VA awards $47.8M UESC for energy services at San Francisco medical center

Contract Overview

Contract Amount: $47,812,577 ($47.8M)

Contractor: Pacific GAS and Electric Company

Awarding Agency: Department of Veterans Affairs

Start Date: 2017-12-29

End Date: 2026-05-01

Contract Duration: 3,045 days

Daily Burn Rate: $15.7K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Energy

Official Description: IGF::OT::IGF OTHER FUNCTIONS - UTILITY ENERGY SERVICES CONTRACT (UESC) FOR VISN 21 SIERRA PACIFIC NETWORK VA MEDICAL CENTER IN SAN FRANCISCO, CA.

Place of Performance

Location: SAN FRANCISCO, SAN FRANCISCO County, CALIFORNIA, 94121

State: California Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $47.8 million to PACIFIC GAS AND ELECTRIC COMPANY for work described as: IGF::OT::IGF OTHER FUNCTIONS - UTILITY ENERGY SERVICES CONTRACT (UESC) FOR VISN 21 SIERRA PACIFIC NETWORK VA MEDICAL CENTER IN SAN FRANCISCO, CA. Key points: 1. Contract awarded to Pacific Gas and Electric Company for utility energy services. 2. Long-term contract duration of 3045 days suggests a strategic investment in energy infrastructure. 3. Fixed-price contract type aims to provide cost certainty for the Department of Veterans Affairs. 4. Focus on electric power distribution indicates a need for reliable energy supply. 5. Geographic focus on San Francisco, California, highlights regional infrastructure needs. 6. Contract awarded as a delivery order, implying it's part of a larger framework agreement.

Value Assessment

Rating: fair

Benchmarking the value of this Utility Energy Services Contract (UESC) is challenging without specific performance metrics or comparable UESC contracts for similar facilities. The fixed-price nature provides some cost control, but the long duration could expose the government to market fluctuations if energy prices change significantly. The total award amount of $47.8 million over approximately 8.3 years averages to about $5.76 million annually, which needs to be assessed against the energy consumption and infrastructure needs of the VISN 21 Sierra Pacific Network VA Medical Center.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under a sole-source or non-competitive procedure, likely due to the nature of utility services where a specific provider often holds the necessary infrastructure or franchise rights. The absence of a competitive bidding process means that price discovery through market forces was not utilized, potentially leading to higher costs than if multiple vendors had competed. The justification for this sole-source award would typically be based on the unique ability of Pacific Gas and Electric Company to provide these services.

Taxpayer Impact: Taxpayers may not benefit from the cost savings typically achieved through competitive bidding. The government relies on the awarded contractor to provide fair pricing, and oversight is crucial to ensure value for money.

Public Impact

The primary beneficiaries are the patients and staff of the VISN 21 Sierra Pacific Network VA Medical Center in San Francisco, who will receive reliable and potentially more efficient energy services. The contract delivers essential electric power distribution services, crucial for the continuous operation of a major healthcare facility. The geographic impact is concentrated in San Francisco, California, supporting critical federal infrastructure in the region. While not directly creating new jobs, the contract sustains existing roles within Pacific Gas and Electric Company responsible for maintaining and operating the energy infrastructure.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if energy prices escalate beyond projections within the fixed-price contract over its long duration.
Lack of competition may limit opportunities for innovative energy solutions or cost-saving technologies that could be introduced by other providers.
Dependence on a single utility provider for critical energy infrastructure could pose a risk if service disruptions occur.

Positive Signals

Award to an established utility provider suggests a high likelihood of reliable service delivery.
Fixed-price contract offers budget predictability for the Department of Veterans Affairs.
Long-term nature of the contract indicates a commitment to ensuring sustained energy infrastructure for the medical center.

Sector Analysis

Utility energy services contracts (UESCs) are a common mechanism for federal agencies to improve energy efficiency and reduce utility costs. These contracts often involve performance-based incentives and are typically awarded to utility companies or their partners. The market for energy services within the federal sector is substantial, with agencies continually seeking ways to modernize infrastructure and meet sustainability goals. This contract fits within the broader trend of federal agencies investing in energy resilience and efficiency upgrades.

Small Business Impact

This contract does not appear to involve a small business set-aside, as it was awarded to Pacific Gas and Electric Company, a large utility provider. There is no explicit information regarding subcontracting opportunities for small businesses within this award. The focus on utility services provided by a major entity suggests limited direct impact on the small business ecosystem for this specific contract.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Veterans Affairs' contracting and program management offices. Accountability measures are inherent in the fixed-price contract terms, requiring the contractor to deliver specified services. Transparency may be limited due to the sole-source nature of the award, but contract details and performance reporting should be accessible through federal procurement databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Energy Savings Performance Contracts (ESPCs)
Utility Energy Services Contracts (UESCs)
Department of Veterans Affairs Medical Facility Operations
Federal Energy Management Program (FEMP)

Risk Flags

Sole-source award may limit cost savings.
Long contract duration could expose government to market volatility.
Lack of detailed performance metrics in summary data.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $47.8 million to PACIFIC GAS AND ELECTRIC COMPANY. IGF::OT::IGF OTHER FUNCTIONS - UTILITY ENERGY SERVICES CONTRACT (UESC) FOR VISN 21 SIERRA PACIFIC NETWORK VA MEDICAL CENTER IN SAN FRANCISCO, CA.

Who is the contractor on this award?

The obligated recipient is PACIFIC GAS AND ELECTRIC COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $47.8 million.

What is the period of performance?

Start: 2017-12-29. End: 2026-05-01.

What is the track record of Pacific Gas and Electric Company in delivering similar utility energy services to federal facilities?

Pacific Gas and Electric Company (PG&E) is a major utility provider in California with extensive experience in energy infrastructure and services. While specific details on their track record with federal UESC contracts are not provided in the data, PG&E routinely manages large-scale energy projects and provides essential services to a vast customer base, including commercial and industrial clients. Their experience in operating and maintaining complex energy grids suggests a capability to handle the demands of a federal medical center. However, a deeper dive into their past performance on similar government contracts, including any reported issues or successes, would be necessary for a comprehensive assessment.

How does the awarded price compare to market rates for similar utility energy services?

Direct comparison of the awarded price ($47.8 million over ~8.3 years) to market rates for similar utility energy services is difficult without detailed service specifications and local market data. UESCs are often structured with specific energy conservation measures and performance guarantees, making direct price-per-unit comparisons complex. However, given that this was a sole-source award to a major utility provider, it is crucial for the VA to have conducted internal benchmarking or relied on established rate structures to ensure the price is fair and reasonable. The absence of competition means the government did not benefit from a bidding process to drive down costs.

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

The primary risks include potential cost escalations over the long contract term, despite the fixed-price structure, if unforeseen market shifts occur. There's also the risk of service disruption from the sole provider and the potential for the government not achieving optimal value due to the lack of competitive pressure. Mitigation strategies would typically involve robust contract management by the VA, including performance monitoring, regular reviews of energy usage and costs, and clear clauses for addressing service failures or disputes. The fixed-price nature itself is a risk mitigation tool for budget certainty, but it shifts the risk of cost overruns to the contractor.

How effective is this contract likely to be in achieving the Department of Veterans Affairs' energy management goals?

The effectiveness hinges on the specific energy conservation measures and performance targets embedded within the UESC, which are not detailed here. If the contract includes well-defined, measurable goals for energy reduction, efficiency improvements, and infrastructure upgrades, it can be highly effective. The long duration suggests a commitment to substantial improvements. However, without knowing the scope of work and the performance metrics, it's hard to definitively assess its effectiveness. The VA's diligent contract oversight will be critical in ensuring the contractor meets or exceeds performance expectations and delivers tangible energy management benefits.

What are the historical spending patterns for utility energy services at this specific VA medical center or network?

Historical spending data for utility energy services at the VISN 21 Sierra Pacific Network VA Medical Center is not provided in the given data. To assess this contract's value and necessity, one would typically analyze past expenditures on electricity, gas, and other utilities, as well as any previous energy efficiency projects. Understanding historical spending allows for a baseline comparison to evaluate potential savings or cost increases resulting from this new UESC. Without this context, it's difficult to determine if the $47.8 million award represents an increase, decrease, or comparable level of investment compared to previous energy-related expenditures.

Industry Classification

NAICS: Utilities › Electric Power Generation, Transmission and Distribution › Electric Power 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

Address: 300 LAKESIDE DR, OAKLAND, CA, 94612

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

Financial Breakdown

Contract Ceiling: $75,351,710

Exercised Options: $75,351,710

Current Obligation: $47,812,577

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $31,574,103

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS00P14BSD1137

IDV Type: IDC

Timeline