DoD's $347M Fort Polk Water Privatization Contract with American Water Operations and Maintenance, LLC Faces Scrutiny

Contract Overview

Contract Amount: $347,116,516 ($347.1M)

Contractor: American Water Operations and Maintenance, LLC

Awarding Agency: Department of Defense

Start Date: 2008-09-30

End Date: 2059-01-31

Contract Duration: 18,385 days

Daily Burn Rate: $18.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: UTILITY SERVICE CONTRACT FOR PRIVATIZATION OF THE WATER AND WASTEWATER UTILITY SYSTEM INFRASTRUCTURE AT FORT POLK, LOUISIANA

Place of Performance

Location: FORT POLK, VERNON County, LOUISIANA, 71459

State: Louisiana Government Spending

Plain-Language Summary

Department of Defense obligated $347.1 million to AMERICAN WATER OPERATIONS AND MAINTENANCE, LLC for work described as: UTILITY SERVICE CONTRACT FOR PRIVATIZATION OF THE WATER AND WASTEWATER UTILITY SYSTEM INFRASTRUCTURE AT FORT POLK, LOUISIANA Key points: 1. Long-term contract (50+ years) for essential utility services at Fort Polk. 2. Awarded via full and open competition, suggesting potential for competitive pricing. 3. Significant taxpayer investment over the contract's extensive duration. 4. Focus on privatization of water and wastewater infrastructure.

Value Assessment

Rating: fair

The contract value of $347 million over 50+ years is substantial. Benchmarking against similar long-term utility privatization contracts is difficult due to unique site-specific factors and the extended duration. Pricing appears to be a fixed-price model, which can offer predictability but may not always reflect the most cost-effective solution over such a long period.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which is a positive sign for price discovery. However, the long-term nature and specialized requirements of privatizing utility infrastructure may limit the number of truly competitive bids received.

Taxpayer Impact: The long duration of this contract means taxpayers will be committed to this pricing structure for over five decades, impacting long-term budget planning and potentially limiting future cost-saving opportunities.

Public Impact

Ensures continuous water and wastewater services for Fort Polk personnel and operations. Potential for improved infrastructure maintenance and upgrades through private sector investment. Long-term financial commitment for taxpayers, requiring careful monitoring of service delivery and costs. Impacts local water resource management and environmental compliance at the military installation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Extended contract duration (50+ years)
Lack of clear performance metrics in provided data
Potential for cost overruns in long-term infrastructure projects
Limited visibility into operational efficiency and maintenance quality

Positive Signals

Awarded through full and open competition
Fixed-price contract offers budget predictability
Private sector expertise in utility management

Sector Analysis

This contract falls within the broader 'Utilities' sector, specifically focusing on water and wastewater services. Benchmarking is challenging due to the unique nature of military base privatization and the extremely long contract term, which extends far beyond typical service contracts.

Small Business Impact

The provided data indicates that small business participation was not a stated factor in this contract (ss: false, sb: false). This suggests that the primary contractor, American Water Operations and Maintenance, LLC, is likely a large entity, and subcontracting opportunities for small businesses are not explicitly detailed.

Oversight & Accountability

Oversight of this long-term privatization contract is crucial. The Department of Defense and the Defense Logistics Agency must ensure robust monitoring of service delivery, infrastructure maintenance, and adherence to environmental regulations to protect taxpayer interests and operational readiness.

Related Government Programs

Water Supply and Irrigation Systems
Department of Defense Contracting
Defense Logistics Agency Programs

Risk Flags

Extended contract duration presents long-term financial risk.
Potential for cost overruns due to fixed-price nature over decades.
Lack of detailed performance metrics in summary data.
Limited visibility into operational efficiency and maintenance quality.
Dependence on private entity for critical infrastructure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $347.1 million to AMERICAN WATER OPERATIONS AND MAINTENANCE, LLC. UTILITY SERVICE CONTRACT FOR PRIVATIZATION OF THE WATER AND WASTEWATER UTILITY SYSTEM INFRASTRUCTURE AT FORT POLK, LOUISIANA

Who is the contractor on this award?

The obligated recipient is AMERICAN WATER OPERATIONS AND MAINTENANCE, LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Logistics Agency).

What is the total obligated amount?

The obligated amount is $347.1 million.

What is the period of performance?

Start: 2008-09-30. End: 2059-01-31.

What are the key performance indicators (KPIs) and service level agreements (SLAs) in place to measure the effectiveness and efficiency of the privatized water and wastewater services?

The provided data does not detail specific KPIs or SLAs. Effective oversight would require clearly defined metrics for water quality, system reliability, response times for issues, and infrastructure maintenance schedules. These should be regularly reviewed and enforced by the contracting agency to ensure the contractor meets performance expectations and provides value for taxpayer money.

How does the long-term fixed-price structure mitigate risks associated with potential fluctuations in operating costs, inflation, or unforeseen infrastructure challenges over 50+ years?

A fixed-price contract offers budget certainty but can expose the government to risks if costs escalate beyond projections. For a 50+ year term, it's critical to understand if escalation clauses are included and how they are calculated. Without adequate provisions for cost adjustments or performance-based incentives, the government might overpay if costs decrease or under-receive if costs rise significantly.

What is the process for evaluating the contractor's performance and ensuring accountability, particularly concerning environmental compliance and infrastructure upgrades, over the multi-decade contrac

Accountability over such a long period relies on consistent contract management, regular performance reviews, and clear mechanisms for addressing non-compliance. The DoD/DLA must have a dedicated team to monitor environmental reports, infrastructure condition assessments, and operational metrics. Penalties for non-performance and incentives for exceeding standards should be clearly defined and enforced throughout the contract's duration.

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: 6

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: American Water Works Company, Inc.

Address: 1 WATER ST, CAMDEN, NJ, 08102

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $849,772,384

Exercised Options: $849,772,384

Current Obligation: $347,116,516

Actual Outlays: $5,225,730

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline