GSA's $20M Chilled Water/Steam Utility Contract with Cleveland Thermal, LLC awarded via sole-source mechanism

Contract Overview

Contract Amount: $20,004,345 ($20.0M)

Contractor: Cleveland Thermal, LLC

Awarding Agency: General Services Administration

Start Date: 2006-10-01

End Date: 2014-12-31

Contract Duration: 3,013 days

Daily Burn Rate: $6.6K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: CHILLED WATER/STEAM UTILITY CONTRACT

Place of Performance

Location: CLEVELAND, CUYAHOGA County, OHIO, 44199

State: Ohio Government Spending

Plain-Language Summary

General Services Administration obligated $20.0 million to CLEVELAND THERMAL, LLC for work described as: CHILLED WATER/STEAM UTILITY CONTRACT Key points: 1. The contract represents a significant, long-term commitment for utility services. 2. Sole-source award suggests limited market alternatives or specific infrastructure dependencies. 3. The firm fixed-price structure provides cost certainty but may limit flexibility. 4. The contract duration of over 8 years indicates a strategic, ongoing need. 5. Performance context is critical given the essential nature of utility services. 6. Sector positioning is within essential public infrastructure and building operations.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without detailed service level agreements and market comparisons for similar utility services in the Cleveland area. The firm fixed-price nature over an extended period suggests a negotiated rate that may or may not reflect current market conditions. Without competitive bidding, it's difficult to definitively assess if the government received the best possible price. However, the consistent award over a long period implies a perceived value by the agency.

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 not seeking competition, such as unique capabilities or existing infrastructure integration. The lack of competition limits the government's ability to leverage market forces to drive down prices and ensure the most cost-effective solution.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive pressure. Without a competitive process, there's less assurance that the price reflects true market value, potentially leading to higher overall expenditure for the government.

Public Impact

Federal buildings in the Cleveland, Ohio area benefit from reliable chilled water and steam services. The contract ensures the continuous operation of essential building systems, supporting government functions. Geographic impact is localized to the service area of Cleveland Thermal, LLC. Workforce implications include the employment of personnel to operate and maintain the utility infrastructure.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potential savings.
Long contract duration may not adapt to changing market rates or technological advancements.
Lack of competition raises questions about the efficiency of the procurement process.

Positive Signals

Ensures consistent and reliable delivery of essential utility services.
Firm fixed-price contract provides budget certainty for the agency.
Long-term award suggests a stable and established relationship meeting agency needs.

Sector Analysis

This contract falls within the Utilities and Energy Services sector, specifically focusing on the provision of chilled water and steam for building climate control and other operational needs. The market for such services can be highly localized, often dominated by entities with established infrastructure and distribution networks. Comparable spending benchmarks would typically involve analyzing utility rates for similar large-scale commercial or governmental facilities in the same metropolitan area.

Small Business Impact

This contract does not appear to have a small business set-aside component, nor is there information indicating significant subcontracting opportunities for small businesses. The nature of utility provision often involves large, established infrastructure providers, which may limit the direct participation of small businesses in the prime contract.

Oversight & Accountability

Oversight for this contract would primarily reside with the General Services Administration (GSA), specifically the Public Buildings Service. Accountability measures would be tied to the terms and conditions of the firm fixed-price contract, including service level agreements and performance standards. Transparency is generally available through federal contract databases, but detailed operational oversight specifics are not publicly disclosed.

Related Government Programs

Federal Building Operations
Utility Services Contracts
Energy Management
Public Infrastructure

Risk Flags

Sole-source award
Lack of competition
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $20.0 million to CLEVELAND THERMAL, LLC. CHILLED WATER/STEAM UTILITY CONTRACT

Who is the contractor on this award?

The obligated recipient is CLEVELAND THERMAL, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $20.0 million.

What is the period of performance?

Start: 2006-10-01. End: 2014-12-31.

What is the historical spending trend for this specific contract or similar utility contracts awarded by GSA?

Historical spending data for this specific contract shows a consistent annual expenditure reflecting the firm fixed-price nature over its duration. The total award value of approximately $20 million over roughly 8 years averages around $2.5 million per year. Analyzing similar utility contracts within GSA or other agencies for chilled water and steam services would provide a broader context. However, without access to a comprehensive database of all such contracts and their specific terms, a precise historical trend comparison is difficult. Generally, utility costs are subject to market fluctuations in energy prices and infrastructure maintenance, which can influence year-over-year spending, even under a fixed-price agreement if escalation clauses are present or if the base price was set based on projected costs.

How does the per-unit cost of chilled water/steam compare to market rates in Cleveland, OH?

Determining the precise per-unit cost for chilled water and steam under this contract is challenging without specific metering and billing details provided in the contract's service level agreements. The contract is a firm fixed-price award, meaning the price is set regardless of the exact volume consumed, up to certain operational parameters. To compare with market rates, one would need to obtain publicly available utility tariffs from Cleveland Thermal, LLC or other providers in the region for comparable commercial or industrial customers. Additionally, factors like delivery pressure, temperature, and volume significantly influence per-unit pricing. Given the sole-source nature, a direct, definitive comparison to ascertain if the government is receiving a competitive rate is difficult without proprietary market intelligence or detailed tariff analysis.

What are the specific performance metrics and service level agreements (SLAs) associated with this contract?

The provided data does not include the specific performance metrics or service level agreements (SLAs) tied to this contract. However, for a utility service contract of this nature, typical SLAs would likely encompass reliability (e.g., uptime percentages for steam and chilled water delivery), temperature and pressure ranges, response times for service interruptions or emergencies, and potentially energy efficiency targets. The firm fixed-price structure suggests that the contractor is obligated to provide the service within agreed-upon parameters, and failure to meet critical SLAs could result in penalties or contract remedies, though the exact mechanisms are not detailed in the summary data.

What is Cleveland Thermal, LLC's track record with federal contracts, particularly with GSA?

Cleveland Thermal, LLC has a history of providing utility services, including chilled water and steam, to federal entities, notably through contracts with the General Services Administration (GSA). This specific contract, awarded in 2006 and ending in 2014, indicates a long-standing relationship. While the provided data focuses on this single award, a comprehensive assessment of their track record would involve reviewing their performance on other federal contracts, including any past performance evaluations, contract modifications, disputes, or awards. Their ability to secure and fulfill a sole-source contract of this magnitude suggests a level of established capability and agency trust, but a deeper dive into their broader federal contracting history would be necessary for a complete picture.

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

The primary risk associated with a sole-source award for essential utility services is the lack of competitive pressure, which can lead to higher costs for the government compared to a fully competed contract. Without multiple bidders vying for the contract, the government has less leverage to negotiate favorable pricing and terms. Additionally, reliance on a single provider can create vulnerabilities if that provider experiences financial difficulties, operational issues, or fails to meet performance standards. There's also a risk of vendor lock-in, where switching providers becomes prohibitively expensive or complex due to integrated infrastructure or specialized knowledge requirements, potentially limiting future flexibility and innovation.

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-05P-06-SL-C-3020

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1921 HAMILTON AVE, CLEVELAND, OH, 44114

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $20,004,345

Exercised Options: $20,004,345

Current Obligation: $20,004,345

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Timeline