Pentagon Awards Massive $7 Billion Wind Power Contract

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The Department of Defense issued 10 new contracts on Tuesday worth a combined $7.42 billion. One single award, however, ate up more than 94% of the funds on offer.

This contract, a massive $7 billion deal to supply wind energy "from renewable and alternative energy production facilities that are designed, financed, constructed, operated and maintained by private sector entities," involves some 17 separate companies. Taking the form of a multiple-vendor, indefinite-delivery/indefinite-quantity, firm-fixed-price, non-option, non-multiyear contract, it requires vendors will to bid against each other to sell wind energy to the U.S. Army in response to individual "task orders" issued by the U.S. Army Corps of Engineers.

Once won, a task order will be funded out of the $7 billion "pot" of funds allocated under this master Power Purchase Agreement. Bidders who won the right to compete for these task orders number 17, out of a total of 45 bids submitted. Most of the winners are either small, privately held concerns or small subsidiaries of foreign energy utilities whose stocks are not listed in the U.S. The few exceptions include U.S. listed major energy companies Dominion Resources (NYSE: D  ) , Duke Energy (NYSE: DUK  ) , Siemens (NASDAQOTH: SIEGY  ) , and Canada's Toronto-listed NorthlandPower (TSX: NPI  ) .

In both form and function, this contract announcement echoes a similar one -- also valued at up to $7 billion -- awarded late last month. That contract, however, concerned the supply of solar energy to the military and awarded 22 companies the right to bid against one another to fulfill task orders under it.

Among the winners of this current contract, Dominion and Siemens also won the right to participate in the earlier award for the provision of solar power to the military.

Read/Post Comments (4) | Recommend This Article (3)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On September 10, 2013, at 7:43 AM, cwon14 wrote:

    Waste, fraud and abuse all in one project. Trillions in debt and the government buys the most wasteful of energy options all based on a Greenshirt dream.

  • Report this Comment On September 10, 2013, at 8:42 AM, True411 wrote:

    If you click on the "also valued at $7 billion" link you'll see that the DoD also signed a contract for solar power with Siemens.

    Someone needs to tell the DoD that Siemens shut down their solar unit being unable to sell it after massive losses. Don't believe it? Look up "Siemens shuts down solar unit".

  • Report this Comment On September 10, 2013, at 8:47 AM, TMFDitty wrote:

    If you click through the "new contracts" link, you can see the Siemens entity awarded the contract here is "Siemens Government Technologies," a unit which bills itself as "an integrator of IT-enabled solutions for the federal marketplace."

    I'm not sure that makes the reason for awarding them a contract any clearer, though ...

  • Report this Comment On September 10, 2013, at 1:44 PM, antiobama wrote:

    $7 billion that will have to be repeated every 15 years as that is the life expectancy of wind generators and solar cells. With a 15% efficiency I would call this and other wind farms a Ponzi scheme by the government as a payback for bribes or gifts?

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