DOJ awards $113K for natural gas services to Mid American Energy Company, citing sole-source justification

Contract Overview

Contract Amount: $113,107 ($113.1K)

Contractor: MID American Energy Company

Awarding Agency: Department of Justice

Start Date: 2025-10-01

End Date: 2026-09-30

Contract Duration: 364 days

Daily Burn Rate: $311/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Energy

Official Description: FY26 P4 MIDAMERICAN NATURAL GAS SERVICES

Place of Performance

Location: DAVENPORT, SCOTT County, IOWA, 52808

State: Iowa Government Spending

Plain-Language Summary

Department of Justice obligated $113,107.4 to MID AMERICAN ENERGY COMPANY for work described as: FY26 P4 MIDAMERICAN NATURAL GAS SERVICES Key points: 1. Contract awarded on a sole-source basis, limiting potential cost savings from competition. 2. Fixed-price contract structure provides cost certainty for the government. 3. Performance period of one year suggests a need for ongoing utility services. 4. The contract falls under the 'Regulation and Administration of Communications, Electric, Gas, and Other Utilities' NAICS code. 5. Geographic location in Iowa may indicate specific facility needs. 6. No indication of small business participation or set-aside.

Value Assessment

Rating: fair

The contract value of $113,107.4 for one year of natural gas services appears reasonable for a utility contract of this nature. However, without a competitive bidding process, it is difficult to benchmark the pricing against market rates or identify potential cost savings. The fixed-price nature of the award provides budget predictability. Further analysis would require comparing this rate to similar utility contracts awarded competitively in the same region or for similar federal facilities.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. The justification for this approach is 'NOT AVAILABLE FOR COMPETITION,' which typically implies that only one responsible source is capable of providing the required service. This lack of competition limits the government's ability to explore alternative providers and potentially secure more favorable pricing through a bidding process.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as the government may not benefit from the price reductions typically achieved through competitive bidding.

Public Impact

Federal Prison System facilities in Iowa will receive natural gas services. Ensures continued operation and essential services for correctional facilities. Supports the energy needs of federal inmates and staff. The contract directly benefits the awarded contractor, Mid American Energy Company.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in a higher price than a competitively bid contract.
Sole-source justification needs to be robust to ensure taxpayer funds are used efficiently.
Limited transparency into the pricing structure due to the absence of bids.

Positive Signals

Fixed-price contract provides cost certainty for the government.
Contract ensures continuity of essential utility services for federal facilities.
Award to an established utility provider likely ensures reliable service delivery.

Sector Analysis

The energy utilities sector is a critical component of federal infrastructure, encompassing the provision of electricity, natural gas, and other essential services to government facilities nationwide. Federal agencies often rely on established utility providers, which can sometimes lead to sole-source or limited competition awards, particularly for localized services. The market for natural gas services is typically regional, with established providers serving specific geographic areas. Benchmarking this contract would involve comparing its unit costs and overall value to similar natural gas supply contracts awarded to utilities in Iowa or comparable states.

Small Business Impact

There is no indication that this contract included a small business set-aside. The award was made to Mid American Energy Company, a large utility provider. Consequently, there are no direct subcontracting opportunities for small businesses stemming from this specific award, nor is there an immediate impact on the small business ecosystem related to this contract.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Justice's Federal Prison System / Bureau of Prisons. Accountability measures are inherent in the purchase order terms and conditions, requiring the contractor to deliver specified services. Transparency is limited due to the sole-source nature of the award. The Inspector General for the Department of Justice would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Federal Prison System Utility Contracts
Department of Justice Energy Procurement
Iowa State Energy Services

Risk Flags

Sole-source award
Lack of competition
Potential for higher costs

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $113,107.4 to MID AMERICAN ENERGY COMPANY. FY26 P4 MIDAMERICAN NATURAL GAS SERVICES

Who is the contractor on this award?

The obligated recipient is MID AMERICAN ENERGY COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Justice (Federal Prison System / Bureau of Prisons).

What is the total obligated amount?

The obligated amount is $113,107.4.

What is the period of performance?

Start: 2025-10-01. End: 2026-09-30.

What is the historical spending pattern for natural gas services by the Federal Prison System in Iowa?

Analyzing historical spending for natural gas services by the Federal Prison System in Iowa would require accessing detailed procurement data over several fiscal years. This would involve identifying all contracts awarded for natural gas supply to facilities within the state, noting the contractors, award amounts, contract types, and duration. A trend analysis could reveal whether spending has increased, decreased, or remained stable. It would also highlight if Mid American Energy Company has been a consistent provider and whether previous awards were also sole-source or competitively bid. Understanding past spending patterns is crucial for contextualizing the current $113,107.4 award and assessing its value for money over time.

How does the pricing of this contract compare to other federal natural gas contracts in similar regions?

Benchmarking the pricing of this $113,107.4 sole-source contract against similar federal natural gas contracts in comparable regions is challenging without access to competitive bid data. Typically, a competitive process reveals a range of prices, allowing for a clear assessment of whether the awarded price is at, above, or below market rates. For sole-source awards, comparison relies on publicly available data for similar contracts or industry benchmarks. If other federal facilities in Iowa or adjacent states have recently procured natural gas under competitive solicitations, comparing those per-unit costs (e.g., per therm or per dekatherm) or total contract values for similar service durations would provide a valuable reference point to evaluate the fairness of Mid American Energy Company's pricing.

What specific risks are associated with a sole-source award for essential utility services?

Sole-source awards for essential utility services, such as natural gas, present several risks. Primarily, the lack of competition can lead to inflated prices, meaning taxpayers may pay more than necessary. It also reduces the incentive for the sole provider to innovate or improve service quality, as there is no direct threat from competitors. Furthermore, reliance on a single provider can create vulnerability; if the contractor experiences operational issues, service disruptions, or financial instability, the government facility could face significant consequences, potentially impacting its core mission. Ensuring robust contract management and performance monitoring becomes even more critical in sole-source situations to mitigate these risks.

What is the track record of Mid American Energy Company in serving federal government contracts?

Mid American Energy Company's track record in serving federal government contracts can be assessed by reviewing its past performance on federal awards. This involves searching federal procurement databases for previous contracts awarded to the company, noting the agencies served, the services provided, contract values, and performance ratings if available. A history of successful contract completions, timely delivery, and adherence to terms and conditions would indicate reliability. Conversely, any past performance issues, disputes, or contract terminations would raise concerns. Understanding their experience with government contracting, particularly for utility services, provides insight into their capability and potential risks associated with this award.

How does the 'Regulation and Administration of Communications, Electric, Gas, and Other Utilities' NAICS code influence contract competition?

The 'Regulation and Administration of Communications, Electric, Gas, and Other Utilities' NAICS code (926130) often pertains to government administrative functions rather than direct procurement of utility services. However, if this code is associated with the procurement of the *services* themselves, it can influence competition. Utility services are often provided by regulated monopolies or oligopolies within specific geographic regions. This inherent market structure can naturally limit the number of potential bidders, sometimes leading to sole-source or limited competition justifications, even when the government desires a competitive process. The regulatory environment governing utilities also plays a role in how services are priced and procured.

Industry Classification

NAICS: Public Administration › Administration of Economic Programs › Regulation and Administration of Communications, Electric, Gas, and Other Utilities

Product/Service Code: UTILITIES AND HOUSEKEEPING › UTILITIES

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Berkshire Hathaway Inc.

Address: 106 E 2ND ST FL 3, DAVENPORT, IA, 52801

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $113,107

Exercised Options: $113,107

Current Obligation: $113,107

Actual Outlays: $30,449

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline