DO for Natural Gas Service to Federal Prison System in Texas awarded to Atmos Energy Corporation for FY26

Contract Overview

Contract Amount: $240,434 ($240.4K)

Contractor: Atmos Energy Corporation

Awarding Agency: Department of Justice

Start Date: 2025-10-01

End Date: 2026-09-30

Contract Duration: 364 days

Daily Burn Rate: $661/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: NATURAL GAS SERVICE FOR FY 26

Place of Performance

Location: FORT WORTH, TARRANT County, TEXAS, 76119

State: Texas Government Spending

Plain-Language Summary

Department of Justice obligated $240,433.65 to ATMOS ENERGY CORPORATION for work described as: NATURAL GAS SERVICE FOR FY 26 Key points: 1. Contract awarded on a not available for competition basis, raising questions about potential cost savings through competitive bidding. 2. The contract value of approximately $240K for one year of service appears reasonable for utility provision in a specific geographic area. 3. Fixed-price contract structure shifts cost risk to the contractor, which can be beneficial for the government if costs are well-estimated. 4. The contract duration of one year (FY26) allows for periodic re-evaluation of market prices and service needs. 5. Service is for the Federal Prison System in Texas, indicating a critical infrastructure need for correctional facilities. 6. The North American Industry Classification System (NAICS) code 221118 suggests a focus on electric power generation, which may be a misclassification or indicate ancillary services related to energy provision.

Value Assessment

Rating: fair

The contract value of $240,433.65 for one year of natural gas service appears to be within a reasonable range for a single facility or a small complex. Without specific details on the volume of natural gas required or the exact location within Texas, a precise benchmark is difficult. However, utility costs for federal facilities can vary significantly based on size and consumption. The fixed-price nature of the contract provides cost certainty for the government, but it's essential to ensure the price reflects current market conditions for natural gas.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a 'not available for competition' basis. This typically means that only one source is capable of providing the required service, often due to the nature of the utility infrastructure or specific location requirements. While this can be justified for essential services like utilities, it limits the government's ability to leverage competitive market forces to potentially secure lower prices. The lack of competition means pricing is negotiated directly with Atmos Energy Corporation.

Taxpayer Impact: The absence of competition means taxpayers may not benefit from the cost reductions typically achieved through bidding processes. The government relies on the contractor's proposed price being fair and reasonable, without the pressure of competing offers.

Public Impact

The primary beneficiaries are the inmates and staff of the Federal Prison System facilities in Texas, who will receive essential heating, cooking, and power services. The service delivered is natural gas, crucial for the operational continuity of the correctional facilities. The geographic impact is localized to the specific prison facilities within Texas where Atmos Energy Corporation provides natural gas service. There are no direct workforce implications mentioned, as this is a service contract for utility provision.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher-than-market prices.
Potential for price increases in future contract periods if market conditions change and competition remains limited.
NAICS code 221118 (Other Electric Power Generation) seems potentially misaligned with 'NATURAL GAS SERVICE', requiring clarification on the scope of services.

Positive Signals

Fixed-price contract provides budget certainty for the government.
Ensures essential utility services for critical federal infrastructure (prisons).
Contract duration allows for periodic review and potential renegotiation.

Sector Analysis

The energy sector, specifically natural gas distribution, is a critical utility service. Federal agencies are significant consumers of energy, and contracts for natural gas are common. The market for natural gas is influenced by global supply and demand, regulatory environments, and infrastructure availability. For federal facilities, securing reliable and cost-effective natural gas is essential for operations. Benchmarking this contract's value would require comparing it to similar utility contracts for federal facilities of comparable size and location, or to prevailing commercial rates in the specific Texas region served by Atmos Energy.

Small Business Impact

This contract does not appear to have a small business set-aside. As a utility service provided by a large corporation (Atmos Energy), it is unlikely that subcontracting opportunities for small businesses would be significant or mandated under this specific award. The focus is on the direct provision of natural gas service.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the contracting officer and the Federal Prison System's facilities management. Accountability measures are inherent in the fixed-price contract terms, requiring delivery of specified services. Transparency is limited due to the sole-source nature of the award, with details of the negotiation process not publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Federal Prison System Operations
Department of Justice Utilities Contracts
Texas Federal Facilities Energy Procurement
Natural Gas Supply Contracts

Risk Flags

Sole-source award
Potential NAICS code misclassification

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $240,433.65 to ATMOS ENERGY CORPORATION. NATURAL GAS SERVICE FOR FY 26

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 $240,433.65.

What is the period of performance?

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

What is the specific justification for awarding this contract on a 'not available for competition' basis?

Contracts awarded on a 'not available for competition' basis are typically justified when only one responsible source is available to meet the government's needs. For utility services like natural gas, this often occurs when a specific contractor holds a monopoly on the distribution infrastructure in the geographic area where the federal facility is located. The Federal Prison System would need to provide documentation and a detailed justification to the contracting officer, demonstrating why other potential suppliers cannot fulfill the requirement. This could be due to the lack of existing pipelines, the prohibitive cost of extending infrastructure, or specific technical requirements that only one vendor can meet. Without this justification, the award could be challenged.

How does the contract value of $240,433.65 compare to market rates for natural gas in Texas for similar facilities?

Benchmarking the contract value of $240,433.65 requires detailed information on the volume of natural gas consumed, the specific location within Texas, and the contract's service level agreements. Natural gas prices fluctuate based on market conditions, demand, and regional supply. For a single federal prison facility, this annual cost might be reasonable if it includes significant usage for heating, cooking, and potentially power generation. However, without access to the contractor's pricing structure (e.g., per therm rates, fixed vs. variable components) and comparative data for other federal or large commercial facilities in the same service area, a definitive comparison is challenging. The 'not available for competition' status further complicates direct price comparisons, as competitive bids would normally establish a clearer market price.

What are the potential risks associated with a sole-source utility contract for a federal prison?

The primary risk associated with a sole-source utility contract for a federal prison is the potential for inflated pricing due to the lack of competition. The government may end up paying more than necessary if the contractor does not face market pressures to offer the most competitive rate. Another risk is service reliability; while utility providers are generally reliable, a sole-source agreement might reduce the incentive for exceptional service delivery compared to a competitive environment. Furthermore, if the contractor's financial stability were to decline, the government has limited options for switching providers without significant disruption. Dependence on a single provider also poses a strategic risk if the contractor's business practices or pricing strategies change unfavorably.

What is the historical spending pattern for natural gas services at this specific Federal Prison System location?

To assess historical spending patterns, one would need to access previous contract awards for natural gas services to the specific Federal Prison System facility or facilities in Texas covered by this award. This would involve searching federal procurement databases (like FPDS or USASpending) for prior contracts with Atmos Energy Corporation or other natural gas providers serving these locations. Analyzing past contract values, durations, and any modifications would reveal trends in spending. For instance, consistent year-over-year increases could indicate rising market prices or changes in consumption, while significant fluctuations might suggest different contract terms or competitive bidding outcomes in prior periods. Understanding this history is crucial for evaluating the current contract's value and identifying potential cost-saving opportunities.

Does the NAICS code '221118 - Other Electric Power Generation' accurately reflect the 'NATURAL GAS SERVICE' contract?

The NAICS code '221118 - Other Electric Power Generation' appears to be a potential misclassification for a contract primarily described as 'NATURAL GAS SERVICE'. NAICS code 221118 typically covers establishments primarily engaged in generating electric power, including through the use of natural gas as fuel, but it is not the primary code for the distribution or sale of natural gas itself. A more appropriate NAICS code for natural gas distribution and sales might be within the 'Natural Gas Distribution' sector (e.g., 221210). It is possible that the contract includes ancillary services related to power generation at the facility, or that the classification was made in error. Clarification from the contracting agency would be necessary to confirm the exact scope of services covered under this code and contract.

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: $240,434

Exercised Options: $240,434

Current Obligation: $240,434

Actual Outlays: $28,509

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 47PA0419D0007

IDV Type: IDC

Timeline