DOJ's $11M Natural Gas Distribution contract awarded to Arapahoe Communications Inc/ST shows long duration and fixed pricing

Contract Overview

Contract Amount: $11,028,621 ($11.0M)

Contractor: Arapahoe Communications Inc/St

Awarding Agency: Department of Justice

Start Date: 2000-12-15

End Date: 2009-09-30

Contract Duration: 3,211 days

Daily Burn Rate: $3.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Energy

Place of Performance

Location: WAYMART, WAYNE County, PENNSYLVANIA, 18472

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Justice obligated $11.0 million to ARAPAHOE COMMUNICATIONS INC/ST for work described as: Key points: 1. Contract duration of 3211 days suggests a long-term need for natural gas distribution services. 2. Firm Fixed Price contract type indicates price certainty for the government over the contract's life. 3. Awarded under full and open competition, implying a broad market search for the best value. 4. The contract's value of over $11 million over its term warrants scrutiny for cost-effectiveness. 5. Geographic focus on Pennsylvania for natural gas distribution. 6. The contract was awarded in 2000, with performance extending to 2009, indicating historical spending patterns.

Value Assessment

Rating: fair

Benchmarking the value of this natural gas distribution contract is challenging without specific service details and comparable market rates from the early 2000s. The total value of over $11 million spread across approximately 8.8 years suggests an average annual expenditure of roughly $1.25 million. This figure needs to be compared against similar contracts for natural gas distribution to federal facilities in the Pennsylvania region during that period. The firm fixed-price nature provides cost predictability, but the long duration could mask potential inefficiencies if not managed closely.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that the government solicited bids from all responsible sources. The fact that it was competed broadly suggests that multiple companies likely had the capability to provide natural gas distribution services. This level of competition is generally expected to drive down prices and ensure that the government receives a fair market price for the services rendered.

Taxpayer Impact: Taxpayers benefit from full and open competition as it fosters a competitive environment, which typically leads to more favorable pricing and better service quality. It ensures that public funds are used efficiently by preventing sole-source awards that might carry inflated costs.

Public Impact

The primary beneficiaries are likely federal facilities within the Bureau of Prisons' jurisdiction in Pennsylvania requiring natural gas for heating, power, or other operational needs. The service delivered is the distribution of natural gas, a critical utility for the functioning of correctional facilities. The geographic impact is concentrated within Pennsylvania, specifically serving Bureau of Prisons sites. Workforce implications could include jobs related to the installation, maintenance, and operation of natural gas distribution infrastructure, though the contract itself is for distribution, not necessarily construction or direct labor provision.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (3211 days) could lead to complacency or missed opportunities for cost optimization if not actively managed.
Firm Fixed Price over a long period might not reflect potential market price decreases for natural gas.
Lack of specific performance metrics in the provided data makes it difficult to assess service quality and value realization.
The contract was awarded over 20 years ago; current market conditions and pricing benchmarks may differ significantly.

Positive Signals

Awarded through full and open competition, suggesting a robust selection process and potential for competitive pricing.
Firm Fixed Price provides budget certainty for the government over the contract term.
The contract served a critical utility need for federal correctional facilities.

Sector Analysis

Natural gas distribution is a critical component of the energy sector, ensuring the reliable supply of fuel for various consumers, including government facilities. The market for natural gas distribution is typically characterized by regulated utilities operating within specific geographic territories. This contract represents a specific instance of federal procurement within this sector, likely for facilities operated by the Bureau of Prisons. Comparable spending benchmarks would involve analyzing other federal contracts for utility services, particularly natural gas, to similar institutions in the Northeast region during the early 2000s.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract, nor does it detail subcontracting plans. Given the nature of natural gas distribution, which often involves significant infrastructure and regulatory compliance, it's possible that larger, established energy providers or specialized utility contractors were the primary bidders. Further analysis would be needed to determine if small businesses had opportunities to participate as subcontractors.

Oversight & Accountability

Oversight for this contract would have been managed by the contracting officer and the relevant program officials within the Federal Prison System / Bureau of Prisons. Accountability measures would be tied to the terms and conditions of the Firm Fixed Price contract, including adherence to delivery schedules and service standards. Transparency is generally facilitated through contract award databases like FPDS, where basic information is publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Federal Prison System Utilities Contracts
Bureau of Prisons Energy Procurement
Department of Justice Facility Operations
Natural Gas Supply Contracts
Federal Energy Management Program

Risk Flags

Long contract duration may obscure potential cost savings.
Firm Fixed Price over extended period might not reflect market volatility.
Lack of detailed performance metrics limits assessment of value.
Historical data (awarded 2000) may not reflect current market conditions.

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $11.0 million to ARAPAHOE COMMUNICATIONS INC/ST. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is ARAPAHOE COMMUNICATIONS INC/ST.

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 $11.0 million.

What is the period of performance?

Start: 2000-12-15. End: 2009-09-30.

What was the specific performance period and key milestones for this contract?

The contract was awarded on December 15, 2000, with an estimated end date of September 30, 2009. This represents a performance duration of approximately 3,211 days, or about 8.8 years. Key milestones would typically include the initiation of service, ongoing delivery and maintenance of the natural gas distribution system, and adherence to any regulatory compliance requirements. Without the full contract details, specific interim milestones are not available, but the long duration implies a sustained operational requirement.

How did the firm fixed price compare to market rates for natural gas distribution at the time of award?

Determining the precise comparison of the firm fixed price to market rates at the time of award (2000) requires access to historical market data for natural gas distribution services in Pennsylvania and detailed contract specifications. Firm Fixed Price (FFP) contracts aim to lock in a price, which can be advantageous if prices rise but disadvantageous if they fall. The total award value of $11,028,620.57 over nearly 9 years suggests an average annual cost of approximately $1.25 million. Benchmarking this against similar federal or large commercial contracts for utility services in the region during that era would be necessary to assess value for money.

What were the primary risks associated with this long-term natural gas distribution contract?

Key risks for this contract include potential fluctuations in natural gas market prices (though mitigated by FFP), the risk of infrastructure degradation or failure over the long term requiring costly repairs, regulatory changes impacting natural gas distribution, and the potential for the contractor to become less efficient or innovative due to the long duration. Furthermore, ensuring consistent service quality and reliability over nearly nine years requires diligent government oversight. The risk of the government being locked into a suboptimal price if market rates decreased significantly is also present with FFP.

Were there any performance issues or disputes reported during the contract's lifecycle?

The provided data does not contain information regarding performance issues, disputes, or contract modifications. Such details are typically found in more comprehensive contract files or agency performance reports. Given the contract's long duration and the nature of utility services, it's plausible that minor issues may have arisen and been resolved through standard contract management processes. However, without specific records, it's impossible to confirm the absence or presence of significant performance problems.

How does this contract's value and duration compare to other similar federal contracts for utility services?

Comparing this $11 million, nearly 9-year contract for natural gas distribution requires a dataset of similar federal utility contracts, ideally within the Bureau of Prisons or Department of Justice, and geographically focused on the Northeast. Contracts for utilities can vary widely based on facility size, energy needs, and local market conditions. A contract of this value over this duration suggests a significant energy requirement for the facilities served. Benchmarking would involve looking at average annual spending per facility for utilities or per-unit costs (e.g., cost per therm) if available for comparable sites.

What is the track record of Arapahoe Communications Inc/ST in providing similar services to the federal government?

Information on Arapahoe Communications Inc/ST's specific track record for this contract is limited to the award details provided. To assess their broader track record, one would need to search federal procurement databases for other contracts awarded to this entity, noting the types of services provided, contract values, durations, and performance ratings, if available. Understanding their history with similar utility or infrastructure services, especially for government clients, would provide context for their capability and reliability in fulfilling this DOJ contract.

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

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Address: 840 KASTRIN ST STE A, EL PASO, TX, 16

Business Categories: Category Business, Small Business

Financial Breakdown

Contract Ceiling: $5,260,116

Exercised Options: $5,260,116

Current Obligation: $11,028,621

Timeline