GSA Awards $18.2M for Chilled Water Services to Vicinity Energy, Lacking Competition

Contract Overview

Contract Amount: $18,221,903 ($18.2M)

Contractor: Vicinity Energy Baltimore Cooling LLP

Awarding Agency: General Services Administration

Start Date: 2008-12-17

End Date: 2021-12-31

Contract Duration: 4,762 days

Daily Burn Rate: $3.8K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Other

Official Description: CHILLED WATER SERVICES FOR FOUR FEDERAL BUILDINGS, BALTIMORE, MD

Place of Performance

Location: BALTIMORE, BALTIMORE CITY County, MARYLAND, 21201

State: Maryland Government Spending

Plain-Language Summary

General Services Administration obligated $18.2 million to VICINITY ENERGY BALTIMORE COOLING LLP for work described as: CHILLED WATER SERVICES FOR FOUR FEDERAL BUILDINGS, BALTIMORE, MD Key points: 1. Significant contract value of $18.2 million over 13 years. 2. Sole-source award indicates a lack of competitive bidding. 3. Long contract duration raises concerns about price escalation and market responsiveness. 4. Services provided to four federal buildings in Baltimore, MD.

Value Assessment

Rating: questionable

The contract's fixed-price with economic price adjustment structure, coupled with a lack of competition, makes a direct pricing assessment difficult. Without comparable bids, it's hard to determine if the $18.2 million represents a fair market value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was awarded on a sole-source basis, meaning no other vendors were considered. This significantly limits price discovery and potentially leads to higher costs for taxpayers.

Taxpayer Impact: The lack of competition for a substantial contract value suggests potential overspending and a missed opportunity for cost savings through a competitive process.

Public Impact

Federal agencies in Baltimore will continue to receive essential cooling services. Taxpayers may be paying a premium due to the absence of competitive bidding. The long-term nature of the contract impacts budget predictability for cooling services. Potential for service disruptions if the sole provider faces issues.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Long contract duration
Economic price adjustment clause
Lack of small business participation

Positive Signals

Ensures continuous service for federal buildings
Established provider with existing infrastructure

Sector Analysis

This contract falls under utility services, specifically steam and air-conditioning supply. Benchmarks for such long-term, sole-source utility contracts are difficult to establish due to unique local infrastructure and market conditions.

Small Business Impact

The data indicates that small business participation was not a factor in this contract award (ss: false, sb: false). There is no indication of efforts to include small businesses in the provision of these essential services.

Oversight & Accountability

The sole-source nature of this award warrants scrutiny from oversight bodies to ensure the government received the best possible value. The long duration also necessitates ongoing monitoring for potential price adjustments.

Related Government Programs

Steam and Air-Conditioning Supply
General Services Administration Contracting
Public Buildings Service Programs

Risk Flags

Lack of competition
Long contract duration (13 years)
Economic price adjustment
No small business participation
Potential for cost overruns

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $18.2 million to VICINITY ENERGY BALTIMORE COOLING LLP. CHILLED WATER SERVICES FOR FOUR FEDERAL BUILDINGS, BALTIMORE, MD

Who is the contractor on this award?

The obligated recipient is VICINITY ENERGY BALTIMORE COOLING LLP.

Which agency awarded this contract?

Awarding agency: General Services Administration (Public Buildings Service).

What is the total obligated amount?

The obligated amount is $18.2 million.

What is the period of performance?

Start: 2008-12-17. End: 2021-12-31.

What was the justification for awarding this contract on a sole-source basis, and were alternative competitive strategies explored?

The justification for the sole-source award is not detailed in the provided data. Typically, sole-source contracts are used when only one responsible source is available. However, for utility services like chilled water, it's unusual not to have competitive options, especially over such a long period. Further investigation into the specific circumstances and GSA's procurement regulations is needed to understand why competition was deemed impossible or impractical.

How does the economic price adjustment clause impact the total cost over the contract's lifespan, and what indices are used?

The economic price adjustment (EPA) clause allows for changes in contract price based on fluctuations in specific economic factors, such as labor or material costs. Without knowing the specific indices and their historical performance, it's difficult to quantify the exact impact. However, EPAs on long-term contracts, especially those awarded without competition, can significantly increase the final cost beyond initial projections, potentially leading to substantial taxpayer expense.

What is the estimated cost savings if this contract had been awarded competitively?

Estimating the precise cost savings from a competitive award is challenging without market research or bid data. However, sole-source contracts, particularly those with long durations and EPA clauses, are generally understood to be more expensive than competitively procured ones. A competitive process could have driven down prices through vendor innovation and negotiation, potentially saving taxpayers millions over the 13-year period.

Industry Classification

NAICS: Utilities › Water, Sewage and Other Systems › Steam and Air-Conditioning Supply

Product/Service Code: UTILITIES AND HOUSEKEEPING › UTILITIES

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: GS-03P-09-DX-C-0005

Offers Received: 1

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

Evaluated Preference: NONE

Contractor Details

Parent Company: Veolia Environnement (UEI: 494763675)

Address: 6 SOUTH FREDERICK ST, BALTIMORE, MD, 21202

Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $18,221,903

Exercised Options: $18,221,903

Current Obligation: $18,221,903

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline