DOJ awards $36.4M contract for electric power generation services in Texas, citing sole-source justification

Contract Overview

Contract Amount: $36,402 ($36.4K)

Contractor: Atmos Energy Corporation

Awarding Agency: Department of Justice

Start Date: 2025-10-01

End Date: 2026-01-31

Contract Duration: 122 days

Daily Burn Rate: $298/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: ATMOS FY26 OCT

Place of Performance

Location: DALLAS, DALLAS County, TEXAS, 75265

State: Texas Government Spending

Plain-Language Summary

Department of Justice obligated $36,402.46 to ATMOS ENERGY CORPORATION for work described as: ATMOS FY26 OCT Key points: 1. Contract awarded for electric power generation services, indicating a need for reliable energy supply. 2. The contract's duration of 122 days suggests a short-term or interim need. 3. Sole-source award raises questions about potential lack of competition and price discovery. 4. The fixed-price contract type aims to control costs, but the absence of competition may negate savings. 5. Services are geographically focused within Texas, potentially impacting local energy infrastructure. 6. The contract falls under 'Other Electric Power Generation,' a broad category requiring further definition.

Value Assessment

Rating: questionable

The contract value of $36.4 million for a 122-day period appears high, averaging approximately $298,380 per day. Without comparable sole-source contracts for similar services in the region or specific details on the scope of 'Other Electric Power Generation,' it is difficult to benchmark the value effectively. The lack of competition inherently limits the ability to assess if this price represents fair market value.

Cost Per Unit: $298,380 per day (estimated)

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 is a critical detail requiring further investigation. Typically, sole-source awards occur when only one responsible source can provide the required supplies or services. The absence of a competitive process means potential bidders were not given an opportunity to offer their services, which can lead to higher prices and reduced innovation.

Taxpayer Impact: Taxpayers may be paying a premium due to the lack of competitive bidding. Without exploring alternative sources, the government may not be securing the most cost-effective solution for its energy needs.

Public Impact

The Federal Prison System / Bureau of Prisons is the primary beneficiary, ensuring operational continuity through reliable power. Services delivered include electric power generation, crucial for maintaining essential functions within correctional facilities. The geographic impact is limited to Texas, specifically where the services are being provided. Workforce implications are not immediately clear but may involve specialized personnel for power generation operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition for a significant contract value raises concerns about potential overpayment.
The broad 'Other Electric Power Generation' category lacks specificity, making it difficult to assess the exact services required and their necessity.
The short contract duration (122 days) might indicate an emergency or temporary solution, but the justification for sole-sourcing remains unclear.
Limited transparency due to sole-source award hinders public understanding of the procurement process and value obtained.

Positive Signals

The contract ensures the continuity of essential services for the Federal Prison System.
The firm fixed-price contract type provides cost certainty for the government, assuming the price is reasonable.
The award is made to a specific entity, ATMOS ENERGY CORPORATION, suggesting they are a known provider in the region.

Sector Analysis

The energy sector, particularly electric power generation, is critical for government operations. This contract falls under 'Other Electric Power Generation,' which could encompass a range of services from traditional power plants to more specialized solutions. The market for energy services is often characterized by significant infrastructure investment and regulatory oversight. Benchmarking this contract's value is challenging without knowing the specific technology or service provided, but large-scale power generation contracts can run into millions or billions of dollars.

Small Business Impact

There is no indication that this contract includes small business set-asides, as the 'ss' field is false and the 'sb' field is also false. This suggests that small businesses were not specifically targeted for this procurement. Consequently, there are no direct subcontracting implications for small businesses arising from this award based on the provided data. The focus appears to be on a larger, potentially sole-source provider.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Justice's internal audit and compliance functions, as well as potentially the Bureau of Prisons' own oversight mechanisms. Given the sole-source nature, transparency might be limited unless specific justifications and documentation are publicly released. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Federal Prison System Operations
Department of Justice Energy Procurement
Texas Electric Power Grid Services
Sole-Source Energy Contracts

Risk Flags

Sole-source award without clear justification
High daily cost for power generation services
Broad and potentially vague service description ('Other Electric Power Generation')

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $36,402.46 to ATMOS ENERGY CORPORATION. ATMOS FY26 OCT

Who is the contractor on this award?

The obligated recipient is ATMOS ENERGY CORPORATION.

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 $36,402.46.

What is the period of performance?

Start: 2025-10-01. End: 2026-01-31.

What is the specific nature of the 'Other Electric Power Generation' services being procured, and why was it deemed unavailable for competition?

The provided data classifies the service under 'Other Electric Power Generation' (NAICS code 221118) and states the contract was 'NOT AVAILABLE FOR COMPETITION.' This broad classification lacks specificity regarding the exact services, such as whether it involves operating existing facilities, providing emergency power, or constructing new generation capacity. The justification for sole-sourcing is critical; typically, this requires demonstrating that only one vendor can meet the government's needs due to unique capabilities, proprietary technology, or urgent circumstances. Without this detailed justification, it's impossible to assess if the sole-source award was appropriate or if alternative solutions were overlooked, potentially impacting the value for taxpayers.

How does the daily cost of this contract compare to market rates for similar electric power generation services in Texas?

The contract's estimated daily cost is approximately $298,380 ($36,402,460 / 122 days). Benchmarking this figure against market rates for electric power generation in Texas is challenging without knowing the specific type of generation (e.g., natural gas, solar, emergency diesel), the capacity (megawatts), and the service level agreements. However, this daily rate appears substantial. For context, commercial power purchase agreements for utility-scale solar or wind farms can range from $30,000 to $100,000 per day depending on capacity and contract terms. Industrial or emergency power generation solutions can be significantly more expensive. The sole-source nature of this award prevents a direct comparison with competitive bids, making it difficult to ascertain if this rate represents fair market value.

What is ATMOS ENERGY CORPORATION's track record with federal sole-source contracts, particularly for power generation?

ATMOS ENERGY CORPORATION is primarily known as a major natural gas distribution company serving millions of residential, commercial, and industrial customers across eight states, including Texas. While they are a significant energy provider, their core business is natural gas distribution, not necessarily large-scale electric power generation for federal agencies, especially on a sole-source basis. Information regarding their specific track record with federal sole-source contracts for power generation is not readily available in public databases. Further investigation into the contract's justification would be needed to understand why they were uniquely positioned to fulfill this requirement, particularly if it involves services beyond standard natural gas supply.

What are the potential risks associated with awarding a sole-source contract for essential services like electric power generation?

The primary risk of a sole-source contract for essential services like electric power generation is the lack of competition, which can lead to inflated prices and reduced incentive for the contractor to innovate or provide optimal service. Without competitive pressure, the government may overpay for the services rendered. Furthermore, it limits the government's ability to explore alternative technologies or providers that might offer better value, efficiency, or reliability. There's also a risk that the sole-source justification might be weak or based on outdated information, potentially masking a failure to properly plan or conduct market research. This can undermine public trust and lead to inefficient use of taxpayer funds.

How does this contract's value compare to historical federal spending on electric power generation services in Texas?

Comparing this $36.4 million contract for a 122-day period to historical federal spending on electric power generation in Texas requires access to detailed historical procurement data, which is not fully provided here. However, federal agencies, particularly those with large facilities like military bases or correctional institutions, do spend significant amounts on energy. The Bureau of Prisons, as the procuring entity, likely has ongoing needs for power. The 'Other Electric Power Generation' category is broad, making direct historical comparisons difficult without knowing the specific services. If this represents a new or expanded requirement, or a shift in how power is procured (e.g., from grid reliance to on-site generation), historical spending patterns might not be directly comparable. The sole-source nature also suggests this might be a unique situation rather than a recurring competitive procurement.

Industry Classification

NAICS: Utilities › Electric Power Generation, Transmission and Distribution › Other Electric Power Generation

Product/Service Code: UTILITIES AND HOUSEKEEPING › UTILITIES

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 5430 LBJ FWY STE 1800, DALLAS, TX, 75240

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

Financial Breakdown

Contract Ceiling: $36,402

Exercised Options: $36,402

Current Obligation: $36,402

Actual Outlays: $17,360

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 47PA0419D0007

IDV Type: IDC

Timeline