DoD awards $6M contract for Fort Jackson natural gas system, spanning 49 years

Contract Overview

Contract Amount: $6,002,004 ($6.0M)

Contractor: Dominion Energy South Carolina, Inc.

Awarding Agency: Department of Defense

Start Date: 2019-11-19

End Date: 2069-11-18

Contract Duration: 18,262 days

Daily Burn Rate: $329/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::OT::IGF THIS CONTRACT IS AWARDED FOR THE OWNERSHIP, OPERATION, AND MAINTENANCE OF THE NATURAL GAS DISTRIBUTION SYSTEM AT FORT JACKSON, SOUTH CAROLINA

Place of Performance

Location: COLUMBIA, RICHLAND County, SOUTH CAROLINA, 29207

State: South Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $6.0 million to DOMINION ENERGY SOUTH CAROLINA, INC. for work described as: IGF::OT::IGF THIS CONTRACT IS AWARDED FOR THE OWNERSHIP, OPERATION, AND MAINTENANCE OF THE NATURAL GAS DISTRIBUTION SYSTEM AT FORT JACKSON, SOUTH CAROLINA Key points: 1. Long-term contract duration suggests a need for stable, ongoing utility services. 2. Fixed-price contract type shifts cost risk to the contractor. 3. Awarded via full and open competition, indicating a potentially competitive bidding process. 4. Contractor has a significant tenure, suggesting established performance or market position. 5. Geographic concentration in South Carolina for a critical utility infrastructure. 6. The contract's value is spread over a very long period, requiring careful annual performance monitoring.

Value Assessment

Rating: fair

The total contract value of $6,002,004.30 over nearly 50 years averages to approximately $122,490 per year. This annual figure for natural gas distribution system operation and maintenance for a large military installation needs to be benchmarked against similar contracts for utility infrastructure at other bases. Without comparable data, assessing the value for money is challenging. The firm fixed-price structure provides cost certainty but may not reflect the most economical pricing if market conditions fluctuate significantly over the contract's lifespan.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, with four bidders participating. This level of competition is generally positive for price discovery and ensuring a reasonable market price. The presence of multiple bidders suggests that the market for natural gas distribution system services is sufficiently robust to support competition for this type of long-term infrastructure contract.

Taxpayer Impact: A competitive bidding process helps ensure that taxpayer dollars are used efficiently by driving down costs and encouraging the most capable contractor to offer favorable terms.

Public Impact

The primary beneficiary is the Department of Defense, ensuring reliable natural gas supply for Fort Jackson. Services delivered include the ownership, operation, and maintenance of the natural gas distribution system. Geographic impact is localized to Fort Jackson, South Carolina. Workforce implications may include the contractor's employees operating and maintaining the system, potentially impacting local employment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long-term contract duration (49 years) increases the risk of unforeseen cost escalations or technological obsolescence.
Reliance on a single contractor for such a critical, long-duration utility service could lead to vendor lock-in.
Potential for contractor performance degradation over an extended period without sufficient oversight.

Positive Signals

Firm fixed-price contract provides budget certainty for the government.
Full and open competition suggests a potentially competitive initial award price.
Contractor's established presence may indicate a reliable service provider.

Sector Analysis

This contract falls within the Utilities and Energy sector, specifically focusing on natural gas distribution infrastructure. The market for such services is often characterized by regional monopolies or oligopolies due to the extensive physical infrastructure required. Long-term contracts are common for maintaining critical utility systems at government installations to ensure operational continuity. Benchmarking would involve comparing annual operating and maintenance costs for similar natural gas systems at other large federal facilities.

Small Business Impact

The contract data indicates that small business participation was not a specific set-aside criterion (ss: false, sb: false). While the prime contractor is Dominion Energy South Carolina, Inc., there is no explicit information on subcontracting plans for small businesses within this award. Further analysis would be needed to determine if small businesses are involved in the supply chain or service delivery for this contract.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Logistics Agency (DLA) or a designated contracting officer's representative (COR) at Fort Jackson. Accountability measures would be tied to performance metrics outlined in the contract, service level agreements, and payment schedules. Transparency is generally maintained through contract award databases, but detailed operational performance data may not be publicly accessible. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Base Operations Support Contracts
Utility Privatization Programs
Energy Infrastructure Management
Department of Defense Facilities Maintenance

Risk Flags

Long contract duration
Potential for cost escalation over time
Reliance on single provider for critical infrastructure

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $6.0 million to DOMINION ENERGY SOUTH CAROLINA, INC.. IGF::OT::IGF THIS CONTRACT IS AWARDED FOR THE OWNERSHIP, OPERATION, AND MAINTENANCE OF THE NATURAL GAS DISTRIBUTION SYSTEM AT FORT JACKSON, SOUTH CAROLINA

Who is the contractor on this award?

The obligated recipient is DOMINION ENERGY SOUTH CAROLINA, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $6.0 million.

What is the period of performance?

Start: 2019-11-19. End: 2069-11-18.

What is the historical spending pattern for natural gas distribution at Fort Jackson prior to this contract?

Information on historical spending for natural gas distribution at Fort Jackson prior to this contract is not directly available in the provided data. This contract, awarded in late 2019 and extending to 2069, represents a long-term strategy for managing this critical utility. To understand historical patterns, one would need to access previous contracts, utility bills, or base operational budgets from the Defense Logistics Agency or the Department of the Army for Fort Jackson. Such historical data would allow for a comparison of annual costs, service levels, and the impact of any previous management approaches (e.g., direct utility purchase versus contractor operation) on overall expenditure and system reliability.

How does the annual cost of this contract compare to similar natural gas utility contracts at other large military installations?

The annual cost of this contract averages approximately $122,490 ($6,002,004.30 / 49 years). Benchmarking this figure against similar contracts at other large military installations is crucial for assessing value for money. Factors influencing cost include the size and complexity of the distribution network, the volume of gas consumed, local labor rates, and regulatory requirements. Without access to a database of comparable utility contracts, a precise comparison is difficult. However, this annual figure should be evaluated in the context of the total energy expenditure of a base of Fort Jackson's size and operational tempo. A detailed analysis would require identifying comparable bases and their respective natural gas utility O&M contracts.

What are the specific performance metrics and service level agreements (SLAs) associated with this contract?

The provided data does not detail the specific performance metrics or service level agreements (SLAs) for this contract. Typically, for a natural gas distribution system operation and maintenance contract, SLAs would cover aspects such as system uptime, response times to leaks or outages, safety compliance, pressure regulation, and preventative maintenance schedules. Performance metrics would quantify adherence to these SLAs. The firm fixed-price nature suggests that the contractor is incentivized to meet these requirements to avoid penalties or ensure full payment. A thorough review of the contract's Statement of Work (SOW) and associated appendices would be necessary to identify these critical performance indicators.

What is Dominion Energy South Carolina, Inc.'s track record with similar long-term government utility contracts?

Dominion Energy South Carolina, Inc. is a major utility provider with extensive experience in natural gas infrastructure. While specific details on their track record with long-term government utility contracts are not provided in this data snippet, their operational history as a regulated utility suggests a capacity for managing complex, long-duration infrastructure. Assessing their performance on similar contracts would involve reviewing past government performance evaluations, contract awards and terminations, and any public records of disputes or contract modifications. Their established presence in South Carolina indicates a deep understanding of the regional operating environment.

What are the potential risks associated with a 49-year contract for utility infrastructure?

A 49-year contract for utility infrastructure presents several potential risks. Firstly, the long duration increases the likelihood of unforeseen technological advancements that could render current systems or maintenance practices obsolete, potentially leading to higher-than-expected upgrade costs or inefficiencies. Secondly, economic conditions, inflation, and changes in energy markets over nearly five decades can significantly impact the fixed-price agreement, potentially leading to contractor requests for adjustments or reduced service quality if not carefully managed. Thirdly, there's a risk of contractor performance degradation over such an extended period; maintaining consistent oversight and accountability mechanisms becomes paramount. Finally, changes in government policy or base operational needs could necessitate contract modifications, adding complexity and potential cost.

Industry Classification

NAICS: Utilities › Natural Gas Distribution › Natural Gas Distribution

Product/Service Code: UTILITIES AND HOUSEKEEPING › UTILITIES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: SP060016R0805

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 100 SCANA PKWY, CAYCE, SC, 29033

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

Financial Breakdown

Contract Ceiling: $74,778,082

Exercised Options: $74,778,082

Current Obligation: $6,002,004

Actual Outlays: $221,639

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline