a failure to achieve cost-effectiveness. Conversely, if it aligns with or beats market rates, the sole-source nature might be less concerning from a purely financial standpoint, though competitive concerns remain.

What mechanisms are in place to ensure service quality and performance over the 15-year contract term?

A 15-year contract duration necessitates robust performance monitoring and quality assurance mechanisms. The government must have clear metrics, regular reviews, and remedies for non-performance to ensure the contractor consistently delivers reliable electric power distribution. Without these, the long-term nature of the contract poses a risk to operational continuity and mission effectiveness.

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

Pricing Type: NOT REPORTED (NO)

Contractor Details

Address: P O BOX 26543, RICHMOND, VA, 04

Business Categories: Category Business, Not Designated a Small Business

Timeline