DoD's $19.2M utility services contract for German bases lacked competition, raising cost concerns

Contract Overview

Contract Amount: $19,247,419 ($19.2M)

Contractor: Foreign Utility Consolidated Reporting

Awarding Agency: Department of Defense

Start Date: 2010-10-01

End Date: 2011-09-30

Contract Duration: 364 days

Daily Burn Rate: $52.9K/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 THE GREATER BAMBERG AREA (INCL ANSBACH, SCHWEINFURT) FOR OTHER UTILITY SVCS IN FY11

Plain-Language Summary

Department of Defense obligated $19.2 million to FOREIGN UTILITY CONSOLIDATED REPORTING for work described as: CONSOLIDATED REPORT FOR THE GREATER BAMBERG AREA (INCL ANSBACH, SCHWEINFURT) FOR OTHER UTILITY SVCS IN FY11 Key points: 1. The contract was awarded on a non-competitive basis, limiting price discovery. 2. The fixed-price with economic adjustment structure introduces potential for cost overruns. 3. Performance dates indicate a single-year duration, suggesting a need for ongoing services. 4. The specific utility services are not detailed, making direct performance assessment difficult. 5. The contract falls under regulation and administration of utilities, a critical but often complex area.

Value Assessment

Rating: questionable

Benchmarking this contract's value is challenging due to the lack of detailed service descriptions and competitive bidding. The 'NOT AVAILABLE FOR COMPETITION' status suggests potential inefficiencies. The fixed-price with economic price adjustment (FPEPA) contract type can lead to higher costs if economic factors escalate significantly, especially without competitive pressure to drive down baseline prices. The awarded amount of $19.2M for a single year of utility services for multiple bases requires scrutiny, particularly given the absence of comparative bids.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was explicitly marked as 'NOT AVAILABLE FOR COMPETITION,' indicating a sole-source award. This means no other vendors were solicited or considered, significantly reducing the opportunity for price negotiation and potentially leading to a higher cost for the government. The lack of competition prevents a clear understanding of market rates for these specific utility services in the Greater Bamberg Area.

Taxpayer Impact: The absence of competition means taxpayers may have paid a premium for these essential utility services, as there was no market pressure to ensure the lowest possible price.

Public Impact

Military personnel and their families stationed at U.S. Army bases in the Greater Bamberg Area (including Ansbach and Schweinfurt) benefit from the continuity of essential utility services. The contract ensures the provision of electricity, gas, and other critical utility services necessary for the operation and habitability of military installations. The geographic impact is concentrated on U.S. Army installations in Germany, supporting the U.S. military's presence in Europe. The contract supports the operational readiness of these overseas bases by maintaining essential infrastructure.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated prices.
Economic price adjustment clause introduces cost uncertainty.
Limited transparency on specific utility services provided.
Contract duration of one year may indicate short-term solutions rather than long-term strategic planning.

Positive Signals

Ensures essential utility services for critical military infrastructure.
Contract awarded to a single entity suggests potential specialized capability or established presence.

Sector Analysis

This contract falls within the broader utilities sector, specifically focusing on the provision of essential services like electricity, gas, and potentially water and communications to government facilities. The market for such services, especially in overseas locations supporting military operations, can be specialized and subject to unique regulatory and logistical challenges. Benchmarking against domestic utility contracts is difficult due to geographic and operational differences. The awarded amount of approximately $19.2 million for a year reflects the scale of operations for multiple bases.

Small Business Impact

There is no indication that this contract involved small business set-asides or subcontracting opportunities. The sole-source nature of the award further suggests that small businesses were likely not considered or solicited for this particular requirement.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and financial management divisions. Given its overseas nature, specific logistical and operational oversight mechanisms would also be in place. Transparency is limited due to the sole-source award and the lack of detailed public reporting on the specific services rendered and their associated costs beyond the total contract value.

Related Government Programs

Foreign Military Base Operations Support
Overseas Utility Services Contracts
Department of Defense Energy Contracts
Army Garrison Support Services

Risk Flags

Sole-source award
Potential for cost overruns due to economic price adjustment
Lack of detailed service description
Limited transparency on contractor performance

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.2 million to FOREIGN UTILITY CONSOLIDATED REPORTING. CONSOLIDATED REPORT FOR THE GREATER BAMBERG AREA (INCL ANSBACH, SCHWEINFURT) FOR OTHER UTILITY SVCS IN FY11

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 $19.2 million.

What is the period of performance?

Start: 2010-10-01. End: 2011-09-30.

What specific utility services were included in this $19.2 million contract?

The provided data indicates the contract was for 'Regulation and Administration of Communications, Electric, Gas, and Other Utilities' for U.S. Army bases in the Greater Bamberg Area. However, the exact breakdown of services, such as the volume of electricity or gas supplied, or the specific communication services administered, is not detailed in the summary data. This lack of specificity makes it difficult to assess the value for money or to compare unit costs accurately. The 'Other Utilities' category is particularly broad and could encompass a range of services from water and sewage to waste management or specialized communication infrastructure maintenance.

Why was this contract awarded on a sole-source basis, and what are the implications for cost?

The contract was designated as 'NOT AVAILABLE FOR COMPETITION,' signifying a sole-source award. The specific justification for this designation is not provided in the summary data. Sole-source awards typically occur when only one vendor can provide the required goods or services due to factors like unique capabilities, proprietary technology, or urgent needs where competition is impractical. However, the absence of competition generally leads to higher costs for the government, as there is no market pressure to drive down prices through bidding. Taxpayers may bear a premium for these services compared to a competitively procured contract.

How does the 'Fixed Price with Economic Price Adjustment' (FPEPA) clause affect the overall cost and risk?

The FPEPA contract type means the base price is fixed, but it can be adjusted based on pre-defined economic factors, such as inflation rates for labor or materials, or currency exchange fluctuations. While intended to protect both the contractor and the government from unforeseen economic shifts, this clause introduces cost uncertainty for the government. In a sole-source scenario, the government has less leverage to negotiate the terms of the economic price adjustment, potentially leading to higher final costs if economic conditions escalate unfavorably. The risk of cost overruns is higher compared to a firm fixed-price contract without such adjustments.

What is the historical spending pattern for utility services at these German bases?

The provided data only details this specific contract for FY11. To understand historical spending patterns, one would need to examine contract awards for similar utility services at the Greater Bamberg Area bases (Ansbach, Schweinfurt) in preceding fiscal years and potentially subsequent years. Analyzing trends in contract values, competition levels, and contract types over time would reveal whether spending has increased or decreased, if competition has improved or worsened, and if the contract structure has evolved. Without this historical context, it's difficult to determine if the $19.2 million in FY11 represents a typical expenditure or an anomaly.

What is the track record of the contractor, 'FOREIGN UTILITY CONSOLIDATED REPORTING', in providing similar services?

The summary data identifies the contractor as 'FOREIGN UTILITY CONSOLIDATED REPORTING' (CO). However, it does not provide any information regarding their track record, past performance ratings, or experience in delivering utility services, particularly in overseas military installations. To assess the contractor's reliability and capability, a review of their performance history on previous government contracts, including any quality issues, delivery delays, or cost disputes, would be necessary. This information is crucial for understanding the risk associated with awarding a sole-source contract to this entity.

Industry Classification

NAICS: Public Administration › Administration of Economic Programs › Regulation and Administration of Communications, Electric, Gas, and Other Utilities

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: 1275 FIRST ST NE, WASHINGTON, DC, 20417

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

Financial Breakdown

Contract Ceiling: $19,247,419

Exercised Options: $19,247,419

Current Obligation: $19,247,419

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline