US Military Wants Long-Term Infrastructure
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Most people never see services like wastewater management and water distribution, maintenance of the electric grid, et. al. The cost is built into their taxes and utility bills, or into initial subdivision fees. Military bases have to deal with these sorts of issues, just as homeowners and developer do – but on a much larger scale. The preference in the US military seems to be shifting toward very long term (about 50 year) term fixed-price or regulated tariff contracts, which are often coupled with partial privatization or conveyance of assets to make the contractor 100% responsible for the utility.
This Spotlight article covers recent contracts that fall under this format, totaling over $5 billion. In the latest offering, Entergy Arkansas won a contract worth a maximum of $25.3 million to own, operate and maintain the electric distribution system at Little Rock Air Force Base…
Long-Term Infrastructure Contracts
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Oct 5/09: Entergy Arkansas in Little Rock, AR won a maximum $25.3 million regulated tariff contract for assumption of ownership, operation and maintenance of the electric distribution system at Little Rock Air Force Base. The original proposal was Web solicited with 3 responses received by the Defense Energy Support Center in Fort Belvoir, VA (SP0600-09-C-8259). The date of performance completion is September 2059.
Sept 30/09: American Water Operations & Maintenance in Voorhees, NJ won a maximum $650.3 million firm-fixed-price, prospective redetermination contract for ownership, operation and maintenance of potable water and wastewater utility systems at the US Army’s Fort Meade, MD. The original proposal was Web solicited with 2 responses received by the Defense Energy Support Center at Fort Belvoir, VA (SP0600-09-C-8256). The date of performance completion is 2060.
Sept 30/09: American Water Operations & Maintenance in Voorhees, NJ won a maximum $287.8 million firm-fixed-price, prospective redetermination contract for ownership, operation and maintenance of potable water and wastewater utility systems at the US Army’s Fort Belvoir, VA. The original proposal was Web solicited with 3 responses received by the Defense Energy Support Center at Fort Belvoir, VA (SP0600-09-C-8257). The date of performance completion is 2060.
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Sept 29/09: Rio Grande Electric Cooperative in Brackettville, TX received a maximum $72.9 million firm-fixed-price prospective redetermination contract for ownership, operation and maintenance of the electric distribution system at Laughlin Air Force Base in Texas. Laughlin AFB is a significant base for pilot training, flying T-6 Texan II, T-38 Talon, and T-1A Jayhawk aircraft as well offering simulators and classrooms for pilots and air traffic controllers. The original proposal was Web solicited with 1 response received by the Defense Energy Support Center (DESC) at Fort Belvoir, VA (SP0600-09-C-8258). The contract will end in December 2060.
The DESC Utility Privatization Division is moving ahead with utility privatizations at other Air Force bases, including Columbus Air Force Base in Mississippi and Fairchild Air Force Base in Washington state.
Sept 4/09: Dayton Power and Light Co. (DP&L) in Dayton, OH won a maximum $175.5 million contract to take over ownership, operation, and maintenance of the electric distribution system at Wright Patterson Air Force Base in Ohio. This contract is regulated tariff rate based for a 50-year contract period. The date of performance completion is July 10/61.
The original proposal was Web solicited and through a mailing list, with 3 responses received by the Defense Energy Support Center at Fort Belvoir, VA (SP0600-09-C-8251). This contract is part of a broader effort to privatize Wright Patterson’s utility infrastructure. In addition to the electrical grid, the base intends to sell off its natural gas and water distribution and wastewater collection systems. See “Wright Patterson AFB in Ohio Sells Off Electrical Grid to DP&L” for more details.
May 1/09: Southern Maryland Electric Cooperative, Inc. (SMECO) in Hughesville, MD won a $154 million utilities privatization contract for electric distribution services to Naval Air Station Patuxent River in Patuxent River, MD. he facilities covered under this contract include Naval Air Station, Patuxent River, Webster Field Annex, and Solomon’s Island Annex. This procurement was initiated and procured under the authority of 10 U.S.C. 2688. The utility assets will be conveyed via a sale and quitclaim deed.
The work to be performed provides for installation of metering during the initial 2-year fixed-price period; operation, maintenance and repair of the systems, and renewal and replacement of the system’s components over a contract term that could extend to 50 years, to 2060. The initial 2 years of the contract are fixed price. At the conclusion of the 2 year period, the contract will be subject to SMECO’s Retail Electric Service Tariff.
This contract was competitively procured via the Navy Electronic Commerce Online website, with 2 offers received. The Naval Facilities Engineering Command Atlantic, Norfolk, VA is the “procuring contracting activity” (technically, the buyer), and the Naval Facilities Engineering Command Washington, Washington, D.C., is the administrative contracting activity who will manage the contract (N62470-09-C-9026).
Sept 10/08: American Water Operations and Maintenance, Inc. in Voorhees, NJ received a maximum $329.7 million fixed-price, prospective price redetermination contract that will run until 2059. The firm will assume ownership, operation and maintenance of the potable water distribution and wastewater collection systems at Fort Hood, TX on behalf of the US Army. There were originally 340 proposals Web-solicited, with 2 responses to the Defense Energy Support Center (DESC) in Fort Belvoir, VA (SP0600-08-C-8250).
May 28/08: Champion Energy Services, LLC of Houston, TX received a firm-fixed-price, indefinite term utilities contract for $400 million for retail electric provider services to Goodfellow AFB, Laughlin AFB, and Sheppard AFB in Texas. The contractor will manage a strategic supply portfolio, to provide renewable and non-renewable electricity in the deregulated market. Only $70,000 is currently committed, and actual costs will be dependent on electricity usage over the estimated 20year life of the contract. The AETC CONS/LGCD at Randolph AFB, TX manages this contract (FA3002-08-D—0026).
March 17/08: Nueces Electric Coop. in Robstown, TX received a $92.6 million fixed-price, Prospective Price Redetermination contract, plus the conveyance of the electrical distribution systems at Naval Air Station Corpus Christi, TX (incl. Naval Auxiliary Landing Field (NALF) Cabaniss and NALF Waldron), and Naval Air Station Kingsville, TX (incl. NALF Orange Grove). Sale of the DoD utility systems under utility privatization procedures was authorized by 10 U.S.C. 2688, and will be conveyed to NEC via a bill-of-sale.
Work to be performed under the contract provides for initial system modifications required to bring the systems up to industry standards, maintenance and repair of the systems, and renewal and replacement of the various components over the term of the contract. Work will be performed in Corpus Christi, TX (75%) and Kingsville, TX (25%), and is expected to continue for 50 years. This contract was competitively procured with 1 proposal received by Naval Facilities Engineering Command (NAVFAC) Southeast in Jacksonville, FL (N69450-08-0052).
Feb 28/08: Beaufort-Jasper Water & Sewer Authority (BJWSA) in Okatie, SC is quasi-state organization categorized as “other than small business,” and acts as the regional water and wastewater utility provider in the Beaufort-Jasper County region of South Carolina. Now, BJSWA won an estimated $251.5 million firm-fixed-price, prospective price re-determination, 50-year utilities privatization contract to continue to operate and maintain the water and wastewater utility system of US Marine Corps and Navy activities in the Beaufort, SC area.
The water and wastewater utility systems will be conveyed to BJWSA through a quit claim deed. Work to be performed provides for initial system modifications required to bring the systems up to industry standards, operation, maintenance and repair of the systems, as well as renewal and replacement of the system’s components over the term of the contract. 10 U.S.C. 2688 authorized the privatization of Government utility systems if certain criteria were met.
This contract was competitively procured via the Naval Facilities Engineering Command e-solicitation website, with 5 proposals received by The Naval Facilities Engineering Command (NAVFAC) Southeast, in Jacksonville, FL (N69450-08-C-0070).
Sept 28/07: Augusta Utilities Department, Augusta, GA won a $202 million firm fixed price, prospective price re-determination, 50-year contract for assumption of ownership, operation and maintenance of potable water distribution and wastewater collection systems at Fort Gordon Army Installation, Georgia. The contract will last until February 2058.
There were 503 original proposals solicited, including web solicitations, with 4 responses to the Defense Energy Support Center in Fort Belvoir, VA (SP0600-07-C-8259).
Sept 28/07: Small business qualifier Miami-Case County Rural Electric Membership Corp. in Peru, IN received a $5.1 million firm-fixed-price, prospective price re-determination, 50-year contract for assumption of ownership, operation and maintenance of the electric distribution system at Grissom Air Reserve Base, Indiana. The contract will last until Dec. 26, 2057.
There were 700 original proposals solicited, including web solicitations, with 1 response to the Defense Energy Support Center, Fort Belvoir, Va. (SP0600-07-C-8256).
Sept 28/07: Doyon Utilities, LLC in Fairbanks, AK won a $553.3 million regulated tariff rate, 50-year contract for assumption of ownership, operation and maintenance of the central heat and power plant and heat distribution system, electric distribution system, potable water distribution system, and the wastewater collection system at Fort Greely, Alaska. The contract will last until February 2058.
There were 503 original proposals solicited, including web solicitations, with 7 responses to the Defense Energy Support Center in Fort Belvoir, VA (SP0600-07-C-8261).
Sept 28/07: Doyon Utilities, LLC in Fairbanks, AK won a $939.6 million regulated tariff rate, 50-year contract for assumption of ownership, operation and maintenance of the electric distribution system, natural gas distribution system, potable water distribution system, and the wastewater collection system at Fort Richardson, Alaska. The contract will last until February 2058.
There were 503 original proposals solicited, including web solicitations, with 7 responses to the Defense Energy Support Center in Fort Belvoir, VA (SP0600-07-C-8262).
Sept 28/07: Doyon Utilities, LLC in Fairbanks, AK won a $2.42 billion regulated tariff rate, 50-year contract for assumption of ownership, operation and maintenance of the central heat and power plant, heat and electric distribution systems, and potable water distribution and wastewater collection systems at the US Army’s Fort Wainwright, Alaska.
There were 503 original proposals solicited, including web solicitations, with 3 responses to the Defense Energy Support Center in Fort Belvoir, VA (SP0600-07-C-8263).
Sept 26/07: American Water Operation & Maintenance, Inc. in Voorhees, NJ received a $67.3 million firm fixed price, prospective price re-determination, 50-year contract for assumption of ownership, operation and maintenance of water distribution system at Scott Air Force Base, IL. The contract will last until Nov. 24, 2057.
There were 700 proposals solicited, including web solicitations, with 1 response to the Defense Energy Support Center in Fort Belvoir, VA (SP0600-07-C-8253).
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Sept. 25/07: The Florida Keys Aqueduct Authority (FKAA) in Key West, FL won an estimated $45.2 million utilities privatization contract for the operation and maintenance of the water distribution systems of Naval activities in the Key West, Florida area. FKAA is a quasi-state organization categorized as “other than small business,” and a provider of water utilities in the unincorporated areas of Key West. The water distribution system will be conveyed to FKAA through a quit claim deed (10 U.S.C. 2688 authorizes privatized Government utility systems if certain criteria are met). The contractual instrument is a fixed-price contract with a term of 50 years, and prospective price redetermination during that period.
Work includes initial system modifications required to bring the systems up to industry standards, operation, maintenance and repair of the systems, as well as renewal and replacement of the system’s components over the term of the contract. Funding for this contract will be provided through annual O&M budgets of the activities. This contract was competitively procured via the NAVFAC e-solicitation website, with 3 proposals received by the Naval Facilities Engineering Command Southeast in Jacksonville, FL (N69450-07-C-0103).
Sept 14/07: American States Utility Services, Inc. in Costa Mesa, CA won a $143.8 million firm-fixed-price contract with prospective price re-determination for work at the US Army’s Fort Jackson Army Installation and environs in South Carolina. It covers a 50-year contract period for ownership, operation and maintenance of water distribution system and wastewater collection systems.
The contract will last until December 2057. There were 340 proposals originally solicited, and also web solicited, with 5 responses to the Defense Energy Support Center (DESC) in Fort Belvoir, VA (SP0600-07-C-8251).
Sept 14/07: American Water Operations and Maintenance, Inc. in Voorhees, NJ won a $98.1 million firm-fixed-price contract with prospective price re-determination for work at the US Army’s Fort A.P. Hill Army Installation and environs in Virginia. It covers a 50-year contract period for ownership, operation and maintenance of water distribution system and wastewater collection systems
The contract will last until December 2057. There were 340 proposals originally solicited, and also web solicited, with 5 responses to the Defense Energy Support Center (DESC) in Fort Belvoir, VA (SP0600-07-C-8254).
