DoD's $6.5M energy conservation contract with Virginia Natural Gas, Inc. awarded for 18 years

Contract Overview

Contract Amount: $6,529,972 ($6.5M)

Contractor: Virginia Natural GAS, Inc.

Awarding Agency: Department of Defense

Start Date: 2012-09-27

End Date: 2030-11-01

Contract Duration: 6,609 days

Daily Burn Rate: $988/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Energy

Official Description: IGF::OT::IGF UTILITY ENGERGY SERVICES CONTRACT, ENERGY CONSERVATION MEASURES AT JOINT EXPEDITIONARY BASE LITTLE CREEK-FORT STORY, VIRGINIA

Place of Performance

Location: VIRGINIA BEACH, NORFOLK CITY County, VIRGINIA, 23459

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $6.5 million to VIRGINIA NATURAL GAS, INC. for work described as: IGF::OT::IGF UTILITY ENGERGY SERVICES CONTRACT, ENERGY CONSERVATION MEASURES AT JOINT EXPEDITIONARY BASE LITTLE CREEK-FORT STORY, VIRGINIA Key points: 1. Contract awarded for a long duration, potentially impacting long-term energy efficiency goals. 2. Focus on energy conservation measures suggests a strategic investment in operational sustainability. 3. Sole-source award raises questions about potential cost savings through competitive bidding. 4. The contract's value is spread over a significant period, requiring careful performance monitoring. 5. Performance at a Joint Expeditionary Base indicates a critical infrastructure support role. 6. Fixed-price contract type shifts performance risk to the contractor.

Value Assessment

Rating: fair

The contract value of $6.5 million over 18 years averages approximately $360,000 annually. Without comparable contracts for similar energy conservation measures at military bases, a precise value-for-money assessment is challenging. However, the long duration and sole-source nature warrant scrutiny to ensure the pricing remains competitive and reflects actual market rates for energy services and conservation technologies.

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 among multiple vendors. While sole-source awards can be justified for specific circumstances, they limit the opportunity for price discovery through competition. This approach may result in higher costs for the government compared to a fully competed contract, as there is no direct comparison of bids to determine the most cost-effective solution.

Taxpayer Impact: The lack of competition means taxpayers may not be receiving the best possible price for these energy conservation services. Without competitive pressure, the contractor has less incentive to offer the lowest possible price, potentially leading to overspending.

Public Impact

The primary beneficiary is the Department of Defense, specifically Joint Expeditionary Base Little Creek-Fort Story, Virginia, through improved energy efficiency. Services delivered include energy conservation measures, aiming to reduce utility consumption and operational costs. The geographic impact is localized to the military installation in Virginia. Workforce implications are likely related to the installation and maintenance of energy-saving equipment and systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (18 years) may lead to vendor lock-in and reduced flexibility.
Sole-source award limits price competition, potentially increasing costs for taxpayers.
Lack of detailed performance metrics in the provided data makes it difficult to assess effectiveness.
Contract value is substantial, requiring diligent oversight to ensure funds are used efficiently.

Positive Signals

Focus on energy conservation aligns with government sustainability goals.
Fixed-price contract shifts risk to the contractor, potentially ensuring cost certainty.
Contract awarded to a known entity (Virginia Natural Gas) may imply a level of trust or existing relationship.

Sector Analysis

The energy services sector for government facilities is a significant market. Contracts often focus on improving energy efficiency, reducing operational costs, and meeting sustainability mandates. Benchmarks for similar energy conservation projects at federal installations vary widely based on scope, technology, and duration. This contract's value, spread over 18 years, suggests a comprehensive approach to energy management rather than a single project.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses, nor does it explicitly mention subcontracting requirements for small businesses. Therefore, the direct impact on the small business ecosystem appears limited unless Virginia Natural Gas, Inc. voluntarily engages small businesses for specific services or components.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and facilities management divisions. Accountability measures would be tied to the performance standards outlined in the contract, with potential for review by the Government Accountability Office (GAO) or the Department of Defense Inspector General if issues arise. Transparency could be enhanced by public reporting of energy savings achieved.

Related Government Programs

Department of Defense Energy Programs
Federal Energy Management Program (FEMP)
Military Base Infrastructure Modernization
Utility Energy Services Contracts (UESC)

Risk Flags

Sole-source award
Long contract duration
Lack of detailed performance metrics
Potential for cost inefficiency due to lack of competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $6.5 million to VIRGINIA NATURAL GAS, INC.. IGF::OT::IGF UTILITY ENGERGY SERVICES CONTRACT, ENERGY CONSERVATION MEASURES AT JOINT EXPEDITIONARY BASE LITTLE CREEK-FORT STORY, VIRGINIA

Who is the contractor on this award?

The obligated recipient is VIRGINIA NATURAL GAS, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $6.5 million.

What is the period of performance?

Start: 2012-09-27. End: 2030-11-01.

What specific energy conservation measures are included in this contract?

The provided data does not specify the exact energy conservation measures (ECMs) covered under this contract. Typically, such contracts can include a range of upgrades such as high-efficiency lighting retrofits, HVAC system improvements, building envelope enhancements (insulation, windows), water conservation measures, and the implementation of advanced energy management systems. The scope would be detailed in the contract's statement of work, outlining the specific technologies and services Virginia Natural Gas, Inc. is obligated to provide to achieve energy savings at Joint Expeditionary Base Little Creek-Fort Story.

How does the $6.5 million contract value compare to similar energy conservation projects at other military installations?

Direct comparison is difficult without knowing the specific scope and scale of 'similar' projects. However, $6.5 million over 18 years averages roughly $360,000 per year. This figure needs to be contextualized against the size of the installation, its existing energy infrastructure, and the specific technologies implemented. Larger bases or those with more extensive upgrade needs would naturally command higher contract values. The sole-source nature of this award also complicates direct benchmarking against competitively bid projects, which often yield lower prices due to market pressures.

What are the primary risks associated with an 18-year sole-source contract for energy services?

The primary risks include potential cost overruns if pricing is not regularly reviewed against market benchmarks, vendor lock-in limiting future flexibility, and the possibility of the contractor not delivering optimal performance over such a long period. A sole-source award inherently carries the risk of paying a premium due to the lack of competitive bidding. Furthermore, technological advancements in energy conservation could outpace the contract's scope, making the implemented solutions outdated before the contract term ends. Ensuring robust performance monitoring and clear exit clauses is crucial.

What is the track record of Virginia Natural Gas, Inc. in performing similar federal contracts?

Information regarding Virginia Natural Gas, Inc.'s specific track record on similar federal contracts is not detailed in the provided data. A comprehensive assessment would require reviewing past performance evaluations, any contract disputes or awards, and the successful completion of previous energy conservation projects, particularly for government or military clients. Their status as a natural gas provider suggests expertise in energy infrastructure, but the specifics of their federal contracting performance would need further investigation through databases like the Federal Procurement Data System (FPDS) or contractor performance databases.

How will the effectiveness of the energy conservation measures be measured and verified?

Effectiveness is typically measured through baseline energy consumption data established before the contract begins, compared against post-implementation consumption. Verification often involves Measurement and Verification (M&V) protocols, as defined in the contract, which may include regular energy audits, utility bill analysis, and performance monitoring of installed systems. The contract likely specifies key performance indicators (KPIs) related to energy savings, cost reductions, and operational efficiency that the contractor must meet to fulfill their obligations.

What is the historical spending trend for energy services at Joint Expeditionary Base Little Creek-Fort Story?

The provided data only includes this single contract and does not offer historical spending trends for energy services at the base. To understand historical spending, one would need to analyze past contracts related to utilities, energy management, and infrastructure maintenance at Joint Expeditionary Base Little Creek-Fort Story over several years. This would involve searching federal procurement databases for relevant contract awards and expenditures to identify patterns, fluctuations, and the overall investment in energy-related services prior to this current contract.

Industry Classification

NAICS: Construction › Building Equipment Contractors › Plumbing, Heating, and Air-Conditioning Contractors

Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR NONBUILDINGS

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Southern CO Services Inc

Address: 544 S INDEPENDENCE BLVD, VIRGINIA BEACH, VA, 23452

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $13,153,423

Exercised Options: $13,153,423

Current Obligation: $6,529,972

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline