NASA's $28.2M electricity contract with TXU Energy Retail Company LLC awarded under full and open competition
Contract Overview
Contract Amount: $28,220,740 ($28.2M)
Contractor: TXU Energy Retail Company LLC
Awarding Agency: National Aeronautics and Space Administration
Start Date: 2014-01-10
End Date: 2017-01-31
Contract Duration: 1,117 days
Daily Burn Rate: $25.3K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 5
Pricing Type: FIRM FIXED PRICE
Sector: Energy
Official Description: IGF::OT::IGF THIS DELIVERY ORDER SHALL BE USED TO FUND, TRACK AND PAY INVOICES FOR THE ELECTRICITY SERVICES SPECIFIED IN THE CONTRACT (SPE600-14-D-8002).
Place of Performance
Location: HOUSTON, HARRIS County, TEXAS, 77058
State: Texas Government Spending
Plain-Language Summary
National Aeronautics and Space Administration obligated $28.2 million to TXU ENERGY RETAIL COMPANY LLC for work described as: IGF::OT::IGF THIS DELIVERY ORDER SHALL BE USED TO FUND, TRACK AND PAY INVOICES FOR THE ELECTRICITY SERVICES SPECIFIED IN THE CONTRACT (SPE600-14-D-8002). Key points: 1. Contract value represents a significant investment in essential utility services for NASA operations. 2. Full and open competition suggests a potentially competitive pricing environment. 3. The contract duration of over three years indicates a stable, long-term need for electricity. 4. Fixed-price contract type offers budget certainty but may limit flexibility for fluctuating energy costs. 5. The award to a single entity, TXU Energy Retail Company LLC, highlights market concentration in this service area. 6. Geographic focus on Texas (TX) aligns with regional energy market dynamics.
Value Assessment
Rating: good
The contract value of $28.2 million over approximately three years for electricity services appears reasonable given the scale of NASA's operations. Benchmarking against similar large-scale utility contracts for federal agencies is challenging without specific consumption data, but the price per year ($9.4M) is within expected ranges for substantial energy procurement. The firm fixed-price structure provides cost predictability for the agency.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. The presence of 5 bids suggests a healthy level of competition for this significant electricity supply contract. This competitive process is expected to drive more favorable pricing and terms for the government.
Taxpayer Impact: Taxpayers benefit from the competitive bidding process, which aims to secure the most cost-effective electricity services for NASA, ensuring federal funds are used efficiently.
Public Impact
NASA facilities in Texas will receive reliable electricity services, crucial for mission operations and administrative functions. The contract supports the energy sector by procuring services from a major utility provider. Employees working at NASA facilities in Texas will benefit from uninterrupted power supply. The contract contributes to the economic activity within the Texas energy market.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for price volatility if market conditions change significantly, despite fixed-price contract.
- Dependence on a single provider for a critical utility service could pose a risk if the provider faces operational issues.
Positive Signals
- Awarded through full and open competition, indicating a robust bidding process.
- Firm fixed-price contract provides budget certainty for NASA.
- Long contract duration suggests a stable and reliable energy supply.
Sector Analysis
This contract falls within the Energy sector, specifically focusing on the procurement of electricity services. The market for electricity supply is typically characterized by regulated utilities and competitive retail providers, especially in deregulated states like Texas. NASA's spending here is a standard operational expense for any large federal facility, ensuring continuous power for its missions and infrastructure. Comparable spending benchmarks would vary widely based on facility size, energy intensity, and regional pricing.
Small Business Impact
There is no indication that this contract included specific small business set-asides. As a utility service contract likely awarded to a large energy provider, the primary focus is on securing reliable and cost-effective electricity. Subcontracting opportunities for small businesses may exist indirectly through the prime contractor's broader operational needs, but are not explicitly detailed in this award.
Oversight & Accountability
The contract is subject to standard federal procurement oversight mechanisms. NASA's contracting officers are responsible for monitoring performance and ensuring compliance with contract terms. The firm fixed-price nature simplifies some aspects of financial oversight. Transparency is maintained through public contract databases where award details are published. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.
Related Government Programs
- Federal Utility Services
- Energy Procurement
- NASA Operational Support Contracts
- Fossil Fuel Electric Power Generation Services
Risk Flags
- Potential for price increases if market conditions change significantly.
- Dependence on a single provider for critical utility.
Tags
energy, utilities, nasa, texas, delivery-order, full-and-open-competition, firm-fixed-price, large-business, fossil-fuel-electric-power-generation
Frequently Asked Questions
What is this federal contract paying for?
National Aeronautics and Space Administration awarded $28.2 million to TXU ENERGY RETAIL COMPANY LLC. IGF::OT::IGF THIS DELIVERY ORDER SHALL BE USED TO FUND, TRACK AND PAY INVOICES FOR THE ELECTRICITY SERVICES SPECIFIED IN THE CONTRACT (SPE600-14-D-8002).
Who is the contractor on this award?
The obligated recipient is TXU ENERGY RETAIL COMPANY 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 $28.2 million.
What is the period of performance?
Start: 2014-01-10. End: 2017-01-31.
What is the historical spending pattern for electricity services at NASA facilities in Texas?
Historical spending data for electricity services at NASA facilities in Texas would provide crucial context for evaluating the $28.2 million awarded to TXU Energy Retail Company LLC. Without specific historical figures, it's difficult to ascertain if this represents an increase, decrease, or stable level of expenditure. Analyzing past contracts, including their values, durations, and the incumbent providers, would reveal trends in energy consumption and pricing. For instance, if previous contracts were significantly lower, it might indicate rising energy costs or increased demand. Conversely, if this award is lower than prior contracts, it could suggest successful cost-saving measures or improved negotiation outcomes. Understanding this historical context is vital for assessing the value and efficiency of the current procurement.
How does the price per kilowatt-hour (kWh) for this contract compare to market rates in Texas?
Determining the precise price per kilowatt-hour (kWh) for this contract is challenging without access to the detailed pricing structure and actual energy consumption data. Federal contracts often include complex rate schedules, demand charges, and other fees that vary based on usage patterns and time of day. However, a general comparison to market rates in Texas can be made. Texas has a deregulated energy market, meaning prices can fluctuate based on supply, demand, and wholesale market conditions. If the contract's average kWh rate, once calculated, is significantly higher than prevailing commercial or industrial rates in the region, it could indicate a suboptimal price. Conversely, a rate at or below market averages, especially considering the scale and fixed-price nature, would suggest good value. Further analysis would require obtaining the specific rate tables and estimating typical NASA consumption.
What are the key performance indicators (KPIs) used to evaluate TXU Energy Retail Company LLC's performance under this contract?
Key Performance Indicators (KPIs) for this electricity services contract would likely focus on reliability, responsiveness, and adherence to service level agreements (SLAs). Essential KPIs would include metrics such as 'uptime' or 'service availability,' ensuring continuous power delivery with minimal interruptions. 'Response time' to outages or service requests would be critical. 'Billing accuracy' and adherence to the firm fixed-price terms are also important. Furthermore, compliance with environmental regulations and any specific energy efficiency targets set by NASA could be included. NASA's contracting officer and technical representatives would monitor these KPIs throughout the contract's duration to ensure TXU Energy Retail Company LLC is meeting its obligations and providing satisfactory service.
What is the track record of TXU Energy Retail Company LLC in fulfilling similar federal contracts?
TXU Energy Retail Company LLC, as a major energy provider, likely has a substantial track record, but its specific performance on federal contracts requires detailed examination. Federal procurement databases and past performance reviews would indicate their history with government agencies. Key aspects to assess include their on-time delivery record, quality of service, past contract values, and any history of disputes, penalties, or contract terminations. A strong track record with federal entities suggests reliability and competence in meeting government requirements. Conversely, a history of performance issues could raise concerns about their ability to fulfill this NASA contract effectively and efficiently, potentially impacting NASA's operations and budget.
What are the potential risks associated with a firm fixed-price contract for electricity services?
A firm fixed-price (FFP) contract for electricity services, while offering budget certainty, carries specific risks. The primary risk is that if market electricity prices rise significantly above the contracted rate, TXU Energy Retail Company LLC may face financial losses, potentially impacting their motivation or ability to provide optimal service, or leading to requests for contract modification. Conversely, if prices fall substantially, NASA may be overpaying compared to current market rates. Another risk is that the contractor might cut corners on service quality to protect profit margins if costs increase unexpectedly. NASA needs robust performance monitoring to mitigate these risks and ensure the contractor remains incentivized to deliver reliable service throughout the contract term.
How does this contract align with NASA's broader energy management and sustainability goals?
This contract for electricity services needs to be assessed against NASA's broader energy management and sustainability goals. While procuring electricity is a fundamental operational necessity, the source and type of energy can have significant environmental implications. If the electricity is sourced primarily from fossil fuels, it may conflict with sustainability targets aimed at reducing greenhouse gas emissions. NASA's goals often include increasing the use of renewable energy sources and improving energy efficiency. Therefore, an analysis should consider whether TXU Energy Retail Company LLC offers options for renewable energy procurement or if NASA has internal policies to ensure the sourced electricity aligns with its environmental commitments. The contract's structure might also influence NASA's ability to implement energy-saving initiatives.
Industry Classification
NAICS: Utilities › Electric Power Generation, Transmission and Distribution › Fossil Fuel Electric Power Generation
Product/Service Code: UTILITIES AND HOUSEKEEPING › UTILITIES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 5
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Texas Energy Future Holdings Limited Partnership (UEI: 808084607)
Address: 1601 BRYAN ST, DALLAS, TX, 75201
Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $28,741,492
Exercised Options: $28,741,492
Current Obligation: $28,220,740
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL ITEM
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: SPE60014D8002
IDV Type: IDC
Timeline
Start Date: 2014-01-10
Current End Date: 2017-01-31
Potential End Date: 2017-01-31 00:00:00
Last Modified: 2017-11-13
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