GSA's $18.5M electric utility contract for NYC federal buildings shows long-term reliance on a single provider

Contract Overview

Contract Amount: $18,475,729 ($18.5M)

Contractor: Consolidated Edison Company of NEW York, Inc.

Awarding Agency: General Services Administration

Start Date: 2005-10-20

End Date: 2013-04-30

Contract Duration: 2,749 days

Daily Burn Rate: $6.7K/day

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: UTILITY - ELECTRIC FOR 26 FEDERAL PLAZA AND 203-209 CENTRE ST.NY

Place of Performance

Location: NEW YORK, NEW YORK County, NEW YORK, 10278

State: New York Government Spending

Plain-Language Summary

General Services Administration obligated $18.5 million to CONSOLIDATED EDISON COMPANY OF NEW YORK, INC. for work described as: UTILITY - ELECTRIC FOR 26 FEDERAL PLAZA AND 203-209 CENTRE ST.NY Key points: 1. Contract value of $18.5M over nearly 8 years suggests a stable, albeit potentially unoptimized, energy procurement strategy. 2. The firm-fixed-price structure provides budget certainty but may limit flexibility in response to fluctuating energy market prices. 3. A single award without a small business set-aside indicates a focus on established utility providers rather than broader market competition. 4. The contract's duration and scope point to essential service provision, critical for the operational continuity of federal facilities. 5. Performance context is limited without specific metrics on reliability or cost-effectiveness compared to alternative energy solutions.

Value Assessment

Rating: fair

The contract's total value of $18.5 million over approximately 7.5 years averages to about $2.47 million annually. Benchmarking this against similar utility contracts is challenging due to the regulated nature of electric power distribution and geographic specificity. However, the lack of competitive bidding suggests potential for above-market rates if alternative providers were available. Without more granular data on energy consumption and pricing structures, a definitive value-for-money assessment is difficult, but the absence of competition raises concerns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a sole-source procurement, indicating that Consolidated Edison Company of New York, Inc. was the only viable provider for electric power distribution to the specified federal buildings in New York City. The lack of competition means that price discovery through a bidding process did not occur, potentially leading to higher costs for the government compared to a competitive scenario. The rationale for sole-source likely stems from the monopolistic nature of utility infrastructure in the region.

Taxpayer Impact: Sole-source awards for essential services like electricity can mean taxpayers are not benefiting from potential cost savings that competitive bidding might achieve. This necessitates strong oversight to ensure the awarded price remains reasonable.

Public Impact

Federal buildings in New York City, including 26 Federal Plaza and 203-209 Centre St., benefit from reliable electricity supply. The contract ensures the continuous operation of critical government functions housed within these facilities. The primary beneficiaries are federal agencies operating within the designated buildings, ensuring uninterrupted services to the public. The contract supports the local utility workforce employed by Consolidated Edison.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Firm fixed-price contract may not capture potential market efficiencies.
Long-term reliance on a single provider could reduce incentive for innovation or cost reduction.
Absence of small business participation limits economic opportunity.

Positive Signals

Ensures reliable and continuous power supply to critical federal facilities.
Firm fixed-price provides budget certainty for the agency.
Consolidated Edison is a well-established utility provider with extensive infrastructure.

Sector Analysis

The electric power distribution sector is characterized by significant infrastructure investment and regulatory oversight. Utilities typically operate as natural monopolies within defined geographic areas. Federal agencies often procure electricity through long-term contracts, either directly from utilities or through energy service companies. Spending benchmarks for utility services vary widely based on location, consumption, and energy source. This contract falls within the essential services category for federal real property management.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to involve significant subcontracting opportunities for small businesses. The nature of electric power distribution, particularly in established urban areas, is dominated by large, regulated utility companies. This limits the direct impact on the small business ecosystem for this specific procurement, as the primary contractor is a large, established entity.

Oversight & Accountability

Oversight for this contract would primarily fall under the General Services Administration (GSA), specifically the Public Buildings Service. Accountability measures would include ensuring consistent service delivery as per the contract terms and adherence to pricing agreements. Transparency is generally high for regulated utility rates, though the specific negotiated price within the contract may be less public. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Federal Buildings Fund
Energy Management Programs
Public Utilities Contracts
General Services Administration Real Property Management

Risk Flags

Sole-source procurement
Lack of competition
Potential for above-market pricing
Limited transparency on specific pricing components

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $18.5 million to CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.. UTILITY - ELECTRIC FOR 26 FEDERAL PLAZA AND 203-209 CENTRE ST.NY

Who is the contractor on this award?

The obligated recipient is CONSOLIDATED EDISON COMPANY OF NEW YORK, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $18.5 million.

What is the period of performance?

Start: 2005-10-20. End: 2013-04-30.

What is the historical spending trend for electric power at 26 Federal Plaza and 203-209 Centre St. prior to this contract?

Detailed historical spending data prior to this contract (2005-2013) is not readily available in the provided data. However, the contract's duration of nearly 8 years and its firm fixed-price nature suggest a consistent annual expenditure. The total award of $18.5 million implies an average annual cost of approximately $2.47 million. Without prior contract details or consumption data, it's difficult to establish a precise historical trend or identify significant deviations. Future analysis could benefit from comparing this contract's average annual cost to the agency's overall utility spending or to similar federal facilities in the region to identify potential cost efficiencies or anomalies.

How does the average annual cost of this contract compare to similar federal facilities in New York City?

Comparing the average annual cost of approximately $2.47 million for this contract to similar federal facilities in New York City is challenging without specific data on the size, energy consumption, and exact locations of those other facilities. However, given that this contract covers two significant federal buildings, the cost appears to be within a reasonable range for essential utility services in a high-cost urban environment like New York City. The lack of competitive bidding, however, means it's difficult to ascertain if this represents optimal value. A more robust comparison would require detailed energy usage data and benchmarking against facilities of comparable square footage and operational intensity within the GSA portfolio.

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

The primary risk associated with a sole-source award for electric utility services is the potential for inflated costs due to the absence of competition. Taxpayers may end up paying more than necessary if the sole provider does not face market pressure to offer competitive pricing. Another risk is a reduced incentive for the provider to innovate or improve service quality beyond the minimum contractual requirements, as there are no alternative providers to attract customers. Furthermore, reliance on a single provider can create vulnerabilities; if the provider experiences service disruptions, the federal facilities are left without power, impacting critical government operations. Ensuring fair pricing and robust service level agreements becomes paramount in sole-source situations.

What performance metrics were likely used to evaluate Consolidated Edison during the contract period?

While specific performance metrics are not detailed in the provided data, typical performance evaluations for electric utility contracts would likely include reliability of service (e.g., frequency and duration of outages), adherence to power quality standards (e.g., voltage stability), response times to service calls or emergencies, and billing accuracy. For a firm-fixed-price contract, the primary focus might be on ensuring uninterrupted service delivery and compliance with the agreed-upon rate structure. The General Services Administration (GSA) would likely have internal procedures for monitoring utility performance, potentially involving regular reports from facility managers and direct communication with the utility provider.

What is the potential impact of this contract on energy efficiency initiatives within the federal buildings?

The impact of this contract on energy efficiency initiatives is likely limited, primarily due to its nature as a standard electric power supply agreement. A firm-fixed-price contract for basic utility service typically does not incentivize the provider to actively promote or implement energy efficiency measures within the federal buildings. Instead, the responsibility for energy efficiency often lies with the federal agency managing the facility through separate initiatives, building retrofits, or energy performance contracts. While Consolidated Edison may offer energy-saving programs to its customers, the structure of this specific contract doesn't inherently drive such actions from the utility's side beyond meeting basic service requirements.

Could this contract have been competed more broadly, or is a sole-source award standard for this type of service?

For electric power distribution in established urban areas like New York City, a sole-source award to the incumbent utility provider (Consolidated Edison in this case) is often standard and practically unavoidable. This is because utility infrastructure, including power lines and substations, represents a natural monopoly. Building duplicate infrastructure would be prohibitively expensive and redundant. Therefore, the General Services Administration (GSA) likely had limited options for broader competition unless alternative energy sources or distribution methods were feasible and cost-effective, which is rare for basic electricity supply. The procurement approach reflects the regulated monopoly nature of the utility sector.

Industry Classification

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

Product/Service Code: UTILITIES AND HOUSEKEEPING › UTILITIES

Contractor Details

Parent Company: Consolidated Edison, Inc. (UEI: 002944531)

Address: 4 IRVING PL, NEW YORK, NY, 90

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $18,475,729

Exercised Options: $18,475,729

Current Obligation: $18,475,729

Parent Contract

Parent Award PIID: GS00P05BSD0359

IDV Type: IDC

Timeline