NASA's $32.3M electricity contract with Reliant Energy Retail Services shows fixed-price adjustments and full competition
Contract Overview
Contract Amount: $32,316,763 ($32.3M)
Contractor: Reliant Energy Retail Services, LLC
Awarding Agency: National Aeronautics and Space Administration
Start Date: 2011-01-28
End Date: 2014-01-31
Contract Duration: 1,099 days
Daily Burn Rate: $29.4K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 8
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Energy
Official Description: THIS ORDER IS FOR FUNDING, TRACKING, AND PAYMENT OF INVOICES FOR THE SUPPLY AND TRANSMISSION OF ELECTRICITY AND ANCILLARY SERVICES FOR NASA JSC, ELLINGTON, AND SONNY CARTER TRAINING CENTER
Place of Performance
Location: HOUSTON, HARRIS County, TEXAS, 77058, UNITED STATES OF AMERICA
State: Texas Government Spending
Plain-Language Summary
National Aeronautics and Space Administration obligated $32.3 million to RELIANT ENERGY RETAIL SERVICES, LLC for work described as: THIS ORDER IS FOR FUNDING, TRACKING, AND PAYMENT OF INVOICES FOR THE SUPPLY AND TRANSMISSION OF ELECTRICITY AND ANCILLARY SERVICES FOR NASA JSC, ELLINGTON, AND SONNY CARTER TRAINING CENTER Key points: 1. Contract value of $32.3 million over three years for electricity supply and transmission. 2. Fixed-price contract with economic price adjustment mechanism allows for fluctuations in energy costs. 3. Awarded under full and open competition, indicating a competitive bidding process. 4. Contract duration of approximately three years, from January 2011 to January 2014. 5. Services provided include electricity supply and ancillary services for NASA facilities in Texas. 6. The contract type suggests potential for cost savings if energy prices remain stable, but also risk of increased costs if prices rise significantly.
Value Assessment
Rating: good
The contract value of $32.3 million over three years for electricity services appears reasonable given the scope of supplying and transmitting electricity and ancillary services to NASA facilities. Benchmarking against similar utility contracts is challenging without specific consumption data, but the fixed-price with economic price adjustment structure is common in the energy sector. The price adjustment mechanism allows for market fluctuations, which can be beneficial for both parties depending on market conditions. The total award amount of $29,406 for the base period suggests a significant portion of the contract value is allocated to potential price adjustments over the full term.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, meaning that all responsible sources were permitted to submit a bid. The presence of 8 bidders indicates a healthy level of competition for this electricity supply contract. A competitive bidding process generally leads to better price discovery and can result in more favorable terms for the government.
Taxpayer Impact: The full and open competition for this contract likely resulted in a more competitive price for taxpayers compared to a sole-source or limited competition award. The multiple bids suggest that the government received a range of pricing options, allowing for selection of the most cost-effective offer.
Public Impact
NASA's Johnson Space Center (JSC), Ellington field, and Sonny Carter Training Center benefit from reliable electricity supply. Ensures continuous operation of critical NASA facilities and training programs. Geographic impact is localized to the Houston, Texas area where the facilities are located. Supports the energy sector by providing a consistent demand for electricity and related services.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Economic price adjustment clause introduces potential for cost overruns if energy prices increase substantially.
- Reliance on a single vendor for essential utility services creates a dependency.
Positive Signals
- Awarded through full and open competition, suggesting competitive pricing.
- Fixed-price component provides a baseline cost certainty.
- Contract duration aligns with typical utility service agreements.
Sector Analysis
The energy sector, specifically electric power generation and distribution, is a critical infrastructure component for government operations. This contract falls within the segment of electricity supply and transmission services. The market for electricity is typically regulated, with competition often occurring at the retail supply level. The contract value of $32.3 million over three years is a significant but not exceptionally large sum for a federal agency's energy needs, reflecting the ongoing demand for reliable power. Comparable spending benchmarks would depend on the specific energy consumption profiles of the NASA facilities involved.
Small Business Impact
There is no indication that this contract included small business set-asides, nor is there information suggesting subcontracting opportunities for small businesses. The nature of large-scale electricity supply contracts often involves established utility providers, which may limit direct participation by small businesses unless they are acting as subcontractors to the primary awardee. Further analysis would be needed to determine if any subcontracting goals were established or met.
Oversight & Accountability
Oversight for this contract would typically be managed by the contracting officer and the relevant program officials within NASA. Accountability measures are embedded in the contract terms, including performance requirements for electricity supply and adherence to the economic price adjustment clauses. Transparency is facilitated through contract award databases, though detailed operational performance data may not be publicly available. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.
Related Government Programs
- Federal Energy Management Program
- NASA Facilities Management
- Utility Services Contracts
- Electric Power Generation and Distribution
Risk Flags
- Potential for cost increases due to economic price adjustment clause.
- Lack of detailed performance metrics in public data.
Tags
energy, nasa, texas, electricity-supply, fixed-price-with-economic-price-adjustment, full-and-open-competition, utility-services, 2011-2014, large-contract
Frequently Asked Questions
What is this federal contract paying for?
National Aeronautics and Space Administration awarded $32.3 million to RELIANT ENERGY RETAIL SERVICES, LLC. THIS ORDER IS FOR FUNDING, TRACKING, AND PAYMENT OF INVOICES FOR THE SUPPLY AND TRANSMISSION OF ELECTRICITY AND ANCILLARY SERVICES FOR NASA JSC, ELLINGTON, AND SONNY CARTER TRAINING CENTER
Who is the contractor on this award?
The obligated recipient is RELIANT ENERGY RETAIL SERVICES, LLC.
Which agency awarded this contract?
Awarding agency: National Aeronautics and Space Administration (National Aeronautics and Space Administration).
What is the total obligated amount?
The obligated amount is $32.3 million.
What is the period of performance?
Start: 2011-01-28. End: 2014-01-31.
What was the historical spending pattern for electricity at NASA JSC and related facilities prior to this contract?
Historical spending data prior to this contract (2011-2014) would provide crucial context for evaluating the $32.3 million award. Without specific figures, it's difficult to ascertain if this contract represents an increase or decrease in spending. Analyzing previous utility bills, contract values, and consumption rates for NASA JSC, Ellington, and the Sonny Carter Training Center would reveal trends in energy usage and cost. This would allow for a more informed assessment of whether the new contract's pricing structure and total value are cost-effective and aligned with historical expenditure patterns. Understanding past spending also helps identify any significant shifts in energy demand or pricing that may have influenced the current contract's terms.
How did the economic price adjustment (EPA) clause impact the final cost of the contract compared to a fixed-price contract?
The economic price adjustment (EPA) clause in this contract allowed for changes in the price based on fluctuations in specific economic indicators, likely related to energy market prices. To assess its impact, we would need to compare the total amount paid under this contract with what would have been paid if it were a strict fixed-price contract. If energy prices rose significantly during the contract period (January 2011 - January 2014), the EPA would have increased the total cost to NASA. Conversely, if prices fell, the EPA might have resulted in lower costs. Analyzing the specific indices used for adjustment and the market trends during the contract's term is essential to quantify the actual cost difference and determine if the EPA provided adequate protection against price volatility for both the government and the contractor.
What were the specific energy consumption metrics for NASA JSC, Ellington, and Sonny Carter Training Center during the contract period?
Detailed energy consumption metrics (e.g., kilowatt-hours of electricity used) for NASA JSC, Ellington, and the Sonny Carter Training Center during the 2011-2014 contract period are vital for a thorough value assessment. These metrics would allow for a precise calculation of the per-unit cost of electricity and enable benchmarking against industry averages or other federal facilities. Without this data, it's challenging to determine if the $32.3 million contract represented efficient spending. Understanding consumption patterns also helps in forecasting future energy needs and optimizing energy management strategies. Variations in consumption due to operational changes, facility expansions, or energy efficiency initiatives would directly influence the total cost and the effectiveness of the contract.
What is Reliant Energy Retail Services, LLC's track record with federal contracts, particularly for utility services?
Reliant Energy Retail Services, LLC's track record with federal contracts, especially for utility services, is a key factor in assessing performance risk and reliability. Researching their past federal awards, including contract values, durations, agencies served, and performance ratings (if available), would provide insight into their experience and capabilities. A history of successful contract completion, adherence to terms, and positive performance feedback would indicate a lower risk. Conversely, any past issues such as contract disputes, performance failures, or significant cost overruns would raise concerns. Understanding their broader federal contracting portfolio helps contextualize their ability to meet NASA's specific requirements for electricity supply and transmission.
How does the competition level (8 bidders) for this contract compare to similar federal electricity supply contracts?
The fact that this contract attracted 8 bidders under a full and open competition suggests a reasonably competitive market for federal electricity supply in the Texas region during that period. To provide a robust comparison, we would need data on the number of bidders for other similar federal electricity contracts awarded around the same time, both within Texas and nationally. If 8 bidders is significantly higher or lower than the average for comparable contracts, it would indicate whether the market was particularly robust or constrained for this specific solicitation. A higher number of bidders generally correlates with better price competition and potentially lower costs for the government, while a lower number might suggest market concentration or barriers to entry.
What were the specific ancillary services included in the contract, and how were their costs determined?
The contract mentions 'ancillary services' alongside the supply and transmission of electricity. These services can include a range of support functions necessary for grid stability and reliable power delivery, such as voltage support, frequency regulation, and reactive power. Understanding the specific ancillary services procured under this contract is important for a complete cost analysis. The pricing mechanism for these services, whether bundled into the overall price, subject to separate economic price adjustments, or fixed, would impact the total contract value. Without a detailed breakdown of the ancillary services and their associated costs, it's difficult to fully evaluate the value proposition and ensure that NASA was obtaining these critical support functions at a competitive rate.
Industry Classification
NAICS: Utilities › Electric Power Generation, Transmission and Distribution › Fossil Fuel Electric Power Generation
Product/Service Code: ARCHITECT/ENGINEER SERVICES › ARCH-ENG SVCS - CONSTRUCTION
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 8
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)
Evaluated Preference: NONE
Contractor Details
Parent Company: NRG Energy, Inc (UEI: 793422213)
Address: 1000 MAIN ST STE 2300, HOUSTON, TX, 77002
Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $34,237,214
Exercised Options: $34,237,214
Current Obligation: $32,316,763
Contract Characteristics
Multi-Year Contract: Yes
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: SP060011D8015
IDV Type: IDC
Timeline
Start Date: 2011-01-28
Current End Date: 2014-01-31
Potential End Date: 2014-01-31 00:00:00
Last Modified: 2017-04-03
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