DOE awards $200M+ contract for electric bulk power transmission and control to Ohio Valley Electric Corporation
Contract Overview
Contract Amount: $200,023,017 ($200.0M)
Contractor: Ohio Valley Electric Corporation
Awarding Agency: Department of Energy
Start Date: 2003-04-15
End Date: 2029-12-31
Contract Duration: 9,757 days
Daily Burn Rate: $20.5K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: COST NO FEE
Sector: Energy
Place of Performance
Location: PIKETON, PIKE County, OHIO, 45661
State: Ohio Government Spending
Plain-Language Summary
Department of Energy obligated $200.0 million to OHIO VALLEY ELECTRIC CORPORATION for work described as: Key points: 1. Contract value exceeds $200 million, indicating a significant investment in critical infrastructure. 2. The contract is for electric bulk power transmission and control, a vital service for grid stability. 3. Awarded to a single entity, raising questions about the extent of competition. 4. Long contract duration of over 8 years suggests a need for sustained service delivery. 5. The contract type is a definitive contract, implying a firm agreement for services. 6. The service area appears to be focused on Ohio, based on the contractor's name and state code.
Value Assessment
Rating: fair
The contract value of over $200 million is substantial, but without specific performance metrics or comparable contracts, a precise value-for-money assessment is difficult. The 'COST NO FEE' contract type suggests that the government reimburses the contractor for allowable costs, which can sometimes lead to less incentive for cost control compared to fixed-price contracts. Benchmarking this against similar large-scale power transmission and control contracts would be necessary for a more definitive value assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded as 'NOT AVAILABLE FOR COMPETITION,' indicating a sole-source or limited competition procurement. This suggests that the Department of Energy identified a specific need that could only be met by Ohio Valley Electric Corporation, or that the circumstances of the procurement did not allow for a broader solicitation. The lack of competition means that price discovery through market forces was limited, potentially impacting the final negotiated cost.
Taxpayer Impact: For taxpayers, a sole-source award means there was no opportunity to benefit from competitive bidding, which typically drives down prices. The government may have paid a higher price than if multiple companies had competed for the contract.
Public Impact
The primary beneficiaries are likely the residents and businesses within the service area that rely on stable and reliable electric power transmission and control. The contract ensures the continued operation and maintenance of critical electric infrastructure. Geographic impact is concentrated in Ohio, where the electric bulk power transmission and control services are delivered. The contract supports jobs within the energy sector, particularly in the operation and maintenance of power grids.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition may lead to higher costs for taxpayers.
- The 'COST NO FEE' contract type could reduce contractor's incentive for cost efficiency.
- Long contract duration might not adapt well to rapidly changing technological needs in power transmission.
Positive Signals
- Ensures continuity of essential electric power transmission and control services.
- Award to an established entity may imply a track record of reliable service delivery.
- Significant investment signals commitment to maintaining critical national infrastructure.
Sector Analysis
The electric bulk power transmission and control sector is a critical component of national infrastructure, ensuring the reliable delivery of electricity. This contract falls within the energy sector, specifically focusing on the operational aspects of the power grid. The market for such services is often characterized by high barriers to entry due to the specialized nature of the technology and the extensive infrastructure required. Comparable spending benchmarks would involve looking at other large-scale contracts for grid modernization, maintenance, and operational control across different regions.
Small Business Impact
There is no indication of a small business set-aside for this contract, and the nature of bulk power transmission and control services typically requires large-scale capabilities. It is unlikely that small businesses would be primary contractors for such a specialized and extensive service. Subcontracting opportunities for small businesses might exist in ancillary services, but this would depend on the specific requirements outlined in the contract, which are not detailed here.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of Energy's contracting and program management offices. Accountability measures would be tied to the performance standards and deliverables outlined in the definitive contract. Transparency might be limited due to the sole-source nature of the award, but contract award details are generally publicly available. Inspector General jurisdiction would apply to any potential fraud, waste, or abuse related to the contract.
Related Government Programs
- Electric Grid Modernization Initiatives
- Power Infrastructure Resilience Programs
- Energy Security Contracts
- Critical Infrastructure Protection
Risk Flags
- Sole-source award
- Cost-reimbursement contract type
- Long contract duration
Tags
energy, department-of-energy, ohio, definitive-contract, large-contract, sole-source, critical-infrastructure, power-transmission, bulk-power, cost-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $200.0 million to OHIO VALLEY ELECTRIC CORPORATION. See the official description on USAspending.
Who is the contractor on this award?
The obligated recipient is OHIO VALLEY ELECTRIC CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $200.0 million.
What is the period of performance?
Start: 2003-04-15. End: 2029-12-31.
What is the specific nature of the 'Electric Bulk Power Transmission and Control' services being procured?
The 'Electric Bulk Power Transmission and Control' services procured under this contract likely encompass the operational management, maintenance, and potentially upgrades of the high-voltage electrical grid infrastructure responsible for transmitting large amounts of electricity over long distances. This includes ensuring grid stability, managing power flow, responding to outages, and implementing control systems to maintain a balance between electricity supply and demand. The 'COST NO FEE' contract type suggests the government will reimburse the contractor for approved costs incurred in performing these services, plus a fee. The specific technical requirements, performance metrics, and service level agreements would be detailed within the contract's statement of work.
How does the 'COST NO FEE' contract type compare to other contract types in terms of cost efficiency for the government?
A 'COST NO FEE' (Cost Plus Fixed Fee - CPFF, or Cost Plus Incentive Fee - CPIF, etc., though 'NO FEE' is unusual and might imply Cost Plus Zero Fee or a specific interpretation) contract type means the government reimburses the contractor for all allowable costs incurred in performing the contract, plus a predetermined fee. This contrasts with fixed-price contracts, where the price is set regardless of the contractor's costs. While 'COST NO FEE' can be useful for research and development or when costs are highly uncertain, it offers less incentive for the contractor to control costs compared to fixed-price contracts or even cost-reimbursement contracts with incentive fees. The government bears more risk regarding cost overruns, making robust oversight and cost monitoring crucial.
What are the potential risks associated with a sole-source award for critical infrastructure like power transmission?
Sole-source awards for critical infrastructure like power transmission carry several risks. Firstly, the lack of competition can lead to inflated prices, as the contractor faces no market pressure to offer the most cost-effective solution. Secondly, it limits the government's ability to leverage innovation from a wider pool of potential providers. Thirdly, it can create vendor lock-in, making it difficult and costly to switch providers in the future. Finally, without competitive benchmarking, it's harder to ensure the government is receiving the best value and that the chosen contractor is truly the most capable and efficient provider for such essential services.
Given the contract duration of over 8 years, what are the implications for technological obsolescence?
A contract duration of over 8 years (9757 days is approximately 26.7 years, but the end date is 2029-12-31, making it about 26 years from 2003, or about 6 years from now if the start date is 2023. Assuming the start date is 2023 and end date is 2029, it's about 6 years. If the start date is 2003 and end date is 2029, it's about 26 years. The provided data 'dur': 9757 suggests days. 9757 days / 365.25 days/year = ~26.7 years. The end date is 2029-12-31. If the start date is 2003-04-15, the duration is ~26.7 years. If the start date is more recent, the duration is shorter. Let's assume the duration is indeed long. A long contract duration, especially in a rapidly evolving field like energy technology, poses a significant risk of technological obsolescence. The systems and processes in place at the beginning of the contract may be outdated by the end. This necessitates careful contract management, including provisions for technology refresh, performance-based incentives for adopting new technologies, and potentially periodic reviews or renegotiations to ensure the services remain state-of-the-art and efficient throughout the contract term. Without such provisions, the government might be locked into using older, less efficient, or less secure technologies.
What is Ohio Valley Electric Corporation's track record with the Department of Energy or similar entities?
Information regarding Ohio Valley Electric Corporation's specific track record with the Department of Energy or similar entities is not provided in the data. However, as a recipient of a large, long-term definitive contract for critical infrastructure, it is likely that OVEC has demonstrated a capacity to manage and operate such systems. A comprehensive assessment would require reviewing their past performance evaluations, any history of contract disputes or awards, and their experience with similar large-scale energy infrastructure projects. Without this specific data, it's difficult to definitively assess their track record beyond the implication of being awarded this contract.
Industry Classification
NAICS: Utilities › Electric Power Generation, Transmission and Distribution › Electric Bulk Power Transmission and Control
Product/Service Code: UTILITIES AND HOUSEKEEPING › UTILITIES
Competition & Pricing
Extent Competed: NOT AVAILABLE FOR COMPETITION
Offers Received: 1
Pricing Type: COST NO FEE (S)
Contractor Details
Parent Company: Ohio Valley Electrical Services, LLC
Address: 3932 US HIGHWAY 23, PIKETON, OH, 45661
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $218,358,259
Exercised Options: $218,358,259
Current Obligation: $200,023,017
Actual Outlays: $24,934,097
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Timeline
Start Date: 2003-04-15
Current End Date: 2029-12-31
Potential End Date: 2029-12-31 00:00:00
Last Modified: 2026-03-20
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