Department of the Army awarded $146.6M for utility services, with limited competition impacting price discovery

Contract Overview

Contract Amount: $146,628,302 ($146.6M)

Contractor: Keenan FT Detrick Energy LLC

Awarding Agency: Department of Defense

Start Date: 2015-03-04

End Date: 2019-09-30

Contract Duration: 1,671 days

Daily Burn Rate: $87.7K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Energy

Official Description: IGF::CL::IGF UTILITY SERVICES CAPACITY CHARGE (DEBT)

Place of Performance

Location: COLUMBIA, RICHLAND County, SOUTH CAROLINA, 29201

State: South Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $146.6 million to KEENAN FT DETRICK ENERGY LLC for work described as: IGF::CL::IGF UTILITY SERVICES CAPACITY CHARGE (DEBT) Key points: 1. The contract's value of $146.6 million over its period of performance suggests a significant investment in utility services. 2. Limited competition for this contract raises questions about achieving optimal value for taxpayer dollars. 3. The contract's duration of over 4 years indicates a long-term commitment to the awarded vendor. 4. The firm fixed-price contract type provides cost certainty but may limit flexibility for the government. 5. The absence of a small business set-aside suggests larger prime contractors are likely involved. 6. The contract's focus on electric power distribution highlights a critical infrastructure need for the Army.

Value Assessment

Rating: fair

The total award of $146.6 million for utility services over approximately four years represents a substantial expenditure. Benchmarking this against similar utility contracts is challenging without more specific service details. However, the 'NOT AVAILABLE FOR COMPETITION' status suggests potential for higher costs than if robust competition had been present. The firm fixed-price nature offers budget predictability, but the absence of competitive pressure could mean the government is not realizing the lowest possible price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under a sole-source basis, indicated by 'NOT AVAILABLE FOR COMPETITION'. This means that only one vendor, KEENAN FT DETRICK ENERGY LLC, was solicited and awarded the contract. The lack of competition limits the government's ability to explore alternative solutions or pricing structures that might be offered by other qualified providers. This approach is typically used when only one source can fulfill the requirement, but it bypasses the price discovery benefits of a competitive bidding process.

Taxpayer Impact: For taxpayers, sole-source awards mean that the price is determined by negotiation with a single entity, rather than through market forces. This can lead to higher costs compared to competitively awarded contracts, as there is less incentive for the contractor to offer the most aggressive pricing.

Public Impact

The primary beneficiaries are the Department of the Army, ensuring reliable electric power distribution for its facilities. The services delivered are crucial for maintaining operational readiness and infrastructure support at Army installations. The geographic impact is concentrated in South Carolina, where the contract is associated with Fort Detrick. Workforce implications may include direct employment by the contractor and potential indirect support roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may result in higher costs for taxpayers.
Sole-source award bypasses market-driven price discovery.
Lack of transparency in the selection process due to sole-sourcing.

Positive Signals

Ensures critical utility services for a key military installation.
Firm fixed-price contract provides budget certainty.
Award to a specific entity suggests a potentially specialized capability.

Sector Analysis

This contract falls within the Utilities and Energy sector, specifically focusing on electric power distribution. The market for utility services to federal installations is often characterized by long-term contracts and specialized infrastructure requirements. While specific market size data for this niche is not provided, the federal government is a significant consumer of such services across numerous bases and facilities. This award represents a substantial, albeit specific, portion of federal spending in this area, likely involving established energy providers.

Small Business Impact

The contract details indicate that small business participation was not a primary consideration, as it was not set aside for small businesses and the prime contractor is KEENAN FT DETRICK ENERGY LLC. There is no explicit information on subcontracting plans for small businesses. This suggests that the primary contract is likely being performed by a larger entity, and the direct impact on the small business ecosystem may be limited unless significant subcontracting opportunities are pursued.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. The firm fixed-price nature provides some cost control. Transparency is limited due to the sole-source award. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse, but the initial award process itself was not subject to broad competitive oversight.

Related Government Programs

Federal Utility Contracts
Department of Defense Energy Procurement
Electric Power Distribution Services
Army Infrastructure Support Contracts

Risk Flags

Sole-source award may lead to higher costs.
Lack of competitive bidding limits price discovery.
Potential for vendor lock-in.
Performance metrics not specified in summary data.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $146.6 million to KEENAN FT DETRICK ENERGY LLC. IGF::CL::IGF UTILITY SERVICES CAPACITY CHARGE (DEBT)

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 $146.6 million.

What is the period of performance?

Start: 2015-03-04. End: 2019-09-30.

What is the track record of KEENAN FT DETRICK ENERGY LLC in performing similar utility service contracts for the federal government?

Information regarding the specific track record of KEENAN FT DETRICK ENERGY LLC in performing similar utility service contracts for the federal government is not detailed in the provided data. To assess their performance history, one would need to consult contract databases (like FPDS or SAM.gov) for past awards, performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), and any documented issues or successes. Without this specific data, it's difficult to definitively gauge their reliability and past performance quality for this type of critical infrastructure service.

How does the awarded price compare to market rates for similar electric power distribution services in South Carolina?

Direct comparison of the awarded price to market rates for similar electric power distribution services in South Carolina is challenging without detailed service specifications and a robust market analysis. The contract's sole-source nature ('NOT AVAILABLE FOR COMPETITION') inherently limits the ability to benchmark against competitive bids. To perform such a comparison, one would need to identify comparable commercial or government contracts in the region, analyze their scope of work, pricing structures (e.g., per kWh, fixed capacity charges), and contract duration. The absence of competitive bidding suggests the negotiated price might not reflect the lowest achievable market rate.

What are the primary risks associated with a sole-source award for essential utility services?

The primary risks associated with a sole-source award for essential utility services include potential overpayment due to lack of competitive pricing, reduced incentive for the contractor to innovate or improve efficiency, and a lack of alternative providers if the incumbent contractor fails to perform or faces financial difficulties. Furthermore, the government has less leverage in negotiating terms and conditions. For critical services like electric power distribution, reliance on a single source can create vulnerabilities if that source experiences disruptions or if their pricing escalates significantly over the contract term without market-based checks.

What specific performance metrics or deliverables are included in this contract to ensure service quality?

The provided data summary does not specify the performance metrics or deliverables associated with this contract for electric power distribution services. Typically, such contracts would include Service Level Agreements (SLAs) detailing reliability standards (e.g., uptime percentages), response times for outages, maintenance schedules, and reporting requirements. The effectiveness of the contract in delivering value relies heavily on these defined metrics and the government's ability to monitor and enforce them. Without this information, assessing the contractor's adherence to quality standards is not possible.

What was the justification for awarding this contract on a sole-source basis instead of seeking competitive bids?

The justification for awarding this contract on a sole-source basis ('NOT AVAILABLE FOR COMPETITION') is not provided in the summary data. Federal procurement regulations (like the Federal Acquisition Regulation - FAR) outline specific circumstances under which sole-source awards are permissible. These often include situations where only one responsible source exists, or where urgency, national security, or specific technological capabilities necessitate it. A formal justification document, typically found in the contract file, would detail the rationale, such as unique infrastructure, proprietary technology, or lack of qualified alternatives.

How has federal spending on utility services, specifically electric power distribution, trended over the past five years?

Analyzing the trend of federal spending on utility services, particularly electric power distribution, over the past five years requires access to broader federal procurement data. While this specific contract award of $146.6 million occurred between 2015 and 2019, overall federal spending in this category can fluctuate based on infrastructure needs, base consolidations or closures, energy market prices, and policy initiatives (e.g., renewable energy adoption). General trends might show increased investment in grid modernization, cybersecurity for utility infrastructure, and potentially a shift towards more sustainable energy sources, impacting the types and costs of contracts awarded.

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

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1301 GERVAIS ST STE 805, COLUMBIA, SC, 29201

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $147,875,779

Exercised Options: $147,875,779

Current Obligation: $146,628,302

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NOT OBTAINED - WAIVED

Timeline