DLA Awards $74M for Grand Forks AFB Water Systems Maintenance Over 50 Years
Contract Overview
Contract Amount: $73,955,717 ($74.0M)
Contractor: Base Utilities Inc
Awarding Agency: Department of Defense
Start Date: 2019-01-01
End Date: 2069-01-31
Contract Duration: 18,293 days
Daily Burn Rate: $4.0K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 4
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Defense
Official Description: IGF::OT::IGF THIS CONTRACT IS AWARDED FOR THE OWNERSHIP, OPERATION AND MAINTENANCE OF THE WATER AND WASTEWATER UTILITY SYSTEMS AT GRAND FORKS AFB AND CAVALIER AFS, NORTH DAKOTA.
Place of Performance
Location: GRAND FORKS AFB, GRAND FORKS County, NORTH DAKOTA, 58204
Plain-Language Summary
Department of Defense obligated $74.0 million to BASE UTILITIES INC for work described as: IGF::OT::IGF THIS CONTRACT IS AWARDED FOR THE OWNERSHIP, OPERATION AND MAINTENANCE OF THE WATER AND WASTEWATER UTILITY SYSTEMS AT GRAND FORKS AFB AND CAVALIER AFS, NORTH DAKOTA. Key points: 1. Long-term contract ($74M) for essential utility services at Grand Forks AFB. 2. Fixed-price with economic adjustment contract type may expose taxpayers to inflation. 3. No small business participation noted, potentially limiting opportunities. 4. Defense Logistics Agency manages this critical infrastructure contract.
Value Assessment
Rating: fair
The contract value of $74M over 50 years averages $1.48M annually. Benchmarking is difficult without specific service level agreements and comparable utility contracts for military bases.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded through full and open competition, suggesting a competitive bidding process. However, the long duration may have limited the number of active bidders.
Taxpayer Impact: The fixed-price with economic adjustment structure means taxpayers will bear the brunt of potential cost increases due to inflation over the 50-year term.
Public Impact
Ensures continuous operation of vital water and wastewater systems for military personnel and families. Long-term nature provides stability for Base Utilities Inc. and predictable service delivery. Potential for cost overruns due to economic price adjustments over the extended contract period.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration (50 years)
- Economic price adjustment clause
- No small business participation
Positive Signals
- Full and open competition
- Essential service provision
- Stable provider
Sector Analysis
This contract falls under the Defense sector, specifically focusing on base infrastructure and utility services. Annual spending of approximately $1.48M is typical for maintaining critical water and wastewater systems at large military installations.
Small Business Impact
The contract data indicates no small business participation (ss: false, sb: false). This suggests that opportunities for small businesses were either not sought or not met in this procurement, potentially limiting broader economic impact.
Oversight & Accountability
The long duration of this contract warrants careful oversight to ensure continued value and performance. Regular reviews of the economic price adjustments and service delivery are crucial for accountability.
Related Government Programs
- Water Supply and Irrigation Systems
- Department of Defense Contracting
- Defense Logistics Agency Programs
Risk Flags
- Long contract duration (50 years)
- Economic price adjustment clause
- No small business participation
- Potential for cost escalation
- Risk of contractor underperformance over time
Tags
water-supply-and-irrigation-systems, department-of-defense, nd, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $74.0 million to BASE UTILITIES INC. IGF::OT::IGF THIS CONTRACT IS AWARDED FOR THE OWNERSHIP, OPERATION AND MAINTENANCE OF THE WATER AND WASTEWATER UTILITY SYSTEMS AT GRAND FORKS AFB AND CAVALIER AFS, NORTH DAKOTA.
Who is the contractor on this award?
The obligated recipient is BASE UTILITIES INC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Logistics Agency).
What is the total obligated amount?
The obligated amount is $74.0 million.
What is the period of performance?
Start: 2019-01-01. End: 2069-01-31.
What is the projected total cost of the contract considering potential economic price adjustments over the 50-year period?
The total projected cost is difficult to ascertain precisely due to the economic price adjustment (EPA) clause. While the base award is $73,955,717.31, the EPA allows for adjustments based on economic factors like inflation. Over 50 years, these adjustments could significantly increase the final cost to taxpayers, potentially doubling or tripling the initial value depending on inflation rates.
What are the specific risks associated with a 50-year contract for utility operations and maintenance?
A 50-year contract presents risks of technological obsolescence, changing regulatory environments, and potential contractor underperformance over time. The long duration may also reduce the government's flexibility to adapt to new technologies or changing mission requirements. Furthermore, ensuring consistent quality and fair pricing over such an extended period requires robust oversight mechanisms.
How does the fixed-price with economic adjustment structure impact the effectiveness of service delivery and cost control?
This contract structure aims to balance cost stability for the government with the contractor's need to manage fluctuating input costs. While it provides a degree of predictability, the economic price adjustment can lead to higher-than-anticipated costs for taxpayers if inflation is high. Effectiveness relies heavily on clear performance metrics and diligent oversight to ensure the contractor maintains service quality despite cost adjustments.
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
Solicitation ID: SPE60013R0801
Offers Received: 4
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)
Evaluated Preference: NONE
Contractor Details
Address: 389 FIRING LN, MINOT AFB, ND, 58704
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business
Financial Breakdown
Contract Ceiling: $413,320,434
Exercised Options: $413,320,434
Current Obligation: $73,955,717
Actual Outlays: $5,091,545
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2019-01-01
Current End Date: 2069-01-31
Potential End Date: 2069-01-31 00:00:00
Last Modified: 2025-11-17
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