Defense Logistics Agency (DLA) Energy, in coordination with Naval Facilities Engineering Systems Command (NAVFAC), awarded a $117,004,772 regulated tariff contract to Southern Maryland Electric Cooperative (SMECO) Inc., Hughesville, Maryland, to privatize the electric utility system for a 50-year term at Naval Support Facility Indian Head, Maryland, Dec. 12.

NSF Indian Head’s electric system privatization is one in a series of utilities privatization (UP) projects between NAVFAC and DLA Energy. The UP program’s purpose is to review Navy Installations that are deemed economically unsound for privatization in the early 2000s and determine if today’s market offers better opportunities.

“This project provides much-needed investment at NSF Indian Head in support of a direct critical mission enabler for the U.S. and Allied militaries,” said Capt. David Wilson, Commanding Officer, Naval Support Activity South Potomac. “By going the utilities privatization route, we’re not only able to start work earlier than through the typical funds programing process, but it will also be with a significant cost savings.”

A system owner, such as SMECO, can respond to changes in technology with greater ease and utilize purchasing power to garner better systems at a reduced cost. This utilities privatization contract represents significant cost savings for the government in lieu of traditional funding options such as Military Construction (MILCON) including approximately $35 million in repair and replacement investments of electric infrastructure at NSF Indian Head.

“The Navy must look inside the shore to find effective ways to conduct our business and operate our programs, and this utility privatization partnership is a great way to accomplish that, said Capt. Omarr Tobias, NAVFAC Washington commanding officer.

The utilities privatization contract addresses cybersecurity requirements and improves control features, while providing the flexibility necessary to refine and enhance future cybersecurity measures. The service provider is contractually required to comply with National Institute of Standards and Technology criteria and protect controlled unclassified information.

NSF Indian Head is strategically situated less than 30 miles south of the nation’s capital. In addition to its military value, the 3400-acre installation makes a significant economic contribution to the local community by serving as one of Charles County, Maryland’s largest employers.

NSF Indian Head was founded in 1890 and began as a gun test facility on the Potomac River. The installation evolved and expanded to include numerous scientific and response-force missions that serve all branches of the military – Navy, Air Force, Army and Marines.

NAVFAC is the Systems Command that delivers and maintains quality, sustainable facilities, acquires and manages capabilities for the Navy’s expeditionary combat forces, provides contingency engineering response, and enables energy security and environmental stewardship. NAVFAC Washington directly supports Joint Task Force National Capital Region and its partnership with all local, state, and federal agencies in the region.