DoD's $19.15M contract for electric power distribution services awarded to Rappahannock Electric Cooperative shows fair competition

Contract Overview

Contract Amount: $19,151,430 ($19.2M)

Contractor: Rappahannock Electric Cooperative

Awarding Agency: Department of Defense

Start Date: 2002-09-23

End Date: 2021-09-30

Contract Duration: 6,947 days

Daily Burn Rate: $2.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: 200212!001519!2100!DW35 !MDW ACQUISITION CENTER !DACA3102C0006 !A!N! !N!P00001 !20020923!20050930!001823350!001823350!001823350!N!RAPPAHANNOCK ELECTRIC COOPERAT!247 INDUSTRIAL CT !FREDERICKSBURG !VA!22408!29128!033!51!FORT HILL !CAROLINE !VIRGINIA !+000000173712!N!N!000000000000!6120!TRANSFORMERS: DISTRIBUTION & POWER STATION !C9E!ALL OTHER SUPPLIES AND EQUIPME!1000!NOT DISCERNABLE OR CLASSIFIED !221122!E! !3! ! !C! ! !99990909!B! ! !A! !A!U!J!2!002!A! !Z!N!Z! ! !Y!B!N!N! ! !A! !A!A!000!A!B!N! ! ! ! ! ! !0001!

Place of Performance

Location: FORT A P HILL, CAROLINE County, VIRGINIA, 22427

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $19.2 million to RAPPAHANNOCK ELECTRIC COOPERATIVE for work described as: 200212!001519!2100!DW35 !MDW ACQUISITION CENTER !DACA3102C0006 !A!N! !N!P00001 !20020923!20050930!001823350!001823350!001823350!N!RAPPAHANNOCK ELECTRIC COOPERAT!247 INDUSTRIAL CT !FREDERICKSBURG !VA!22408!29128!033!51!FORT HILL !CAROL… Key points: 1. Contract awarded through full and open competition, indicating a competitive bidding process. 2. The contract value of $19.15M over its duration suggests a significant investment in essential infrastructure. 3. Performance period spans over 19 years, implying a long-term need for these services. 4. The contract type is Firm Fixed Price, which provides cost certainty for the government. 5. The contractor, Rappahannock Electric Cooperative, is a regional utility provider, suggesting established infrastructure and expertise. 6. The service category, Electric Power Distribution, is critical for military base operations.

Value Assessment

Rating: good

The contract value of $19.15M over nearly 20 years for electric power distribution services appears reasonable given the long-term nature and critical infrastructure involved. Benchmarking against similar long-term utility contracts for military installations would provide a more precise value assessment. The firm fixed-price structure offers predictability, but the total cost over such an extended period warrants ongoing monitoring for potential cost efficiencies or escalations.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple qualified bidders had the opportunity to submit proposals. The presence of two bids indicates a degree of competition, which typically helps in achieving fair market prices. The specific number of bidders (2) is on the lower side for full and open competition, which could warrant further investigation into potential barriers to entry or market concentration.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to lower prices and better value. Even with two bidders, the process ensures that the government is not limited to a single provider, promoting a more cost-effective outcome.

Public Impact

Military bases in Virginia, specifically those served by Rappahannock Electric Cooperative, benefit from reliable electric power distribution. Essential services for military operations, including power for facilities, equipment, and personnel, are sustained. The contract supports the operational readiness and infrastructure of the Department of Defense in the region. Local workforce within the service area may benefit from employment opportunities related to the maintenance and operation of the power distribution network.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (nearly 20 years) increases the risk of price escalation or technological obsolescence.
Limited number of bidders (2) in a full and open competition could indicate potential market limitations or barriers.
Firm Fixed Price contracts can be disadvantageous if unforeseen costs arise for the contractor, potentially leading to disputes or reduced service quality if not managed carefully.

Positive Signals

Awarded under full and open competition, suggesting a robust and fair bidding process.
Contractor is a regional electric cooperative with established infrastructure and experience in power distribution.
Firm Fixed Price contract provides budget certainty for the government over the contract term.
Long-term contract indicates a stable and predictable need for essential utility services.

Sector Analysis

The electric power distribution sector is a critical utility service, essential for the functioning of all organizations, including government and military installations. This contract falls within the broader category of utilities and infrastructure services. The market for such services is often characterized by regional monopolies or oligopolies due to the nature of physical infrastructure. Comparable spending benchmarks would typically involve analyzing per-mile costs for distribution lines, substation maintenance, and energy delivery rates for similar-sized military bases or large commercial facilities.

Small Business Impact

There is no explicit indication of small business set-asides or subcontracting requirements in the provided data. As this is a contract for electric power distribution services typically provided by established utility companies, it is less likely to have significant small business subcontracting opportunities unless specialized support services are required. Further analysis would be needed to determine if any small business participation was mandated or achieved.

Oversight & Accountability

Oversight for this contract would likely fall under the Department of the Army's contracting and facilities management divisions. Accountability measures would be tied to the performance work statement and the firm fixed-price terms. Transparency is generally maintained through contract award databases, though specific performance metrics and oversight reports may not be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Military Base Operations Support Contracts
Utility Privatization Programs
Energy Infrastructure Modernization Projects
Department of Defense Facilities Management

Risk Flags

Long contract duration may increase risk of price escalation or obsolescence.
Limited competition (2 bidders) could indicate potential market concentration.
Firm Fixed Price contracts can pose risks if contractor costs increase significantly.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.2 million to RAPPAHANNOCK ELECTRIC COOPERATIVE. 200212!001519!2100!DW35 !MDW ACQUISITION CENTER !DACA3102C0006 !A!N! !N!P00001 !20020923!20050930!001823350!001823350!001823350!N!RAPPAHANNOCK ELECTRIC COOPERAT!247 INDUSTRIAL CT !FREDERICKSBURG !VA!22408!29128!033!51!FORT HILL !CAROLINE !VIRGINIA !+000000173712!N!N!000000000000!6120!TRANSFORMERS: DISTRIBUTION & POWER STATION !C9E!ALL OTHER SUPPLIES AND EQUIPME!1000!NOT DISCERNABLE OR CLASSIFIED !221122!E! !3! ! !C! ! !99990909!B

Who is the contractor on this award?

The obligated recipient is RAPPAHANNOCK ELECTRIC COOPERATIVE.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $19.2 million.

What is the period of performance?

Start: 2002-09-23. End: 2021-09-30.

What is the historical spending pattern for electric power distribution services at this specific military installation or within the Department of the Army?

Analyzing historical spending requires access to detailed procurement data over multiple fiscal years. Without specific historical data for this installation or broader Army utility contracts, it's difficult to establish a precise pattern. However, the duration of this contract (nearly 20 years) suggests a consistent and long-standing requirement for electric power distribution. Typically, such services involve recurring costs for maintenance, operation, and energy supply. Fluctuations in spending could be influenced by factors such as base expansion or contraction, energy price volatility, and infrastructure upgrades. A comprehensive review would involve comparing this contract's total value against previous contracts for similar services at the same location or comparable bases to identify trends in cost and volume.

How does the per-unit cost or overall value of this contract compare to similar electric power distribution contracts awarded to other utilities or cooperatives serving military bases?

Direct per-unit cost comparison is challenging without specific metrics like cost per kilowatt-hour delivered, cost per mile of distribution line maintained, or cost per service connection. However, the total contract value of $19.15M over approximately 19.5 years equates to roughly $982,000 annually. This figure needs to be contextualized by the size and power demands of the specific military installation(s) served. Generally, utility services for large federal facilities are procured through competitive processes. If this annual cost is significantly higher or lower than benchmarks for comparable facilities (considering factors like geographic location, climate, and infrastructure complexity), it would indicate potential overpricing or exceptional value. The firm fixed-price nature provides cost certainty, but the absence of detailed cost breakdowns makes granular comparison difficult.

What are the key performance indicators (KPIs) and service level agreements (SLAs) associated with this contract, and how is contractor performance monitored?

The provided data does not detail the specific Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) for this contract. However, for an electric power distribution contract, typical KPIs would likely include metrics such as reliability (e.g., average outage duration, frequency of outages), response times for service calls and emergency repairs, power quality (voltage stability, frequency), and adherence to safety standards. Contractor performance is generally monitored by a Contracting Officer's Representative (COR) or a Technical Monitor assigned by the requiring agency (in this case, likely the Department of the Army). Monitoring involves regular performance reviews, tracking adherence to SLAs, and potentially site inspections. Failure to meet KPIs or SLAs could result in contractually defined remedies, such as service credits or penalties, depending on the contract's specific terms.

What is Rappahannock Electric Cooperative's track record with federal contracts, particularly with the Department of Defense or Department of the Army?

Rappahannock Electric Cooperative (REC) is a member-owned utility cooperative serving a significant portion of central and northeastern Virginia. While specific details on their federal contract history are not provided in the summary data, utility cooperatives often have long-standing relationships with government entities within their service territories, including military bases. Their track record would typically be assessed based on past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), any history of contract disputes or terminations, and their demonstrated capability to manage large-scale infrastructure projects. Given the award of this significant, long-term contract, it suggests a positive or at least acceptable performance history with the Department of the Army or relevant DoD entity.

Are there any identified risks associated with the long duration of this contract (nearly 20 years) regarding technological advancements or changes in energy infrastructure?

Yes, there are inherent risks associated with a contract duration of nearly 20 years, particularly in a rapidly evolving field like energy infrastructure. Technological advancements could lead to more efficient or alternative energy solutions (e.g., microgrids, renewable energy integration, advanced metering) that might make the current distribution system less optimal or cost-effective over time. Changes in energy policy, market dynamics (e.g., fluctuating fuel costs, emergence of new energy sources), or evolving military operational requirements could also impact the relevance and cost-effectiveness of the existing infrastructure. While the firm fixed-price nature provides current budget certainty, it may limit flexibility to adapt to future changes without potentially costly contract modifications or renegotiations. Risk mitigation strategies could include periodic reviews, incorporating clauses for technological updates, or exploring performance-based incentives tied to modernization.

Industry Classification

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

Product/Service Code: ELECTRIC WIRE, POWER DISTRIB EQPT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 247 INDUSTRIAL CT, FREDERICKSBURG, VA, 22408

Business Categories: Category Business, Corporate Entity Tax Exempt, Nonprofit Organization, Small Business

Financial Breakdown

Contract Ceiling: $6,534,476

Exercised Options: $6,534,476

Current Obligation: $19,151,430

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline