DLA Awards $872.6M Utility Service Contract to Doyon Utilities, LLC for Alaska Fossil Fuel Power Generation
Contract Overview
Contract Amount: $872,583,226 ($872.6M)
Contractor: Doyon Utilities, LLC
Awarding Agency: Department of Defense
Start Date: 2007-09-28
End Date: 2058-08-14
Contract Duration: 18,583 days
Daily Burn Rate: $47.0K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: FIRM FIXED PRICE
Sector: Energy
Official Description: UTILITY SERVICE CONTRACT FOR UTILITY PRIVATIZATION
Place of Performance
Location: FORT WAINWRIGHT, FAIRBANKS NORTH STAR County, ALASKA, 99703
State: Alaska Government Spending
Plain-Language Summary
Department of Defense obligated $872.6 million to DOYON UTILITIES, LLC for work described as: UTILITY SERVICE CONTRACT FOR UTILITY PRIVATIZATION Key points: 1. Significant long-term contract for essential utility services in Alaska. 2. Sole awardee suggests potential for limited competition or specialized capabilities. 3. Long duration (2007-2058) raises questions about price stability and future needs. 4. Fossil fuel generation aligns with current infrastructure but faces future energy transition risks.
Value Assessment
Rating: fair
The contract value is substantial, but without specific unit cost data or benchmarks for similar long-term utility privatization contracts, a precise value assessment is difficult. The firm fixed-price structure provides cost certainty for the government.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating a competitive bidding process. However, the long-term nature and specialized requirements of utility privatization may limit the number of actual bidders.
Taxpayer Impact: The long-term fixed-price nature aims to provide predictable costs for taxpayers over the contract's extensive duration, though potential for price escalation or renegotiation exists.
Public Impact
Ensures reliable utility services for military installations in Alaska. Supports critical infrastructure operations for the Department of Defense. Long-term commitment impacts energy planning and investment in the region.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration (51 years) poses risks of technological obsolescence and changing energy policies.
- Reliance on fossil fuels may become increasingly costly and environmentally scrutinized.
- Potential for price increases over the decades despite fixed-price structure.
- Limited visibility into operational efficiency and maintenance costs.
Positive Signals
- Provides essential, long-term utility services critical for national defense.
- Firm fixed-price contract offers cost predictability.
- Awarded through full and open competition.
Sector Analysis
This contract falls within the utility services sector, specifically focusing on fossil fuel-based electric power generation. Long-term utility privatization contracts are common for government facilities, especially in remote locations like Alaska, ensuring operational continuity.
Small Business Impact
The data does not indicate any specific subcontracting goals or participation by small businesses in this contract. Further analysis would be needed to determine the extent of small business involvement.
Oversight & Accountability
The long duration of the contract necessitates robust oversight to ensure performance standards are met and that the government receives value throughout the contract's life. Regular performance reviews and audits are crucial.
Related Government Programs
- Fossil Fuel Electric Power Generation
- Department of Defense Contracting
- Defense Logistics Agency Programs
Risk Flags
- Long contract duration (51 years)
- Reliance on fossil fuels
- Potential for price escalation
- Limited competition indicated by sole awardee
- Uncertainty of future energy policies and technology
Tags
fossil-fuel-electric-power-generation, department-of-defense, ak, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $872.6 million to DOYON UTILITIES, LLC. UTILITY SERVICE CONTRACT FOR UTILITY PRIVATIZATION
Who is the contractor on this award?
The obligated recipient is DOYON UTILITIES, LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Logistics Agency).
What is the total obligated amount?
The obligated amount is $872.6 million.
What is the period of performance?
Start: 2007-09-28. End: 2058-08-14.
What is the projected annual cost and how does it compare to government-operated utilities or alternative energy sources?
The total contract value is $872.6 million over approximately 51 years, averaging roughly $17.1 million per year. Without specific annual breakdowns or benchmarks for comparable government-operated utilities or renewable energy solutions in Alaska, it's difficult to definitively assess cost-effectiveness. However, this figure provides a baseline for evaluating the long-term financial commitment.
What are the specific risks associated with a 51-year contract for fossil fuel generation in a changing climate and energy landscape?
The primary risks include potential for significant price increases due to carbon pricing or volatile fossil fuel markets, technological obsolescence of generation equipment, and increasing regulatory or public pressure to transition to cleaner energy sources. The long duration makes it difficult to anticipate future energy policies and environmental standards.
How will the effectiveness of this contract be measured over its long lifespan, particularly regarding reliability and environmental impact?
Effectiveness will likely be measured through key performance indicators (KPIs) related to uptime, power quality, response times to outages, and adherence to environmental regulations. Regular performance reviews and audits by the Defense Logistics Agency are essential. However, measuring long-term environmental impact and adapting to evolving standards over 51 years presents a significant oversight challenge.
Industry Classification
NAICS: Utilities › Electric Power Generation, Transmission and Distribution › Fossil Fuel Electric Power Generation
Product/Service Code: UTILITIES AND HOUSEKEEPING › UTILITIES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 3
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 1 DOYON PLACE, FAIRBANKS, AK, 99701
Business Categories: Category Business, Minority Owned Business, Native American Owned Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $3,080,959,440
Exercised Options: $3,080,959,440
Current Obligation: $872,583,226
Actual Outlays: $598,768
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Timeline
Start Date: 2007-09-28
Current End Date: 2058-08-14
Potential End Date: 2058-08-14 00:00:00
Last Modified: 2025-12-17
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