DoD's $7M electric utility contract for JBER awarded to Chugach Electric Association, Inc

Contract Overview

Contract Amount: $7,002,000 ($7.0M)

Contractor: Chugach Electric Association, Inc.

Awarding Agency: Department of Defense

Start Date: 2025-10-03

End Date: 2026-09-30

Contract Duration: 362 days

Daily Burn Rate: $19.3K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: FY26 UTILITY ELECTRIC JBER PREDECESSOR CONTRACT - F6550180D0018 JBER ELECTRIC INCORPORATE DPCAP CLASS DEVIATION 2026-O0001-CONTRACT OBLIGATIONS IN ADVANCE OF FISCAL YEAR 2026 FUNDING.

Place of Performance

Location: JBER, ANCHORAGE County, ALASKA, 99506

State: Alaska Government Spending

Plain-Language Summary

Department of Defense obligated $7.0 million to CHUGACH ELECTRIC ASSOCIATION, INC. for work described as: FY26 UTILITY ELECTRIC JBER PREDECESSOR CONTRACT - F6550180D0018 JBER ELECTRIC INCORPORATE DPCAP CLASS DEVIATION 2026-O0001-CONTRACT OBLIGATIONS IN ADVANCE OF FISCAL YEAR 2026 FUNDING. Key points: 1. Contract value of $7.00M for a 12-month period. 2. Awarded to a single, incumbent provider, raising questions about competition. 3. Potential for cost savings through competitive bidding not realized. 4. Performance period aligns with the upcoming fiscal year, ensuring service continuity. 5. Geographic focus on Joint Base Elmendorf-Richardson (JBER) in Alaska. 6. Contract type is Firm Fixed Price, offering cost certainty to the government.

Value Assessment

Rating: fair

The contract value of $7.00M for a 12-month period for electric utility services at JBER appears to be within a reasonable range for a large military installation. However, without specific benchmarks for utility costs in Alaska or comparable contracts for similar facilities, a precise value-for-money assessment is challenging. The lack of competition suggests that the government may not have secured the most advantageous pricing possible.

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 it was 'NOT AVAILABLE FOR COMPETITION'. This approach is typically used when only one responsible source can provide the required services. While this ensures service continuity, it limits the government's ability to leverage market competition to drive down prices and explore innovative solutions from a wider range of vendors.

Taxpayer Impact: The lack of competition means taxpayers may be paying a premium, as the absence of bidding prevents price discovery and potentially allows the sole provider to set terms that are less favorable than in a competitive scenario.

Public Impact

Provides essential electric utility services to Joint Base Elmendorf-Richardson (JBER) in Alaska. Ensures the operational readiness and continuity of military functions at JBER. Supports the daily lives and activities of military personnel and their families stationed at JBER. Maintains critical infrastructure necessary for national defense operations in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially leading to higher costs for taxpayers.
Lack of competitive bidding may stifle innovation in utility service delivery.
Dependence on a single provider could pose a risk if performance issues arise.

Positive Signals

Firm Fixed Price contract provides cost certainty for the government.
Award ensures continued, uninterrupted utility services for a critical military installation.
Incumbent provider likely has established infrastructure and expertise for the location.

Sector Analysis

The electric utility sector is a critical component of national infrastructure, providing essential services to residential, commercial, and government entities. Federal spending in this area often involves long-term contracts for maintaining and operating power grids, substations, and distribution networks, particularly at large installations like military bases. While specific market size data for federal utility contracts is not readily available, the consistent need for reliable power makes this a perpetual spending category. This contract fits within the broader category of public utilities and infrastructure support for government operations.

Small Business Impact

The provided data does not indicate any small business set-aside or subcontracting requirements for this contract. As a sole-source award to Chugach Electric Association, Inc., it is unlikely that small businesses will be directly involved as prime contractors. Further analysis would be needed to determine if the prime contractor has any subcontracting plans that would benefit small businesses.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Air Force's contracting and financial management offices. The Firm Fixed Price nature of the contract provides a degree of cost control. Transparency regarding the justification for the sole-source award and the specific terms of the contract would be subject to federal procurement regulations and potential Freedom of Information Act requests. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Base Operations Support Contracts
Utility Privatization Program
Defense Logistics Agency Energy Contracts
Federal Power Marketing Administrations

Risk Flags

Sole-source award may limit cost savings.
Lack of competition could lead to higher prices.
Dependence on a single provider carries inherent risks.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $7.0 million to CHUGACH ELECTRIC ASSOCIATION, INC.. FY26 UTILITY ELECTRIC JBER PREDECESSOR CONTRACT - F6550180D0018 JBER ELECTRIC INCORPORATE DPCAP CLASS DEVIATION 2026-O0001-CONTRACT OBLIGATIONS IN ADVANCE OF FISCAL YEAR 2026 FUNDING.

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 $7.0 million.

What is the period of performance?

Start: 2025-10-03. End: 2026-09-30.

What is the historical spending pattern for electric utility services at JBER?

Analyzing historical spending for electric utility services at Joint Base Elmendorf-Richardson (JBER) is crucial for understanding cost trends and identifying potential anomalies. While the specific data for this predecessor contract (F6550180D0018) is not detailed here, a review of past awards for similar services at JBER would reveal the annual expenditure, contract duration, and the incumbent contractors. For instance, if previous contracts were significantly lower in value or awarded through competitive processes, it would highlight the current contract's deviation. Understanding the historical context allows for a more informed assessment of whether the current $7.00M obligation represents a fair price or a potential escalation due to market factors, inflation, or changes in service requirements. Without this historical data, it is difficult to benchmark the current award effectively and determine if taxpayers are receiving optimal value over time.

What is the justification for awarding this contract on a sole-source basis?

The justification for awarding this electric utility contract on a sole-source basis is critical for understanding the procurement strategy and its implications for cost and competition. Federal Acquisition Regulation (FAR) Part 6 outlines the policies for contracting without full and open competition. Common justifications include the existence of only one responsible source, urgent and compelling needs, or specific statutory authority. For utility services at a fixed location like JBER, it's plausible that Chugach Electric Association, Inc. is the only entity with the necessary infrastructure, rights-of-way, and regulatory approvals to provide reliable electric service to the base. The Department of the Air Force would need to document this justification thoroughly, demonstrating why competition was not feasible or advantageous. This documentation is essential for oversight and accountability, ensuring that sole-source awards are used appropriately and not as a means to avoid competitive pressures.

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

Benchmarking the pricing of this $7.00M electric utility contract against similar contracts at other military installations is essential for assessing value for money. However, direct comparisons can be complex due to variations in geographic location, local energy market rates, installation size, power consumption levels, and the scope of services included (e.g., maintenance, generation, distribution). Utilities in Alaska, for example, may have higher operational costs due to climate and logistics compared to those in the contiguous United States. To conduct a meaningful comparison, one would need to identify comparable bases in similar geographic or economic regions, normalize for factors like average cost per kilowatt-hour or cost per square foot of facility, and account for any unique service requirements. Without such detailed comparative analysis, it's difficult to definitively state whether this contract's pricing is advantageous or disadvantageous for the government.

What are the potential risks associated with relying on a sole-source provider for critical utility services?

Relying on a sole-source provider for critical utility services like electricity at JBER presents several potential risks. Firstly, there is a risk of price escalation over time, as the absence of competition removes the incentive for the provider to offer the most competitive rates. The government may become locked into pricing structures that are less favorable than what could be achieved through bidding. Secondly, there's a risk related to service quality and responsiveness. Without competitive pressure, the provider might be less motivated to invest in service improvements or respond promptly to issues. Thirdly, dependence on a single entity can create vulnerability. If the sole provider experiences financial difficulties, operational failures, or labor disputes, it could lead to disruptions in essential services for the base, impacting military readiness and personnel welfare. Robust contract management and performance monitoring are therefore crucial to mitigate these risks.

What is the track record of Chugach Electric Association, Inc. in serving federal government contracts?

Evaluating the track record of Chugach Electric Association, Inc. (CEA) in serving federal government contracts is important for assessing their reliability and performance. As the incumbent provider for electric utility services at JBER, CEA likely has a history of fulfilling similar requirements. A review of their past performance on government contracts, including any awards, past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), and any documented disputes or contract terminations, would provide insight into their capabilities. Understanding their experience with large-scale utility provision, adherence to federal regulations and security requirements, and their financial stability is key. Given this is a sole-source award, the government's confidence in CEA's established performance and ability to meet the base's needs is likely a primary factor in the decision.

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: $27,704,000

Exercised Options: $27,704,000

Current Obligation: $7,002,000

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