VA awards $2.3M contract for natural gas to NRG Business Marketing LLC, ensuring energy supply for Buffalo VAMC

Contract Overview

Contract Amount: $2,298,281 ($2.3M)

Contractor: NRG Business Marketing LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2022-12-01

End Date: 2025-11-30

Contract Duration: 1,095 days

Daily Burn Rate: $2.1K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Energy

Official Description: GAS COMMODITY FOR BUFFALO VAMC

Place of Performance

Location: BUFFALO, ERIE County, NEW YORK, 14215

State: New York Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $2.3 million to NRG BUSINESS MARKETING LLC for work described as: GAS COMMODITY FOR BUFFALO VAMC Key points: 1. Contract ensures a stable supply of natural gas for a critical healthcare facility. 2. The contract was awarded through full and open competition, suggesting a competitive bidding process. 3. The fixed-price structure provides cost certainty for the duration of the contract. 4. The contract duration of three years aligns with typical energy supply agreements. 5. The award to NRG Business Marketing LLC indicates a specific market player for this commodity. 6. The contract value is modest in the context of federal energy procurement.

Value Assessment

Rating: good

The contract value of approximately $2.3 million over three years for natural gas supply to the Buffalo VAMC appears reasonable. Benchmarking against similar utility contracts for federal facilities of comparable size and location would provide a more precise assessment. However, the firm fixed-price nature of the contract offers predictable costs, which is a positive indicator of value. Without specific per-unit pricing data or comparison to market fluctuations, a definitive value-for-money judgment is challenging, but the competitive award process suggests a fair market price was likely achieved.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The specific number of bidders is not provided, but this method generally fosters a competitive environment, which is expected to drive down prices and ensure the government receives the best value. The open competition suggests that the Department of Veterans Affairs actively sought multiple proposals to meet its natural gas needs for the Buffalo VAMC.

Taxpayer Impact: Taxpayers benefit from the competitive process through potentially lower prices and a more efficient allocation of resources. Open competition increases the likelihood that the government is not overpaying for essential services like natural gas.

Public Impact

The primary beneficiary is the Department of Veterans Affairs' Buffalo VAMC, ensuring uninterrupted natural gas service for its operations. This contract directly supports the delivery of healthcare services to veterans by maintaining essential facility functions. The geographic impact is localized to Buffalo, New York, where the VAMC is situated. The contract supports the energy sector by engaging a provider for a critical commodity.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific per-unit cost data makes it difficult to assess price efficiency against market trends.
Limited information on the number of bidders prevents a full understanding of the competitive intensity.
The contract is for a commodity, which can be subject to significant price volatility not fully captured in the fixed price.

Positive Signals

Awarded through full and open competition, indicating a robust bidding process.
Firm fixed-price contract provides cost certainty for the duration.
Ensures a critical utility service for a healthcare facility serving veterans.

Sector Analysis

This contract falls within the Energy sector, specifically concerning the procurement of natural gas, a vital utility for federal facilities. The market for natural gas supply is often regional and subject to regulatory oversight and commodity price fluctuations. Federal agencies are significant consumers of energy, and contracts like this are essential for maintaining operations. Comparable spending benchmarks would involve analyzing other federal contracts for natural gas supply to facilities of similar size and location, considering factors like regional pricing differences and contract terms.

Small Business Impact

The provided data indicates that small business participation was not a specific set-aside for this contract (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific impacts on the small business ecosystem stemming from set-aside requirements. The primary contractor, NRG Business Marketing LLC, is likely a larger entity, and the focus of this award is on securing the commodity rather than promoting small business engagement through this specific procurement vehicle.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Veterans Affairs (VA) contracting officers and program managers. They are responsible for monitoring contractor performance, ensuring compliance with contract terms, and verifying delivery of natural gas as specified. Accountability measures are embedded in the contract through performance standards and payment terms. Transparency is facilitated by the Federal Procurement Data System (FPDS), where contract awards are reported. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to this contract were suspected.

Related Government Programs

Federal Energy Management Program
Utility Services Contracts
Department of Veterans Affairs Facility Operations
Natural Gas Procurement

Risk Flags

Potential for price volatility not fully captured by fixed price if market conditions change drastically.
Dependence on a single supplier for a critical utility.
Lack of detailed performance metrics in the summary data.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $2.3 million to NRG BUSINESS MARKETING LLC. GAS COMMODITY FOR BUFFALO VAMC

Who is the contractor on this award?

The obligated recipient is NRG BUSINESS MARKETING LLC.

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $2.3 million.

What is the period of performance?

Start: 2022-12-01. End: 2025-11-30.

What is the historical spending pattern for natural gas at the Buffalo VAMC?

Historical spending data for natural gas at the Buffalo VAMC is not directly available in the provided contract details. However, this $2.3 million contract over three years (approximately $767,000 annually) can serve as a benchmark for future analysis. To understand historical patterns, one would need to access prior contract awards for natural gas at this specific facility or similar VA facilities in the region. Analyzing past expenditures would reveal trends in pricing, consumption volumes, and the number of competing vendors over time, helping to identify any significant deviations or cost efficiencies.

How does the price per unit of natural gas in this contract compare to market rates?

The provided data does not include the specific per-unit cost (e.g., per dekatherm or therm) of natural gas for this contract. Therefore, a direct comparison to prevailing market rates is not possible with the given information. To perform this comparison, one would need to obtain the unit pricing from the contract documents and benchmark it against regional natural gas indices (like those from EIA or specific trading hubs) during the contract period. The firm fixed-price nature suggests the contractor has absorbed potential price volatility, but without the unit price, assessing the fairness of that fixed price relative to the market is speculative.

What is NRG Business Marketing LLC's track record with federal energy contracts?

NRG Business Marketing LLC's track record with federal energy contracts can be assessed by reviewing its award history in the Federal Procurement Data System (FPDS). While this specific contract is for natural gas supply to the Buffalo VAMC, NRG likely holds other contracts for energy commodities or services with various federal agencies. Analyzing these past awards would reveal the types of energy procured, contract values, durations, competition levels, and performance history. A review of past performance evaluations and any reported issues or successes would provide insight into their reliability and experience in serving federal clients.

What are the potential risks associated with this natural gas supply contract?

Potential risks include price volatility if the fixed price was set too low relative to future market conditions, although the risk is primarily on the contractor. Supply disruptions due to unforeseen events (e.g., infrastructure damage, extreme weather) could impact the VAMC, though mitigation plans are usually part of such contracts. Furthermore, changes in energy regulations or environmental policies could affect supply or cost. Ensuring the contractor maintains adequate capacity and adheres to delivery schedules are ongoing monitoring risks for the VA.

How does the competition level for this contract compare to similar energy procurements?

This contract was awarded under 'full and open competition,' which is the preferred method for federal procurements and generally indicates a healthy level of competition. However, the specific number of bids received is not provided, making a direct comparison difficult. For many energy commodity contracts, especially those involving established providers and standard terms, competition can be robust. If only a few bids were received, it might suggest a more concentrated market or specific technical requirements. A broader analysis of similar natural gas contracts across federal agencies would be needed to establish a typical competition level.

What is the significance of the firm fixed-price contract type for this natural gas procurement?

A firm fixed-price (FFP) contract type means the price is set and not subject to adjustment based on the contractor's cost experience. For a commodity like natural gas, which can experience price fluctuations, an FFP contract shifts the risk of cost increases to the contractor. This provides the VA with budget certainty, as the total cost is known upfront. Conversely, if market prices decrease significantly, the contractor may realize a higher profit margin. The FFP structure is generally favored when price is a primary concern and risks can be reasonably estimated.

Industry Classification

NAICS: Utilities › Natural Gas Distribution › Natural Gas Distribution

Product/Service Code: UTILITIES AND HOUSEKEEPING › UTILITIES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: TWO STEP

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 194 S WOOD AVE 2ND FL, ISELIN, NJ, 08830

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

Financial Breakdown

Contract Ceiling: $2,298,281

Exercised Options: $2,298,281

Current Obligation: $2,298,281

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 47PA0422D0083

IDV Type: IDC

Timeline