Navy UESC contract for utility energy services awarded to City of Groton for $15.8M, spanning over 11 years

Contract Overview

Contract Amount: $15,789,787 ($15.8M)

Contractor: City of Groton Department of Utilities

Awarding Agency: Department of Defense

Start Date: 2016-12-14

End Date: 2028-10-28

Contract Duration: 4,336 days

Daily Burn Rate: $3.6K/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 SERVICE CONTRACT (UESC)

Place of Performance

Location: NEW LONDON, NEW LONDON County, CONNECTICUT, 06320

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $15.8 million to CITY OF GROTON DEPARTMENT OF UTILITIES for work described as: IGF::OT::IGF UTILITY ENERGY SERVICE CONTRACT (UESC) Key points: 1. The contract's long duration suggests a need for sustained utility energy services, potentially indicating significant infrastructure or operational requirements. 2. The firm-fixed-price structure provides cost certainty for the Navy, though it may limit flexibility if project needs evolve. 3. The absence of readily available competition data raises questions about the procurement process and potential value for money. 4. Performance context is limited without specific details on the services delivered or measurable energy savings achieved. 5. This contract falls within the broader category of energy services and infrastructure support for federal facilities.

Value Assessment

Rating: fair

Benchmarking the value of this $15.8 million contract is challenging without specific details on the services rendered and the baseline energy consumption. However, the duration of over 11 years suggests a substantial scope of work. Comparing it to similar Utility Energy Service Contracts (UESCs) would require access to data on the energy savings achieved and the total project cost relative to those savings. The firm-fixed-price nature implies a negotiated price upfront, which could be advantageous if costs are well-controlled, but may represent a risk if market conditions change significantly.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as 'NOT AVAILABLE FOR COMPETITION,' indicating a sole-source or limited competition procurement. This approach is often used for energy service contracts where a specific utility provider has the exclusive right or capability to provide services to a federal facility, or when a specific technology or solution is required. The lack of open competition means that price discovery through market forces was limited, potentially leading to a higher price than if multiple bidders had competed.

Taxpayer Impact: For taxpayers, a sole-source award means there was no opportunity to benefit from competitive bidding, which typically drives down costs. This could result in a less efficient use of public funds compared to a fully competed contract.

Public Impact

The primary beneficiary is the Department of the Navy, which receives utility energy services to support its operations. The contract aims to deliver energy efficiency improvements and potentially renewable energy solutions at Navy facilities. The geographic impact is localized to the facilities operated by the City of Groton Department of Utilities in Connecticut. Workforce implications may include specialized technical roles for energy auditing, installation, and maintenance, potentially benefiting local skilled labor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Long contract duration could mask inefficiencies if not actively managed.
Firm-fixed-price may not adapt well to unforeseen changes in energy markets or facility needs.

Positive Signals

Firm-fixed-price provides budget certainty for the Navy.
UESC model often includes performance-based incentives for energy savings.
Long-term contract can foster a stable relationship for sustained infrastructure improvements.

Sector Analysis

This contract falls within the energy services sector, specifically focusing on utility energy services for federal facilities. UESCs are a common mechanism for government agencies to improve energy efficiency and reduce utility costs, often leveraging private sector expertise. The market for energy services is competitive, but specific utility providers may have exclusive rights or unique capabilities within certain geographic areas, leading to sole-source awards. Comparable spending benchmarks for UESCs vary widely based on facility size, scope of improvements, and energy prices.

Small Business Impact

The data indicates this contract was not awarded to a small business, and there is no explicit mention of small business set-asides or subcontracting requirements. This suggests that the primary contractor is likely a larger entity. The absence of small business participation in the prime contract could limit opportunities for smaller firms to contribute to this project, unless they are engaged as subcontractors by the City of Groton.

Oversight & Accountability

Oversight for this contract would typically reside with the contracting officer at the Department of the Navy. The firm-fixed-price structure implies that the contractor is responsible for delivering the agreed-upon services within the set price. Transparency is limited by the sole-source nature of the award. Accountability would be measured against the contract's performance metrics, which are not detailed here. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Utility Energy Service Contracts (UESCs)
Energy Efficiency and Conservation Block Grants
Department of Energy Federal Energy Management Program
Department of Defense Energy Resilience and Security

Risk Flags

Sole-source award limits price competition.
Long contract duration requires robust oversight.
NAICS code may not fully represent contract scope.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $15.8 million to CITY OF GROTON DEPARTMENT OF UTILITIES. IGF::OT::IGF UTILITY ENERGY SERVICE CONTRACT (UESC)

Who is the contractor on this award?

The obligated recipient is CITY OF GROTON DEPARTMENT OF UTILITIES.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $15.8 million.

What is the period of performance?

Start: 2016-12-14. End: 2028-10-28.

What specific energy conservation measures are included in this UESC contract?

The provided data does not specify the exact energy conservation measures (ECMs) included in this $15.8 million UESC contract. Typically, UESCs encompass a range of upgrades such as lighting retrofits, HVAC system modernizations, building envelope improvements, water conservation measures, and the integration of renewable energy sources. The City of Groton Department of Utilities, as the contractor, would have likely conducted an energy audit to identify potential savings and propose specific measures tailored to the Navy's facilities. The success of the contract hinges on the effectiveness of these implemented ECMs in reducing energy consumption and costs over the contract's 11-year duration.

How does the $15.8 million contract value compare to typical UESC contract sizes for the Department of the Navy?

The $15.8 million contract value for this UESC is a significant investment, but its size relative to typical Department of the Navy UESC contracts is difficult to ascertain without broader benchmarking data. Navy UESCs can range from hundreds of thousands to tens of millions of dollars, depending on the scope of facilities, the complexity of the energy conservation measures, and the potential for energy savings. Longer-term contracts, like this one spanning over 11 years, often involve larger capital investments for infrastructure upgrades. To provide a precise comparison, one would need access to a database of historical Navy UESC awards, including their duration, scope, and total value, to determine if $15.8 million falls within the average, high, or low end for similar projects.

What are the primary risks associated with a sole-source UESC contract of this magnitude and duration?

The primary risks associated with a sole-source UESC contract of this magnitude ($15.8 million) and duration (over 11 years) include potential overpricing due to the lack of competitive bidding, and a reduced incentive for the contractor to innovate or achieve maximum cost savings if performance is not rigorously monitored. Taxpayers may not receive the best possible value for money. Furthermore, the long duration increases the risk of technological obsolescence if the implemented solutions become outdated before the contract ends. There's also a risk that the Navy's energy needs or operational requirements might change significantly over the contract period, and the firm-fixed-price structure might make it difficult or costly to adapt the scope of work.

What performance metrics are likely used to evaluate the success of this contract?

While specific performance metrics are not detailed in the provided data, UESC contracts typically evaluate success based on achieved energy savings, cost reductions, and the reliability of the implemented systems. Key metrics often include guaranteed energy savings (measured in kilowatt-hours, therms, or gallons of water saved), cost savings realized against a baseline, and the performance and uptime of newly installed or upgraded equipment. For a firm-fixed-price contract, the primary metric is often the delivery of the agreed-upon services and achieving the guaranteed savings. The contract likely includes provisions for measurement and verification (M&V) to track actual savings against projections over the contract's life.

How does the 'Plumbing, Heating, and Air-Conditioning Contractors' NAICS code relate to the utility energy services provided?

The NAICS code '238220 - Plumbing, Heating, and Air-Conditioning Contractors' is somewhat specific and might not fully encompass the breadth of a comprehensive Utility Energy Service Contract (UESC). While HVAC systems are a significant component of energy consumption and efficiency improvements in federal facilities, UESCs often involve a wider array of services. These can include lighting upgrades, building envelope improvements, water conservation, renewable energy integration, and advanced energy management systems. The chosen NAICS code suggests that the primary focus or the core competency of the City of Groton Department of Utilities, as the awarded contractor, lies within the HVAC and related mechanical systems domain, which is a critical part of energy services.

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

Solicitation ID: N4008516R2256

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 295 MERIDIAN ST, GROTON, CT, 06340

Business Categories: Category Business, Government, U.S. Local Government, U.S. National Government, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $21,020,175

Exercised Options: $21,020,175

Current Obligation: $15,789,787

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline