HHS awards $67.5K for electric service to Monacan Health Center, highlighting a critical need for reliable power

Contract Overview

Contract Amount: $67,528 ($67.5K)

Contractor: American Electric Power Company, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2024-09-19

End Date: 2026-09-30

Contract Duration: 741 days

Daily Burn Rate: $91/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: ELECTRIC SERVICE FOR MONACAN HEALTH CENTER

Place of Performance

Location: COLUMBUS, FRANKLIN County, OHIO, 43215

State: Ohio Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $67,527.69 to AMERICAN ELECTRIC POWER COMPANY, INC. for work described as: ELECTRIC SERVICE FOR MONACAN HEALTH CENTER Key points: 1. The contract value appears modest, suggesting a focus on essential utility services rather than large-scale projects. 2. Limited competition data prevents a thorough assessment of value for money. 3. The fixed-price contract type offers cost certainty for the government. 4. Performance is tied to the delivery of electric power, a fundamental operational requirement. 5. This contract positions the agency to ensure continuous healthcare services at the Monacan Health Center. 6. The duration of the contract suggests a need for sustained, reliable energy provision.

Value Assessment

Rating: fair

Benchmarking the value of electric service contracts is challenging without specific usage data or comparable contracts within the same geographic region. However, the awarded amount of $67,527.69 for a period of approximately two years seems reasonable for essential utility services for a health center. The fixed-price nature of the contract provides predictability. Further analysis would require understanding the energy consumption patterns and local utility rates.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, indicating that only one vendor was deemed capable of providing the required electric service. This could be due to the nature of utility services, where a specific provider often has a monopoly in a given geographic area. The lack of competition means there was no opportunity for price negotiation or comparison against multiple offers, potentially impacting the final price.

Taxpayer Impact: For taxpayers, a sole-source award means there is less assurance that the government secured the most competitive price possible. The justification for the sole-source award is critical to understanding if this was a necessary procurement approach.

Public Impact

The primary beneficiaries are the patients and staff of the Monacan Health Center, who will receive uninterrupted access to essential healthcare services. The service delivered is reliable electric power, crucial for operating medical equipment, lighting, and climate control systems. The geographic impact is localized to the area served by the Monacan Health Center in Ohio. There are no direct workforce implications mentioned, as this is a utility service contract.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpayment.
Limited transparency into the justification for sole-source award.
Dependence on a single utility provider creates a potential risk if service is interrupted.

Positive Signals

Ensures continuity of essential healthcare services.
Fixed-price contract provides budget certainty.
Awarded to a known utility provider, likely with established infrastructure.

Sector Analysis

The energy sector, specifically electric utilities, is a critical infrastructure component for all government operations. Contracts for electric service are common across federal agencies, ensuring the basic functioning of facilities. The market is typically characterized by regional monopolies or oligopolies, making sole-source or limited competition awards frequent for utility provision. The value of this contract is relatively small compared to broader energy procurements but essential for the specific facility.

Small Business Impact

This contract does not appear to involve small business set-asides or subcontracting opportunities. The nature of utility provision typically involves large, established companies with existing infrastructure, making it less likely for small businesses to be directly involved in such a procurement.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Health and Human Services (HHS) and its Indian Health Service (IHS) component. Standard procurement regulations and contract management practices would apply. Transparency is limited due to the sole-source nature, but the contract details are publicly available through federal procurement databases. There is no specific mention of an Inspector General's direct involvement at this award stage, but audits could occur.

Related Government Programs

Department of Health and Human Services Contracts
Indian Health Service Contracts
Utility Services Contracts
Electric Power Contracts

Risk Flags

Sole-source award may limit price competition.
Lack of detailed usage data hinders precise value assessment.
Dependence on a single utility provider.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $67,527.69 to AMERICAN ELECTRIC POWER COMPANY, INC.. ELECTRIC SERVICE FOR MONACAN HEALTH CENTER

Who is the contractor on this award?

The obligated recipient is AMERICAN ELECTRIC POWER COMPANY, INC..

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Indian Health Service).

What is the total obligated amount?

The obligated amount is $67,527.69.

What is the period of performance?

Start: 2024-09-19. End: 2026-09-30.

What is the historical spending pattern for electric services at the Monacan Health Center?

Without access to historical contract data specifically for the Monacan Health Center, it is impossible to determine the exact historical spending pattern. However, federal agencies typically procure utility services on an ongoing basis. If this is a new contract, it suggests a transition to a new provider or a formalization of a previously informal arrangement. If it is a renewal, the current award amount of $67,527.69 for approximately two years can be compared to previous expenditures to assess price trends. Generally, utility costs can fluctuate based on energy market prices, consumption levels, and regulatory changes. A consistent need for electric service implies a stable operational requirement for the health center.

How does the awarded amount compare to similar electric service contracts for health facilities of comparable size?

Comparing this $67,527.69 award for electric service to similar contracts is difficult without more specific data on the size and energy consumption of the Monacan Health Center, as well as the geographic location's utility rates. However, for a two-year period, this amount suggests a moderate level of energy usage. Larger hospitals or facilities with extensive medical equipment would likely incur significantly higher costs. Conversely, smaller clinics might have lower expenditures. Federal procurement databases could be queried for similar sole-source utility awards to health-related facilities within the Indian Health Service or other agencies to establish a more precise benchmark. The fixed-price nature provides cost certainty, but the absence of competition limits the ability to definitively state if it represents the best possible value.

What are the specific risks associated with a sole-source award for essential utility services?

The primary risk associated with a sole-source award for essential utility services like electricity is the potential for inflated pricing due to the lack of competitive pressure. The government may not be securing the most cost-effective rate available in the market. Additionally, there's a reduced incentive for the sole provider to offer exceptional service or competitive terms, as the client has limited alternatives. Dependence on a single provider also creates vulnerability; any service disruption by the provider could have immediate and severe consequences for the health center's operations, potentially impacting patient care. Ensuring the justification for the sole-source award is robust and that the contracted price is fair and reasonable through independent analysis is crucial to mitigate these risks.

What is the track record of American Electric Power Company, Inc. in providing government contracts?

American Electric Power Company, Inc. (AEP) is a major utility provider with a significant operational footprint. While specific details of their federal contracting history are not provided in the abbreviated data, large utility companies often engage with government entities for service provision. Their track record would typically involve providing reliable electric service to various customers, including government facilities. Assessing their performance on government contracts would require reviewing past performance evaluations, any documented disputes or contract terminations, and their history of compliance with federal regulations. Given their scale, it's probable they have experience serving government installations, but a deeper dive into their specific contract history with federal agencies would be necessary for a comprehensive assessment.

How does the contract duration (741 days) align with typical utility service agreements?

A contract duration of 741 days, which is approximately two years, is quite common for utility service agreements, especially for essential services like electricity. Utility providers often enter into contracts of this length to ensure a stable customer base and predictable revenue, while also allowing government agencies to budget effectively. Shorter-term contracts might be subject to more frequent price fluctuations or administrative overhead. Longer-term contracts (e.g., 5+ years) might offer greater price stability but could also lock the government into unfavorable terms if market conditions change significantly. The two-year duration for this contract appears to strike a reasonable balance between stability and flexibility for providing electric power to the Monacan Health Center.

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

Address: 1 RIVERSIDE PLAZA, COLUMBUS, OH, 43215

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

Financial Breakdown

Contract Ceiling: $67,528

Exercised Options: $67,528

Current Obligation: $67,528

Actual Outlays: $26,550

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline