DoD's $25.6M Utility Services Contract Faces Limited Competition, Raising Cost Concerns

Contract Overview

Contract Amount: $25,596,881 ($25.6M)

Contractor: Foreign Utility Consolidated Reporting

Awarding Agency: Department of Defense

Start Date: 2018-10-01

End Date: 2019-07-31

Contract Duration: 303 days

Daily Burn Rate: $84.5K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Other

Official Description: CONSOLIDATED REPORT FOR UTILITY SERVICES (HEAT) FY19 1ST QTR

Plain-Language Summary

Department of Defense obligated $25.6 million to FOREIGN UTILITY CONSOLIDATED REPORTING for work described as: CONSOLIDATED REPORT FOR UTILITY SERVICES (HEAT) FY19 1ST QTR Key points: 1. Significant spending on utility services for the Department of the Army. 2. Contract awarded under a limited competition, potentially impacting price discovery. 3. Fixed Price with Economic Price Adjustment (FPEPA) contract type introduces cost escalation risk. 4. The contract duration of 303 days suggests a need for ongoing utility provision.

Value Assessment

Rating: fair

The contract value of $25.6M for 303 days is substantial. Without specific benchmarks for steam and air-conditioning supply in this region, it's difficult to definitively assess pricing. However, the FPEPA clause warrants close monitoring for potential cost overruns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was not available for competition, indicating a limited source selection process. This lack of broad competition may have restricted opportunities for more competitive pricing and potentially led to a higher overall cost for the government.

Taxpayer Impact: The limited competition and FPEPA clause suggest potential for increased taxpayer cost if not managed effectively, as prices can adjust upwards.

Public Impact

Military bases rely on consistent utility services for operational readiness. Economic price adjustments can shield contractors from rising energy costs, but may inflate government expenses. Transparency in limited competition awards is crucial for public trust.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition
Economic Price Adjustment
Lack of specific contract award details (PSC, etc.)

Positive Signals

Essential service provision
Defined contract duration

Sector Analysis

This contract falls under utility services, specifically steam and air-conditioning supply, which are critical for maintaining operational environments in government facilities. Benchmarks for such services can vary widely based on location, scale, and specific requirements.

Small Business Impact

The provided data does not indicate any specific provisions or set-asides for small businesses in this contract. Further analysis would be needed to determine small business participation.

Oversight & Accountability

The limited competition aspect raises questions about the effectiveness of the procurement process. Robust oversight is needed to ensure fair pricing and prevent potential cost escalations due to the economic price adjustment clause.

Related Government Programs

Steam and Air-Conditioning Supply
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Potential for inflated costs due to limited competition.
Risk of cost escalation through the Economic Price Adjustment clause.
Lack of transparency regarding the justification for limited competition.
Absence of small business participation data.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $25.6 million to FOREIGN UTILITY CONSOLIDATED REPORTING. CONSOLIDATED REPORT FOR UTILITY SERVICES (HEAT) FY19 1ST QTR

Who is the contractor on this award?

The obligated recipient is FOREIGN UTILITY CONSOLIDATED REPORTING.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $25.6 million.

What is the period of performance?

Start: 2018-10-01. End: 2019-07-31.

What is the typical cost range for similar steam and air-conditioning supply contracts in the region to benchmark this award?

Benchmarking this contract's value requires detailed regional data on utility services. Factors like climate, facility size, and energy source significantly influence pricing. Without this specific context, a precise cost comparison is challenging. However, the $25.6M for 303 days suggests a substantial daily operational cost that warrants scrutiny against comparable government or commercial contracts in similar geographic and operational settings.

What specific factors necessitated the limited competition for this essential utility service?

The justification for limited competition is not detailed in the provided data. Typically, such awards are made when only one responsible source can satisfy agency requirements, or in cases of urgent need. Understanding the specific circumstances, such as unique infrastructure requirements, proprietary technology, or geographic isolation, would clarify why broader competition was not pursued and assess the associated risks.

How will the economic price adjustment clause be monitored to ensure it reflects genuine cost increases and not contractor profiteering?

Effective monitoring of the economic price adjustment (EPA) clause requires clear, pre-defined indices or formulas tied to verifiable cost drivers (e.g., fuel prices, labor rates). The contracting officer must regularly review documentation submitted by the contractor to substantiate price increases, ensuring they align with the EPA terms and market realities. Independent verification or audits may be necessary to prevent unwarranted price hikes.

Industry Classification

NAICS: Utilities › Water, Sewage and Other Systems › Steam and Air-Conditioning Supply

Product/Service Code: UTILITIES AND HOUSEKEEPING › UTILITIES

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

Evaluated Preference: NONE

Contractor Details

Address: 1800 F ST NW, WASHINGTON, DC, 20405

Business Categories: Category Business, Foreign Owned, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $25,596,881

Exercised Options: $25,596,881

Current Obligation: $25,596,881

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline