DoD Awards $39K Contract for Electric Services to Leavenworth-Jefferson Electric, Ending 2055

Contract Overview

Contract Amount: $22,098,429 ($22.1M)

Contractor: Leavenworth-Jefferson Electrical Cooperative Inc

Awarding Agency: Department of Defense

Start Date: 2005-09-30

End Date: 2055-09-29

Contract Duration: 18,261 days

Daily Burn Rate: $1.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIXED PRICE REDETERMINATION

Sector: Energy

Official Description: 200512!009600!97AS!SP0600!DEFENSE ENERGY SUPPORT CENTER !SP060005C8254 !A!N! !N! ! !20050930!20050930!003847753!003847753!003847753!N!LEAVENWORTH-JEFFERSON ELECTRIC!507 N UNION ST !MC LOUTH !KS!66054!39000!103!20!LEAVENWORTH !LEAVENWORTH !KANSAS !+000001619447!N!N!000000000000!S112!ELECTRIC SERVICES !S1 !SERVICES !000 !* !221122!E! !3!A!S! ! ! !20200930!B! ! !B! !A!N!A!2!003!B! !C!N!Z! ! !N!B!N!N! ! !C! !A!A!000!A!B!N! ! ! ! ! ! !0001! !

Place of Performance

Location: FORT LEAVENWORTH, LEAVENWORTH County, KANSAS, 66027

State: Kansas Government Spending

Plain-Language Summary

Department of Defense obligated $22.1 million to LEAVENWORTH-JEFFERSON ELECTRICAL COOPERATIVE INC for work described as: 200512!009600!97AS!SP0600!DEFENSE ENERGY SUPPORT CENTER !SP060005C8254 !A!N! !N! ! !20050930!20050930!003847753!003847753!003847753!N!LEAVENWORTH-JEFFERSON ELECTRIC!507 N UNION ST !MC LOUTH !KS!66054!39000!103!20!LEAVENWORTH !LEAV… Key points: 1. Contract awarded for electric services to Leavenworth-Jefferson Electric. 2. The contract has a total value of $39,000. 3. Competition type is 'Full and Open Competition'. 4. The sector is Energy, specifically Electric Power Distribution. 5. The contract duration is exceptionally long, spanning 50 years.

Value Assessment

Rating: questionable

The contract value of $39,000 is relatively small. However, the extremely long duration of 50 years raises questions about the pricing strategy and potential for escalation or overpayment over time. Without more data on unit pricing or historical costs, a definitive assessment is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting a competitive bidding process. However, the extremely long contract duration of 50 years may have deterred some potential bidders or limited the scope of competitive pricing strategies.

Taxpayer Impact: The initial award value is low, but the 50-year term could lead to significant long-term costs for taxpayers if not managed effectively.

Public Impact

Long-term energy supply for a DoD facility. Potential for price fluctuations over a 50-year period. Impact on local electric utility market dynamics. Ensuring reliable power infrastructure for national defense.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Excessively long contract duration (50 years)
Potential for price escalation over the contract term
Limited visibility into long-term cost-effectiveness

Positive Signals

Awarded under full and open competition
Secures essential electric services for a DoD facility

Sector Analysis

This contract falls within the Energy sector, specifically for Electric Power Distribution. The Department of Defense relies on consistent and reliable energy sources for its operations. Benchmarks for similar long-term electric service contracts are difficult to establish due to the unusual duration.

Small Business Impact

The data does not indicate if Leavenworth-Jefferson Electric is a small business. Further investigation would be needed to determine the impact on small business participation.

Oversight & Accountability

The extremely long duration of this contract warrants close oversight to ensure fair pricing and continued value for taxpayers throughout its 50-year term. Regular reviews of performance and cost adjustments will be crucial.

Related Government Programs

Electric Power Distribution
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Excessively long contract duration (50 years)
Potential for significant price escalation over time
Uncertainty regarding long-term cost-effectiveness
Limited ability to adapt to future technological changes
Questionable effectiveness of 'Full and Open Competition' for such a long term

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.1 million to LEAVENWORTH-JEFFERSON ELECTRICAL COOPERATIVE INC. 200512!009600!97AS!SP0600!DEFENSE ENERGY SUPPORT CENTER !SP060005C8254 !A!N! !N! ! !20050930!20050930!003847753!003847753!003847753!N!LEAVENWORTH-JEFFERSON ELECTRIC!507 N UNION ST !MC LOUTH !KS!66054!39000!103!20!LEAVENWORTH !LEAVENWORTH !KANSAS !+000001619447!N!N!000000000000!S112!ELECTRIC SERVICES !S1 !SERVICES !000 !* !221122!E! !3!A!S! ! ! !202

Who is the contractor on this award?

The obligated recipient is LEAVENWORTH-JEFFERSON ELECTRICAL COOPERATIVE INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $22.1 million.

What is the period of performance?

Start: 2005-09-30. End: 2055-09-29.

What is the rationale behind awarding a 50-year contract for electric services, and how does this impact long-term cost-effectiveness for the DoD?

The rationale for such a long contract duration is unclear from the provided data. Typically, long-term contracts are used for infrastructure development or services with very stable pricing and demand. For electric services, a 50-year term is highly unusual and raises concerns about potential price escalation, technological obsolescence, and the ability to secure competitive rates over such an extended period. This could lead to significantly higher costs for taxpayers compared to shorter, more frequent contract cycles.

How does the 'Full and Open Competition' method ensure competitive pricing for a contract spanning five decades?

While 'Full and Open Competition' indicates that all responsible sources were permitted to submit offers, its effectiveness in ensuring competitive pricing over a 50-year span is questionable. Market conditions, energy prices, and technology can change dramatically over five decades. Bidders may have factored in significant risk premiums or used pricing models that are not transparently beneficial to the government over the entire term, potentially limiting true long-term price discovery and competitiveness.

What are the primary risks associated with a 50-year contract for electric services, and what oversight mechanisms are in place to mitigate them?

The primary risks include significant price escalation due to market volatility, technological advancements making current service offerings obsolete, and the potential for the contractor to become complacent or less efficient over time. Mitigation would require robust contract clauses for price adjustments, performance reviews, and potentially termination for convenience options. Effective oversight would necessitate regular re-evaluation of market rates and service needs, which may be challenging given the contract's longevity.

Industry Classification

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

Product/Service Code: UTILITIES AND HOUSEKEEPING › UTILITIES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: SP060001R0026

Offers Received: 2

Pricing Type: FIXED PRICE REDETERMINATION (A)

Evaluated Preference: NONE

Contractor Details

Address: 507 N UNION ST, MC LOUTH, KS, 66054

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $277,675,270

Exercised Options: $188,666,707

Current Obligation: $22,098,429

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline