Navy's $21.1M Electric Service Contract for NCBC Gulfport Awarded to Mississippi Power Co

Contract Overview

Contract Amount: $21,107,978 ($21.1M)

Contractor: Mississippi Power CO

Awarding Agency: Department of Defense

Start Date: 1996-08-26

End Date: 2016-08-25

Contract Duration: 7,304 days

Daily Burn Rate: $2.9K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: TO PROVIDE ELECTRIC SERVICE TO NCBC GULFPORT

Place of Performance

Location: GULFPORT, HARRISON County, MISSISSIPPI, 39501

State: Mississippi Government Spending

Plain-Language Summary

Department of Defense obligated $21.1 million to MISSISSIPPI POWER CO for work described as: TO PROVIDE ELECTRIC SERVICE TO NCBC GULFPORT Key points: 1. Contract awarded on a non-competitive basis, raising questions about potential cost savings. 2. Long contract duration of 20 years suggests a need for stable, long-term service. 3. The fixed-price contract type offers cost certainty for the government. 4. Service provided to Naval Construction Battalion Center (NCBC) Gulfport indicates critical infrastructure support. 5. The contract's value is moderate within the context of large federal energy procurements. 6. Lack of competition may limit opportunities for alternative providers and potentially higher prices.

Value Assessment

Rating: fair

The contract value of $21.1 million over 20 years averages to approximately $1.05 million per year for electric service. Benchmarking this against similar large-scale utility contracts is challenging without specific usage data. However, the absence of competition suggests that the pricing may not have been subjected to market pressures that could drive down costs. The long duration implies a stable, albeit potentially unoptimized, pricing structure.

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. This typically occurs when only one vendor can provide the required service, often due to geographic exclusivity or unique capabilities. The lack of competition means there were no other bidders to compare against, and the government did not benefit from a competitive bidding process to potentially secure lower prices or better terms.

Taxpayer Impact: Taxpayers may have paid a premium due to the lack of competitive bidding. Without multiple offers, there's less assurance that the price reflects the most economical option available in the market.

Public Impact

Provides essential electric power to the Naval Construction Battalion Center (NCBC) in Gulfport, Mississippi. Ensures continuous operations for military personnel and facilities at the base. Supports the Department of the Navy's mission readiness and infrastructure needs. Impacts the local Mississippi economy through service provision and potential employment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Non-competitive award limits price discovery and potential savings.
Long contract duration may not reflect current market efficiencies.
Lack of performance metrics in provided data makes value assessment difficult.

Positive Signals

Firm fixed-price contract provides budget certainty.
Long-term award ensures stable and reliable utility service.
Service is critical for a key naval installation.

Sector Analysis

The energy sector, particularly utility services, is a critical component of federal infrastructure. This contract falls under the provision of electric power, a regulated utility service often characterized by natural monopolies in specific geographic areas. Federal agencies rely on utility providers like Mississippi Power Co. to maintain operations. Comparable spending benchmarks for utility services can vary widely based on location, demand, and contract structure, but long-term agreements are common for essential services.

Small Business Impact

This contract does not appear to have a small business set-aside component, nor is there information indicating significant subcontracting opportunities for small businesses. The award to a large utility provider suggests the primary focus was on securing reliable service rather than promoting small business participation.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and financial management offices. Given the long duration, periodic reviews of the contract's terms and pricing would be expected. Transparency is limited by the sole-source nature of the award, but contract details should be publicly accessible through federal procurement databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Federal Utility Contracts
Department of Defense Energy Procurement
Naval Base Operations Support
Mississippi State Contracts

Risk Flags

Sole-source award
Long contract duration
Lack of competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.1 million to MISSISSIPPI POWER CO. TO PROVIDE ELECTRIC SERVICE TO NCBC GULFPORT

Who is the contractor on this award?

The obligated recipient is MISSISSIPPI POWER CO.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $21.1 million.

What is the period of performance?

Start: 1996-08-26. End: 2016-08-25.

What is the historical spending trend for electric services at NCBC Gulfport?

The provided data indicates a single definitive contract for electric service to NCBC Gulfport awarded in 1996 and ending in 2016, totaling $21.1 million. This suggests a consistent need for electric power at the facility over a 20-year period. Without access to prior contracts or more granular historical data, it's difficult to establish a precise spending trend year-over-year. However, the duration and value imply a stable, ongoing requirement for utility services, likely tied to the base's operational tempo and infrastructure.

How does the per-unit cost of this contract compare to market rates for similar services in Mississippi?

Determining a precise per-unit cost comparison is challenging without specific energy consumption data (e.g., kilowatt-hours used) and the corresponding pricing structure from the contract. The total contract value of $21.1 million over 20 years averages to approximately $1.05 million annually. However, this figure represents the total expenditure, not necessarily a direct reflection of unit pricing. Utility rates are typically based on complex tariffs that include energy charges, demand charges, and various surcharges. Given that Mississippi Power Co. is a regulated utility, its rates are subject to state commission approval, implying a degree of oversight. However, the sole-source nature of this federal contract means it may not have benefited from the competitive bidding that could potentially drive down unit costs compared to standard commercial rates.

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

The primary risks associated with a sole-source contract of this 20-year duration include potential price escalation above market rates due to the lack of competition, and a reduced incentive for the contractor to innovate or improve service efficiency. Over such a long period, market conditions, technology, and energy prices can change significantly, and a fixed, non-competitive arrangement may not adapt optimally. There's also a risk of vendor lock-in, making it difficult and costly to switch providers if performance issues arise or better alternatives become available. Furthermore, the absence of competitive pressure could lead to complacency in service delivery.

What performance metrics or service level agreements (SLAs) were likely in place for this contract?

While specific performance metrics and SLAs are not detailed in the provided data, federal contracts for essential services like electricity typically include provisions for reliability, uptime, and response times. For a utility provider, key metrics would likely involve maintaining power quality (voltage and frequency stability), minimizing service interruptions, and ensuring rapid restoration of power after outages. Response times for reported issues or emergencies would also be critical. The Department of the Navy would have oversight to ensure Mississippi Power Co. met these standards, with potential penalties or remedies for non-compliance, although the exact terms would be stipulated in the full contract.

What is Mississippi Power Co.'s track record with federal government contracts?

Mississippi Power Co., as a subsidiary of Southern Company, has a significant history of providing utility services across various sectors, including federal government facilities. While specific details on all their federal contracts are not provided here, utility companies of this scale typically engage in numerous agreements with government entities for power supply. Their track record would generally be assessed based on reliability, adherence to regulatory standards, and responsiveness to client needs. Given the long-term nature of this specific contract with the Navy, it suggests a level of trust and satisfactory performance over the contract period, although a comprehensive review would require examining past performance evaluations and any documented disputes or commendations.

Could this service have been procured through a competitive process, or were there genuine justifications for a sole-source award?

The justification for a sole-source award typically hinges on specific circumstances where only one responsible source can satisfy the agency's needs. For electric service in a defined geographic area like a military base, this often relates to the existing infrastructure and the regulated nature of utility monopolies. If Mississippi Power Co. is the sole provider of electricity infrastructure to the NCBC Gulfport location, then a sole-source award might have been justified. However, agencies are generally required to conduct market research to confirm the lack of competition. Without detailed documentation on the justification, it's difficult to definitively assess whether a competitive process was truly impossible or simply not pursued.

Industry Classification

NAICS: Utilities › Electric Power Generation, Transmission and Distribution › Electric Power Distribution

Product/Service Code: UTILITIES AND HOUSEKEEPING › UTILITIES

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: Southern CO Services Inc (UEI: 006925341)

Address: 2992 W BEACH BLVD, GULFPORT, MS, 39501

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $35,081,178

Exercised Options: $35,081,178

Current Obligation: $21,107,978

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline