DoD's $33M Camp Lejeune UESC contract with Piedmont Natural Gas faces scrutiny over competition and value
Contract Overview
Contract Amount: $33,196,124 ($33.2M)
Contractor: Piedmont Natural GAS Company, Inc.
Awarding Agency: Department of Defense
Start Date: 2015-03-30
End Date: 2031-05-15
Contract Duration: 5,890 days
Daily Burn Rate: $5.6K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Energy
Official Description: IGF::OT::IGF UTILITY ENERGY SERVICES CONTRACT (UESC) CAMP LEJEUNE STEAM DECENTRALIZATION
Place of Performance
Location: CAMP LEJEUNE, ONSLOW County, NORTH CAROLINA, 28542
Plain-Language Summary
Department of Defense obligated $33.2 million to PIEDMONT NATURAL GAS COMPANY, INC. for work described as: IGF::OT::IGF UTILITY ENERGY SERVICES CONTRACT (UESC) CAMP LEJEUNE STEAM DECENTRALIZATION Key points: 1. The contract's value is $33.19 million over its 16-year term. 2. Competition is limited, raising concerns about price discovery and potential overpayment. 3. The long duration and fixed-price nature may not fully capture market fluctuations. 4. The sector is energy services, crucial for military base operations.
Value Assessment
Rating: questionable
The contract's fixed-price structure and lack of readily available benchmark data make a precise value assessment difficult. However, the extended duration and limited competition suggest potential for suboptimal pricing compared to more competitive, shorter-term arrangements.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was not available for competition, likely due to specific utility service requirements at Camp Lejeune. This limited competition restricts the government's ability to leverage market forces for better pricing and service terms.
Taxpayer Impact: The lack of robust competition may result in taxpayers paying more than necessary for these essential utility services over the contract's long lifespan.
Public Impact
Military base infrastructure relies on consistent energy services, impacting operational readiness. Long-term contracts can lock in prices, potentially missing out on future market savings. Transparency in utility contracts is vital for public trust and efficient resource allocation.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition
- Long contract duration
- Potential for suboptimal pricing
Positive Signals
- Provides essential utility services
- Fixed price provides budget certainty
Sector Analysis
This contract falls within the energy services sector, specifically for utility energy services at a military installation. Benchmarks for similar long-term, fixed-price utility contracts at government facilities are scarce, making direct comparison challenging.
Small Business Impact
There is no indication that small businesses were involved in this contract, as it was awarded to Piedmont Natural Gas Company, Inc. Further analysis would be needed to determine if subcontracting opportunities were explored.
Oversight & Accountability
The contract's long duration and limited competition warrant careful oversight to ensure continued value and adherence to terms. Regular performance reviews and market analysis are crucial for accountability.
Related Government Programs
- Plumbing, Heating, and Air-Conditioning Contractors
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Lack of competition
- Long contract duration
- Potential for price escalation not captured
- Limited transparency on justification for sole-source
Tags
plumbing-heating-and-air-conditioning-co, department-of-defense, nc, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $33.2 million to PIEDMONT NATURAL GAS COMPANY, INC.. IGF::OT::IGF UTILITY ENERGY SERVICES CONTRACT (UESC) CAMP LEJEUNE STEAM DECENTRALIZATION
Who is the contractor on this award?
The obligated recipient is PIEDMONT NATURAL GAS COMPANY, INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Navy).
What is the total obligated amount?
The obligated amount is $33.2 million.
What is the period of performance?
Start: 2015-03-30. End: 2031-05-15.
What is the justification for limiting competition on this essential utility contract?
The justification for limiting competition on this UESC contract is not explicitly detailed in the provided data. Typically, such limitations stem from the unique nature of utility services tied to specific infrastructure at a base, or specific energy-saving performance requirements that only certain providers can meet. Further investigation into the contract's award documentation would be necessary to confirm the precise reasons.
How does the fixed-price structure impact risk and value over the contract's 16-year term?
A fixed-price structure provides budget certainty for the government but shifts the risk of cost overruns to the contractor. Over a 16-year term, this can be advantageous if energy prices rise significantly, as the government is protected. Conversely, if energy prices fall, the government may overpay. The lack of competition exacerbates this risk, as there's no mechanism to adjust prices based on market conditions.
What is the potential taxpayer impact of awarding this contract without full and open competition?
Awarding this contract without full and open competition carries a potential negative taxpayer impact. Limited competition often leads to higher prices than would be achieved in a competitive bidding process. Over the 16-year duration of this $33 million contract, this could translate to millions of dollars in unnecessary expenditure, representing a less efficient use of taxpayer funds for essential base operations.
Industry Classification
NAICS: Construction › Building Equipment Contractors › Plumbing, Heating, and Air-Conditioning Contractors
Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR NONBUILDINGS
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
Parent Company: Duke Energy Corporation
Address: 4720 PIEDMONT ROW DR STE 100, CHARLOTTE, NC, 28210
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $59,571,020
Exercised Options: $59,571,020
Current Obligation: $33,196,124
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2015-03-30
Current End Date: 2031-05-15
Potential End Date: 2031-05-15 00:00:00
Last Modified: 2025-06-20
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