Gexa Corp. awarded $36.2M contract for electric power distribution services in Texas

Contract Overview

Contract Amount: $36,232,350 ($36.2M)

Contractor: Gexa Corp.

Awarding Agency: General Services Administration

Start Date: 2008-10-01

End Date: 2013-09-30

Contract Duration: 1,825 days

Daily Burn Rate: $19.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: ELECTRIC UTILITIES

Place of Performance

Location: DALLAS, DALLAS County, TEXAS, 75242

State: Texas Government Spending

Plain-Language Summary

General Services Administration obligated $36.2 million to GEXA CORP. for work described as: ELECTRIC UTILITIES Key points: 1. Contract value represents a significant investment in utility infrastructure. 2. Full and open competition suggests a potentially competitive pricing environment. 3. Fixed-price contract type shifts performance risk to the contractor. 4. Contract duration of 5 years indicates a long-term service need. 5. Awarded by GSA, a central procurement agency, for public buildings. 6. Texas location highlights regional focus for utility services.

Value Assessment

Rating: good

The contract value of $36.2 million over five years for electric power distribution in Texas appears reasonable given the scope. Benchmarking against similar large-scale utility contracts is challenging without more specific service details. However, the firm fixed-price structure suggests that the contractor assumed the risk of cost overruns, which can be a positive indicator of value if the services are delivered as specified. The General Services Administration's involvement implies adherence to established procurement standards.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. With 3 bidders, the competition level was moderate, suggesting that while multiple companies vied for the contract, it was not an extremely crowded field. This level of competition generally allows for price discovery and can lead to more favorable pricing for the government compared to sole-source or limited competition scenarios.

Taxpayer Impact: A competitive bidding process helps ensure that taxpayer dollars are used efficiently by driving down costs through market forces.

Public Impact

Federal facilities in Texas benefit from reliable electric power distribution. Ensures continuous operation of government buildings and services. Supports the local Texas economy through service provision. Potential for job creation within the utility sector in Texas.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases in future contract renewals if competition diminishes.
Dependence on a single contractor for critical utility services.

Positive Signals

Firm fixed-price contract mitigates cost escalation risk for the government.
Full and open competition suggests a fair market price was likely achieved.
Long-term contract provides service stability for federal facilities.

Sector Analysis

The electric utilities sector is a critical component of national infrastructure, responsible for the generation, transmission, and distribution of electricity. Federal spending in this area often supports government facilities, research, and energy independence initiatives. This contract, valued at over $36 million, falls within the typical range for large-scale utility service agreements, particularly for a significant geographic area like Texas. The GSA's role as an awarding agency for utility services underscores the government's reliance on private sector providers for essential operational needs.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. There is no explicit information regarding subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem from this specific award is likely minimal, though the prime contractor may engage small businesses in their supply chain.

Oversight & Accountability

The General Services Administration (GSA) typically has robust oversight mechanisms for its contracts, including performance monitoring and compliance checks. As a firm fixed-price contract, the primary accountability measure is the contractor's delivery of services according to the contract's terms and conditions. Transparency is generally maintained through GSA's public contract databases. Inspector General oversight would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Federal Energy Management Program
GSA Public Buildings Service Operations
Utility Services Contracts

Risk Flags

Potential for contractor cost-cutting impacting service quality.
Dependence on a single provider for critical infrastructure.
Geographic concentration of service delivery.

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $36.2 million to GEXA CORP.. ELECTRIC UTILITIES

Who is the contractor on this award?

The obligated recipient is GEXA CORP..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $36.2 million.

What is the period of performance?

Start: 2008-10-01. End: 2013-09-30.

What is Gexa Corp.'s track record with federal contracts, particularly for utility services?

Gexa Corp. has a history of federal contracting, with this award being a significant one in terms of value. Analyzing their past performance requires reviewing other awarded contracts, their completion status, and any performance evaluations or disputes. Federal procurement data can reveal if Gexa has successfully managed similar large-scale utility contracts for other agencies or if they have a history of performance issues. Understanding their experience with firm fixed-price contracts and their ability to meet delivery schedules and quality standards is crucial for assessing future performance risk.

How does the awarded price compare to market rates for similar electric power distribution services in Texas?

Determining the precise market rate comparison for this $36.2 million contract is complex without granular data on the specific services rendered (e.g., distribution infrastructure maintenance, energy supply, grid management). However, the fact that it was awarded under full and open competition with three bidders suggests that the pricing was likely competitive within the market. GSA often uses established benchmarks and cost-analysis techniques during procurement to ensure fair and reasonable pricing. Further analysis would involve comparing the per-kilowatt-hour cost or cost per mile of distribution line against regional utility tariffs and other government contracts for similar services in Texas.

What are the primary risks associated with this firm fixed-price contract for electric power distribution?

The primary risk with a firm fixed-price contract is that the contractor, Gexa Corp., bears the financial burden if their costs exceed the agreed-upon price. This could lead to potential issues if unforeseen circumstances, such as extreme weather events impacting infrastructure, or significant increases in energy commodity prices occur. While this shifts cost risk to the contractor, it could incentivize them to cut corners on maintenance or service quality to protect their profit margin, necessitating robust government oversight. Another risk is the potential for contractor default or bankruptcy, though less likely for a company of this apparent scale.

How effective is the GSA in overseeing utility contracts to ensure value and performance?

The GSA generally employs a structured approach to contract oversight, including performance management plans, regular progress meetings, and site inspections where applicable. For utility contracts, effectiveness hinges on clear performance metrics, service level agreements (SLAs), and the agency's capacity to monitor energy consumption, reliability, and maintenance activities. GSA's Public Buildings Service (PBS) division is experienced in managing facilities and their associated services. However, the effectiveness can vary based on the specific contracting officers, the complexity of the services, and the resources allocated for oversight. Independent audits and Inspector General reviews can provide further assurance.

What has been the historical spending trend for electric power distribution services by the federal government, and how does this contract fit?

Federal spending on electric power distribution services fluctuates based on infrastructure needs, energy policies, and the number of government facilities requiring such services. Historically, agencies like the Department of Defense and GSA have been significant spenders in this category to maintain operational readiness and facility functionality. This $36.2 million contract awarded to Gexa Corp. represents a substantial, but not unprecedented, investment for a specific region (Texas) and duration (5 years). It aligns with the government's ongoing need to secure reliable and cost-effective utility services for its extensive real estate portfolio.

Industry Classification

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

Product/Service Code: UTILITIES AND HOUSEKEEPING › UTILITIES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Florida Power & Light Company (UEI: 122723174)

Address: 20 E GREENWAY PLZ, HOUSTON, TX, 90

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

Financial Breakdown

Contract Ceiling: $36,232,350

Exercised Options: $36,232,350

Current Obligation: $36,232,350

Timeline