Department of Defense awards $17.4M contract for electric power distribution to Freestate Electric Cooperative, Inc

Contract Overview

Contract Amount: $17,455,616 ($17.5M)

Contractor: Freestate Electric Cooperative, Inc

Awarding Agency: Department of Defense

Start Date: 2005-09-30

End Date: 2055-09-29

Contract Duration: 18,261 days

Daily Burn Rate: $956/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: CONTINUATION CONTRACT OF W9124J18C0038, PER THE TRANSFER FROM MICC-FDO FT SAM HOUSTON

Place of Performance

Location: FORT LEAVENWORTH, LEAVENWORTH County, KANSAS, 66027

State: Kansas Government Spending

Plain-Language Summary

Department of Defense obligated $17.5 million to FREESTATE ELECTRIC COOPERATIVE, INC for work described as: CONTINUATION CONTRACT OF W9124J18C0038, PER THE TRANSFER FROM MICC-FDO FT SAM HOUSTON Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. Long contract duration of 18,261 days (50 years) may indicate a need for sustained services. 3. Firm Fixed Price contract type helps manage cost certainty for the government. 4. The contract is a continuation, implying prior performance and established relationship. 5. Awarded by the Defense Logistics Agency, a key procurement arm for the DoD. 6. The North American Industry Classification System (NAICS) code 221122 points to electric power distribution.

Value Assessment

Rating: fair

The contract value of $17.4 million over a 50-year period averages to approximately $348,000 per year. Without specific details on the scope of services or the geographic area covered, it is difficult to benchmark this against similar contracts. The firm fixed-price nature provides cost certainty, but the long duration warrants scrutiny for potential price escalations or changes in market conditions over time. The contract is a continuation, suggesting that the pricing may be based on previous agreements.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. This suggests a robust competitive environment at the time of award. The number of bids received is not specified, but the designation implies that the government sought the best value through a broad solicitation process. This approach is generally expected to yield competitive pricing.

Taxpayer Impact: Full and open competition typically benefits taxpayers by fostering a marketplace where contractors vie to offer the most competitive prices and best value, potentially leading to cost savings.

Public Impact

This contract ensures the continued provision of essential electric power distribution services, likely supporting military installations and related facilities. The services delivered are critical for the operational readiness and infrastructure maintenance of the Department of Defense. The geographic impact is concentrated in Kansas, where the contractor is located and services are likely performed. Workforce implications may include employment opportunities for electricians, technicians, and support staff within Freestate Electric Cooperative, Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The exceptionally long 50-year duration raises concerns about potential cost overruns due to market fluctuations and technological obsolescence.
Lack of specific performance metrics or service level agreements in the provided data makes it difficult to assess performance quality.
The continuation nature of the contract could indicate a lack of proactive market research for potentially more cost-effective solutions over the long term.

Positive Signals

Awarded through full and open competition, suggesting a fair and competitive process.
Firm Fixed Price contract type provides cost predictability for the government.
The contractor, Freestate Electric Cooperative, Inc., has secured a long-term contract, indicating a level of trust and established capability.

Sector Analysis

This contract falls within the electric power generation, transmission, and distribution sector. The market for such services is generally stable, driven by the continuous need for reliable energy infrastructure. The Department of Defense is a significant consumer of utility services, and contracts like this are essential for maintaining its operational capabilities. Comparable spending benchmarks would typically involve analyzing annual utility expenditures for similar large federal facilities or military bases.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a set-aside provision. The primary contractor is Freestate Electric Cooperative, Inc., which may itself be a cooperative entity. Analysis of subcontracting opportunities would require further investigation into the contractor's specific subcontracting plans and policies.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the contracting officer's representative (COR) within the Department of Defense or the Defense Logistics Agency. Accountability measures are inherent in the firm fixed-price contract structure, requiring the contractor to deliver services as specified. Transparency is facilitated through contract award databases, though detailed performance reports may not always be publicly accessible. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Department of Defense Utility Services Contracts
Federal Energy Management Program
Defense Logistics Agency Procurement
Electric Power Infrastructure Maintenance

Risk Flags

Long contract duration (50 years)
Lack of specific performance metrics in summary data
Potential for price escalation over long term
Risk of technological obsolescence

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.5 million to FREESTATE ELECTRIC COOPERATIVE, INC. CONTINUATION CONTRACT OF W9124J18C0038, PER THE TRANSFER FROM MICC-FDO FT SAM HOUSTON

Who is the contractor on this award?

The obligated recipient is FREESTATE ELECTRIC COOPERATIVE, INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $17.5 million.

What is the period of performance?

Start: 2005-09-30. End: 2055-09-29.

What is the specific scope of electric power distribution services required under this contract?

The provided data indicates the contract is for 'Electric Power Distribution' (NAICS 221122) and is a continuation of a previous award. However, the specific scope of services is not detailed. Typically, such contracts would encompass the operation, maintenance, repair, and potentially upgrade of electrical distribution systems, including substations, power lines, transformers, and associated equipment. This ensures a reliable and safe supply of electricity to government facilities. The long duration suggests a comprehensive and ongoing need for these services, likely covering routine maintenance, emergency repairs, and potentially infrastructure modernization efforts over several decades.

How does the average annual cost of this contract compare to similar federal electric power distribution contracts?

The contract value is $17.4 million over approximately 50 years, averaging about $348,000 per year. Benchmarking this requires comparing it to contracts for similar-sized facilities or geographic areas. Federal agencies often manage extensive electrical infrastructure. Without knowing the specific size and complexity of the facilities served in Kansas, a direct comparison is challenging. However, for large military installations or extensive utility networks, this annual figure might be considered moderate. Factors like the age of the infrastructure, the criticality of the facilities, and the specific service level agreements would influence cost comparisons. Further analysis would involve examining the contract's detailed scope and the number of facilities supported.

What are the key performance indicators (KPIs) or service level agreements (SLAs) associated with this contract?

The provided summary data does not include specific Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) for this contract. In a typical federal contract for electric power distribution, KPIs and SLAs would focus on reliability metrics such as outage frequency and duration, response times for emergency repairs, power quality standards (e.g., voltage stability, frequency), and adherence to safety protocols. The firm fixed-price nature suggests that the contractor is obligated to meet certain performance standards to receive full payment. However, the absence of explicit KPIs in the summary makes it difficult to assess the contractor's performance obligations and the government's ability to measure success beyond basic service delivery.

What is the track record of Freestate Electric Cooperative, Inc. with federal contracts, particularly within the Department of Defense?

Freestate Electric Cooperative, Inc. has secured this significant, long-term contract with the Department of Defense, indicating a history of working with federal agencies. As a cooperative, its operational model may differ from traditional for-profit corporations. To assess its track record thoroughly, one would need to examine its past performance on similar federal contracts, including timeliness of delivery, quality of work, adherence to budget (though this is fixed-price), and any past performance issues or awards. Information from sources like the Federal Procurement Data System (FPDS) or the Contractor Performance Assessment Reporting System (CPARS) would be crucial for a comprehensive evaluation of their federal contracting history and reliability.

Given the 50-year duration, what mechanisms are in place to manage potential risks associated with technological advancements or infrastructure degradation?

The 50-year duration presents inherent risks related to technological obsolescence and infrastructure degradation. Federal contracts of this length typically include clauses addressing these issues. Mechanisms might include periodic reviews (e.g., every 5-10 years) to assess the need for upgrades or modernization, allowing for contract modifications to incorporate new technologies or address deteriorating infrastructure. The contract might also specify standards for materials and equipment that anticipate future needs or allow for flexibility. Furthermore, the firm fixed-price nature could be structured with provisions for equitable adjustments if unforeseen technological shifts or significant infrastructure failures necessitate substantial changes beyond the contractor's control, though such adjustments are usually tightly controlled.

How does the 'continuation contract' status impact the assessment of value for money compared to a newly competed contract?

A 'continuation contract' implies that this award is a follow-on to a previous contract, potentially awarded to the same or a different contractor. If it's a continuation with the same contractor, it suggests satisfaction with past performance, which can be a positive signal. However, it also raises questions about whether the government conducted sufficient market research to ensure continued best value. If the original competition was many years ago, market conditions, technology, and pricing may have evolved. A new competition could potentially yield lower prices or more innovative solutions. Therefore, while continuation can offer stability and reduce transition costs, it necessitates careful review to ensure it still represents optimal value for taxpayers compared to a fresh competitive process.

Industry Classification

NAICS: Utilities › Electric Power Generation, Transmission and Distribution › Electric Power Distribution

Product/Service Code: UTILITIES AND HOUSEKEEPING › UTILITIES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: SP060001R0026

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1100 SW AUBURN RD, TOPEKA, KS, 66615

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

Financial Breakdown

Contract Ceiling: $46,892,865

Exercised Options: $17,789,938

Current Obligation: $17,455,616

Actual Outlays: $2,605,189

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline