HHS awards $55.6M contract for natural gas distribution to Washington Gas Light Company
Contract Overview
Contract Amount: $55,554,478 ($55.6M)
Contractor: Washington GAS Light Company
Awarding Agency: Department of Health and Human Services
Start Date: 2021-12-01
End Date: 2026-11-30
Contract Duration: 1,825 days
Daily Burn Rate: $30.4K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Pricing Type: FIRM FIXED PRICE
Sector: Energy
Official Description: WASHINGTON GAS UTILITY PAYMENTS METER# 1, 20, 56 & CONSOLIDATED BILLING CONTRACT# NEW CONTRACT
Place of Performance
Location: BETHESDA, MONTGOMERY County, MARYLAND, 20892
State: Maryland Government Spending
Plain-Language Summary
Department of Health and Human Services obligated $55.6 million to WASHINGTON GAS LIGHT COMPANY for work described as: WASHINGTON GAS UTILITY PAYMENTS METER# 1, 20, 56 & CONSOLIDATED BILLING CONTRACT# NEW CONTRACT Key points: 1. Contract value of $55.6M over 5 years. 2. Sole-source award to Washington Gas Light Company. 3. Risk of limited competition and potential overpricing. 4. Sector: Energy (Natural Gas Distribution).
Value Assessment
Rating: questionable
The contract is a sole-source award, making direct price comparison difficult. Without competitive bidding, it's challenging to ascertain if the $55.6M price represents fair market value for natural gas distribution services.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, indicating a lack of competition. This method limits price discovery and may result in higher costs for the government compared to a competitive procurement.
Taxpayer Impact: The sole-source nature of this award raises concerns about potential overspending, impacting taxpayer funds negatively due to the absence of competitive pressure.
Public Impact
Ensures essential utility services for NIH facilities. Potential for higher costs due to lack of competition. Limited transparency in pricing mechanisms. Impacts federal energy procurement strategies.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Potential for price gouging
- Limited transparency
Positive Signals
- Ensures critical utility service delivery
- Long-term contract provides stability
Sector Analysis
This contract falls within the energy sector, specifically natural gas distribution. Federal spending on utilities like natural gas is substantial, and competitive bidding is crucial to ensure cost-effectiveness.
Small Business Impact
There is no indication that small businesses were involved in this sole-source contract, which is a missed opportunity for small business participation.
Oversight & Accountability
The sole-source nature of this award warrants closer oversight to ensure the government is receiving fair value and that the contract terms are being met without undue cost escalation.
Related Government Programs
- Natural Gas Distribution
- Department of Health and Human Services Contracting
- National Institutes of Health Programs
Risk Flags
- Sole-source award limits competition.
- Potential for inflated pricing.
- Lack of transparency in cost structure.
- Missed opportunity for small business engagement.
- Dependency on a single utility provider.
Tags
natural-gas-distribution, department-of-health-and-human-services, md, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $55.6 million to WASHINGTON GAS LIGHT COMPANY. WASHINGTON GAS UTILITY PAYMENTS METER# 1, 20, 56 & CONSOLIDATED BILLING CONTRACT# NEW CONTRACT
Who is the contractor on this award?
The obligated recipient is WASHINGTON GAS LIGHT COMPANY.
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 $55.6 million.
What is the period of performance?
Start: 2021-12-01. End: 2026-11-30.
What is the justification for the sole-source award, and have alternatives been thoroughly explored?
The justification for a sole-source award typically involves unique capabilities or circumstances where only one vendor can meet the requirement. For this natural gas distribution contract, it's crucial to understand if Washington Gas Light Company holds a monopoly in the service area or if there were other compelling reasons. A thorough review should confirm that no viable competitive alternatives were overlooked, ensuring the government isn't unnecessarily foregoing competitive pricing.
How is the government ensuring fair pricing without competitive bidding?
Without competition, the government must rely on robust price analysis and negotiation. This involves benchmarking against similar contracts, market research on natural gas prices, and potentially incorporating price adjustment clauses tied to market indices. Regular audits and performance reviews are essential to monitor costs and ensure the vendor is not exploiting the sole-source situation.
What is the long-term risk associated with a sole-source utility contract?
The primary long-term risk is sustained higher costs due to the lack of competitive pressure. Over time, this can lead to significant overspending compared to what could be achieved through competitive means. Additionally, dependence on a single supplier can create vulnerabilities if the supplier's service quality declines or if their business circumstances change unexpectedly.
Industry Classification
NAICS: Utilities › Natural Gas Distribution › Natural Gas 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: Altagas Ltd
Address: 1000 MAINE AVE SW, WASHINGTON, DC, 20024
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Not Designated a Small Business, Special Designations
Financial Breakdown
Contract Ceiling: $55,554,478
Exercised Options: $55,554,478
Current Obligation: $55,554,478
Actual Outlays: $50,876,805
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: GS00P16BSD1206
IDV Type: IDC
Timeline
Start Date: 2021-12-01
Current End Date: 2026-11-30
Potential End Date: 2026-11-30 00:00:00
Last Modified: 2026-04-08
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