DOD's $11.6M contract for sewage treatment facilities awarded to Municipality of Anchorage, raising value-for-money questions

Contract Overview

Contract Amount: $11,620,849 ($11.6M)

Contractor: Municipality of Anchorage

Awarding Agency: Department of Defense

Start Date: 2003-10-01

End Date: 2023-09-30

Contract Duration: 7,304 days

Daily Burn Rate: $1.6K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: TAS::21 2020 000::TAS 200412!001740!2100!W912CZ!ACA, FORT RICHARDSON !DAPC4901C0007 !A!N! !N! ! !20031001!20040930!128711322!128711322!076667013!Y!MUNICIPALITY OF ANCHORAGE !3000 ARCTIC BLVD !ANCHORAGE !AK!99503!26210!020!02!FORT RICHARDSON !ANCHORAGE !ALASKA !+000000215718!N!N!000000000000!S114!WATER SERVICES !S1 !SERVICES !000 !* !221320!E! !3! ! ! ! ! !99990909!B! ! ! ! ! ! ! ! !000! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! !00 ! ! ! ! ! ! ! ! ! !0001! !

Place of Performance

Location: FORT RICHARDSON, ANCHORAGE County, ALASKA, 99505

State: Alaska Government Spending

Plain-Language Summary

Department of Defense obligated $11.6 million to MUNICIPALITY OF ANCHORAGE for work described as: TAS::21 2020 000::TAS 200412!001740!2100!W912CZ!ACA, FORT RICHARDSON !DAPC4901C0007 !A!N! !N! ! !20031001!20040930!128711322!128711322!076667013!Y!MUNICIPALITY OF ANCHORAGE !3000 ARCTIC BLVD !ANCHORAGE !AK!99503!26210!020!02!FO… Key points: 1. The contract's value of over $11.6 million for sewage treatment facilities raises concerns about potential overspending given the duration. 2. Awarded to the Municipality of Anchorage, the contract's sole-source nature limits competitive pressure and may inflate costs. 3. The lack of competition and fixed-price structure could expose the government to risks if costs escalate beyond initial estimates. 4. Performance context is limited, but the long duration suggests a need for sustained service delivery for Fort Richardson. 5. This contract falls within the Defense sector, specifically supporting infrastructure at Fort Richardson, Alaska. 6. The absence of small business participation is noted, with no indication of set-asides or subcontracting plans.

Value Assessment

Rating: questionable

The contract's total value of $11.6 million over two years, averaging approximately $5.8 million annually, appears high for municipal sewage treatment services. Without detailed service level agreements or performance metrics, it's difficult to benchmark the value effectively. However, compared to typical municipal contracts for similar services, this price point warrants scrutiny, especially given the lack of competitive bidding which typically drives down costs.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not openly competed. The data indicates the award was made directly to the Municipality of Anchorage without soliciting bids from other potential providers. This lack of competition significantly reduces the government's ability to ensure it is receiving the best possible price and service.

Taxpayer Impact: Sole-source awards mean taxpayers may be paying a premium, as there was no competitive pressure to drive down costs. This limits the government's leverage in price negotiations and could lead to less efficient use of public funds.

Public Impact

The primary beneficiary is the Municipality of Anchorage, which receives substantial funding for providing essential services. The contract ensures the continued operation and maintenance of sewage treatment facilities, critical for environmental protection and public health at Fort Richardson. The geographic impact is localized to Fort Richardson, Alaska, and the surrounding areas reliant on its infrastructure. Workforce implications include employment opportunities within the Municipality of Anchorage for personnel involved in operating and maintaining the sewage treatment facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potentially inflates costs for taxpayers.
Lack of competition raises concerns about the government securing the most cost-effective solution.
The high total contract value over two years may indicate a lack of cost optimization.
Absence of small business participation means missed opportunities for economic inclusion.
Fixed-price contract could pose risks if unforeseen operational costs arise for the contractor.

Positive Signals

Ensures critical infrastructure maintenance for a military installation.
Provides a stable, long-term service provider for essential environmental services.
The Municipality of Anchorage is a known local entity, potentially offering familiarity and established operational capacity.

Sector Analysis

This contract falls within the Utilities and Waste Management sector, specifically focusing on sewage treatment. The market for municipal services can vary significantly by location and the specific needs of the client. For a federal installation like Fort Richardson, securing a reliable provider for essential services is paramount. Benchmarking this contract's value is challenging without more granular data on service scope and local market rates, but the sole-source nature suggests a deviation from standard competitive procurement practices.

Small Business Impact

This contract does not appear to include any provisions for small business set-asides. The award to a municipality suggests that subcontracting opportunities for small businesses are unlikely unless the municipality voluntarily engages them. This represents a missed opportunity to leverage the small business industrial base and promote economic participation.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and financial management offices. Given the sole-source nature, scrutiny on performance and adherence to the contract terms is crucial. Transparency is limited due to the lack of competitive bidding, and it's unclear if an Inspector General review has been conducted or is planned.

Related Government Programs

Fort Richardson Operations and Maintenance Contracts
Department of Defense Environmental Services
Municipal Utility Service Contracts
Alaska Infrastructure Projects

Risk Flags

Sole Source Award
Potential Overpricing
Lack of Competition
No Small Business Participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.6 million to MUNICIPALITY OF ANCHORAGE. TAS::21 2020 000::TAS 200412!001740!2100!W912CZ!ACA, FORT RICHARDSON !DAPC4901C0007 !A!N! !N! ! !20031001!20040930!128711322!128711322!076667013!Y!MUNICIPALITY OF ANCHORAGE !3000 ARCTIC BLVD !ANCHORAGE !AK!99503!26210!020!02!FORT RICHARDSON !ANCHORAGE !ALASKA !+000000215718!N!N!000000000000!S114!WATER SERVICES !S1 !SERVICES !000 !* !221

Who is the contractor on this award?

The obligated recipient is MUNICIPALITY OF ANCHORAGE.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $11.6 million.

What is the period of performance?

Start: 2003-10-01. End: 2023-09-30.

What specific services are included under the "Sewage Treatment Facilities" contract, and what are the performance standards?

The provided data indicates the contract is for "Sewage Treatment Facilities" (NAICS code 221320) and falls under "WATER SERVICES" (PSC code S114). However, the specific details of the services, such as the volume of sewage to be treated, the required treatment levels (e.g., primary, secondary, tertiary), and the performance standards or metrics the Municipality of Anchorage must meet, are not detailed in the summary data. These specifics are crucial for a thorough value assessment and would typically be found in the contract's statement of work. Without this information, it's difficult to ascertain if the $11.6 million price tag is justified by the scope and quality of services expected.

Why was this contract awarded on a sole-source basis to the Municipality of Anchorage?

The data explicitly states the contract type as 'NOT AVAILABLE FOR COMPETITION,' which typically signifies a sole-source or limited-source award. The rationale for such an award is not provided in the summary data. Common justifications for sole-source contracts include unique capabilities possessed by only one vendor, urgent and compelling needs where competition is impractical, or when a specific entity (like a local government) is the only viable option due to geographic or jurisdictional reasons. For this contract, it's possible that Fort Richardson's sewage infrastructure is uniquely integrated with the Municipality of Anchorage's systems, making them the only feasible provider. However, without official documentation detailing the justification, this remains speculative.

How does the $11.6 million contract value compare to historical spending on sewage treatment at Fort Richardson or similar military installations?

Historical spending data for sewage treatment at Fort Richardson or comparable military installations is not provided in the summary. However, the contract value of $11.6 million over two years (approximately $5.8 million per year) appears substantial for municipal sewage services. To conduct a proper comparison, one would need to analyze past contracts for this specific facility, look at contracts for similar-sized installations in similar geographic regions (like Alaska), and consider inflation and changes in service requirements over time. The lack of competitive bidding in this instance makes direct cost-benefit analysis challenging compared to potentially competed contracts.

What are the potential risks associated with a sole-source, firm-fixed-price contract for essential services like sewage treatment?

A sole-source, firm-fixed-price contract for essential services like sewage treatment carries several risks. Firstly, the sole-source nature means the government did not benefit from competitive bidding, potentially leading to a higher price than could have been achieved through competition. Secondly, while a firm-fixed-price contract shifts cost overrun risk to the contractor, if the contractor underestimated the costs or encountered unforeseen issues, they might cut corners on service quality to maintain profitability, especially if they lack strong performance incentives or oversight. This could impact the reliability and effectiveness of the sewage treatment facilities, posing environmental and health risks.

What is the track record of the Municipality of Anchorage as a government contractor, particularly for utility services?

The provided data does not include information on the Municipality of Anchorage's track record as a government contractor. To assess this, one would need to research their past performance on federal, state, or local contracts, specifically those related to utility services or infrastructure management. Key areas to investigate would include their history of meeting contract requirements, on-time delivery, budget adherence, and any past performance issues or disputes. Without this information, it's difficult to gauge their reliability and experience in fulfilling the obligations of this significant contract.

Industry Classification

NAICS: Utilities › Water, Sewage and Other Systems › Sewage Treatment Facilities

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: 3000 ARCTIC BLVD, ANCHORAGE, AK, 99503

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

Financial Breakdown

Contract Ceiling: $12,290,346

Exercised Options: $12,099,348

Current Obligation: $11,620,849

Actual Outlays: $165,044

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline