Department of the Army's $31.3M utility services contract awarded to Foreign Utility Consolidated Reporting shows potential for cost savings

Contract Overview

Contract Amount: $31,298,428 ($31.3M)

Contractor: Foreign Utility Consolidated Reporting

Awarding Agency: Department of Defense

Start Date: 2019-10-01

End Date: 2020-09-30

Contract Duration: 365 days

Daily Burn Rate: $85.7K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Other

Official Description: CONSOLIDATED REPORT FOR UTILITY SERVICES (HEAT) FY20 1ST QTR

Plain-Language Summary

Department of Defense obligated $31.3 million to FOREIGN UTILITY CONSOLIDATED REPORTING for work described as: CONSOLIDATED REPORT FOR UTILITY SERVICES (HEAT) FY20 1ST QTR Key points: 1. The contract's fixed-price with economic price adjustment structure may offer some cost stability while allowing for market fluctuations. 2. Limited competition for this contract raises questions about potential price overruns and the optimal use of taxpayer funds. 3. The contract duration of one year (FY20) suggests a need for regular re-evaluation of services and pricing. 4. Performance context is limited due to the 'NOT AVAILABLE FOR COMPETITION' status, making direct comparison difficult. 5. The service category 'Steam and Air-Conditioning Supply' is essential for facility operations, indicating a critical need. 6. The award value of $31.3M for a single year of utility services warrants scrutiny for efficiency.

Value Assessment

Rating: fair

The contract value of $31.3 million for one year of utility services appears substantial. Without comparable contract data or detailed service breakdowns, it is difficult to definitively benchmark the value for money. The fixed-price with economic price adjustment (FPEPA) contract type can sometimes lead to higher initial prices compared to firm-fixed-price contracts, as it incorporates risk for the contractor. However, it also protects against unforeseen market shifts. Further analysis of the economic price adjustment clauses and historical price trends would be necessary to assess if this represents a fair price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under a 'NOT AVAILABLE FOR COMPETITION' status, indicating a sole-source or limited competition scenario. This approach bypasses the standard competitive bidding process, which typically involves multiple vendors submitting proposals. While sole-source awards can be justified in specific circumstances (e.g., unique capabilities, urgent needs), they generally result in less price discovery and potentially higher costs for the government compared to full and open competition. The lack of multiple bidders means the government did not benefit from the competitive pressure that drives down prices.

Taxpayer Impact: Sole-source awards limit the government's ability to secure the best possible price, potentially leading to higher expenditures for taxpayers. Without competitive bids, there is less assurance that the awarded price reflects the most economical option available in the market.

Public Impact

The primary beneficiaries are the Department of the Army facilities requiring essential utility services like steam and air conditioning. The services delivered are critical for maintaining operational readiness and habitability within military installations. The geographic impact is localized to the specific Army facilities serviced under this contract. Workforce implications are likely internal to the contractor, Foreign Utility Consolidated Reporting, and potentially facility maintenance staff at the Army sites.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated pricing and reduced value for taxpayer money.
The 'NOT AVAILABLE FOR COMPETITION' status requires further justification to ensure necessity and prevent potential abuse.
Economic price adjustment clauses, while providing flexibility, can obscure true cost control if not carefully monitored.
The substantial award amount for a single year necessitates rigorous performance monitoring to ensure service delivery meets expectations.

Positive Signals

The contract addresses essential utility services, crucial for the operational continuity of Army facilities.
The fixed-price component of the contract offers some predictability in budgeting.
The award is to a single entity, potentially simplifying contract management and oversight for the Army.

Sector Analysis

The utility services sector is a critical component of infrastructure support for government facilities. This contract falls under the broader category of facility support services, which includes the provision of essential utilities like heating, cooling, and power. The market for such services is often characterized by established providers with specialized expertise. Benchmarking this contract's value would ideally involve comparing its per-unit costs (e.g., cost per therm of steam, cost per ton of cooling) against similar contracts awarded by other federal agencies or large private sector entities for comparable services and geographic regions.

Small Business Impact

The provided data does not indicate any small business set-aside provisions for this contract, nor does it specify subcontracting goals for small businesses. The award was made to Foreign Utility Consolidated Reporting, and without further information on their subcontracting plans or the nature of the services, it is difficult to assess the impact on the small business ecosystem. Typically, larger utility contracts may have opportunities for small businesses in specialized support roles, but this contract's sole-source nature might limit such avenues.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. Accountability measures would be defined by the contract terms, including performance standards, delivery schedules, and invoicing procedures. Transparency is limited due to the sole-source nature and the lack of publicly available detailed performance reports. The Inspector General's office for the Department of Defense may have jurisdiction for audits and investigations if concerns regarding fraud, waste, or abuse arise.

Related Government Programs

Department of Defense Utility Privatization Program
Federal Energy Management Program (FEMP)
General Services Administration (GSA) Public Buildings Service

Risk Flags

Sole-source award requires justification.
Potential for cost overruns due to economic price adjustment.
Lack of transparency in performance metrics.
Limited data on contractor's past performance.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $31.3 million to FOREIGN UTILITY CONSOLIDATED REPORTING. CONSOLIDATED REPORT FOR UTILITY SERVICES (HEAT) FY20 1ST QTR

Who is the contractor on this award?

The obligated recipient is FOREIGN UTILITY CONSOLIDATED REPORTING.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $31.3 million.

What is the period of performance?

Start: 2019-10-01. End: 2020-09-30.

What is the historical spending pattern for utility services at this specific Department of the Army facility or similar facilities?

Analyzing historical spending for utility services at this specific Department of the Army facility or comparable installations is crucial for context. Without access to prior contract data or internal Army spending reports, it's challenging to establish a baseline. However, federal agencies are generally mandated to track spending on essential services. If this contract represents a new award or a significant increase from previous years, it warrants further investigation into the reasons, such as expanded facility needs, increased utility rates, or changes in service scope. Comparing this $31.3 million annual spend against previous years' expenditures for similar services would reveal trends and potential anomalies, informing whether the current award aligns with historical cost management or indicates a deviation requiring explanation.

How does the pricing structure (Fixed Price with Economic Price Adjustment) compare to other government utility contracts?

The Fixed Price with Economic Price Adjustment (FPEPA) contract type is common for services where input costs (like fuel or labor) are subject to market volatility. Compared to Firm Fixed Price (FFP) contracts, FPEPA can offer more protection to the contractor against unforeseen cost increases, which might lead to a slightly higher base price. Conversely, it provides the government with some cost certainty by capping potential increases through defined adjustment formulas, unlike Cost Plus contracts. For utility services, FPEPA is often used to account for fluctuating energy prices. A thorough comparison would involve examining the specific economic adjustment indices used in this contract against those in similar utility contracts awarded by agencies like GSA or other branches of the DoD to determine if the adjustment mechanism is standard, overly generous, or restrictive.

What specific justification was provided for awarding this contract on a sole-source basis ('NOT AVAILABLE FOR COMPETITION')?

The justification for a sole-source award, categorized as 'NOT AVAILABLE FOR COMPETITION,' is critical for understanding the procurement strategy and ensuring fair use of taxpayer funds. Federal Acquisition Regulation (FAR) Part 6 outlines the policies for contracting without full and open competition. Common justifications include the existence of only one responsible source (e.g., unique proprietary technology, specialized expertise), urgent and compelling needs where competition is impractical, or specific national security requirements. Without the official justification document (often a Justification and Approval - J&A), it's impossible to verify the validity of the sole-source determination. This lack of transparency means taxpayers cannot independently assess if competitive bidding was truly infeasible or if alternative sources were overlooked.

What are the key performance indicators (KPIs) and service level agreements (SLAs) associated with this contract?

Key Performance Indicators (KPIs) and Service Level Agreements (SLAs) are essential for measuring contractor performance and ensuring the government receives the contracted services effectively. For a utility services contract like this, KPIs might include: uptime percentages for steam and air conditioning systems, response times for emergency service calls, energy efficiency targets, and adherence to safety protocols. SLAs would define the specific standards for these metrics and outline remedies or penalties for non-compliance. The absence of publicly detailed KPIs and SLAs makes it difficult to assess the contractor's performance and the overall value delivered. A robust contract management framework would include clearly defined, measurable, and auditable KPIs/SLAs to hold the contractor accountable.

What is the track record of Foreign Utility Consolidated Reporting in delivering similar utility services to government entities?

Assessing the track record of Foreign Utility Consolidated Reporting (FUCR) is vital for understanding their capability and reliability in fulfilling this $31.3 million utility services contract. Information on their past performance, including the types of services provided, contract values, durations, and client agencies, would offer insight into their experience. Specifically, looking for evidence of successful delivery of steam and air-conditioning supply to large federal facilities, adherence to schedules, quality of service, and any history of contract disputes or performance issues is important. Publicly available contract databases (like FPDS) and contractor performance assessment reporting tools (like CPARS) can provide some of this information, though access may be limited. A strong performance history would increase confidence in FUCR's ability to meet the Army's needs.

Industry Classification

NAICS: Utilities › Water, Sewage and Other Systems › Steam and Air-Conditioning Supply

Product/Service Code: UTILITIES AND HOUSEKEEPING › UTILITIES

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

Evaluated Preference: NONE

Contractor Details

Address: 1800 F ST NW, WASHINGTON, DC, 20405

Business Categories: Category Business, Foreign Owned, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $31,298,428

Exercised Options: $31,298,428

Current Obligation: $31,298,428

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline