DoD's $17.2M Natural Gas Distribution Contract Awarded to Peoples Gas System, Inc. Lacks Competition
Contract Overview
Contract Amount: $17,219,127 ($17.2M)
Contractor: Peoples GAS System, Inc
Awarding Agency: Department of Defense
Start Date: 2009-09-29
End Date: 2013-04-30
Contract Duration: 1,309 days
Daily Burn Rate: $13.2K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Energy
Official Description: CNIC PHASE II ENERGY CONSERVATION MEASUR
Place of Performance
Location: JACKSONVILLE, DUVAL County, FLORIDA, 32212
State: Florida Government Spending
Plain-Language Summary
Department of Defense obligated $17.2 million to PEOPLES GAS SYSTEM, INC for work described as: CNIC PHASE II ENERGY CONSERVATION MEASUR Key points: 1. The contract value is $17.2 million for natural gas distribution services. 2. Competition was absent, as the contract was not competed. 3. The lack of competition raises concerns about potential overpricing and reduced value for taxpayers. 4. The sector is Energy, specifically natural gas distribution.
Value Assessment
Rating: questionable
Without competitive bidding, it's difficult to assess if the $17.2 million price represents fair market value. Benchmarking against similar natural gas distribution contracts in Florida would be necessary to determine if the pricing is reasonable.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was not competed, indicating a sole-source or limited competition award. This significantly limits price discovery and may lead to higher costs for the government.
Taxpayer Impact: The absence of competition could result in taxpayers paying more than necessary for these essential energy services.
Public Impact
Taxpayers may be overpaying for natural gas distribution due to a lack of competitive bidding. The Department of the Navy relies on a single provider for a critical energy resource. The long duration of the contract (over 3 years) locks the government into this arrangement.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Potential for overpricing
- Sole-source award
Positive Signals
- Essential energy service provided
- Firm fixed price contract type
Sector Analysis
This contract falls within the Energy sector, specifically natural gas distribution. Spending in this area is crucial for operational continuity, but competitive procurement is vital to ensure cost-effectiveness.
Small Business Impact
There is no indication that small businesses were involved in this contract, as it was awarded directly to Peoples Gas System, Inc. without competition.
Oversight & Accountability
The lack of competition suggests potential weaknesses in oversight regarding procurement practices. Further review is needed to ensure adherence to regulations promoting fair and open competition.
Related Government Programs
- Natural Gas Distribution
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Lack of competition
- Potential for price inflation
- Sole-source award
- Limited oversight on price justification
Tags
natural-gas-distribution, department-of-defense, fl, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $17.2 million to PEOPLES GAS SYSTEM, INC. CNIC PHASE II ENERGY CONSERVATION MEASUR
Who is the contractor on this award?
The obligated recipient is PEOPLES GAS SYSTEM, INC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Navy).
What is the total obligated amount?
The obligated amount is $17.2 million.
What is the period of performance?
Start: 2009-09-29. End: 2013-04-30.
What was the justification for not competing this contract, and was a sole-source justification properly documented?
The provided data indicates the contract was 'NOT COMPETED'. Without further documentation, the specific justification for this sole-source award is unknown. Typically, sole-source justifications require rigorous documentation proving that only one responsible source can provide the required supplies or services. The absence of competition raises concerns about whether such a justification was valid or if it represents a missed opportunity for cost savings.
How does the $17.2 million price compare to market rates for similar natural gas distribution services in Florida during the contract period?
Benchmarking the $17.2 million price against similar natural gas distribution contracts awarded through competitive processes in Florida between 2009 and 2013 is essential. Without this comparative analysis, it's impossible to determine if the government received a fair price. The lack of competition makes it difficult to ascertain if the price reflects market value or includes a premium due to the non-competitive nature of the award.
What are the risks associated with relying on a single, non-competed provider for a critical utility like natural gas?
The primary risk is financial: the government may be overpaying due to the lack of competitive pressure. Other risks include potential service disruptions if the sole provider faces issues, and limited leverage for negotiating service improvements or contract modifications. The long-term nature of the contract further entrenches these risks, potentially impacting the DoD's operational budget and efficiency.
Industry Classification
NAICS: Utilities › Natural Gas Distribution › Natural Gas Distribution
Product/Service Code: UTILITIES AND HOUSEKEEPING › UTILITIES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: NEW Mexico GAS Company Inc. (UEI: 248535390)
Address: 702 N. FRANKLIN ST, TAMPA, FL, 33602
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $17,219,127
Exercised Options: $17,219,127
Current Obligation: $17,219,127
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: N6945007G0089
IDV Type: IDC
Timeline
Start Date: 2009-09-29
Current End Date: 2013-04-30
Potential End Date: 2013-04-30 00:00:00
Last Modified: 2017-08-30
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