Army turns over utility services to Doyon Utilities at 3 Alaska posts
Published Saturday, August 16, 2008
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Stumble It!FAIRBANKS — At 12:01 a.m. Friday, the U.S. Army turned over electric, water, waste and other services at three Alaska installations to Doyon Utilities. The privatization process took less than a year and is expected to save the military a bundle in operations and maintenance costs at forts Wainwright, Greely and Richardson.
Doyon Utilities, a joint venture between Doyon Properties and Fairbanks Sewer and Water, assumed ownership and operations of 12 utilities at three Army posts in what company officials said is the largest utility privatization contract ever awarded by the U.S. military.
The utility provider was awarded the 50-year, $3.9 billion contract last fall, and invested $40 million to prepare for the transfer, Doyon Utilities President and CEO George Gordon said.
Ceremonies were held at each of the three posts last week to mark the occasion.
“Today, we’re operating the utilities under private ownership and maintenance, and we’re very excited about that,” Gordon said Friday. “It’s a great opportunity to show we can provide the best possible service to the government and have the government save money.”
The military said privatization will cut costs and increase efficiency while using the power of a private, competitive market to drive better reliability.
Col. Timothy Jones, Fort Wainwright garrison commander, said the transfer was the culmination of years of work to privatize utilities across the country.
“We can allow the Army to focus more on its core functions and let the private sector focus on providing those services that they do well, and utilities are one of those,” Jones said.
Fort Wainwright is one of the few with its own power plant, and Jones couldn’t say enough about the team that staffed it 24 hours a day, year-round, through flood and fire.
“They have just done a tremendous job,” Jones said. “We appreciate their service.”
Doyon hired 50 to 60 former government employees affected by the transfer. Another 30 or so skilled, certified workers, such as water treatment plant operators, were hired from across the state, Gordon said. Up to eight positions still need to be filled.
Mike Holz is already impressed by the greater efficiencies. He’s the administrative director for Nenana Lumber, which won a competitive bid to construct operations buildings at all three posts.
Holz attended the transition ceremony Friday at Fort Wainwright. Doyon Utilities hired Fairbanks contractors for construction at all three posts, even shipping crews to Fort Richardson near Anchorage, he said.
“The government seems happy, the garrison commander seems happy and, of course, Doyon seems happy,” Holz said. “This is good for Fairbanks, no doubt about it.”
Nenana Lumber, owned by Susan Holz and Jeff Barney, had a $9 million contract to construct the three 9,700-square foot operations depots — but had 100 days, start to finish.
Mike Holz said Doyon was efficient in resolving environmental, missile defense and other concerns that enabled Nenana Lumber to stick to the tight schedule.
“If this is how privatization is going to work, this company is all for it,” Holz said.
Community Discussion
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When they say the government is going to 'save a bundle' - exactly how much is that?
Who were the other companies that were allowed to bid on this lucrative contract?
Hundreds of companies and teams initially showed interest in the offer and many submitted bids. Most did not survive the technical review and then the financial review. Ultimately the finalists had to beat the ARmy's expected costs for ALL utilities.
Doyon excelled in both respects and have assembled an outstanding team to implement transition and now operate
Another time Doyon has went out on it's own again without shareholder knowing another president really? How many presidents does a corporation really need? this'll make 5 now. This isn't really a corporation any more it's more like a mob. Every year they are making something new but without the shareholders backing or notification. A 50 yr. contract really needs a president? Guess that's why they are the lowest paying of almost all the native owned companies in yearly dividends. In 2007 they where so nice to pay their shareholders a $317 check.
Doyon went down hill after Morris Thompson and Rosie Maher went on to a better place.
aksunshine your right when they where presidents at least they had the shareholders in mind unlike now. Which they have the only corperation in mind. Back when they did pay $1000 to shareholders I did get my first car. But them days are long gone. Now they are trying to use the Alaskans Perment Fund idea to give out dividends to the shareholders but the only problem is with only 325 million and 18000 share holders means a shareholder worth is about $18500 total.
aksunshine your right when they where presidents at least they had the shareholders in mind unlike now. Which they have the only corporation in mind. Back when they did pay $1000 to shareholders I did get my first car. But them days are long gone. Now they are trying to use the Alaskans Fund idea to give out dividends to the shareholders but the only problem is with only 325 million and 18000 share holders means a shareholder worth is about $18000 total.
How can you save a bundle of money when you pay somebody to do the work that you are doing yourself. What a corrupts.
so does this mean shareholders will be receiving BIGGER checks or is Doyon still going to be CHEAP about it? may guess is there still going to be CHEAP. well I guess now therese no more free electric , water , heat and housing for the military I know where their P.F.D.'s and energy rebates are going just where mine is going to the bills
I sure hope that the contractors are able to operate the plants without destroying them. At the Ft. WW plant almost everything is new and modern. The old part of the plant was built in 1948 and the main part in 1954. In the last several years the Army has spent many tens of millions of dollars to completly rebuild and modernize everything in the plant. Boilers, Turbines and aux equipment including new piping, pumps and a completly different and modern water treatment and storage system. Almost everything
is controlled by a main line computer with many interfaces. Plus new computerized coal handling systems.
The plant was contracted out, to GVEA from 4-1-74 to 4-1-75 and they ran it wide open with very little maintance or care of the equipment. When they quit their contract and the government took it back over it took a major effort (and about 6 months) to clean-up and repair the damage and neglect from that one years operation.
The new contractors are starting off with a completly re-built, modern plant so maybe they won't run it in to the ground.
You're wrong the military families on fort wainwright won't have to use their PFDs to pay for oil, utilities or rent because when these things are privatized the military gives them BAH (housing allowance) which goes toward the rent (immediatly taken out of the check as soon as it hits) so they may see it on the LES but it isn't their's. As for the utilities and oil that is covered as well by the military UNLESS the family uses MORE than what's allowed. I've heard from other military families on privatized bases that such cases are rare.
In the end the only thing that changes for the military families is their name on a lease because the military takes care of the bills one way or the other.
power2-
I hope you're right.
My first thought was: Was this another one of those non-competitive/priority contracts that are afforded so exclusively to the native corps?
The article says that Doyon hired sub-contractors.
I wonder how Doyon got the initial contract.
A 50 year contract seems like an awfully long time. There will be many, many changes in operations over this time that will be negotiated with no competitive process. At least it is an Alaskan company that got the contract.
Can you spell coruption, if not now,certainly in the making.
I don't know about corruption but it certainly is a stupid and costly mistake. Although the government tries to make people believe they are trying to save money, they know from experience that these contracts always costs much more. In addition the money saved initialy is spent in adding a government infastructure to watch the contractor. It's all just window dressing to make people think the government is trying to save money, in addition Gildy is right, there is a very good chance this contract will fail, because of the maintenance standards required on a military installation. Just in case you don't know who to thank for the current privatization fiasco, call your local, state and federal representatives. This was designed, by the Clinton administration to create jobs while appearing to cut down on military spending.
The real corruption has been occurring at the Ft Wainwright Department of Public Works for the past 20 years. It's amazing that the same people who wrote the contract and hired Doyon now have high paying jobs with Doyon. At least Doyon will have government contract analysts looking over their shoulders unlike the previous regime who spent what they wanted, hired who the wanted, took what they wanted, and produced the dirtiest, most expensive electricity and steam you could imagine. They should have gone to jail. I'm hoping Doyon does a good job and gets the place running good and it's not a death trap for it's employees.
The government is not going to save a cent turning things over to Doyon. They can't even satisfy their own shareholders. Just read the letters from them. Let's get some more money from the White Man. They owe it to us
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