Department of Defense awards $17.6M for JBER electric utility services, continuing a sole-source contract

Contract Overview

Contract Amount: $17,655,654 ($17.7M)

Contractor: Chugach Electric Association, Inc.

Awarding Agency: Department of Defense

Start Date: 2024-10-01

End Date: 2025-09-30

Contract Duration: 364 days

Daily Burn Rate: $48.5K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: FY25 UTILITY ELECTRIC JBER PREDECESSOR CONTRACT - F6550180D0018 JBER ELECTRIC

Place of Performance

Location: JBER, ANCHORAGE County, ALASKA, 99506

State: Alaska Government Spending

Plain-Language Summary

Department of Defense obligated $17.7 million to CHUGACH ELECTRIC ASSOCIATION, INC. for work described as: FY25 UTILITY ELECTRIC JBER PREDECESSOR CONTRACT - F6550180D0018 JBER ELECTRIC Key points: 1. Contract awarded to Chugach Electric Association, Inc. for utility electric services at Joint Base Elmendorf-Richardson (JBER). 2. The contract is a sole-source award, indicating limited competition. 3. This award represents a continuation of services, suggesting a stable but potentially unoptimized pricing structure. 4. The contract duration is one year, aligning with typical utility service agreements. 5. The fixed-price contract type offers cost certainty for the government. 6. Services are essential for base operations, highlighting critical infrastructure reliance.

Value Assessment

Rating: fair

The contract value of $17.6 million for a one-year utility electric service at JBER appears to be within a reasonable range for such essential services, though a direct comparison to similar sole-source contracts is difficult without more data. The fixed-price nature provides cost predictability. However, the lack of competition raises concerns about whether the pricing reflects the best possible value for the government, as there's no market pressure to drive down costs. Benchmarking against other military base utility contracts would be necessary for a more definitive assessment of value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. This typically occurs when only one responsible source is available or when a compelling justification for other than full and open competition exists. The lack of multiple bidders means there was no opportunity for price discovery through a competitive bidding process, which could lead to higher costs for the government compared to a fully competed contract.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive bidding. Without a competitive process, there is less incentive for the contractor to offer the lowest possible price.

Public Impact

The primary beneficiaries are the Department of the Air Force and its personnel stationed at JBER, ensuring reliable power. Essential utility electric services are delivered to support base operations, including housing, facilities, and mission-critical infrastructure. The geographic impact is localized to Joint Base Elmendorf-Richardson in Alaska. The contract supports the operational workforce at JBER by ensuring the continuity of essential services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially impacting cost-effectiveness.
Lack of transparency in pricing justification due to non-competitive nature.
Reliance on a single provider for critical infrastructure could pose a risk if performance issues arise.

Positive Signals

Continuation of essential services ensures operational stability for the base.
Fixed-price contract provides budget certainty.
Established relationship with the incumbent provider may ensure smooth service delivery.

Sector Analysis

The defense sector relies heavily on utility services to maintain operational readiness at military installations worldwide. This contract falls within the broader utilities and infrastructure support services category, which is a critical component of defense spending. While specific market size data for sole-source utility contracts at military bases is not readily available, the overall market for utility services is substantial. This contract represents a specific instance of the government procuring essential services to support its mission.

Small Business Impact

This contract does not appear to have a small business set-aside. There is no indication of subcontracting plans specifically targeting small businesses within the provided data. The sole-source nature of the award further limits opportunities for small businesses to participate as prime contractors or through subcontracting unless explicitly included by the prime.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Air Force's contracting and financial management offices. Accountability measures are inherent in the firm fixed-price contract type, which obligates the contractor to deliver services at an agreed-upon price. Transparency is limited due to the sole-source nature, but contract performance would be monitored by the contracting officer's representative (COR). Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Base Operations Support (BOS)
Utility Privatization Program
Defense Infrastructure Contracts
Energy Services Contracts

Risk Flags

Sole-source award lacks competitive pricing.
Potential for cost overruns due to lack of market pressure.
Limited transparency in pricing justification.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.7 million to CHUGACH ELECTRIC ASSOCIATION, INC.. FY25 UTILITY ELECTRIC JBER PREDECESSOR CONTRACT - F6550180D0018 JBER ELECTRIC

Who is the contractor on this award?

The obligated recipient is CHUGACH ELECTRIC ASSOCIATION, INC..

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 $17.7 million.

What is the period of performance?

Start: 2024-10-01. End: 2025-09-30.

What is the historical spending trend for utility electric services at JBER with Chugach Electric Association, Inc.?

Analyzing historical spending requires access to previous contract awards and modifications for JBER's electric utility services. Without specific prior contract numbers or award data, it's impossible to provide a precise spending trend. However, given this is a sole-source award, it's likely that Chugach Electric Association, Inc. has been the incumbent provider for some time. To assess trends, one would need to compare the current $17.6 million award against previous years' expenditures, looking for significant increases or decreases that might indicate changes in service scope, pricing, or inflation adjustments. A consistent, sole-source relationship often suggests stable, albeit potentially less competitive, pricing over time.

How does the pricing of this contract compare to similar utility contracts at other Department of Defense installations?

Directly comparing the pricing of this $17.6 million sole-source contract to similar utility contracts at other DoD installations is challenging without detailed benchmarking data. Sole-source awards inherently lack the price discovery mechanism of competition. To perform a robust comparison, one would need to identify comparable contracts (e.g., similar size bases, similar service scope, similar geographic regions if possible) that were competitively procured. Key metrics to compare would include cost per kilowatt-hour, cost per customer, or cost per square foot of facility supported. The absence of competition here suggests that this contract's pricing may not be as optimized as a competitively awarded one, making direct apples-to-apples comparisons difficult and potentially unfavorable to the government.

What are the specific risks associated with a sole-source award for essential utility services?

The primary risk associated with a sole-source award for essential utility services is the potential for inflated costs due to the lack of competitive pressure. Without competing bids, the government has less leverage to negotiate the lowest possible price. Another risk is vendor lock-in; the incumbent provider may become indispensable, making it difficult to switch even if performance or pricing becomes unsatisfactory. Furthermore, a sole-source situation can reduce the incentive for the contractor to innovate or improve service quality beyond the minimum contractual requirements, as there is no direct threat of losing the business to a competitor. Ensuring robust oversight and performance monitoring becomes even more critical in such scenarios.

What is the expected performance standard for these utility electric services?

The expected performance standards for these utility electric services would be detailed within the Performance Work Statement (PWS) or Statement of Work (SOW) of the contract. Generally, for utility services, performance standards focus on reliability, availability, and quality of service. This includes maintaining a consistent power supply with minimal interruptions, adhering to voltage and frequency standards, and ensuring timely response to outages or emergencies. Specific metrics might include maximum allowable downtime, response times for service calls, and adherence to safety protocols. The contract likely specifies penalties or remedies for failure to meet these standards, although the effectiveness of these remedies can be limited in a sole-source context.

Are there any provisions for future competition or re-evaluation of the sole-source justification?

The contract data provided does not specify provisions for future competition or re-evaluation of the sole-source justification. However, federal acquisition regulations typically require agencies to periodically assess whether competition is possible for requirements previously awarded on a sole-source basis. If circumstances change, such as the emergence of new potential providers or a change in the justification for sole-sourcing, the agency may be obligated to conduct a competitive procurement in the future. The length of the contract (one year) suggests that re-evaluation would likely occur annually, providing an opportunity to reconsider competition.

Industry Classification

NAICS: Public Administration › Administration of Economic Programs › Regulation and Administration of Communications, Electric, Gas, and Other Utilities

Product/Service Code: UTILITIES AND HOUSEKEEPING › UTILITIES

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 5601 ELECTRON DR, ANCHORAGE, AK, 99518

Business Categories: Category Business, Corporate Entity Tax Exempt, Nonprofit Organization, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $21,500,000

Exercised Options: $21,500,000

Current Obligation: $17,655,654

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA500023D0009

IDV Type: IDC

Timeline