IRS to pay $7.6M for electric service in West Virginia under GSA contract

Contract Overview

Contract Amount: $7,656,570 ($7.7M)

Contractor: THE Potomac Edison CO

Awarding Agency: Department of the Treasury

Start Date: 2021-04-26

End Date: 2024-09-30

Contract Duration: 1,253 days

Daily Burn Rate: $6.1K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: THE INTERNAL REVENUE SERVICE (IRS) LOCATED AT 250 MURALL DRIVE, KEARNEYSVILLE, WV, 25430, REQUIRES ELECTRIC SERVICE. THE ELECTRIC SERVICE SHALL BE PROVIDED UNDER THE TERMS AND CONDITIONS OF THE GSA AREAWIDE CONTRACT 47PA0418D0035.

Place of Performance

Location: KEARNEYSVILLE, JEFFERSON County, WEST VIRGINIA, 25430

State: West Virginia Government Spending

Plain-Language Summary

Department of the Treasury obligated $7.7 million to THE POTOMAC EDISON CO for work described as: THE INTERNAL REVENUE SERVICE (IRS) LOCATED AT 250 MURALL DRIVE, KEARNEYSVILLE, WV, 25430, REQUIRES ELECTRIC SERVICE. THE ELECTRIC SERVICE SHALL BE PROVIDED UNDER THE TERMS AND CONDITIONS OF THE GSA AREAWIDE CONTRACT 47PA0418D0035. Key points: 1. The IRS is procuring electric service for its Kearneysville, WV facility. 2. The contract is awarded to The Potomac Edison Co. 3. This is a delivery order under an existing GSA Areawide Contract. 4. The contract is for a firm fixed price. 5. The total value is approximately $7.66 million over 3 years.

Value Assessment

Rating: fair

The contract value of $7.66 million for electric service over three years appears reasonable for a government facility of this nature. However, without specific usage data or local utility rates, a precise benchmark is difficult. The firm fixed price structure provides cost certainty.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract is a delivery order under a GSA Areawide Contract, which implies a pre-competed master agreement. However, the specific award to The Potomac Edison Co. is noted as 'NOT AVAILABLE FOR COMPETITION,' suggesting this particular delivery order may have had limited or no direct competition at the task order level.

Taxpayer Impact: Taxpayers are likely paying market rates for electricity, but the lack of direct competition for this delivery order may have limited potential cost savings.

Public Impact

Ensures continuous power supply for critical IRS operations at the Kearneysville facility. Supports the IRS's mission by providing essential utilities. The contract value contributes to the local economy in West Virginia. Government reliance on utility providers highlights the importance of stable energy infrastructure.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition for the delivery order
Potential for higher costs due to lack of direct competition

Positive Signals

Utilizes an existing GSA contract vehicle
Provides essential service for government operations
Firm fixed price offers budget predictability

Sector Analysis

The procurement falls under the 'Other Electric Power Generation' category, which is a standard utility service for federal facilities. Spending benchmarks for electric services vary significantly by location, facility size, and energy consumption patterns. This contract value appears within a typical range for a medium-to-large government site.

Small Business Impact

The data indicates that small business participation was not a factor in this award (ss: false, sb: false). The contract was awarded to The Potomac Edison Co., a larger utility provider, suggesting no specific set-aside for small businesses was utilized or applicable.

Oversight & Accountability

The use of a GSA Areawide Contract provides a layer of oversight. However, the 'NOT AVAILABLE FOR COMPETITION' status for this specific delivery order warrants further scrutiny to ensure fair pricing and adherence to procurement regulations.

Related Government Programs

Other Electric Power Generation
Department of the Treasury Contracting
Internal Revenue Service Programs

Risk Flags

Limited competition
Potential for non-competitive pricing
Lack of detailed usage data for benchmarking
Reliance on a single provider for essential service

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $7.7 million to THE POTOMAC EDISON CO. THE INTERNAL REVENUE SERVICE (IRS) LOCATED AT 250 MURALL DRIVE, KEARNEYSVILLE, WV, 25430, REQUIRES ELECTRIC SERVICE. THE ELECTRIC SERVICE SHALL BE PROVIDED UNDER THE TERMS AND CONDITIONS OF THE GSA AREAWIDE CONTRACT 47PA0418D0035.

Who is the contractor on this award?

The obligated recipient is THE POTOMAC EDISON CO.

Which agency awarded this contract?

Awarding agency: Department of the Treasury (Internal Revenue Service).

What is the total obligated amount?

The obligated amount is $7.7 million.

What is the period of performance?

Start: 2021-04-26. End: 2024-09-30.

What specific factors led to the 'NOT AVAILABLE FOR COMPETITION' designation for this delivery order, and were alternatives explored?

The 'NOT AVAILABLE FOR COMPETITION' designation typically arises from specific circumstances such as urgency, the existence of only one responsible source, or a follow-on contract to a previous sole-source award. Without further details, it's unclear if this was due to the nature of the GSA Areawide Contract structure or a unique situation related to the IRS facility's needs. Exploring alternatives, even within the framework of the GSA contract, is crucial for ensuring taxpayer value.

How does the per-kilowatt-hour cost compare to commercial rates in the Kearneysville, WV area for this contract?

A direct comparison of the per-kilowatt-hour cost is not possible with the provided data, as usage volume and specific rate structures are missing. However, government contracts often negotiate rates that are competitive with, or aim to be lower than, commercial rates through bulk purchasing power. Further analysis would require detailed usage data and access to local commercial utility rate schedules.

What is the potential risk of service interruption or price escalation given the contract structure and provider?

The risk of service interruption is generally low, as The Potomac Edison Co. is a utility provider responsible for maintaining service. The firm fixed price structure mitigates price escalation risk for the duration of the contract. However, the lack of direct competition for this delivery order could imply less leverage in future negotiations or renewals if the situation persists.

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

Parent Company: Firstenergy Corp.

Address: 10802 BOWER AVENUE, WILLIAMSPORT, MD, 21795

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

Financial Breakdown

Contract Ceiling: $7,656,570

Exercised Options: $7,656,570

Current Obligation: $7,656,570

Actual Outlays: $7,656,570

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 47PA0418D0035

IDV Type: IDC

Timeline