Naval Facilities Engineering Command awarded $14.6M for electric services, with a 19-year performance period

Contract Overview

Contract Amount: $14,626,891 ($14.6M)

Contractor: SAN Diego GAS & Electric Compa

Awarding Agency: Department of Defense

Start Date: 1997-08-05

End Date: 2014-12-31

Contract Duration: 6,357 days

Daily Burn Rate: $2.3K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Energy

Official Description: 199712!1700!Y756!C8711!NAVAL FACILITIES ENGINEERING COM!N6871170C1200 !A!*!P00578 !19970805!19961231!836404368!006911457!837509157!N!04QN9!SAN DIEGO GAS & ELECTRIC COMPA!8326 CENTURY PARK CT !SAN DIEGO !CA!92123!66000!073!06!SAN DIEGO !SAN DIEGO !CALIFORNIA!0001!+000000800468!N!N!000000000000!S112!ELECTRIC SERVICES !C9E!ALL OTHER SUPPLIES AND EQUIPME!2000!NOT DISCERNABLE OR CLASSIFIED !4911!3!*!*!D!A!N!Z!B !U!J!0!000!*!* !C!Y!Z!* !* !Y!Z!*!*!*!A!A!A!*!* !*!N!A!B!N!*!*!*!*!*!

Place of Performance

Location: CAMP PENDLETON, SAN DIEGO County, CALIFORNIA, 92055

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $14.6 million to SAN DIEGO GAS & ELECTRIC COMPA for work described as: 199712!1700!Y756!C8711!NAVAL FACILITIES ENGINEERING COM!N6871170C1200 !A!*!P00578 !19970805!19961231!836404368!006911457!837509157!N!04QN9!SAN DIEGO GAS & ELECTRIC COMPA!8326 CENTURY PARK CT !SAN DIEGO !CA!92123!66000!073!06!SAN DIEGO !SAN DI… Key points: 1. The contract's extended duration suggests a long-term need for reliable electric power infrastructure. 2. The significant performance period may indicate a lack of readily available alternative providers or a strategic decision for continuity. 3. The contract was not competitively procured, raising questions about potential cost efficiencies and market-driven pricing. 4. The value of the contract, while substantial, needs to be benchmarked against similar long-term utility service agreements. 5. The absence of a small business set-aside suggests the primary contractor is a large utility provider. 6. The contract's focus on electric services aligns with essential infrastructure needs for naval facilities.

Value Assessment

Rating: fair

This contract for electric services spans nearly two decades, which is an unusually long period for a single award. While utility services are often long-term, the lack of competitive bidding over this duration makes it difficult to assess if the government consistently received optimal pricing. Benchmarking against other long-term utility contracts awarded by federal agencies would be necessary to determine if the $14.6 million expenditure represents good value for money. The fixed price nature of the contract provides some cost certainty, but the extended term without re-competition limits opportunities for cost savings through market fluctuations or new provider entry.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was awarded under a sole-source or not available for competition basis. This indicates that the Naval Facilities Engineering Command identified a specific contractor, San Diego Gas & Electric Company, as the only viable source for these electric services. The reasons for this designation are not detailed, but it typically implies unique capabilities, existing infrastructure integration, or geographical exclusivity. The lack of competition means that the pricing and terms were negotiated directly with the selected vendor, potentially leading to higher costs than if multiple bids were solicited.

Taxpayer Impact: A sole-source award means taxpayers did not benefit from the price reductions typically achieved through competitive bidding processes. This could result in a higher overall cost for the electric services provided to the naval facility.

Public Impact

Naval facilities in the San Diego, California area benefit from a continuous and reliable supply of electricity. The contract ensures the operational readiness of critical naval infrastructure by providing essential utility services. The services directly support the daily operations of military personnel and the execution of naval missions. The contract supports the local economy through the operations of San Diego Gas & Electric Company, a major utility provider in California.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition for a long-term contract may lead to suboptimal pricing.
Extended contract duration without re-competition limits opportunities for cost savings.
Sole-source award raises questions about the necessity and justification for not seeking competitive bids.

Positive Signals

Ensures continuity of essential electric services for critical naval operations.
Firm fixed-price contract provides cost certainty for the government.
Long performance period indicates a stable and reliable provider for a critical utility.

Sector Analysis

This contract falls within the Energy sector, specifically focusing on electric power distribution and services. The market for utility services is often characterized by natural monopolies or highly regulated environments, especially for large-scale infrastructure like that required by military bases. San Diego Gas & Electric Company is a major utility provider in its region, and its services are essential for maintaining operations. Comparable spending benchmarks for utility services to federal facilities can vary widely based on location, demand, and the specific services required, but long-term agreements are common for ensuring grid stability and supply.

Small Business Impact

The contract data indicates that small business participation was not a primary consideration, as the award was made to a large utility company, San Diego Gas & Electric. There is no indication of a small business set-aside. Subcontracting opportunities for small businesses are not explicitly detailed in the provided data, but typically, large utility providers may engage small businesses for specific maintenance, repair, or specialized services, though this is not guaranteed.

Oversight & Accountability

Oversight for this contract would primarily fall under the Naval Facilities Engineering Command, responsible for managing and overseeing contracts related to facilities and infrastructure. Accountability measures are inherent in the firm fixed-price structure, which obligates the contractor to deliver services at an agreed-upon price. Transparency is limited due to the sole-source nature of the award, with less public information available compared to competitively bid contracts. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Utility Services Contracts
Electric Power Generation, Transmission, and Distribution
Base Operations Support Contracts
Department of Defense Energy Procurement

Risk Flags

Long contract duration
Sole-source award
Lack of competition
Extended performance period without re-competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.6 million to SAN DIEGO GAS & ELECTRIC COMPA. 199712!1700!Y756!C8711!NAVAL FACILITIES ENGINEERING COM!N6871170C1200 !A!*!P00578 !19970805!19961231!836404368!006911457!837509157!N!04QN9!SAN DIEGO GAS & ELECTRIC COMPA!8326 CENTURY PARK CT !SAN DIEGO !CA!92123!66000!073!06!SAN DIEGO !SAN DIEGO !CALIFORNIA!0001!+000000800468!N!N!000000000000!S112!ELECTRIC SERVICES !C9E!ALL OTHER SUPPLIES AND EQUIPME!2000!NOT DISCERNABLE OR CLASSIFIED !4911!3!*!*!D!A!N!Z!B !U!J!0!0

Who is the contractor on this award?

The obligated recipient is SAN DIEGO GAS & ELECTRIC COMPA.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $14.6 million.

What is the period of performance?

Start: 1997-08-05. End: 2014-12-31.

What specific electric services are covered under this contract, and how have the needs evolved over its nearly 20-year duration?

The contract specifies 'ELECTRIC SERVICES' and 'ELECTRIC POWER DISTRIBUTION' (PSC 5110, ND 221122). Over its extensive performance period from August 1997 to December 2014, the core need likely remained the provision of reliable electricity to naval facilities in the San Diego area. However, the evolution of technology and energy demands may have introduced requirements for upgraded infrastructure, smart grid capabilities, or integration of renewable energy sources, depending on the specific terms negotiated within the contract's framework. Without access to contract modifications or detailed statements of work, the precise evolution of services is not discernible from the provided data alone.

Can the pricing structure of this contract be considered competitive given its long duration and sole-source nature?

The pricing structure is 'FIRM FIXED PRICE,' which provides cost certainty for the government. However, given the 'NOT AVAILABLE FOR COMPETITION' (sole-source) award and the contract's nearly 20-year duration (6357 days), it is difficult to definitively state if the pricing is competitive without further benchmarking. Sole-source awards inherently lack the price discovery mechanism of competition. While San Diego Gas & Electric is a regulated utility, the specific rates negotiated for this government contract might not reflect the most advantageous pricing achievable in a competitive market. A comparative analysis against similar long-term utility contracts awarded competitively by other federal agencies would be necessary to assess value for money.

What were the primary justifications for awarding this contract on a sole-source basis to San Diego Gas & Electric Company?

The data indicates the contract was 'NOT AVAILABLE FOR COMPETITION,' implying a sole-source award. Typical justifications for sole-source contracts include situations where only one responsible source can provide the required supplies or services, such as when a specific technology is proprietary, the contractor possesses unique expertise, or there is an urgent need that cannot be met through competition. For utility services in a specific geographic area, the incumbent provider with existing infrastructure (like San Diego Gas & Electric in San Diego) is often the only practical or economically feasible option. However, the exact justification would be documented in the contract's Justification and Approval (J&A) for Other Than Full and Open Competition.

What is the historical spending pattern for electric services by the Department of the Navy in the San Diego region?

The provided data represents a single contract awarded in 1997 for $14.6 million with a long performance period ending in 2014. This specific award suggests a significant, long-term commitment to San Diego Gas & Electric for essential utility services. To understand the broader historical spending pattern, one would need to analyze all contracts for electric services awarded by the Department of the Navy (and potentially other federal agencies) in the San Diego region over various periods. This would involve examining spending across different fiscal years, contract types, and awardees to identify trends, average costs, and the prevalence of sole-source versus competitive procurements for similar services.

What are the potential risks associated with a nearly 20-year contract for electric services awarded without competition?

The primary risks associated with a nearly 20-year, sole-source contract for electric services include: 1) **Above-market pricing:** Without competition, the contractor may not be incentivized to offer the lowest possible price, potentially leading to the government overpaying over the contract's life. 2) **Lack of innovation:** The absence of competitive pressure can reduce the incentive for the contractor to introduce cost-saving innovations or adopt new technologies. 3) **Vendor lock-in:** The government becomes heavily reliant on a single provider, making it difficult and costly to switch even if performance or pricing becomes unsatisfactory. 4) **Missed opportunities:** The government misses opportunities to leverage market changes, new entrants, or more competitive pricing structures that might emerge over such a long period.

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

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Address: 8326 CENTURY PARK CT, SAN DIEGO, CA, 92123

Business Categories: Category Business, Nonprofit Organization, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: YES

Timeline