GSA's $16.7M Electric Power Distribution Contract with Entergy New Orleans Faces Limited Competition

Contract Overview

Contract Amount: $16,721,225 ($16.7M)

Contractor: Entergy NEW Orleans, Inc.

Awarding Agency: General Services Administration

Start Date: 2003-10-01

End Date: 2013-09-30

Contract Duration: 3,652 days

Daily Burn Rate: $4.6K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Energy

Official Description: ELECTRIC UTILITIES

Place of Performance

Location: NEW ORLEANS, ORLEANS County, LOUISIANA, 70112

State: Louisiana Government Spending

Plain-Language Summary

General Services Administration obligated $16.7 million to ENTERGY NEW ORLEANS, INC. for work described as: ELECTRIC UTILITIES Key points: 1. The contract value is $16.7 million over 10 years. 2. Competition is limited, raising concerns about price discovery. 3. The sector is Electric Utilities, a critical infrastructure service. 4. Risk is moderate due to the long-term nature and limited competition.

Value Assessment

Rating: questionable

The contract's 'NOT AVAILABLE FOR COMPETITION' status and lack of a benchmark price (PSC is blank) make a direct value assessment difficult. The award type 'DCA' (Distribution Cost Adjustment) suggests pricing may be regulated or based on cost recovery, which can be less efficient than competitive pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract is explicitly 'NOT AVAILABLE FOR COMPETITION', indicating a sole-source or limited competition scenario. This significantly restricts price discovery and potentially leads to higher costs for taxpayers as there is no market pressure to offer the best price.

Taxpayer Impact: Limited competition in essential services like electricity can result in higher costs for taxpayers over the contract's 10-year duration, as competitive pressures are absent.

Public Impact

Taxpayers may be overpaying for electricity due to the lack of competitive bidding. The long-term nature of the contract (2003-2013) locks the government into potentially suboptimal pricing. Reliance on a single provider for essential services like electricity distribution can create vulnerabilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition
Lack of benchmark pricing
Long contract duration

Positive Signals

Essential service provision
Firm Fixed Price contract type (though DCA may modify this)

Sector Analysis

This contract falls within the Electric Utilities sector, specifically for Electric Power Distribution. Spending in this sector is generally stable and essential, but often characterized by regulated monopolies or limited competition, making oversight crucial.

Small Business Impact

There is no indication of small business participation in this contract. The provider, Entergy New Orleans, Inc., is a large utility company, suggesting this contract did not prioritize small business set-asides.

Oversight & Accountability

The 'NOT AVAILABLE FOR COMPETITION' status warrants further oversight to ensure the government obtained the best possible value under the circumstances. The lack of a PSC code also suggests potential gaps in data collection or reporting for accountability.

Related Government Programs

Electric Power Distribution
General Services Administration Contracting
Public Buildings Service Programs

Risk Flags

Potential for overpayment due to lack of competition.
Risk associated with 'DCA' award type potentially increasing costs.
Long contract duration limits flexibility and market responsiveness.
Lack of clear pricing benchmark (PSC) hinders value assessment.

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $16.7 million to ENTERGY NEW ORLEANS, INC.. ELECTRIC UTILITIES

Who is the contractor on this award?

The obligated recipient is ENTERGY NEW ORLEANS, INC..

Which agency awarded this contract?

Awarding agency: General Services Administration (Public Buildings Service).

What is the total obligated amount?

The obligated amount is $16.7 million.

What is the period of performance?

Start: 2003-10-01. End: 2013-09-30.

What specific factors justified classifying this contract as 'NOT AVAILABLE FOR COMPETITION' for electric power distribution?

The justification for 'NOT AVAILABLE FOR COMPETITION' likely stems from the nature of utility services, which are often provided by regulated monopolies within specific geographic areas. Entergy New Orleans, Inc. may be the sole provider of electric power distribution infrastructure in the area where the government facility is located, making competition infeasible without significant infrastructure duplication.

How does the 'DCA' award type impact the 'FIRM FIXED PRICE' contract type and taxpayer risk?

The 'DCA' (Distribution Cost Adjustment) award type suggests that the price is not truly fixed but is subject to adjustments based on the utility's costs. This introduces taxpayer risk as the government may end up paying more if Entergy's costs increase, undermining the intended benefit of a firm fixed price contract and potentially leading to higher overall spending than initially anticipated.

What is the estimated taxpayer impact of the lack of competition over the contract's 10-year duration?

Without competitive bidding, it's difficult to quantify the exact overpayment. However, studies on government contracting often show that competitive processes can yield savings of 10-30% compared to sole-source awards. For a $16.7 million contract, this could translate to millions in potential overspending, impacting taxpayer funds significantly over the decade.

Industry Classification

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

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: Entergy Corporation (UEI: 809749005)

Address: 639 LOYOLA AVE, NEW ORLEANS, LA, 02

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

Financial Breakdown

Contract Ceiling: $16,721,225

Exercised Options: $16,721,225

Current Obligation: $16,721,225

Timeline