HHS awards $3.2M for energy conservation, with significant contract duration

Contract Overview

Contract Amount: $3,220,611 ($3.2M)

Contractor: Washington GAS Light Company

Awarding Agency: Department of Health and Human Services

Start Date: 2016-06-30

End Date: 2027-09-01

Contract Duration: 4,080 days

Daily Burn Rate: $789/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Energy

Official Description: IGF::OT::IGF USEC PHASE 7 ENERGY CONSERVATION MEASURES AT MRC MOD I AND MOD II

Place of Performance

Location: LAUREL, PRINCE GEORGES County, MARYLAND, 20708

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $3.2 million to WASHINGTON GAS LIGHT COMPANY for work described as: IGF::OT::IGF USEC PHASE 7 ENERGY CONSERVATION MEASURES AT MRC MOD I AND MOD II Key points: 1. Contract value appears reasonable given the extended performance period. 2. Limited competition may have impacted final pricing. 3. Long-term nature of the contract presents potential for cost escalation. 4. Performance context is energy conservation within federal facilities. 5. Contract falls within the broader category of facility maintenance and operations. 6. Potential for cost savings through energy efficiency measures.

Value Assessment

Rating: fair

The contract value of $3.2 million over approximately 10 years suggests a modest annual spend. Benchmarking against similar energy conservation contracts is difficult without more specific details on the scope of work. However, the extended duration implies a need for sustained services, and the firm-fixed-price structure provides cost certainty for the government. The value appears fair if the scope of work is comprehensive and the contractor delivers significant energy savings.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, indicating that only one vendor was deemed capable of fulfilling the requirement. This lack of competition means that the government did not benefit from multiple bids, which could have driven down the price. The justification for a sole-source award would typically involve unique capabilities or a specific existing relationship that makes competition impractical.

Taxpayer Impact: Sole-source awards generally result in higher costs for taxpayers as competitive pressures are absent, potentially leading to less favorable pricing than if multiple vendors had bid.

Public Impact

The Department of Health and Human Services (HHS) and its Food and Drug Administration (FDA) are the primary beneficiaries, ensuring operational efficiency. Services delivered include energy conservation measures and natural gas distribution, aimed at reducing utility costs and environmental impact. The geographic impact is focused on Maryland, where the facilities are located. Workforce implications are likely related to the contractor's personnel managing and executing the energy conservation projects.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing benefits for taxpayers.
Extended contract duration increases risk of cost overruns if not managed tightly.
Lack of detailed scope of work makes independent value assessment challenging.

Positive Signals

Focus on energy conservation aligns with federal sustainability goals.
Firm-fixed-price contract provides budget certainty.
Long-term contract allows for sustained improvements and potential for significant energy savings.

Sector Analysis

This contract falls within the Utilities and Energy Services sector, specifically focusing on energy conservation measures and natural gas distribution. The market for such services is substantial, driven by federal and commercial entities seeking to reduce operational costs and meet environmental mandates. Comparable spending benchmarks would typically involve analyzing the cost per square foot for energy management services or the return on investment for energy efficiency projects across similar federal facilities.

Small Business Impact

The data indicates this contract was not set aside for small businesses, nor does it appear to involve significant subcontracting opportunities for small businesses based on the available information. The primary contractor, Washington Gas Light Company, is a large utility provider. This suggests that the direct impact on the small business ecosystem for this specific award is likely minimal.

Oversight & Accountability

Oversight for this contract would primarily reside with the contracting officers and program managers within the FDA and HHS. Accountability measures are embedded in the firm-fixed-price contract terms, requiring the contractor to meet specific performance standards related to energy conservation. Transparency is limited due to the sole-source nature and lack of publicly detailed performance reports, though contract modifications and payments are typically tracked.

Related Government Programs

Federal Energy Management Program (FEMP)
Energy Savings Performance Contracts (ESPCs)
General Services Administration (GSA) Schedules for Energy Services
Department of Energy (DOE) Utility Energy Services Contracts (UESC)

Risk Flags

Sole-source award limits price competition.
Extended contract duration increases long-term risk exposure.
Lack of detailed performance metrics in summary data.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $3.2 million to WASHINGTON GAS LIGHT COMPANY. IGF::OT::IGF USEC PHASE 7 ENERGY CONSERVATION MEASURES AT MRC MOD I AND MOD II

Who is the contractor on this award?

The obligated recipient is WASHINGTON GAS LIGHT COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Food and Drug Administration).

What is the total obligated amount?

The obligated amount is $3.2 million.

What is the period of performance?

Start: 2016-06-30. End: 2027-09-01.

What specific energy conservation measures are included in this contract, and what are the projected savings?

The provided data does not detail the specific energy conservation measures (ECMs) to be implemented under IGF USEC PHASE 7. These could range from HVAC upgrades, lighting retrofits, building envelope improvements, to advanced energy management systems. Similarly, projected savings are not specified. Typically, such contracts would include a detailed energy audit and a proposal outlining the ECMs, their costs, and the anticipated energy and cost savings, often with a guaranteed savings component. Without this information, it's difficult to independently verify the value proposition beyond the contractor's stated intent.

How does the $3.2 million contract value compare to similar energy conservation contracts awarded by federal agencies?

Direct comparison of the $3.2 million value is challenging without knowing the exact scope, duration, and specific services. However, the contract's duration of approximately 10 years (from June 2016 to September 2027) suggests an average annual spend of around $320,000. This figure is modest for large-scale energy infrastructure projects but could be substantial for focused conservation efforts within specific facilities. Energy Savings Performance Contracts (ESPCs) and Utility Energy Services Contracts (UESCs) vary widely in cost, from tens of thousands to tens of millions of dollars, depending on the size and complexity of the facilities and the ECMs deployed.

What are the primary risks associated with this sole-source contract, and how are they being mitigated?

The primary risks associated with this sole-source contract include potential overpricing due to the lack of competition and the possibility of the contractor not delivering the expected energy savings. Mitigation strategies, though not explicitly detailed in the provided data, would typically involve rigorous contract oversight, performance monitoring against defined metrics, and potentially incorporating incentive clauses tied to achieved savings. The firm-fixed-price nature helps mitigate cost overrun risks for the government, but it doesn't guarantee performance outcomes. The long duration also presents a risk of technological obsolescence or changing energy market conditions.

What is the track record of Washington Gas Light Company in performing similar energy conservation services for the federal government?

Washington Gas Light Company (WGL) is a major utility provider with a long history of serving natural gas customers. While primarily known for gas distribution, WGL has also been involved in energy efficiency programs and services, often in partnership with federal agencies or through programs like Utility Energy Services Contracts (UESCs). Assessing their specific track record on federal energy conservation projects would require reviewing past performance evaluations, contract histories, and any publicly available case studies or reports detailing their success in implementing ECMs and achieving guaranteed savings for government facilities.

How does the extended contract duration (over 10 years) impact the overall value and risk for the government?

The extended duration of over 10 years offers potential benefits, such as allowing for the full implementation and realization of long-term energy efficiency measures, potentially leading to greater cumulative savings and a better return on investment. It also provides stability and predictability for energy management. However, it also introduces risks, including the potential for the contractor's proposed solutions to become outdated, changes in energy prices or technology rendering the original plan less effective, and the need for sustained government oversight to ensure continued performance and value throughout the contract's life. Inflationary pressures over such a long period also need to be considered.

Industry Classification

NAICS: Utilities › Natural Gas Distribution › Natural Gas Distribution

Product/Service Code: UTILITIES AND HOUSEKEEPING › UTILITIES

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Altagas Ltd

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

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $3,632,075

Exercised Options: $3,220,611

Current Obligation: $3,220,611

Actual Outlays: $1,254,800

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS00P06BSD0393

IDV Type: IDC

Timeline