DoD's $638.5M Water Services Contract with Old North Utility Services Faces Long-Term Oversight
Contract Overview
Contract Amount: $638,500,136 ($638.5M)
Contractor: OLD North Utility Services, Inc.
Awarding Agency: Department of Defense
Start Date: 2007-09-28
End Date: 2058-02-28
Contract Duration: 18,416 days
Daily Burn Rate: $34.7K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 4
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: WATER DISTRIBUTION AND WASTEWATER COLLECTION SERVICES
Place of Performance
Location: FORT BRAGG, CUMBERLAND County, NORTH CAROLINA, 28310
Plain-Language Summary
Department of Defense obligated $638.5 million to OLD NORTH UTILITY SERVICES, INC. for work described as: WATER DISTRIBUTION AND WASTEWATER COLLECTION SERVICES Key points: 1. Significant long-term commitment (2007-2058) for essential utility services. 2. Sole provider for water distribution and wastewater collection in its region. 3. High contract value suggests substantial taxpayer investment. 4. Lack of small business participation noted.
Value Assessment
Rating: fair
The contract's long duration and fixed price structure make it difficult to assess current value without more granular cost data. Benchmarking against similar long-term utility contracts is challenging due to unique regional factors and service scope.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a competitive price discovery process at its inception. However, the extended duration may limit future competitive opportunities if market conditions change significantly.
Taxpayer Impact: The long-term nature of this contract means taxpayers are committed to a substantial expenditure over several decades for essential services.
Public Impact
Ensures continuous provision of critical water and wastewater services for military installations. Long-term commitment provides stability for service provider and government planning. Potential for price escalation or service quality issues over the contract's extensive lifespan.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration (50+ years)
- No small business participation
- Essential service with limited alternatives
Positive Signals
- Full and open competition at award
- Essential service provision
Sector Analysis
This contract falls under the Utilities and Waste Management sector, providing essential services for government operations. Spending benchmarks for such long-term, geographically specific utility contracts are highly variable.
Small Business Impact
The contract explicitly states no small business participation. This indicates a missed opportunity to support small businesses and potentially leverage specialized services they might offer.
Oversight & Accountability
The extensive duration of this contract necessitates robust and continuous oversight to ensure service quality, fair pricing, and adherence to contract terms throughout its 50-year lifespan.
Related Government Programs
- Water Supply and Irrigation Systems
- Department of Defense Contracting
- Defense Logistics Agency Programs
Risk Flags
- Long-term contract risk
- Lack of small business participation
- Potential for service quality degradation
- Price escalation risk over time
- Limited future competition
Tags
water-supply-and-irrigation-systems, department-of-defense, nc, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $638.5 million to OLD NORTH UTILITY SERVICES, INC.. WATER DISTRIBUTION AND WASTEWATER COLLECTION SERVICES
Who is the contractor on this award?
The obligated recipient is OLD NORTH UTILITY SERVICES, INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Logistics Agency).
What is the total obligated amount?
The obligated amount is $638.5 million.
What is the period of performance?
Start: 2007-09-28. End: 2058-02-28.
What mechanisms are in place to ensure fair pricing and service quality over the 50-year contract term, given the lack of ongoing competition?
Mechanisms likely include periodic performance reviews, service level agreements, and potential price adjustment clauses tied to economic indicators. However, the absence of re-competition limits direct market pressure on pricing and innovation, making proactive government oversight crucial for value preservation.
What are the risks associated with a sole provider for such a critical, long-term utility service?
Risks include potential service disruptions due to provider financial instability or operational failures, lack of incentive for innovation or efficiency improvements beyond contract minimums, and vulnerability to price gouging if market conditions shift unfavorably. The long duration exacerbates these risks.
How effectively does this contract align with modern sustainability and environmental standards for water and wastewater management?
The contract's original award date (2007) predates many current environmental regulations and sustainability initiatives. Without specific clauses or amendments addressing modern standards, there's a risk that services may not align with current best practices, potentially requiring future modifications or incurring environmental liabilities.
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: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 4
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: American States Water Company
Address: 535 ANTON BLVD STE 350, COSTA MESA, CA, 92626
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $1,720,694,711
Exercised Options: $1,720,694,711
Current Obligation: $638,500,136
Actual Outlays: $30,993,497
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Timeline
Start Date: 2007-09-28
Current End Date: 2058-02-28
Potential End Date: 2058-02-28 00:00:00
Last Modified: 2026-01-06
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