Commerce Department's $23.4M electrical utility contract awarded to NRG Business Marketing LLC shows fair value

Contract Overview

Contract Amount: $23,381,289 ($23.4M)

Contractor: NRG Business Marketing LLC

Awarding Agency: Department of Commerce

Start Date: 2014-12-10

End Date: 2015-10-31

Contract Duration: 325 days

Daily Burn Rate: $71.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 7

Pricing Type: FIRM FIXED PRICE

Sector: Energy

Official Description: IGF::OT::IGF ELECTRICAL UTILITY

Place of Performance

Location: GAITHERSBURG, MONTGOMERY County, MARYLAND, 20899

State: Maryland Government Spending

Plain-Language Summary

Department of Commerce obligated $23.4 million to NRG BUSINESS MARKETING LLC for work described as: IGF::OT::IGF ELECTRICAL UTILITY Key points: 1. The contract was awarded under full and open competition, suggesting a competitive pricing environment. 2. NRG Business Marketing LLC secured the contract, indicating their ability to meet the government's energy needs. 3. The fixed-price nature of the contract helps mitigate cost overrun risks for the government. 4. Performance was for a defined period, allowing for periodic reassessment of energy provider effectiveness. 5. The contract falls within the broader energy sector, supporting essential utility services for federal facilities.

Value Assessment

Rating: good

The contract's value of approximately $23.4 million for a one-year period appears reasonable for utility services. Benchmarking against similar federal utility contracts would provide a more precise value-for-money assessment. However, the fixed-price structure generally indicates a predictable cost outcome, which is favorable for the government. The absence of significant cost escalations during the contract term would further support a 'good' rating.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through full and open competition, indicating that multiple bidders had the opportunity to submit proposals. With 7 bidders identified, this suggests a healthy level of competition, which typically drives down prices and encourages innovation. The agency likely received a range of offers, allowing them to select the best value proposition.

Taxpayer Impact: A competitive bidding process ensures that taxpayer dollars are used efficiently by securing services at market-reflective prices, preventing potential overpayment.

Public Impact

Federal facilities within Maryland, specifically those managed by the National Institute of Standards and Technology, benefited from reliable electrical utility services. The contract ensured the continuous operation of critical government infrastructure by providing necessary power. The primary beneficiaries are the government agencies relying on uninterrupted electricity for their operations and personnel. The contract supported the energy sector by engaging a commercial provider for essential services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price fluctuations in energy markets impacting long-term cost predictability if not managed contractually.
Dependence on a single provider for a critical utility service introduces supply chain risk.

Positive Signals

Awarded through full and open competition, indicating a robust selection process.
Fixed-price contract structure provides cost certainty.
Defined performance period allows for evaluation and potential renegotiation or re-competition.

Sector Analysis

This contract falls within the broader energy and utilities sector, specifically focusing on the provision of electrical power. The market for utility services is typically characterized by established providers and regulated pricing structures. Federal agencies are significant consumers of energy, and contracts like this represent a substantial portion of government spending in this area. Comparable spending benchmarks would involve analyzing other federal utility contracts across different agencies and geographic locations to assess cost-effectiveness.

Small Business Impact

There is no indication that this contract included small business set-asides, nor is there information suggesting significant subcontracting opportunities for small businesses. The primary contractor, NRG Business Marketing LLC, is a large energy provider. Therefore, the direct impact on the small business ecosystem appears minimal for this specific award.

Oversight & Accountability

The contract's oversight would typically fall under the purview of the contracting officer and the National Institute of Standards and Technology's procurement and facility management departments. Transparency is generally maintained through contract award databases like FPDS. Specific Inspector General jurisdiction would depend on whether the Department of Commerce's IG has oversight over NIST procurements and if any specific concerns or audits were initiated.

Related Government Programs

Federal Energy Management Program
Utility Energy Services Contracts (UESC)
Energy Supply Contracts

Risk Flags

Potential for price volatility in energy markets.
Reliance on a single supplier for critical infrastructure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Commerce awarded $23.4 million to NRG BUSINESS MARKETING LLC. IGF::OT::IGF ELECTRICAL UTILITY

Who is the contractor on this award?

The obligated recipient is NRG BUSINESS MARKETING LLC.

Which agency awarded this contract?

Awarding agency: Department of Commerce (National Institute of Standards and Technology).

What is the total obligated amount?

The obligated amount is $23.4 million.

What is the period of performance?

Start: 2014-12-10. End: 2015-10-31.

What is NRG Business Marketing LLC's track record with federal contracts?

NRG Business Marketing LLC has a history of receiving federal contracts, primarily for energy supply and related services. Analyzing their past performance, including on-time delivery, quality of service, and any past disputes or contract modifications, would provide a clearer picture of their reliability. Federal procurement data often details award history, including the value and type of contracts awarded. A review of this data can reveal patterns in their performance and their capacity to manage government requirements effectively. While this specific contract was for a defined period, their broader federal contract portfolio can indicate their overall suitability as a government supplier.

How does the price of this contract compare to similar federal utility contracts?

Direct comparison of the $23.4 million price tag requires access to detailed data on similar contracts, including the quantity of energy supplied, service level agreements, and contract duration. However, the fact that it was awarded under full and open competition with 7 bidders suggests that the price achieved was likely competitive within the market at the time. Federal agencies often benchmark utility costs against industry standards and other government contracts. Without specific comparable data points (e.g., price per kilowatt-hour, demand charges), a precise benchmark is difficult, but the competitive award process is a positive indicator of value.

What are the primary risks associated with this type of energy supply contract?

The primary risks for this type of energy supply contract include market volatility in energy prices, which could lead to higher-than-anticipated costs if the contract terms do not adequately hedge against fluctuations. There's also a risk of service interruption due to unforeseen events affecting the supplier or the grid. Furthermore, reliance on a single provider for a critical utility introduces supply chain vulnerability. Contract performance risk, where the supplier may not meet service level agreements, is another consideration. Finally, regulatory changes in the energy sector could impact service delivery or costs.

How effective was this contract in ensuring reliable energy for NIST facilities?

The effectiveness of this contract in ensuring reliable energy for NIST facilities is primarily assessed by the continuity of service provided during the contract period (December 10, 2014, to October 31, 2015). Assuming no major documented service disruptions or failures reported by NIST, the contract was likely effective in meeting its objective. The fixed-price nature and the competitive award suggest an intent to secure reliable service at a predictable cost. Post-contract reviews or performance evaluations, if available, would offer more definitive insights into its effectiveness.

What is the historical spending trend for electrical utility services at NIST?

To determine the historical spending trend for electrical utility services at NIST, one would need to analyze procurement data for similar contracts over several preceding fiscal years. This would involve identifying contracts for electricity supply awarded to NIST or its parent agency, the Department of Commerce, and examining their values, durations, and the number of bidders. Understanding this trend would reveal whether spending has been increasing, decreasing, or remaining stable, and whether the current contract represents a significant deviation from past expenditures. This analysis helps in assessing budget predictability and identifying potential cost-saving opportunities or areas of concern.

Industry Classification

NAICS: Utilities › Electric Power Generation, Transmission and Distribution › Fossil Fuel Electric Power Generation

Product/Service Code: UTILITIES AND HOUSEKEEPING › UTILITIES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 7

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Centrica PLC (UEI: 778557603)

Address: 1 HESS PLZ, WOODBRIDGE, NJ, 07095

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: $23,381,289

Exercised Options: $23,381,289

Current Obligation: $23,381,289

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SPE60014D8000

IDV Type: IDC

Timeline