DoD awards $900M electric power contract to Brunswick Electric Membership Corporation in North Carolina

Contract Overview

Contract Amount: $9,005,016 ($9.0M)

Contractor: Brunswick Electric Membership Corporation

Awarding Agency: Department of Defense

Start Date: 2024-01-01

End Date: 2027-12-01

Contract Duration: 1,430 days

Daily Burn Rate: $6.3K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: NEW TASK ORDER.

Place of Performance

Location: SUPPLY, BRUNSWICK County, NORTH CAROLINA, 28462

State: North Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $9.0 million to BRUNSWICK ELECTRIC MEMBERSHIP CORPORATION for work described as: NEW TASK ORDER. Key points: 1. Contract value represents a significant investment in regional power infrastructure. 2. Sole-source award raises questions about potential price efficiencies and market alternatives. 3. Long contract duration (4 years) suggests a need for sustained, reliable service. 4. Fixed-price contract type shifts performance risk to the contractor. 5. Geographic concentration in North Carolina may indicate specific regional needs or existing infrastructure. 6. Lack of competition data necessitates further analysis to benchmark value.

Value Assessment

Rating: fair

The contract value of $900 million over four years is substantial, indicating a critical need for electric power distribution services. Without comparable contracts or detailed pricing breakdowns, it is difficult to definitively assess value for money. The sole-source nature of the award limits the ability to benchmark against competitive bids, suggesting that the price may not have been optimized through market forces. Further analysis of historical spending on similar services by the Department of Defense would be beneficial.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not openly competed. This approach is typically used when only one responsible source is available or authorized by statute. The lack of competition means that the government did not benefit from multiple bids, which could have driven down prices and spurred innovation. The justification for this sole-source award needs to be thoroughly reviewed to ensure it was appropriate.

Taxpayer Impact: Taxpayers may not have received the best possible price due to the absence of a competitive bidding process. This could result in higher overall costs for the services provided.

Public Impact

The Department of Defense will receive essential electric power distribution services, crucial for military operations and readiness. Personnel and facilities within the specified geographic area of North Carolina will benefit from reliable power. The contract supports the operational infrastructure of the U.S. Army. Local workforce in North Carolina may see employment opportunities related to the execution of this contract.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potential cost savings.
Lack of transparency in the justification for sole-sourcing requires scrutiny.
Long-term duration could lead to cost overruns if not managed effectively.

Positive Signals

Firm fixed-price contract shifts risk to the contractor, potentially ensuring cost certainty.
Award to an established entity (Brunswick Electric Membership Corporation) may indicate reliability.
Focus on essential infrastructure (electric power) supports core government functions.

Sector Analysis

The electric power distribution sector is critical for national infrastructure, supporting both civilian and military needs. This contract falls within the utility services segment, which is characterized by regulated pricing and significant capital investment. The Department of Defense is a major consumer of utility services, often requiring robust and secure power grids to support its operations. Benchmarking this contract against other large-scale utility service contracts awarded by federal agencies would provide further context on its scale and pricing.

Small Business Impact

This contract was awarded to Brunswick Electric Membership Corporation, which is a membership-based cooperative, not a traditional for-profit business. Analysis of small business subcontracting opportunities would depend on the specific structure and capabilities of Brunswick EMC and its potential partners. Without explicit small business set-aside provisions or subcontracting plans detailed in the award notice, the direct impact on the small business ecosystem is unclear.

Oversight & Accountability

Oversight for this contract will primarily reside with the Department of the Army contracting and program management offices. The firm fixed-price nature of the contract provides a degree of cost control, but performance monitoring will be crucial to ensure service delivery meets requirements. Transparency regarding the justification for the sole-source award and ongoing performance metrics would enhance accountability.

Related Government Programs

Department of Defense Utility Contracts
Federal Electric Power Procurement
North Carolina Government Contracts

Risk Flags

Sole-source award
Lack of competition
Significant contract value

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $9.0 million to BRUNSWICK ELECTRIC MEMBERSHIP CORPORATION. NEW TASK ORDER.

Who is the contractor on this award?

The obligated recipient is BRUNSWICK ELECTRIC MEMBERSHIP CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $9.0 million.

What is the period of performance?

Start: 2024-01-01. End: 2027-12-01.

What is the specific justification provided for awarding this contract on a sole-source basis?

The provided data indicates the contract was awarded as 'NOT AVAILABLE FOR COMPETITION,' which is synonymous with a sole-source award. Typically, such awards are justified under specific circumstances outlined in the Federal Acquisition Regulation (FAR), such as when only one responsible source exists, or when a public exigency requires immediate action. Without access to the official justification document (e.g., a Justification and Approval - J&A), it is impossible to determine the precise reasons. However, common justifications include unique capabilities of the contractor, lack of adequate competition, or specific statutory authority. The absence of competition means that the government did not explore alternative solutions or pricing from other potential providers, which could impact overall cost-effectiveness.

How does the $900 million contract value compare to similar electric power distribution contracts awarded by the DoD?

Comparing the $900 million contract value requires access to a broader dataset of federal procurement information, specifically focusing on electric power distribution contracts awarded by the Department of Defense over a similar timeframe and duration. Without this comparative data, it's challenging to definitively state whether this represents a high, low, or average value. However, given the four-year duration (January 1, 2024, to December 1, 2027), the annual value averages approximately $225 million ($900M / 4 years). This figure suggests a substantial requirement, likely supporting significant military installations or infrastructure within North Carolina. Further analysis would involve identifying contracts with similar scope, geographic focus, and service requirements to establish a relevant benchmark.

What are the primary risks associated with a sole-source award of this magnitude?

The primary risks associated with a sole-source award of this magnitude ($900 million) include potential overpayment due to lack of price competition, reduced incentive for the contractor to innovate or improve efficiency, and the possibility that alternative, more cost-effective solutions were not considered. There's also a risk of contractor lock-in, making it difficult to switch providers in the future even if performance or pricing becomes unsatisfactory. Furthermore, the lack of transparency inherent in sole-source justifications can raise concerns about fairness and the proper use of taxpayer funds. Robust oversight and performance management are critical to mitigate these risks.

What is the expected impact on operational readiness for the Department of the Army given this contract?

This contract is expected to have a positive impact on the operational readiness of the Department of the Army by ensuring a reliable and consistent supply of electric power to its facilities and operations in North Carolina. Electric power is a fundamental utility essential for the functioning of command centers, communication systems, barracks, training facilities, and logistical support. By securing this service through a long-term contract, the Army mitigates the risk of power disruptions, which could severely hamper training, deployment readiness, and daily operations. The firm fixed-price nature further adds predictability to budgeting for this essential service.

What historical spending patterns exist for electric power distribution services by the DoD in North Carolina?

Analyzing historical spending patterns for electric power distribution services by the DoD in North Carolina would require accessing historical contract databases and filtering for relevant procurements within that specific geographic region. Without direct access to such historical data, it's difficult to provide specific figures. However, it is reasonable to assume that the DoD has ongoing requirements for utility services at its numerous installations across North Carolina. This $900 million contract suggests either a consolidation of previous, smaller contracts, an expansion of existing needs, or the initiation of a new, large-scale requirement. Understanding past spending could reveal trends in pricing, contractor performance, and the evolution of service needs.

Industry Classification

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

Product/Service Code: UTILITIES AND HOUSEKEEPING › UTILITIES

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 795 OCEAN HWY W, SUPPLY, NC, 28462

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: $11,368,360

Exercised Options: $9,005,016

Current Obligation: $9,005,016

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W81GYE11D0001

IDV Type: IDC

Timeline