DoD's Army Spends $30M on Steam & Air-Conditioning Supply in FY23, Facing Limited Competition

Contract Overview

Contract Amount: $30,137,438 ($30.1M)

Contractor: Foreign Utility Consolidated Reporting

Awarding Agency: Department of Defense

Start Date: 2022-10-01

End Date: 2023-09-30

Contract Duration: 364 days

Daily Burn Rate: $82.8K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Energy

Official Description: CONSOLIDATED REPORT FOR UTILITY SERVICES (HEAT) FY23 1ST QTR.

Plain-Language Summary

Department of Defense obligated $30.1 million to FOREIGN UTILITY CONSOLIDATED REPORTING for work described as: CONSOLIDATED REPORT FOR UTILITY SERVICES (HEAT) FY23 1ST QTR. Key points: 1. Significant spending on essential utility services highlights ongoing operational needs. 2. Limited competition raises concerns about potential price inflation and value for money. 3. The fixed-price contract with economic adjustment introduces risk related to fluctuating energy costs. 4. This spending falls within the broader 'Energy' sector, crucial for infrastructure maintenance.

Value Assessment

Rating: fair

The reported award amount of $30.1M for FY23 is substantial for utility services. Without comparable contract data or benchmarks for steam and air-conditioning supply in similar DoD facilities, assessing value for money is challenging. The lack of competition further complicates a direct pricing assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was not available for competition, indicating a limited source selection. This lack of competitive bidding restricts price discovery and may lead to higher costs for taxpayers compared to a fully competitive environment.

Taxpayer Impact: Limited competition likely results in higher costs for taxpayers, as the government may not be securing the best possible price for these essential utility services.

Public Impact

Taxpayers are funding essential but potentially overpriced utility services for military operations. The reliance on a single source for critical infrastructure services poses a potential operational risk. Lack of transparency in the procurement process hinders public understanding of defense spending efficiency.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition
Economic price adjustment clause
Lack of detailed cost breakdown

Positive Signals

Essential service provision
Defined contract period

Sector Analysis

The Department of Defense's spending on utility services like steam and air-conditioning is a critical component of its operational infrastructure. Benchmarks for such services can vary widely based on location, scale, and specific requirements, but $30M for a single year suggests a significant facility or complex is being supported.

Small Business Impact

There is no indication in the provided data that small businesses were involved in this contract, either as prime contractors or subcontractors. The focus appears to be on larger, established utility providers.

Oversight & Accountability

The contract's limited competition status warrants closer oversight to ensure fair pricing and prevent potential waste. Accountability would involve verifying the necessity of the limited competition justification and monitoring the economic price adjustment clauses.

Related Government Programs

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

Risk Flags

Potential for overpayment due to limited competition.
Risk of escalating costs from economic price adjustments.
Lack of transparency in procurement process.
Dependence on a single provider for critical infrastructure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $30.1 million to FOREIGN UTILITY CONSOLIDATED REPORTING. CONSOLIDATED REPORT FOR UTILITY SERVICES (HEAT) FY23 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 $30.1 million.

What is the period of performance?

Start: 2022-10-01. End: 2023-09-30.

What is the justification for the limited competition on this essential utility service contract, and how does it ensure fair pricing?

The justification for limited competition is crucial for understanding why a full and open bidding process was not pursued. Agencies typically cite factors like unique capabilities, urgent needs, or specific infrastructure requirements. However, even with limited competition, robust price negotiation and analysis are essential to ensure taxpayers receive fair value and that the economic price adjustment clauses do not lead to excessive cost increases.

How does the economic price adjustment clause impact the overall cost certainty and taxpayer exposure to market volatility?

The economic price adjustment (EPA) clause allows for modifications to the contract price based on fluctuations in specific economic factors, such as fuel costs or labor rates. While intended to protect contractors from unforeseen market shifts and ensure service continuity, it introduces cost uncertainty for the government. Taxpayers are exposed to potential price increases if these economic factors rise significantly, making it imperative to closely monitor the indices used for adjustment and negotiate reasonable caps.

What measures are in place to assess the effectiveness and efficiency of the steam and air-conditioning supply provided under this contract?

Assessing effectiveness typically involves performance metrics outlined in the contract, such as service uptime, response times to issues, and adherence to temperature/quality standards. Efficiency can be evaluated by comparing the actual costs incurred against budgeted amounts and by analyzing the utilization of the services. Regular performance reviews and audits by the contracting officer's representative are key to ensuring the services meet the DoD's needs without unnecessary expenditure.

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: $30,137,438

Exercised Options: $30,137,438

Current Obligation: $30,137,438

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline