Utilities Privatization establishes a partnership and direct investment for both the Air Force and utility system providers because systems are privatized were fiscally attractive and operationally sound. Privatization of utility systems involves a "bill of sale" conveyance of the real property to a third party, such as a municipal, private, regional, district, or cooperative utility company. The Air Force conveys the entire system within points of demarcation on the installation, and no longer owns, operates, maintains, or repairs these systems. The agreement also includes a utility service contract for operations, maintenance, and recapitalization for a specified period of time, not to exceed 50 years. System ownership is transferred to the successful offeror under terms and conditions that protect Air Force interests. The terms of the contract are solely for the service of the system and rarely include electrical power, natural gas, water, and wastewater treatment.
By divesting the Air Force of these utilities, active, Guard, and Reserve installation commanders can focus on operations and core defense missions and functions, rather than repairs and upgrades to utility systems.