HUD awards $4.8M for natural gas services in DC, with limited competition

Contract Overview

Contract Amount: $4,786,449 ($4.8M)

Contractor: Washington GAS Light Company

Awarding Agency: Department of Housing and Urban Development

Start Date: 2017-09-01

End Date: 2026-08-31

Contract Duration: 3,286 days

Daily Burn Rate: $1.5K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: UTILITIES; NATURAL GAS SERVICES IGF::OT::IGF

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20410

State: District of Columbia Government Spending

Plain-Language Summary

Department of Housing and Urban Development obligated $4.8 million to WASHINGTON GAS LIGHT COMPANY for work described as: UTILITIES; NATURAL GAS SERVICES IGF::OT::IGF Key points: 1. Contract awarded on a sole-source basis, raising questions about price competitiveness. 2. Long-term contract duration (2017-2026) suggests a need for stable utility provision. 3. Focus on natural gas distribution indicates essential infrastructure support. 4. Geographic concentration in Washington D.C. highlights localized service delivery. 5. No small business set-aside, potentially limiting opportunities for smaller firms.

Value Assessment

Rating: fair

The contract value of $4.8 million over its duration appears reasonable for utility services in a major metropolitan area. However, without competitive bidding, it is difficult to benchmark the pricing against market rates or similar contracts. The firm fixed-price structure provides cost certainty for the government, but the lack of competition means potential savings may have been forgone. Further analysis would require access to historical pricing data and market benchmarks for natural gas in the Washington D.C. area.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not openly competed. This typically occurs when only one vendor can provide the required service, often due to unique capabilities, existing infrastructure, or regulatory requirements. The lack of competition limits the government's ability to solicit multiple bids and negotiate the best possible price, potentially leading to higher costs for taxpayers.

Taxpayer Impact: Sole-source awards mean taxpayers may not be receiving the most cost-effective solution available in the market. The absence of competitive pressure can lead to inflated prices compared to what might be achieved through open bidding.

Public Impact

Federal agencies and facilities in Washington D.C. benefit from a reliable supply of natural gas. Ensures essential heating, cooling, and operational capabilities for government buildings. Supports the daily functioning of HUD operations within the District of Columbia. Indirectly supports the local energy infrastructure and workforce in the D.C. area.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in above-market pricing.
Long contract duration could lock the government into potentially suboptimal terms.
Sole-source award raises concerns about transparency and fairness in procurement.

Positive Signals

Ensures continuity of essential utility services for federal operations.
Firm fixed-price contract provides budget certainty.
Contract is for a critical service (natural gas) necessary for facility operations.

Sector Analysis

The energy sector, specifically natural gas distribution, is a critical component of infrastructure supporting government operations. This contract falls within the utilities sub-sector, which is characterized by regulated pricing and often localized service areas. While the overall market for natural gas is vast, contracts for specific geographic regions or facilities often involve limited competition due to the nature of the service delivery. Benchmarking would typically involve comparing rates with other utility providers in similar urban environments or analyzing historical trends in natural gas pricing.

Small Business Impact

This contract does not appear to have a small business set-aside. The sole-source nature of the award further suggests that opportunities for small businesses, either as prime contractors or subcontractors, may be limited unless specifically included in the sole-source provider's subcontracting plan. Further investigation into subcontracting requirements would be needed to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Housing and Urban Development (HUD). As a sole-source award, transparency might be less than in a competed contract. Accountability measures would be tied to the performance clauses within the firm fixed-price delivery order, ensuring the provision of natural gas services as specified. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Federal Utility Contracts
Natural Gas Supply Contracts
Government Facility Operations
Washington D.C. Federal Spending

Risk Flags

Sole-source award
Long contract duration
Lack of competitive bidding

Frequently Asked Questions

What is this federal contract paying for?

Department of Housing and Urban Development awarded $4.8 million to WASHINGTON GAS LIGHT COMPANY. UTILITIES; NATURAL GAS SERVICES IGF::OT::IGF

Who is the contractor on this award?

The obligated recipient is WASHINGTON GAS LIGHT COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Housing and Urban Development (Department of Housing and Urban Development).

What is the total obligated amount?

The obligated amount is $4.8 million.

What is the period of performance?

Start: 2017-09-01. End: 2026-08-31.

What is the track record of Washington Gas Light Company in providing services to federal agencies?

Washington Gas Light Company has a long history of providing natural gas services to a wide range of customers, including commercial and residential users, as well as government facilities in the Washington D.C. metropolitan area. While specific details on their performance with federal agencies under sole-source contracts are not readily available in this data, their established presence and infrastructure in the region suggest a capacity to meet demand. However, the absence of competitive bidding in this particular award makes it difficult to assess their performance relative to potential competitors or to gauge if the government is receiving optimal value. A review of past federal contracts awarded to Washington Gas Light Company, particularly those with performance metrics or customer satisfaction data, would provide a more comprehensive understanding of their track record.

How does the pricing of this contract compare to similar natural gas utility contracts awarded by other federal agencies?

Direct comparison of pricing for this sole-source contract is challenging due to the lack of competitive bidding. Typically, federal agencies benchmark utility costs against market rates and prices from similar contracts awarded through competitive processes. Without access to the specific pricing structure, unit costs, and volume commitments within this $4.8 million award, it's impossible to definitively state how it compares. However, sole-source awards inherently carry a higher risk of suboptimal pricing compared to competitively bid contracts. To perform a robust comparison, one would need to analyze the per-unit cost of natural gas (e.g., per therm or dekatherm) and compare it to prevailing market rates in the D.C. area and to prices secured by other agencies for comparable services, adjusted for contract duration, volume, and service level agreements.

What are the primary risks associated with a sole-source award for essential utility services like natural gas?

The primary risks associated with a sole-source award for essential utility services like natural gas include potential overpayment due to the absence of competitive pressure, reduced incentive for the contractor to innovate or offer cost-saving measures, and a lack of transparency in the procurement process. Taxpayers may end up paying more than necessary for the service. Furthermore, a long-term sole-source contract can create vendor lock-in, making it difficult and potentially costly to switch providers even if better options become available later. There's also a risk that the contractor may not prioritize service quality or responsiveness as highly as they would in a competitive environment. Ensuring robust contract management and performance monitoring becomes crucial to mitigate these risks.

What is the historical spending pattern for natural gas services by the Department of Housing and Urban Development?

The provided data only details a single contract award for natural gas services valued at $4.8 million, spanning from 2017 to 2026. It does not offer a broader historical spending pattern for HUD's natural gas needs. To understand historical spending, one would need to access procurement data for previous years, identifying all contracts related to natural gas supply for HUD facilities. Analyzing this data would reveal trends in spending volume, average costs per unit, and the extent to which these services were procured through competitive or sole-source means over time. Without this broader dataset, it's impossible to establish a historical spending pattern or identify significant changes or anomalies.

How does the duration of this contract (over 9 years) impact its overall value and risk profile?

The contract's duration of over nine years (September 2017 to August 2026) significantly impacts its value and risk profile. On the positive side, a long-term commitment can provide stability and predictability for both the government and the contractor, potentially leading to more consistent service delivery and a more established working relationship. It can also allow the contractor to make necessary infrastructure investments. However, a long duration, especially with a sole-source award, increases the risk of the government being locked into unfavorable pricing or terms if market conditions change significantly or if better alternatives emerge. It also reduces flexibility to adapt to evolving energy needs or technologies. The firm fixed-price nature mitigates some cost uncertainty but doesn't protect against paying above market rates over an extended period.

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: $4,986,449

Exercised Options: $4,986,449

Current Obligation: $4,786,449

Actual Outlays: $3,499,579

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS00P16BSD1206

IDV Type: IDC

Timeline