DoD's $28.4M Utility Services Contract Faces Limited Competition, Raising Cost Concerns

Contract Overview

Contract Amount: $28,441,334 ($28.4M)

Contractor: Foreign Utility Consolidated Reporting

Awarding Agency: Department of Defense

Start Date: 2023-10-01

End Date: 2024-09-30

Contract Duration: 365 days

Daily Burn Rate: $77.9K/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) FY24 1ST QTR.

Plain-Language Summary

Department of Defense obligated $28.4 million to FOREIGN UTILITY CONSOLIDATED REPORTING for work described as: CONSOLIDATED REPORT FOR UTILITY SERVICES (HEAT) FY24 1ST QTR. Key points: 1. Significant spending on essential utility services for the Department of the Army. 2. Limited competition raises questions about price discovery and potential overspending. 3. Fixed-price contract with economic adjustment introduces cost volatility. 4. Lack of small business participation noted.

Value Assessment

Rating: questionable

The contract value of $28.4M for one year of utility services appears high given the limited competition. Benchmarking against similar utility contracts is difficult without more detailed cost breakdowns, but the lack of competitive bidding suggests potential for inflated pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract is not available for competition, indicating a limited or sole-source award. This significantly restricts price discovery and negotiation leverage, potentially leading to higher costs for taxpayers.

Taxpayer Impact: The lack of competitive bidding limits the government's ability to secure the best possible price, potentially resulting in millions of taxpayer dollars being spent inefficiently.

Public Impact

Taxpayers may be overpaying for essential heating and cooling services due to a lack of competitive bidding. The fixed-price with economic adjustment clause could lead to unexpected cost increases. The absence of small business participation limits opportunities for smaller, potentially more cost-effective providers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition
Economic price adjustment
No small business participation

Positive Signals

Definitive contract awarded
Clear service period

Sector Analysis

This contract falls under general utility services, specifically steam and air-conditioning supply, crucial for facility operations. Spending benchmarks for such services vary widely based on location, scale, and specific utility types, but competitive procurement is key to achieving favorable rates.

Small Business Impact

The data indicates no small business participation in this contract. This is a missed opportunity to leverage potentially more agile and cost-effective small businesses in the utility services sector.

Oversight & Accountability

The limited competition nature of this contract warrants close oversight to ensure the government is receiving fair value. Robust justification for the non-competitive award and regular reviews of the economic price adjustment are essential.

Related Government Programs

Steam and Air-Conditioning Supply
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Lack of competition
Potential for overpayment
Economic price adjustment risk
No small business inclusion

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.4 million to FOREIGN UTILITY CONSOLIDATED REPORTING. CONSOLIDATED REPORT FOR UTILITY SERVICES (HEAT) FY24 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 $28.4 million.

What is the period of performance?

Start: 2023-10-01. End: 2024-09-30.

What is the specific justification for awarding this utility services contract on a limited competition basis, and what steps are being taken to ensure fair pricing?

The justification for limited competition is crucial for understanding potential cost impacts. Agencies must provide detailed documentation explaining why full and open competition was not feasible. Oversight should focus on verifying this justification and ensuring the pricing mechanism, including economic adjustments, is rigorously monitored to prevent excessive costs and protect taxpayer funds.

How does the economic price adjustment clause in this fixed-price contract potentially impact the final cost to taxpayers, especially in volatile energy markets?

The economic price adjustment (EPA) clause allows for contract price changes based on fluctuations in specific economic factors, such as fuel costs or labor indices. In volatile markets, this can lead to significant cost increases beyond the initial fixed price, potentially exceeding budget allocations and increasing the overall burden on taxpayers. Careful monitoring and negotiation of EPA triggers are vital.

What is the long-term strategy for ensuring competitive sourcing of utility services to achieve better value and support small business participation?

A long-term strategy should involve proactive market research to identify potential competitors, including small businesses, for future utility service needs. Breaking down large contracts into smaller, more manageable lots could also encourage broader participation. Regularly reviewing contract types and procurement methods will help ensure sustained competition and optimize value for taxpayer dollars.

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: $28,441,334

Exercised Options: $28,441,334

Current Obligation: $28,441,334

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline