DoD's $31.7M utility contract for US Army Garrison Bavaria shows potential for cost savings through economic price adjustments

Contract Overview

Contract Amount: $31,730,076 ($31.7M)

Contractor: Foreign Utility Consolidated Reporting

Awarding Agency: Department of Defense

Start Date: 2014-10-01

End Date: 2015-09-30

Contract Duration: 364 days

Daily Burn Rate: $87.2K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Other

Official Description: IGF::OT::IGF CONSOLIDATED REPORT FOR UTILITIES (OTHER) IN SUPPORT OF US ARMY GARRISON BAVARIA (GRAFENWOEHR) FOR OCTOBER 2014 UNTIL JUNE 2015

Plain-Language Summary

Department of Defense obligated $31.7 million to FOREIGN UTILITY CONSOLIDATED REPORTING for work described as: IGF::OT::IGF CONSOLIDATED REPORT FOR UTILITIES (OTHER) IN SUPPORT OF US ARMY GARRISON BAVARIA (GRAFENWOEHR) FOR OCTOBER 2014 UNTIL JUNE 2015 Key points: 1. Contract value of $31.7M over one year suggests significant utility needs for the garrison. 2. The fixed-price with economic price adjustment (FP-EPA) contract type allows for cost fluctuations based on market conditions. 3. Awarded to DCA, a single source, raises questions about competition and potential for overpayment. 4. The contract covers essential utilities (electric, gas, communications) critical for base operations. 5. Limited competition may impact the government's ability to secure the best possible pricing. 6. The duration of 364 days aligns with typical annual service contracts. 7. The absence of small business set-aside indicates a focus on large or specialized providers.

Value Assessment

Rating: fair

Benchmarking this contract's value is challenging without specific unit cost data or comparable contracts for similar services at other Army garrisons. The FP-EPA structure introduces variability, making a direct price comparison difficult. However, the total award amount of $31.7M for a year of consolidated utility services for a major garrison warrants scrutiny to ensure cost-effectiveness, especially given the lack of competitive bidding.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor can provide the required services, or in urgent situations. The lack of competition limits the government's ability to leverage market forces to drive down prices and may result in higher costs for taxpayers.

Taxpayer Impact: Sole-source awards mean taxpayers do not benefit from competitive pricing, potentially leading to higher expenditures than if multiple bids were solicited.

Public Impact

US Army Garrison Bavaria personnel and operations benefit from reliable utility services. The contract ensures the provision of electricity, gas, and communication services essential for base functionality. Geographic impact is concentrated at the Grafenwoehr training area in Bavaria, Germany. Workforce implications are likely related to the contractor's personnel managing and delivering these essential services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated pricing.
Sole-source award limits transparency in pricing negotiations.
Economic price adjustment clauses could lead to cost overruns if not carefully monitored.
Contract performance monitoring is crucial to ensure service quality and prevent contractor overreach.

Positive Signals

Consolidated reporting simplifies utility management for the garrison.
FP-EPA structure provides flexibility to adapt to fluctuating utility market prices.
Contract ensures continuity of essential services for a critical military installation.

Sector Analysis

This contract falls within the Utilities and Energy sector, specifically focusing on the provision of essential services to a large government facility. The market for such services is often characterized by regional monopolies or limited providers due to infrastructure requirements. The total spending on utilities for military bases can be substantial, and contracts like this represent a significant portion of operational budgets. Benchmarking would typically involve comparing per-unit costs for electricity, gas, and communication services against similar installations or commercial rates in the region, adjusted for scale and service level agreements.

Small Business Impact

The contract data indicates no small business set-aside (ss: false) and no indication of subcontracting plans (sb: false). This suggests that the primary contractor, DCA, is expected to fulfill the requirements directly or through its own resources, rather than utilizing small businesses for a portion of the work. Consequently, there is no direct positive impact on the small business ecosystem through this specific award, and no subcontracting opportunities are explicitly identified.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and financial management offices. Given its foreign location, specific oversight mechanisms may involve both US military personnel stationed at the garrison and potentially host nation liaison offices. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Utilities Contracts
Army Garrison Operations Support
Foreign Military Base Services
Consolidated Utility Management

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns due to FP-EPA
Limited transparency in pricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $31.7 million to FOREIGN UTILITY CONSOLIDATED REPORTING. IGF::OT::IGF CONSOLIDATED REPORT FOR UTILITIES (OTHER) IN SUPPORT OF US ARMY GARRISON BAVARIA (GRAFENWOEHR) FOR OCTOBER 2014 UNTIL JUNE 2015

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 $31.7 million.

What is the period of performance?

Start: 2014-10-01. End: 2015-09-30.

What is the historical spending pattern for utility services at US Army Garrison Bavaria?

Historical spending data for utility services at US Army Garrison Bavaria prior to this contract (October 2014 - September 2015) is not provided in the given data. To assess historical patterns, one would need to examine previous contracts for electricity, gas, and communications at this specific garrison. Analyzing trends in spending, price adjustments, and service providers over several years would reveal if costs have been increasing, decreasing, or remaining stable. This context is crucial for evaluating whether the current $31.7M award represents a reasonable expenditure compared to past performance and for identifying any potential anomalies or efficiencies.

How does the pricing structure of this FP-EPA contract compare to fixed-price contracts for similar utility services?

A Fixed Price with Economic Price Adjustment (FP-EPA) contract, like this one, allows for adjustments to the contract price based on fluctuations in specified economic factors, such as utility market prices. This differs from a standard fixed-price contract, where the price remains constant regardless of market changes. While FP-EPA can protect the contractor from unforeseen cost increases and potentially ensure service continuity, it also introduces price volatility for the government. Compared to a fixed-price contract, FP-EPA may result in higher initial bids to account for potential adjustments, but it can also prevent significant cost overruns if market prices surge unexpectedly. The key is rigorous monitoring of the economic indicators used for adjustment.

What are the specific economic indicators used for price adjustments in this contract?

The provided data does not specify the exact economic indicators used for the price adjustments within this Fixed Price with Economic Price Adjustment (FP-EPA) contract. Typically, for utility contracts, these indicators might include regional or national indices for electricity generation costs, natural gas prices, fuel oil prices, and potentially currency exchange rates if services are procured in a foreign currency. The contract document itself would detail these specific indices, their base values, and the formula for calculating adjustments. Without this information, it is difficult to precisely quantify the potential impact of price adjustments on the total contract value.

What is the track record of the contractor, DCA, in providing utility services to military installations?

The provided data identifies 'DCA' as the awardee but does not offer details on their track record in providing utility services to military installations. To assess DCA's performance, further research would be required, including reviewing past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), checking for any past disputes or contract terminations, and examining their experience with similar-sized contracts and utility types. A strong track record would indicate reliability and potentially better value, while a history of issues might raise concerns about service quality and cost management.

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

The primary risk associated with a sole-source award for essential utility services is the lack of competitive pressure, which can lead to inflated pricing and reduced incentive for the contractor to innovate or provide exceptional service. Taxpayers may end up paying more than necessary. Additionally, sole-source contracts can sometimes indicate a lack of market research or planning by the procuring agency. For essential services like utilities, reliance on a single provider also poses a risk if that provider experiences financial difficulties, operational failures, or fails to meet performance standards, potentially disrupting critical base functions.

How does the consolidated reporting aspect of this contract benefit the Army Garrison?

Consolidated reporting for utilities, as mentioned in the contract description ('FOREIGN UTILITY CONSOLIDATED REPORTING'), offers significant benefits to the US Army Garrison Bavaria. Instead of managing multiple individual contracts and invoices for electricity, gas, and communications, the garrison receives a single, unified report from the contractor (DCA). This simplifies administrative overhead, streamlines payment processes, and provides a clearer, aggregated view of utility consumption and costs. It allows for more efficient budgeting, easier tracking of expenditures, and potentially better identification of usage patterns and opportunities for conservation or cost savings across all utility types.

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: 1800 F ST NW, WASHINGTON, DC, 20405

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

Financial Breakdown

Contract Ceiling: $31,730,076

Exercised Options: $31,730,076

Current Obligation: $31,730,076

Contract Characteristics

Cost or Pricing Data: NO

Timeline