FORT BELVOIR, Va. –
The Department of Navy is extending its partnership with Defense Logistics Agency Energy to privatize more government-owned utility systems on Navy installations nationwide.
DLA Energy Utility Services provides pre- and post-award contracting and technical expertise for Service partners who want to transfer ownership, operations and maintenance of installation utility systems to a contracted system owner.
Since 1999, DLA Energy Utility Services has managed the utility services contracting mission for the Army and the Air Force, adding the Navy initially in 2019. As of August 2022, DLA Energy has awarded 101 new and continued utilities privatization contracts for 172 systems at 71 installations.
“The Navy had been doing its own utilities privatization procurements from cradle to grave,” said Laurie Carlson, Deputy Division Chief of DLA Energy Utility Services. “They approached us in 2018 to establish an agreement for a three-year pilot program because they lost the historical utilities privatization experience in their contracting shop, and they knew we were the center of excellence for the Army and Air Force programs.”
In June 2022, DLA Energy in coordination with Naval Facilities Engineering Systems Command awarded a contract to privatize the wastewater utility system for Naval Station Mayport, Florida. According to a Navy press release, the contract will upgrade the system and comply with National Pollutant Discharge Elimination System and Clean Water Act regulations, while realizing a cost avoidance of approximately $65 million over the life of the contract.
The Navy and DLA Energy are planning on two more awards in fiscal 2023.
“Over the past few years, the Navy witnessed our unique capabilities, industry partnerships and expert contracting workforce and decided to make the agreement more permanent extending the partnership through June 2028,” Carlson said.
Utilities privatization began in the 1990s to help military installations obtain safe, reliable, technologically current, and environmentally sound utility systems at a relatively lower cost than under government ownership. In the privatization process, military installations shift from the role of owner- operators to that of smart utility service customers.
“Most installations were built many decades ago and many of the utility systems are old and deteriorating,” Carlson said. “Utility services contracts leverage the experts to recapitalize systems and achieve resilient and reliable utilities.”
One distinct advantage of a utilities privatization contract is the Services’ costs for operations, maintenance, renewals and replacements of the system are amortized over 50 years, she said.
“The contracted system owner ensures the system is maintained and complies with current codes, standards, and best practices,” said Ken Richardson, DLA Energy Utility Services Navy Program Manager. “The installation now has a partner it can work with to quickly adapt when change is needed, such as technology advancements or changing environmental or safety requirements. It’s a long-term solution to a very real problem.”
DLA Energy has earned a strong reputation with both utility companies and the customer because of its consistent, reliable and efficient processes for awarding contracts, Carlson said.
About eight years ago, Carlson led a deep dive examination of DLA Energy Utility Services’ contracting processes. The team set milestones and outlined the procurement steps within each milestone looking for ways to improve, expedite or condense the processes.
“Because of the streamlined processes, we’ve been able to successfully award a number of procurements on time and get results,” Richardson said. “Mayport is a really good example of that. We set a timeline in our acquisition plan that we agreed to with the Navy, and we held to it. We were able to executive it on time and deliver results.”
DLA Energy Utility Services plans to continue growing its partnerships and helping military and federal customers increase energy reliability, security and resilience.
A video about DLA Energy’s utilities privatization efforts on Fort Hood, Texas, highlights the installation’s successes in the program. Read more about other utilities privatization projects in the DLA Newsroom.
Learn more about DLA Energy Utility Services and other DLA Energy programs and services at www.DLA.mil/Energy.