DoD's $235M Emergency Power Contract with Keenan FT Detrick Energy LLC Raises Questions on Value and Competition
Contract Overview
Contract Amount: $235,730,363 ($235.7M)
Contractor: Keenan FT Detrick Energy LLC
Awarding Agency: Department of Defense
Start Date: 2006-07-20
End Date: 2020-12-01
Contract Duration: 5,248 days
Daily Burn Rate: $44.9K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Energy
Official Description: CAPACITY CHARGE EMERGENCY POWER
Place of Performance
Location: FREDERICK, FREDERICK County, MARYLAND, 21702
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $235.7 million to KEENAN FT DETRICK ENERGY LLC for work described as: CAPACITY CHARGE EMERGENCY POWER Key points: 1. The contract's significant value of $235.7M warrants scrutiny for cost-effectiveness over its 5+ year duration. 2. While listed as 'Full and Open Competition', the specific details of this process and its impact on pricing are unclear. 3. The 'Fixed Price with Economic Price Adjustment' clause introduces potential for cost overruns, increasing taxpayer risk. 4. The sector is Electric Power Distribution, a critical infrastructure area where reliable and cost-efficient solutions are paramount.
Value Assessment
Rating: questionable
The contract value of $235.7M for emergency power over approximately 5 years suggests a substantial investment. Benchmarking against similar large-scale power infrastructure contracts is necessary to determine if the pricing reflects fair market value and efficiency.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under 'Full and Open Competition'. However, without further details on the bidding process, it's difficult to assess the extent of competition and whether it effectively drove down prices or ensured the best value for the government.
Taxpayer Impact: The economic price adjustment clause introduces uncertainty in the final cost, potentially leading to higher-than-anticipated expenses for taxpayers if energy prices escalate significantly.
Public Impact
Ensures critical power supply for Department of Defense facilities, maintaining operational readiness. Potential for higher costs due to economic price adjustments could impact overall defense budget allocation. The long duration of the contract raises questions about long-term cost management and potential for technological obsolescence.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of detailed competition metrics
- Economic price adjustment clause risk
- Long contract duration without clear performance benchmarks
Positive Signals
- Ensures critical infrastructure power supply
- Awarded under full and open competition
Sector Analysis
The Electric Power Distribution sector is vital for national security and infrastructure. Spending in this area often involves long-term contracts for reliability and maintenance. Benchmarks for similar emergency power solutions for large federal installations are needed for comparison.
Small Business Impact
The contract was awarded to KEENAN FT DETRICK ENERGY LLC. There is no indication of small business participation or subcontracting in the provided data, suggesting this was a large prime contract potentially bypassing smaller entities.
Oversight & Accountability
The contract's duration and fixed-price with economic adjustment structure necessitate robust oversight to manage costs and ensure performance. Regular reviews of price adjustments and contractor performance are crucial for accountability.
Related Government Programs
- Electric Power Distribution
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Potential for cost overruns due to EPA
- Lack of transparency on competition effectiveness
- Long contract duration may not reflect best long-term value
- Limited visibility into small business participation
Tags
electric-power-distribution, department-of-defense, md, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $235.7 million to KEENAN FT DETRICK ENERGY LLC. CAPACITY CHARGE EMERGENCY POWER
Who is the contractor on this award?
The obligated recipient is KEENAN FT DETRICK ENERGY LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $235.7 million.
What is the period of performance?
Start: 2006-07-20. End: 2020-12-01.
What specific metrics were used to evaluate the 'Full and Open Competition' to ensure it yielded the best value and price?
The provided data states 'Full and Open Competition' but lacks specific metrics. A thorough review would require access to the solicitation documents, bid analysis, and award justification. Without this, it's impossible to confirm if the competition was robust enough to drive optimal pricing and ensure the government received the most advantageous terms for this significant expenditure.
How does the economic price adjustment clause mitigate or exacerbate the risk of cost overruns for taxpayers?
The economic price adjustment (EPA) clause allows the contract price to fluctuate based on specific economic indicators, typically related to fuel or material costs. While intended to protect contractors from unforeseen market volatility, it shifts the risk of price increases to the government. This can lead to higher final costs for taxpayers if those indicators rise significantly over the contract's duration.
What is the projected long-term effectiveness and cost-efficiency of this emergency power solution compared to alternative or evolving technologies?
The contract spans over five years, raising questions about the long-term effectiveness and cost-efficiency of the chosen emergency power solution. Without details on the technology employed and its expected lifespan or maintenance costs, it's difficult to assess its value against potentially newer, more efficient, or cost-effective alternatives that may emerge during the contract period.
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
Offers Received: 2
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)
Evaluated Preference: NONE
Contractor Details
Address: 1301 GERVAIS STE 600, COLUMBIA, SC, 29201
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $715,715,271
Exercised Options: $235,813,298
Current Obligation: $235,730,363
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2006-07-20
Current End Date: 2020-12-01
Potential End Date: 2036-07-23 00:00:00
Last Modified: 2016-10-12
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