Air Force awards $38.2M electric power distribution contract to Omaha Public Power District through non-competitive process

Contract Overview

Contract Amount: $38,229,373 ($38.2M)

Contractor: Omaha Public Power District

Awarding Agency: Department of Defense

Start Date: 2014-12-19

End Date: 2055-09-08

Contract Duration: 14,873 days

Daily Burn Rate: $2.6K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::CT::IGF : OAFB ELECTRIC DISTRIBUTION SYSTEM

Place of Performance

Location: OFFUTT AFB, SARPY County, NEBRASKA, 68113

State: Nebraska Government Spending

Plain-Language Summary

Department of Defense obligated $38.2 million to OMAHA PUBLIC POWER DISTRICT for work described as: IGF::CT::IGF : OAFB ELECTRIC DISTRIBUTION SYSTEM Key points: 1. Contract awarded on a sole-source basis, limiting price competition and potentially increasing costs. 2. Long contract duration (over 12 years) suggests a need for stable, long-term infrastructure support. 3. The fixed-price contract type shifts performance risk to the contractor. 4. No small business set-aside indicates potential missed opportunities for smaller firms. 5. The contract's value is moderate within the context of large federal infrastructure projects.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging due to its sole-source nature and specialized service. The fixed-price structure is generally favorable for cost control. However, without competitive bids, it's difficult to ascertain if the $38.2 million represents optimal value for money. The long duration implies a need for sustained service, which could justify the total expenditure if performance is consistently met.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a 'NOT AVAILABLE FOR COMPETITION' justification, indicating that a full and open competition was not pursued. This typically occurs when only one responsible source is capable of providing the required service or when there's a compelling reason to limit competition. The lack of multiple bidders means that price discovery through market forces was absent.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. Without competing offers, there is less assurance that the negotiated price reflects the lowest possible cost for the government.

Public Impact

The primary beneficiary is the Department of the Air Force, ensuring reliable electric power distribution at its facilities. Services delivered include the maintenance and operation of electric power distribution systems. The geographic impact is localized to Nebraska, where the Omaha Public Power District operates. Workforce implications include the potential for continued employment for utility workers involved in power distribution.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpricing.
Long contract duration could lead to cost escalations if not managed effectively.
Sole-source award limits opportunities for other qualified vendors.

Positive Signals

Fixed-price contract shifts risk to the contractor.
Omaha Public Power District is a known utility provider, suggesting established operational capabilities.
Contract ensures essential infrastructure support for military operations.

Sector Analysis

Electric power distribution is a critical utility sector supporting all government operations. This contract falls within the broader utilities and infrastructure management market. Comparable spending benchmarks for similar long-term power distribution contracts can vary significantly based on geographic location, system complexity, and service requirements. The federal government frequently contracts for utility services to maintain its vast real estate and operational footprint.

Small Business Impact

The contract was not set aside for small businesses, and the data indicates no subcontracting requirements were specified. This means that opportunities for small businesses to participate in this contract, either as prime contractors or subcontractors, were not actively pursued through this award mechanism. The absence of a small business focus in this sole-source award limits the direct economic impact on the small business ecosystem for this specific contract.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Air Force's contracting and program management offices. Accountability measures are embedded in the contract terms, including performance standards and payment schedules. Transparency is limited due to the sole-source nature of the award, with less public information available compared to competitively bid contracts. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse.

Related Government Programs

Utility Services Contracts
Base Operations Support
Infrastructure Maintenance Contracts
Electric Grid Management

Risk Flags

Sole-source award
Long contract duration
No small business participation noted

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $38.2 million to OMAHA PUBLIC POWER DISTRICT. IGF::CT::IGF : OAFB ELECTRIC DISTRIBUTION SYSTEM

Who is the contractor on this award?

The obligated recipient is OMAHA PUBLIC POWER DISTRICT.

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 $38.2 million.

What is the period of performance?

Start: 2014-12-19. End: 2055-09-08.

What is the historical spending pattern for electric power distribution services by the Department of the Air Force?

Analyzing historical spending patterns for electric power distribution by the Department of the Air Force requires access to detailed contract databases. Generally, the Air Force, like other branches of the military, relies heavily on utility services for its bases. Spending can fluctuate based on infrastructure upgrades, base expansions or closures, and the age of existing systems. Contracts for such services are often long-term due to the nature of infrastructure maintenance and operation. Without specific historical data for this particular type of service and location, it's difficult to provide precise figures. However, it's common for such contracts to run into millions of dollars over their lifespan, especially for large installations. The current award of $38.2 million over approximately 12 years suggests an average annual expenditure of roughly $3.18 million, which is within the expected range for supporting significant electrical infrastructure.

How does the contract duration of over 12 years compare to typical federal utility contracts?

Federal contracts for essential services like electric power distribution often have long durations to ensure continuity and stability, especially for infrastructure projects. Durations exceeding 10 years are not uncommon, particularly when they involve significant capital investment, specialized knowledge, or are tied to the operational needs of a fixed facility like a military base. These longer terms allow contractors to amortize investments and provide predictable service. However, they also necessitate robust oversight to manage potential cost increases or performance degradation over time. Shorter-term contracts might be used for more routine services or when market conditions are volatile, but for critical infrastructure like power distribution, stability is often prioritized, justifying extended periods.

What are the primary risks associated with a sole-source award for electric power distribution?

The primary risk associated with a sole-source award for electric power distribution is the lack of competitive pressure, which can lead to higher prices than might be achieved through open competition. Without competing bids, the government has less leverage to negotiate the best possible price. Another risk is potential complacency from the awarded contractor, as there is no immediate threat of losing the contract to a competitor. This could potentially impact service quality or innovation over the long contract term. Furthermore, a sole-source award limits the opportunity for other qualified vendors to demonstrate their capabilities and potentially offer more cost-effective or superior solutions, hindering market dynamism.

What performance metrics are likely in place for this contract?

For a contract involving electric power distribution, performance metrics would likely focus on reliability, availability, and safety. Key Performance Indicators (KPIs) could include metrics such as 'System Uptime' (percentage of time the power distribution system is operational), 'Response Time' for outages or service calls, 'Mean Time Between Failures' (MTBF) for critical components, and adherence to safety protocols and industry standards (e.g., OSHA, NERC). The contract would also likely specify requirements for preventative maintenance schedules, emergency preparedness, and reporting. Failure to meet these metrics could result in penalties, reduced payments, or even contract termination, depending on the severity and frequency of non-compliance.

How does the fixed-price contract type benefit the government in this scenario?

The firm fixed-price (FFP) contract type is generally advantageous for the government when the scope of work is well-defined and the risks of cost overruns are manageable. In this case, it shifts the primary responsibility for managing costs and potential overruns to the contractor, Omaha Public Power District. This provides the government with cost certainty, as the price is set and unlikely to change unless there are contract modifications. It incentivizes the contractor to control costs efficiently to maximize their profit margin. For a service like electric power distribution, where operational efficiency is key, the FFP structure encourages the contractor to maintain the system effectively within the agreed-upon budget.

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

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 444 S 16TH ST 444, OMAHA, NE, 68102

Business Categories: Category Business, Government, U.S. National Government, Not Designated a Small Business, U.S. Regional/State Government, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $38,561,874

Exercised Options: $38,561,874

Current Obligation: $38,229,373

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline