DOE's $15.2M natural gas supply contract awarded to Atmos Energy Marketing, LLC
Contract Overview
Contract Amount: $15,224,849 ($15.2M)
Contractor: Atmos Energy Marketing, LLC
Awarding Agency: Department of Energy
Start Date: 2008-10-01
End Date: 2010-09-30
Contract Duration: 729 days
Daily Burn Rate: $20.9K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Energy
Official Description: SUPPLY NATURAL GAS TO OAK RIDGE RESERVATION
Place of Performance
Location: OAK RIDGE, ANDERSON County, TENNESSEE, 37830
Plain-Language Summary
Department of Energy obligated $15.2 million to ATMOS ENERGY MARKETING, LLC for work described as: SUPPLY NATURAL GAS TO OAK RIDGE RESERVATION Key points: 1. Contract value represents a significant investment in energy infrastructure for the Oak Ridge Reservation. 2. Full and open competition suggests a robust market for natural gas supply services. 3. Fixed-price with economic price adjustment indicates potential for cost fluctuations based on market conditions. 4. Contract duration of 729 days (2 years) provides a stable supply chain. 5. Awarded by the Department of Energy, highlighting the critical role of energy in federal operations. 6. The contract falls under the Crude Petroleum and Natural Gas Extraction sector.
Value Assessment
Rating: good
The contract value of $15.2 million over two years for natural gas supply to the Oak Ridge Reservation appears reasonable given the scale of operations. Benchmarking against similar large-scale federal energy contracts would provide a more precise value-for-money assessment. The fixed-price with economic price adjustment structure allows for market volatility but requires careful monitoring to ensure costs remain competitive.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. This competitive process is expected to drive favorable pricing and ensure the government receives the best value. The number of bidders was not specified, but the category suggests a healthy level of market interest.
Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to lower prices and higher quality services.
Public Impact
The Oak Ridge Reservation, a key Department of Energy facility, benefits from a reliable natural gas supply. This contract ensures the operational continuity of critical research, development, and national security missions at the reservation. The primary beneficiaries are the Department of Energy and its associated contractors operating at Oak Ridge. Geographic impact is localized to Oak Ridge, Tennessee, ensuring energy needs for this specific federal site are met.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for price increases due to economic price adjustment clause.
- Dependence on a single supplier for a critical utility.
Positive Signals
- Awarded through full and open competition, suggesting competitive pricing.
- Long-term contract provides supply stability.
- Established contractor with experience in energy markets.
Sector Analysis
This contract falls within the broader energy sector, specifically related to the extraction and supply of natural gas. The market for natural gas supply is dynamic, influenced by global energy prices, regulatory environments, and infrastructure availability. Federal agencies are significant consumers of energy, and contracts like this are essential for maintaining operations at large facilities such as the Oak Ridge Reservation.
Small Business Impact
The data indicates this contract was not specifically set aside for small businesses, nor does it explicitly mention subcontracting goals for small businesses. Therefore, the direct impact on the small business ecosystem is likely minimal unless Atmos Energy Marketing, LLC voluntarily engages small businesses in its supply chain.
Oversight & Accountability
Oversight is primarily managed by the Department of Energy, which is responsible for ensuring contract compliance and performance. Accountability measures would be embedded within the contract terms and conditions, including performance standards and payment schedules. Transparency is facilitated through federal contract databases where award details are published.
Related Government Programs
- Department of Energy Operations
- Federal Energy Procurement
- Natural Gas Supply Contracts
- Oak Ridge Reservation Operations
Risk Flags
- Potential for cost overruns due to economic price adjustment.
- Dependence on market fluctuations for pricing.
Tags
energy, natural-gas, department-of-energy, oak-ridge-reservation, fixed-price-economic-price-adjustment, full-and-open-competition, tennessee, crude-petroleum-and-natural-gas-extraction, supply-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $15.2 million to ATMOS ENERGY MARKETING, LLC. SUPPLY NATURAL GAS TO OAK RIDGE RESERVATION
Who is the contractor on this award?
The obligated recipient is ATMOS ENERGY MARKETING, LLC.
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $15.2 million.
What is the period of performance?
Start: 2008-10-01. End: 2010-09-30.
What is the historical spending pattern for natural gas supply at the Oak Ridge Reservation?
Historical spending data for natural gas supply at the Oak Ridge Reservation prior to this $15.2 million contract (2008-2010) is not directly available in the provided data. However, the award of this contract suggests a recurring need for natural gas. To understand historical patterns, one would need to examine previous contracts awarded for this service at the reservation, looking at their values, durations, and awarded contractors. Analyzing trends over several years would reveal if spending has been consistent, increasing, or decreasing, and whether the supplier has changed. This context is crucial for assessing the current contract's value and the contractor's performance over time.
How does the pricing structure (fixed-price with economic price adjustment) compare to other federal natural gas contracts?
The 'fixed-price with economic price adjustment' (FP-EPA) pricing structure is common for federal contracts involving commodities like natural gas, where market prices can fluctuate significantly. This structure aims to provide price stability for the government while allowing the contractor to adjust for unavoidable cost changes in the market. Compared to purely fixed-price contracts, FP-EPA offers more flexibility but requires careful monitoring of the economic adjustment clauses to ensure they are applied fairly and do not lead to excessive cost increases. Purely fixed-price contracts might offer greater cost certainty but could deter bidders in volatile markets or lead to higher initial bids to account for risk. Conversely, cost-plus contracts would offer the most flexibility but the least price certainty for the government.
What is Atmos Energy Marketing, LLC's track record with federal contracts, particularly for energy supply?
Atmos Energy Marketing, LLC has a track record with federal contracts, as evidenced by this award from the Department of Energy. To fully assess their track record, a deeper dive into federal procurement databases (like FPDS or SAM.gov) would be necessary. This would reveal the number and value of other federal contracts they have held, the agencies they have served, and their performance ratings. Specifically for energy supply, understanding their experience with similar-sized contracts, their ability to meet delivery requirements, and any past performance issues or commendations would be critical. A review of past performance evaluations would provide insights into their reliability and effectiveness as a federal contractor.
What are the key performance indicators (KPIs) for this natural gas supply contract?
While specific Key Performance Indicators (KPIs) are not detailed in the provided summary data, typical KPIs for a natural gas supply contract would likely include: 1. On-time delivery: Ensuring natural gas is supplied according to the agreed schedule and volume requirements. 2. Quality of service: Maintaining the specified quality standards for the natural gas. 3. Price adherence: Ensuring that any economic price adjustments are calculated and applied according to the contract terms. 4. Reliability of supply: Minimizing any disruptions or interruptions in service. 5. Reporting compliance: Submitting required reports accurately and on time. The Department of Energy would establish these KPIs to measure the contractor's performance and ensure the government receives the expected value.
What is the potential risk associated with the economic price adjustment clause in this contract?
The primary risk associated with the economic price adjustment (EPA) clause in this fixed-price contract is the potential for increased costs to the government if natural gas market prices rise significantly during the contract period. While EPA clauses are designed to reflect legitimate market fluctuations and protect the contractor from unforeseen cost increases, they can also be a source of cost growth for the government if not carefully structured and monitored. The specific formula or index used for the adjustment is critical. If the index is volatile or broadly defined, it could lead to unpredictable cost escalations. Effective oversight by the Department of Energy is necessary to ensure that any price adjustments are justified, accurately calculated according to the contract's terms, and do not represent excessive price increases beyond market realities.
Industry Classification
NAICS: Mining, Quarrying, and Oil and Gas Extraction › Oil and Gas Extraction › Crude Petroleum and Natural Gas Extraction
Product/Service Code: CHEMICALS AND CHEMICAL PRODUCTS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 1
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)
Evaluated Preference: NONE
Contractor Details
Parent Company: Atmos Energy Corporation (UEI: 108203241)
Address: 13430 NORTHWEST FWY STE 700, HOUSTON, TX, 90
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $15,224,849
Exercised Options: $15,224,849
Current Obligation: $15,224,849
Parent Contract
Parent Award PIID: SP060008D7500
IDV Type: IDC
Timeline
Start Date: 2008-10-01
Current End Date: 2010-09-30
Potential End Date: 2010-09-30 00:00:00
Last Modified: 2012-06-07
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