DOE's $9.1M natural gas transportation contract with Tennessee Gas Pipeline awarded non-competitively
Contract Overview
Contract Amount: $9,111,164 ($9.1M)
Contractor: Tennessee GAS Pipeline Company, L.L.C.
Awarding Agency: Department of Energy
Start Date: 1995-11-15
End Date: 2030-10-31
Contract Duration: 12,769 days
Daily Burn Rate: $714/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: FIXED PRICE REDETERMINATION
Sector: Energy
Official Description: NATURAL GAS TRANSPORTATION AND STORAGE SERVICES
Place of Performance
Location: OAK RIDGE, ANDERSON County, TENNESSEE, 37830
Plain-Language Summary
Department of Energy obligated $9.1 million to TENNESSEE GAS PIPELINE COMPANY, L.L.C. for work described as: NATURAL GAS TRANSPORTATION AND STORAGE SERVICES Key points: 1. Contract awarded non-competitively, raising questions about price discovery and potential value for money. 2. Long-term contract duration (through 2030) suggests a need for stable, ongoing services. 3. Fixed Price Redetermination pricing structure may offer some cost control but requires careful monitoring. 4. The contract's value is relatively small compared to broader energy infrastructure investments. 5. Focus on natural gas transportation highlights reliance on this energy source for specific DOE operations. 6. Contractor has a long-standing relationship with the agency, indicated by the 1995 start date.
Value Assessment
Rating: fair
Benchmarking the value of this specific natural gas transportation contract is challenging without detailed service level agreements and market comparisons for similar pipeline services. The fixed-price redetermination structure suggests an attempt to balance cost certainty with market fluctuations. However, the lack of competition means there's no direct market validation of the pricing. Compared to large-scale energy infrastructure projects, this contract's dollar value is modest, but its criticality for specific DOE functions needs to be considered.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning it was not competed. This typically occurs when only one responsible source is available or when there is a compelling justification for excluding competition. The lack of multiple bidders limits the government's ability to leverage competitive pressures to secure the best possible price and terms. This approach can lead to higher costs for taxpayers if the sole-source provider does not face market incentives to offer competitive rates.
Taxpayer Impact: Sole-source awards mean taxpayers may not be getting the best possible price, as competition is a key driver for cost savings in government procurement.
Public Impact
The primary beneficiary is the Department of Energy, which receives essential natural gas transportation and storage services. These services likely support specific DOE facilities or research operations requiring reliable natural gas supply. The geographic impact is concentrated in Tennessee, where the contractor operates and likely where the services are delivered. Workforce implications are primarily within the natural gas transportation sector, supporting jobs related to pipeline operation and maintenance.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition may lead to inflated prices.
- Long-term commitment without competitive re-evaluation poses a risk to future cost-effectiveness.
- Dependence on a single provider for critical infrastructure.
Positive Signals
- Ensures continuity of essential natural gas supply for DOE operations.
- Long-standing relationship may indicate reliable service delivery.
- Fixed Price Redetermination offers some cost control mechanism.
Sector Analysis
The energy sector, specifically natural gas transportation and storage, is a critical component of the U.S. infrastructure. This contract falls within the segment of services supporting energy delivery. While the dollar amount is relatively small in the context of the overall energy market, it represents a vital link in the supply chain for the Department of Energy's operations. Comparable spending benchmarks would typically involve analyzing rates for similar pipeline transportation services across different regions and providers, though direct comparisons are difficult for sole-source awards.
Small Business Impact
This contract does not appear to involve small business set-asides, nor is there information suggesting significant subcontracting opportunities for small businesses. The nature of large-scale natural gas transportation infrastructure typically involves major industry players. Therefore, the direct impact on the small business ecosystem is likely minimal, with the primary focus being on the large corporate entity holding the contract.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of Energy's contracting officers and program managers. Accountability measures would be tied to the terms and conditions of the fixed-price redetermination contract, including performance standards and reporting requirements. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.
Related Government Programs
- Natural Gas Pipeline Infrastructure
- Energy Supply Contracts
- Department of Energy Operations Support
- Federal Energy Regulatory Commission (FERC) Regulated Services
Risk Flags
- Sole-source award lacks competitive justification.
- Long contract duration may not reflect evolving market conditions.
- Pricing mechanism (FPR) requires careful government oversight.
Tags
energy, natural-gas-transportation, department-of-energy, tennessee, definitive-contract, sole-source, fixed-price-redetermination, pipeline-transportation, energy-infrastructure, government-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $9.1 million to TENNESSEE GAS PIPELINE COMPANY, L.L.C.. NATURAL GAS TRANSPORTATION AND STORAGE SERVICES
Who is the contractor on this award?
The obligated recipient is TENNESSEE GAS PIPELINE COMPANY, L.L.C..
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $9.1 million.
What is the period of performance?
Start: 1995-11-15. End: 2030-10-31.
What is the historical spending pattern for natural gas transportation and storage services by the Department of Energy, and how does this contract compare?
Analyzing historical spending requires access to detailed DOE procurement data over time. Without that specific dataset, a direct comparison is difficult. However, the current contract value of approximately $9.1 million over its duration (ending 2030) suggests a consistent, albeit not massive, annual expenditure for these services. If similar contracts existed in the past, one would look for trends in contract values, durations, and whether they were also sole-source or competed. A significant increase or decrease in spending on this service category could indicate shifts in DOE's operational needs, energy sourcing strategies, or market price changes for natural gas transportation.
What specific DOE facilities or operations rely on the natural gas provided through this Tennessee Gas Pipeline contract?
The specific facilities or operations that rely on this natural gas transportation and storage service are not detailed in the provided contract abstract. However, the Department of Energy operates numerous research laboratories, power generation facilities, and administrative sites that may require natural gas for heating, electricity generation, or specialized industrial processes. Given the contractor's name and the nature of the service, it's probable that the natural gas is being transported to a DOE-affiliated site located within the service territory of Tennessee Gas Pipeline Company, L.L.C. Further investigation into DOE's operational footprint in Tennessee would be necessary to pinpoint the exact beneficiaries.
What are the key performance indicators (KPIs) and service level agreements (SLAs) associated with this contract?
The provided contract abstract does not detail the specific Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) for this natural gas transportation and storage contract. Typically, such agreements for pipeline services would include metrics related to delivery reliability, pressure maintenance, response times for service disruptions, and potentially capacity commitments. The 'Fixed Price Redetermination' pricing structure implies that while a base price is set, adjustments can occur based on certain factors, which might be linked to operational costs or market indices, but the precise triggers and limits would be defined in the full contract. Without access to the full contract document, these critical performance details remain unknown.
How does the 'Fixed Price Redetermination' pricing structure work in practice for this contract, and what are its implications for cost certainty?
The 'Fixed Price Redetermination' (FPR) pricing structure means that an initial fixed price is established, but it is subject to adjustment based on specific criteria outlined in the contract. These criteria often relate to fluctuations in the contractor's underlying costs, such as fuel, labor, or regulatory compliance expenses. The 'redetermination' typically occurs at specified intervals (e.g., annually). This structure aims to provide some cost certainty for the buyer (DOE) by setting a baseline price, while allowing the seller (Tennessee Gas Pipeline) to recover legitimate cost increases. However, it introduces complexity and requires robust monitoring by the government to ensure that redetermined prices are fair and justified, and do not lead to excessive costs compared to a purely fixed-price or cost-plus model.
What is the track record of Tennessee Gas Pipeline Company, L.L.C. in fulfilling similar government contracts, particularly sole-source awards?
Tennessee Gas Pipeline Company, L.L.C. is a major player in the natural gas transportation industry, operating an extensive pipeline network. While this abstract focuses on a specific DOE contract, the company's broader track record involves numerous commercial and potentially government contracts. Information regarding their performance on specific government contracts, especially sole-source awards, would typically be available through federal procurement databases (like SAM.gov or FPDS) which track past performance evaluations and contract histories. Without accessing those specific records, it's difficult to definitively assess their track record with government entities. However, their longevity and the fact they hold this sole-source DOE contract suggest a history of satisfactory performance, at least to the extent required for continued sole-source justification.
Industry Classification
NAICS: Transportation and Warehousing › Pipeline Transportation of Natural Gas › Pipeline Transportation of Natural Gas
Product/Service Code: UTILITIES AND HOUSEKEEPING › UTILITIES
Competition & Pricing
Extent Competed: NOT AVAILABLE FOR COMPETITION
Offers Received: 1
Pricing Type: FIXED PRICE REDETERMINATION (A)
Contractor Details
Address: 1010 MILAM ST, HOUSTON, TX, 77002
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $13,982,753
Exercised Options: $13,982,753
Current Obligation: $9,111,164
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Timeline
Start Date: 1995-11-15
Current End Date: 2030-10-31
Potential End Date: 2030-10-31 00:00:00
Last Modified: 2026-01-20
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