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News | March 2, 2023

Mayport NS ribbon cutting celebrates cost saving utilities contract

By Irene Smith DLA Energy Public Affairs

The U.S. Navy celebrated a successful transition of ownership of its wastewater utility system, with a ribbon cutting ceremony at Naval Station, Mayport, Florida on March 1st.

Defense Logistics Agency Energy, in coordination with Naval Facilities Engineering Systems Command (NAVFAC), awarded a 50-year contract to American Water Military Services, LLC to privatize the wastewater utility system for Naval Station Mayport, Florida in June 2022. According to the Department of Navy’s economic analysis, this Utilities Privatization effort provides a cost avoidance of approximately $65 million over the life of the contract. The ribbon cutting marked the end of an 8-month transition for American Water to become familiar with operating the 2-million-gallon wastewater treatment plant and the wastewater collection system.

“I want to congratulate DLA Energy Utility Services for their hard work, attention to detail, strong leadership, and steadfast teamwork in ensuring a successful transition of ownership of its first utilities privatization award to the U.S. Navy,” DLA Energy Commander Air Force Brig. Gen. Jimmy Canlas said. “While this is just the beginning of a great partnership with the Navy, DLA Energy looks forward to further growing our relationships with our Industry Partners and the Warfighter.” 

Naval Station Mayport is the third-largest naval surface fleet concentration in the United States with the current wastewater utility system serving more than 14,500 personnel. Naval Station Mayport’s wastewater system privatization was the first of three UP pilot projects between NAVFAC and DLA Energy.  The purpose of entering the Utilities Privatization, or UP Pilot Program was to upgrade the wastewater utility system and comply with National Pollutant Discharge Elimination System and Clean Water Act regulations, while realizing cost savings.

“Naval Station Mayport is a great example of how installations can work together with the system owners to achieve resilient and reliable utilities,” said DLA Energy Utility Services Director Martha Gray. “We are both pleased and excited to see this transition of ownership take place and look forward to future utilities privatization contracts with the U.S. Navy.” 

Patti Rivera is the DLA Energy contracting officer who awarded the Naval Station Mayport wastewater system to American Water. She explained how the contract is a unique partnership between NAVFAC and DLA Energy and the culmination of more than three years of efforts.

“The first joint DLA Energy and Navy utilities privatization effort was released in October 2019 for a wastewater utility system at Mayport Naval Station, Florida,” Rivera said. “The total contract value awarded was approximately $341 million over a 50-year period and will be subject to an annual economic price adjustment. The utilities privatization contract is the first of its kind between the Navy and DLA Energy and is expected to provide a cost avoidance of approximately $65 million over the life of the contract.” 

The DLA Energy team brings vast experience and expertise in the execution of UP projects within the Department of Defense. NAVFAC serves as the Navy’s UP Program Office lead for planning, requirements development, budgeting, programming and project management.

“NS Mayport has been in the transition period since June 2022 and take ownership March 1, known as Contract Start,” Rivera said. “As the the first privatized award by DLA Energy for the Navy, so it has been a big deal and the Navy is ecstatic at how well everything has gone. Thanks to a lot of hard work and close coordination, my team made DLA Energy a hit with the Navy!”

NAVFAC Southeast Utilities and Energy Management Director Kevin Roye said this contract is just the beginning.

“This is not the first time NAVFAC Southeast has looked at UP as a contract tool,” Roye said. “We currently have five UPs in the southeast. They include Key West for (water and wastewater) and Meridian, Kingsville and Corpus Christi for electric utilities privatization. NS Mayport will be the sixth.”

Under its UP contract, AWMS will collect and provide for disposal of domestic and oily-waste water discharge and provide significant rehabilitation of the wastewater treatment plant.

“American Water is honored to officially take ownership of wastewater operations at our first Navy installation,” said Steve Curtis, American Water Military Services Group President. “This transition demonstrates our leading position as a trusted partner for the Department of Defense. We are proud to provide safe, clean, and reliable water and wastewater treatment services for service members, families, and civilians, nationwide.”

DLA Energy Utility Services is the centralized contracting agent for the Military Services’ Utilities Privatization Programs.  DLA Energy Utility Services helps Military Services coordinate and consolidate DoD UP efforts supporting electric, natural gas, water, wastewater, and thermal utility systems.    In the UP process, military installations shift from the role of owner-operator to that of smart utility service customers. In 2022, DLA Energy Utility Services executed 952 contracting actions for Utilities Privatization efforts worth approximately $1,894 million in obligations.