DoD's $10M Water Utility Contract for Chesapeake Faces Competition Concerns

Contract Overview

Contract Amount: $10,096,814 ($10.1M)

Contractor: City of Chesapeake

Awarding Agency: Department of Defense

Start Date: 2019-06-13

End Date: 2029-05-31

Contract Duration: 3,640 days

Daily Burn Rate: $2.8K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: WATER UTILITIES SERVICE ST JULIEN'S

Place of Performance

Location: CHESAPEAKE, CHESAPEAKE CITY County, VIRGINIA, 23323

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $10.1 million to CITY OF CHESAPEAKE for work described as: WATER UTILITIES SERVICE ST JULIEN'S Key points: 1. Significant long-term contract value of $10.1M. 2. Limited competition raises questions about price discovery. 3. Potential risk of overpayment due to lack of competitive bidding. 4. Water utilities sector often involves long-term infrastructure needs.

Value Assessment

Rating: questionable

The contract value of $10.1M over 10 years is difficult to assess without comparable benchmarks. The lack of available competition data prevents a thorough pricing assessment against similar services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was not available for competition, suggesting a sole-source or limited-source award. This significantly impacts price discovery, as competitive pressures are absent, potentially leading to higher costs for the government.

Taxpayer Impact: Taxpayers may bear a higher cost due to the absence of competitive bidding, as the government may not be securing the best possible price for water utility services.

Public Impact

Ensures essential water services for a military installation. Long-term commitment provides stability for service provider. Potential for increased costs impacts local government budgets indirectly.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Long contract duration
Firm Fixed Price with potential for cost overruns if not managed well

Positive Signals

Ensures critical service delivery
Long-term planning and stability

Sector Analysis

This contract falls within the water utilities sector, which is critical for infrastructure and public services. Spending in this area is often characterized by long-term needs and can be subject to regulatory oversight.

Small Business Impact

There is no indication that small businesses were involved in this contract, either as prime contractors or subcontractors. Further analysis would be needed to determine the extent of small business participation.

Oversight & Accountability

The limited competition aspect warrants further oversight to ensure the pricing remains fair and reasonable throughout the contract's duration. Accountability for service delivery and cost management is crucial.

Related Government Programs

Water Supply and Irrigation Systems
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Limited competition
Potential for inflated pricing
Long contract duration increases exposure to market changes
Lack of transparency in award justification

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $10.1 million to CITY OF CHESAPEAKE. WATER UTILITIES SERVICE ST JULIEN'S

Who is the contractor on this award?

The obligated recipient is CITY OF CHESAPEAKE.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $10.1 million.

What is the period of performance?

Start: 2019-06-13. End: 2029-05-31.

What is the justification for limiting competition on this water utility contract?

The justification for limiting competition is not provided in the data. Typically, such limitations occur due to unique circumstances, existing infrastructure integration, or specific technical requirements that only one provider can meet. Without this information, it's difficult to ascertain if the limitation is warranted or if it's a missed opportunity for cost savings through competitive bidding.

What are the potential risks associated with a firm fixed price contract awarded without competition?

The primary risk is paying a premium for the service. Without competitive pressure, the contractor may not have an incentive to offer the lowest possible price. If costs increase unexpectedly for the contractor, they are protected by the fixed price, but the government bears the risk of overpaying if the initial price was not adequately benchmarked or negotiated.

How can the effectiveness of this contract be measured given the lack of competition?

Effectiveness can be measured by service reliability, quality, and adherence to performance standards outlined in the contract. Key performance indicators (KPIs) related to water quality, pressure, and response times to issues should be rigorously monitored. While price effectiveness is compromised by the lack of competition, operational effectiveness remains paramount.

Industry Classification

NAICS: Utilities › Water, Sewage and Other Systems › Water Supply and Irrigation Systems

Product/Service Code: UTILITIES AND HOUSEKEEPING › UTILITIES

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N4008519R9076

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 306 CEDAR RD, CHESAPEAKE, VA, 23322

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

Financial Breakdown

Contract Ceiling: $12,616,120

Exercised Options: $12,616,120

Current Obligation: $10,096,814

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline