TEPCO Energy Partner awarded $10.18M for backup generator services, raising questions on competition and value

Contract Overview

Contract Amount: $10,178,145 ($10.2M)

Contractor: Tepco Energy Partner, Incorporated

Awarding Agency: Department of Defense

Start Date: 2024-09-30

End Date: 2026-09-29

Contract Duration: 729 days

Daily Burn Rate: $14.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: BACKUP POWER GENERATOR FOR CFAY

Plain-Language Summary

Department of Defense obligated $10.2 million to TEPCO ENERGY PARTNER, INCORPORATED for work described as: BACKUP POWER GENERATOR FOR CFAY Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. The contract duration of 729 days suggests a significant need for ongoing services. 3. The firm-fixed-price structure aims to control costs, but the lack of competition is a concern. 4. The service falls under industrial machinery repair, a critical but often specialized sector. 5. No small business set-aside was utilized, indicating potential missed opportunities for smaller firms. 6. The award value is substantial, warranting close scrutiny of performance and pricing.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the sole-source nature of the award and the lack of publicly available comparable contract data for similar backup generator services for naval facilities. The firm-fixed-price contract type suggests an attempt to control costs, but without competitive bidding, it is difficult to ascertain if the $10.18 million represents a fair market price. Further analysis would require access to historical pricing for similar generator maintenance and repair services within the Department of Defense or similar industrial settings.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning TEPCO ENERGY PARTNER, INCORPORATED was the only vendor considered. The justification for a sole-source award typically involves unique capabilities, urgent needs, or a lack of available competition. Without a competitive bidding process, there is no direct comparison of offers, which can lead to higher prices than might be achieved in an open market. The limited competition raises concerns about whether the government secured the best possible value.

Taxpayer Impact: The sole-source nature of this award means taxpayers may not have benefited from the cost savings typically achieved through competitive bidding. This could result in a higher overall expenditure for the backup power generator services.

Public Impact

Naval operations at the CFAY (likely a naval facility) will benefit from reliable backup power. Ensures continuity of essential services and mission readiness by maintaining critical power infrastructure. The contract supports specialized technical services related to industrial machinery and equipment repair. Potential impact on local workforce through employment opportunities for skilled technicians and support staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and value assessment.
Lack of transparency in the justification for sole-source procurement.
Potential for cost overruns if pricing is not rigorously managed without competition.
No indication of small business participation or subcontracting opportunities.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Award to a specific vendor suggests they possess necessary specialized expertise.
Ensures critical infrastructure (backup power) is maintained for operational readiness.

Sector Analysis

The contract falls within the industrial machinery and equipment repair and maintenance sector, specifically supporting critical infrastructure like backup power systems. This sector is vital for maintaining the operational readiness of government facilities, particularly military installations. The market for specialized generator maintenance can be concentrated, sometimes leading to sole-source awards if specific technical expertise or certifications are required. Comparable spending benchmarks for such services are difficult to establish without detailed service scope and location specifics, but large-scale industrial generator maintenance contracts can run into millions of dollars annually.

Small Business Impact

The contract data indicates that this award was not set aside for small businesses, nor is there any explicit mention of subcontracting requirements for small businesses. This suggests that the primary contractor, TEPCO ENERGY PARTNER, INCORPORATED, will be performing the work directly or through its own resources. Without a small business set-aside or subcontracting plan, there may be limited direct economic benefit to the small business ecosystem in this specific procurement.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. As a definitive contract, it is subject to standard federal procurement regulations and oversight. Transparency regarding the sole-source justification and performance monitoring would be key areas for accountability. While specific Inspector General (IG) jurisdiction isn't detailed here, the DoD IG generally oversees significant contract spending for potential fraud, waste, and abuse.

Related Government Programs

Naval Facilities Engineering Command (NAVFAC) Contracts
Department of Defense Maintenance and Repair Contracts
Critical Infrastructure Support Services
Backup Power Systems Procurement and Maintenance

Risk Flags

Sole-source award raises concerns about fair pricing and competition.
Lack of transparency regarding the justification for sole-source procurement.
Potential for higher costs to taxpayers due to limited competition.
No explicit small business subcontracting requirements noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $10.2 million to TEPCO ENERGY PARTNER, INCORPORATED. BACKUP POWER GENERATOR FOR CFAY

Who is the contractor on this award?

The obligated recipient is TEPCO ENERGY PARTNER, INCORPORATED.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $10.2 million.

What is the period of performance?

Start: 2024-09-30. End: 2026-09-29.

What is the specific justification for awarding this contract on a sole-source basis to TEPCO ENERGY PARTNER, INCORPORATED?

The provided data does not include the specific justification for the sole-source award. Typically, sole-source contracts are awarded when only one responsible source is available or capable of providing the required goods or services. This could be due to unique technical capabilities, proprietary technology, urgent and compelling circumstances, or a lack of adequate competition. Without the official justification document (e.g., a Justification and Approval for Other Than Full and Open Competition), it is impossible to definitively assess the validity of the sole-source determination. This lack of transparency is a key concern for ensuring taxpayer value.

How does the $10.18 million contract value compare to similar backup generator services for naval facilities?

Direct comparison of the $10.18 million contract value to similar backup generator services for naval facilities is difficult without access to a broader dataset of comparable contracts. Factors such as the size and type of generator, the scope of services (e.g., maintenance, repair, installation, emergency response), the duration of the contract, and the specific location (e.g., CFAY - likely a naval shipyard) significantly influence pricing. Given the sole-source nature, it's challenging to determine if this price represents a competitive market rate. Further analysis would require benchmarking against other large-scale industrial generator maintenance contracts within the Department of Defense or similar government agencies, considering the specific service level agreements.

What are the potential risks associated with a sole-source award for critical backup power systems?

The primary risk associated with a sole-source award for critical backup power systems is the potential for inflated pricing due to the absence of competitive pressure. Without competing bids, the government may pay more than necessary. Another risk is vendor lock-in, where the government becomes dependent on a single provider, potentially limiting future flexibility and negotiation power. Furthermore, if the sole-source provider experiences financial difficulties or operational issues, it could disrupt the continuity of essential services, posing a significant risk to the facility's operations. Ensuring robust contract management and performance monitoring becomes even more critical in sole-source situations.

What is TEPCO ENERGY PARTNER, INCORPORATED's track record with government contracts, particularly for generator services?

Information regarding TEPCO ENERGY PARTNER, INCORPORATED's specific track record with government contracts, especially for generator services, is not detailed in the provided data. A comprehensive assessment would require searching federal procurement databases (like SAM.gov or FPDS) for past awards, performance reviews (e.g., Contractor Performance Assessment Reporting System - CPARS), and any history of disputes or contract terminations. Understanding their past performance, experience with similar systems, and compliance record is crucial for evaluating the risk associated with this $10.18 million award.

What is the expected performance standard and how will it be measured for this backup power generator service contract?

The provided data indicates a firm-fixed-price contract type and a duration of 729 days, ending September 29, 2026. However, it does not specify the performance standards or metrics that TEPCO ENERGY PARTNER, INCORPORATED must meet. For critical services like backup power generation, performance standards typically include uptime requirements, response times for maintenance and repairs, preventative maintenance schedules, and adherence to safety protocols. The contract should outline key performance indicators (KPIs) and the methods for measuring TEPCO's adherence to these standards. The effectiveness of oversight will depend on the clarity and enforceability of these performance requirements.

Industry Classification

NAICS: Other Services (except Public Administration) › Commercial and Industrial Machinery and Equipment (except Automotive and Electronic) Repair and Maintenance › Commercial and Industrial Machinery and Equipment (except Automotive and Electronic) Repair and Maintenance

Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR BUILDINGS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N4008424R0103

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 8-13-1, GINZA, GINZA MITSUI BLDG,, CHUO-KU

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $23,966,108

Exercised Options: $20,439,093

Current Obligation: $10,178,145

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline