GSA's $27.7M natural gas contract with Washington Gas Light Company for DC utility services shows limited competition

Contract Overview

Contract Amount: $27,676,964 ($27.7M)

Contractor: Washington GAS Light Company

Awarding Agency: General Services Administration

Start Date: 2014-09-30

End Date: 2018-09-30

Contract Duration: 1,461 days

Daily Burn Rate: $18.9K/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Energy

Official Description: OBLIGATIONAL FUNDING FOR HOTD COGENERATION PROJECT UNDER FSA UTILITY AREAWIDE CONTRACT GS-00P-96-BSD-0029 FOR REPAYMENT TO WASHINGTON GAS LIGHT COMPANY PER CONTRACT AMORTIZATION SCHEDULE TERMS AND CONDITIONS.

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20407

State: District of Columbia Government Spending

Plain-Language Summary

General Services Administration obligated $27.7 million to WASHINGTON GAS LIGHT COMPANY for work described as: OBLIGATIONAL FUNDING FOR HOTD COGENERATION PROJECT UNDER FSA UTILITY AREAWIDE CONTRACT GS-00P-96-BSD-0029 FOR REPAYMENT TO WASHINGTON GAS LIGHT COMPANY PER CONTRACT AMORTIZATION SCHEDULE TERMS AND CONDITIONS. Key points: 1. The contract's value of $27.7 million over its 4-year duration suggests a significant investment in utility infrastructure. 2. Limited competition, as indicated by 'NOT COMPETED UNDER SAP', raises questions about potential overpayment and value for money. 3. The fixed-price contract type provides cost certainty but may limit flexibility if market conditions change significantly. 4. The contract's focus on natural gas distribution in the District of Columbia highlights a critical infrastructure need. 5. The absence of small business set-asides or subcontracting requirements means potential benefits are not being extended to smaller enterprises.

Value Assessment

Rating: fair

The obligational funding of $27.7 million for this 4-year contract appears substantial for a utility services agreement. Without specific benchmarks for similar cogeneration projects or detailed cost breakdowns, it is difficult to definitively assess value for money. The lack of competition suggests that the government may not have secured the most competitive pricing available in the market. Further analysis would require comparing the per-unit cost of energy or capacity provided against similar contracts or market rates for natural gas distribution in the Washington D.C. area.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was not competed under the Simplified Acquisition Procedures (SAP), indicating it was likely procured through a limited competition or sole-source justification. The 'NOT COMPETED UNDER SAP' designation suggests that the full and open competitive process was not utilized. This limited competition could stem from various factors, such as the specialized nature of the services or an existing relationship with the contractor. The lack of broad competition may have resulted in a higher price than could have been achieved through a more open bidding process.

Taxpayer Impact: For taxpayers, limited competition often translates to a higher cost for goods and services, as the government may not benefit from the price reductions typically driven by a competitive marketplace.

Public Impact

Federal agencies and facilities in the District of Columbia benefit from reliable natural gas supply for heating and power. The contract ensures the continued operation of cogeneration facilities, supporting energy efficiency and utility services. The geographic impact is concentrated within the District of Columbia, serving federal installations in the area. The contract supports the workforce of Washington Gas Light Company, involved in the distribution and maintenance of natural gas infrastructure.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of full and open competition may lead to suboptimal pricing.
Limited transparency in the procurement process due to 'NOT COMPETED UNDER SAP'.
Potential for cost overruns if market conditions fluctuate and the fixed-price contract is not adaptable.
No explicit provisions for small business participation or subcontracting.

Positive Signals

Ensures a critical utility service for federal operations in the capital.
Fixed-price contract provides budget certainty for the obligated amount.
Contract duration of over 4 years offers stability for service provision.

Sector Analysis

This contract falls within the Utilities and Energy Services sector, specifically focusing on natural gas distribution. The market for utility services is often characterized by regulated monopolies or oligopolies, which can limit competition. Federal agencies are significant consumers of energy, and contracts like this are essential for maintaining operational capabilities. Comparable spending benchmarks would involve analyzing other utility contracts awarded by GSA or other federal agencies for similar services in major metropolitan areas.

Small Business Impact

The contract details indicate that small business participation was not a specified requirement, as 'sb' is false. This suggests that the procurement did not include a small business set-aside or specific subcontracting goals for small businesses. Consequently, the economic benefits typically associated with federal contracts, such as opportunities for small businesses to grow and contribute to the federal supply chain, are not being realized through this specific award. The impact on the small business ecosystem is therefore neutral to negative, as opportunities were not actively created.

Oversight & Accountability

Oversight for this contract would primarily fall under the General Services Administration's Public Buildings Service. Accountability measures are embedded in the firm fixed-price structure, which obligates the contractor to deliver services at an agreed-upon cost. Transparency is limited by the non-competitive nature of the award. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract's execution and funding.

Related Government Programs

Federal Buildings Fund
Energy Management Programs
Utility Privatization Contracts
General Services Administration Acquisition Policies

Risk Flags

Limited competition procurement
Lack of transparency in award justification
Potential for non-optimal pricing

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $27.7 million to WASHINGTON GAS LIGHT COMPANY. OBLIGATIONAL FUNDING FOR HOTD COGENERATION PROJECT UNDER FSA UTILITY AREAWIDE CONTRACT GS-00P-96-BSD-0029 FOR REPAYMENT TO WASHINGTON GAS LIGHT COMPANY PER CONTRACT AMORTIZATION SCHEDULE TERMS AND CONDITIONS.

Who is the contractor on this award?

The obligated recipient is WASHINGTON GAS LIGHT COMPANY.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $27.7 million.

What is the period of performance?

Start: 2014-09-30. End: 2018-09-30.

What is the historical spending pattern for this specific contract vehicle (GS-00P-96-BSD-0029)?

The provided data indicates an obligational amount of $27,676,964.04 for the HotD Cogeneration Project under contract GS-00P-96-BSD-0029. The contract period spans from September 30, 2014, to September 30, 2018, a duration of 1461 days (approximately 4 years). This suggests a significant, multi-year commitment. Without access to historical obligation data beyond this single entry, it's impossible to detail the precise spending trajectory year-over-year or to identify trends in funding adjustments. However, the total amount obligated suggests a consistent need for the services provided throughout the contract's life.

How does the pricing of this contract compare to similar utility contracts awarded by GSA?

Direct comparison of pricing for this specific contract is challenging without detailed cost breakdowns and market data for similar utility services in the Washington D.C. area. The contract is for natural gas distribution and cogeneration support, a specialized service. The 'NOT COMPETED UNDER SAP' status suggests a limited competitive environment, which could imply that the pricing may not be as aggressive as it might be under a full and open competition. To benchmark effectively, one would need to identify comparable contracts for natural gas supply and related utility services awarded by GSA or other agencies to similar facilities in the same geographic region and analyze their pricing structures, per-unit costs, and contract terms.

What are the primary risks associated with a 'NOT COMPETED UNDER SAP' contract for utility services?

The primary risk associated with a 'NOT COMPETED UNDER SAP' contract is the potential for paying a higher price than could be achieved through a competitive bidding process. This lack of competition can reduce the government's leverage in price negotiations. Additionally, it may limit transparency into the procurement process and the justification for selecting a particular contractor. There's also a risk that the government might not be aware of innovative solutions or better value propositions that could have been offered by other potential bidders. For utility services, which are often critical and long-term, these risks can have significant financial implications over the life of the contract.

What is the expected performance outcome or service level for this contract?

The contract is for 'OBLIGATIONAL FUNDING FOR HOTD COGENERATION PROJECT UNDER FSA UTILITY AREAWIDE CONTRACT GS-00P-96-BSD-0029 FOR REPAYMENT TO WASHINGTON GAS LIGHT COMPANY PER CONTRACT AMORTIZATION SCHEDULE TERMS AND CONDITIONS.' This indicates the expected outcome is the reliable provision of natural gas utility services, likely for heating, cooling, and power generation (cogeneration) at a federal facility (HOTD). The 'AMORTIZATION SCHEDULE TERMS AND CONDITIONS' suggest a structured repayment plan for infrastructure or services rendered. Performance is likely measured by the continuity and quality of the natural gas supply, adherence to safety standards, and meeting the energy demands of the facility as outlined in the contract's technical requirements and service level agreements, if any.

How does this contract fit within GSA's broader strategy for energy procurement and utility management?

This contract represents a specific instance of GSA fulfilling its mandate to provide essential services, including utilities, to federal agencies. GSA often manages large-scale utility contracts to leverage economies of scale and expertise. While this particular contract was not competitively bid under SAP, GSA's overall strategy typically emphasizes achieving best value through various procurement methods, including competitive solicitations for larger requirements. Contracts like this, especially those involving repayment schedules or amortization, might be part of a strategy to finance or manage critical infrastructure upgrades or ongoing essential services where direct competition is limited due to the nature of the utility provider or existing infrastructure.

Industry Classification

NAICS: Utilities › Natural Gas Distribution › Natural Gas Distribution

Product/Service Code: ENGINES AND TURBINES AND COMPONENT

Competition & Pricing

Extent Competed: NOT COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Semco Energy Inc. (UEI: 203483169)

Address: 101 CONSTITUTION AVENUE NW, WASHINGTON, DC, 20080

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $27,676,964

Exercised Options: $27,676,964

Current Obligation: $27,676,964

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Timeline