DHHS Awards $4.5M to Duke Energy for NIH Central Plant Optimization, Ending 2036

Contract Overview

Contract Amount: $4,528,544 ($4.5M)

Contractor: Duke Energy Progress, LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2019-02-26

End Date: 2036-05-30

Contract Duration: 6,303 days

Daily Burn Rate: $718/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Energy

Official Description: UESC CENTRAL PLANT OPTIMIZATION AND RECLAMIED WASTE WATER

Place of Performance

Location: BETHESDA, MONTGOMERY County, MARYLAND, 20892

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $4.5 million to DUKE ENERGY PROGRESS, LLC for work described as: UESC CENTRAL PLANT OPTIMIZATION AND RECLAMIED WASTE WATER Key points: 1. Significant long-term contract awarded to a major energy provider. 2. Limited competition raises questions about price discovery and value. 3. Potential for cost savings through plant optimization and wastewater reclamation. 4. Sector focus on energy infrastructure within a healthcare research setting.

Value Assessment

Rating: fair

The contract value of $4.5M over its full term appears reasonable for a large-scale plant optimization project. However, without comparable contract data or detailed cost breakdowns, a precise value assessment is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under limited competition, suggesting a lack of robust price discovery. This approach may lead to higher costs than if full and open competition were pursued.

Taxpayer Impact: Taxpayer funds are being used for this contract. The long duration and limited competition could result in suboptimal value for money.

Public Impact

Enhances operational efficiency at NIH facilities. Contributes to environmental sustainability through wastewater reclamation. Ensures reliable energy infrastructure for critical research operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition
Long contract duration
Lack of detailed cost transparency

Positive Signals

Potential for operational efficiency gains
Focus on sustainability
Critical infrastructure support

Sector Analysis

This contract falls within the Energy sector, specifically focusing on electric power distribution and facility optimization. Benchmarks for similar large-scale energy infrastructure projects are highly variable and depend on scope.

Small Business Impact

The contract does not appear to involve small businesses directly, as it is awarded to a large utility provider. There is no indication of subcontracting opportunities for small businesses.

Oversight & Accountability

Oversight is crucial given the long contract duration and limited competition. The Department of Health and Human Services and NIH should ensure performance metrics are met and costs remain justified.

Related Government Programs

Electric Power Distribution
Department of Health and Human Services Contracting
National Institutes of Health Programs

Risk Flags

Potential for cost overruns due to long duration.
Risk of vendor lock-in with limited competition.
Dependency on a single provider for critical infrastructure.
Uncertainty in achieving projected efficiency gains.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $4.5 million to DUKE ENERGY PROGRESS, LLC. UESC CENTRAL PLANT OPTIMIZATION AND RECLAMIED WASTE WATER

Who is the contractor on this award?

The obligated recipient is DUKE ENERGY PROGRESS, LLC.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (National Institutes of Health).

What is the total obligated amount?

The obligated amount is $4.5 million.

What is the period of performance?

Start: 2019-02-26. End: 2036-05-30.

What specific performance metrics will be used to evaluate the success of the plant optimization and wastewater reclamation efforts?

Success will likely be measured by quantifiable improvements in energy efficiency (e.g., reduced energy consumption per unit of output), cost savings achieved through operational enhancements, and the effectiveness of the wastewater reclamation system in meeting environmental standards and reducing water usage. Regular reporting and independent verification of these metrics will be essential.

How will the government ensure fair pricing over the 17-year contract term, given the limited competition at the outset?

Fair pricing can be ensured through built-in price adjustment mechanisms tied to objective indices (e.g., CPI, energy market prices), clear performance-based incentives, and periodic reviews of the contract's economic terms. The government should also retain the right to re-evaluate pricing if market conditions or technological advancements significantly alter cost structures.

What is the projected return on investment or cost savings expected from this optimization project?

The projected return on investment and cost savings are critical to justifying the expenditure. While not explicitly detailed in the provided data, the agency should have conducted an analysis demonstrating that the long-term operational efficiencies and potential energy cost reductions will outweigh the initial investment and ongoing contract costs over the contract's lifespan.

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

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Duke Energy Corporation

Address: 410 S WILMINGTON ST, RALEIGH, NC, 27601

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

Financial Breakdown

Contract Ceiling: $6,811,289

Exercised Options: $4,528,544

Current Obligation: $4,528,544

Actual Outlays: $3,328,555

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS00P14BSD1055

IDV Type: IDC

Timeline