Interior Department awards $450K contract for electric power distribution to Northwestern Corp

Contract Overview

Contract Amount: $450,000 ($450.0K)

Contractor: Northwestern Corp

Awarding Agency: Department of the Interior

Start Date: 2024-05-21

End Date: 2027-03-31

Contract Duration: 1,044 days

Daily Burn Rate: $431/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: NORTHWESTERN ENERGY RMRDF BASE YEAR

Place of Performance

Location: CROW AGENCY, BIG HORN County, MONTANA, 59022

State: Montana Government Spending

Plain-Language Summary

Department of the Interior obligated $450,000 to NORTHWESTERN CORP for work described as: NORTHWESTERN ENERGY RMRDF BASE YEAR Key points: 1. The contract value of $450,000 appears to be a base year cost, with potential for future task orders. 2. The contract was awarded on a not available for competition basis, raising questions about potential cost savings through competition. 3. The firm fixed price contract type suggests a defined scope and cost, but the lack of competition may limit price discovery. 4. The duration of the contract is over 3 years, indicating a need for sustained electric power services. 5. The service is categorized under Electric Power Distribution, a critical utility service. 6. The contract is awarded to Northwestern Corp, a single entity, suggesting a specific relationship or capability.

Value Assessment

Rating: fair

The contract value of $450,000 for a base year of electric power distribution services needs further context to benchmark effectively. Without comparable contracts or detailed service level agreements, it's difficult to definitively assess value for money. The firm fixed price structure provides cost certainty for the defined period, but the lack of competition means there's no direct market comparison to gauge if this price is optimal. Further analysis would require understanding the specific energy needs, service area, and historical pricing for similar utilities within the Bureau of Indian Affairs and Bureau of Indian Education.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a 'not available for competition' basis, which typically means that only one source was considered capable of fulfilling the requirement. This could be due to specialized capabilities, urgent needs, or existing infrastructure dependencies. The lack of a competitive bidding process means that the government did not benefit from multiple offers, which could have potentially led to lower prices or more innovative solutions. The specific justification for this sole-source award would need to be reviewed to understand the rationale.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive pressure. Without multiple bids, there is less assurance that the price reflects the most economical option available in the market.

Public Impact

The primary beneficiaries are likely the facilities and operations managed by the Bureau of Indian Affairs and Bureau of Indian Education within Montana. The service delivered is essential electric power distribution, ensuring continuity of operations for these government entities. The geographic impact is localized to Montana, where Northwestern Corp operates. There are no immediate workforce implications directly tied to this contract award, as it's for a service rather than a large project requiring new personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Sole-source award requires detailed justification to ensure necessity and fairness.
Contract duration without competitive re-evaluation could miss market efficiencies.

Positive Signals

Firm fixed price provides cost certainty for the base year.
Contract ensures essential utility services for Bureau of Indian Affairs and Education facilities.
Award to an established provider like Northwestern Corp may ensure reliable service delivery.

Sector Analysis

The electric power distribution sector is a critical utility service, essential for the functioning of government facilities and broader infrastructure. This contract falls within the utilities sub-sector, which is characterized by regulated pricing and essential service delivery. Benchmarking this contract's value is challenging without specific kilowatt-hour usage or service level agreements, but the $450,000 for a base year suggests a moderate-sized requirement for a specific location or set of facilities. The market for electric power distribution is often localized due to infrastructure, making direct comparisons difficult.

Small Business Impact

This contract does not appear to have a small business set-aside. There is no indication of subcontracting requirements for small businesses within the provided data. The award to Northwestern Corp, a presumably larger entity, suggests that small business participation is not a primary focus of this specific procurement.

Oversight & Accountability

Oversight for this contract would primarily fall under the Bureau of Indian Affairs and Bureau of Indian Education within the Department of the Interior. Accountability measures would be tied to the terms of the firm fixed price contract, ensuring delivery of electric power as specified. Transparency is limited by the sole-source nature of the award; the justification for not competing the contract would be a key area for oversight. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Bureau of Indian Affairs Operations
Bureau of Indian Education Facilities Management
Department of the Interior Utility Contracts
Federal Electric Power Procurement

Risk Flags

Sole-source award requires justification review.
Lack of competition may impact price optimization.
Need to verify contractor performance history.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Interior awarded $450,000 to NORTHWESTERN CORP. NORTHWESTERN ENERGY RMRDF BASE YEAR

Who is the contractor on this award?

The obligated recipient is NORTHWESTERN CORP.

Which agency awarded this contract?

Awarding agency: Department of the Interior (Bureau of Indian Affairs and Bureau of Indian Education).

What is the total obligated amount?

The obligated amount is $450,000.

What is the period of performance?

Start: 2024-05-21. End: 2027-03-31.

What is the specific justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was awarded on a 'not available for competition' basis. This classification typically implies that only one responsible source was found to be capable of meeting the government's needs. Common reasons for sole-source awards include urgent and compelling circumstances, specialized technical expertise or equipment possessed by only one contractor, or situations where the government has unique requirements that cannot be fulfilled by multiple sources. A detailed review of the contract's justification document (often a Justification and Approval, or J&A) would be necessary to understand the precise rationale behind this decision. Without this document, it is impossible to definitively state why competition was precluded.

How does the $450,000 base year cost compare to similar electric power distribution contracts for federal facilities?

Benchmarking this $450,000 base year contract against similar federal electric power distribution contracts is challenging without more specific data points. Key factors influencing cost include the volume of electricity consumed (kilowatt-hours), the geographic location and associated utility rates, the specific services included (e.g., distribution only, maintenance, emergency response), and the duration of the service period. A contract of this value might represent a moderate-sized requirement for a specific facility or a small group of facilities. To perform a robust comparison, one would need to analyze contracts with similar service scopes, geographic regions, and customer types (e.g., other BIA/BIE facilities, other Interior Department sites, or similar government installations).

What are the potential risks associated with a sole-source award for essential utility services?

The primary risk associated with a sole-source award for essential utility services like electric power distribution is the potential for inflated costs due to the lack of competitive pressure. Without competing bids, the government may not achieve the best possible price. Additionally, there's a risk of complacency from the awarded contractor, potentially leading to less focus on service quality or efficiency improvements over time, as there's no immediate threat of losing the contract to a competitor. Another risk is dependency; if the sole-source contractor faces operational issues, the government's essential services could be severely disrupted without readily available alternatives. Ensuring robust contract management and performance monitoring becomes even more critical in sole-source situations.

What is Northwestern Corp's track record with federal contracts, particularly with the Department of the Interior?

The provided data indicates Northwestern Corp is the contractor for this specific award. To assess their track record, a search of federal procurement databases (like SAM.gov or FPDS) would be necessary. This would reveal the number and types of contracts they have previously held with the federal government, including the Department of the Interior and its sub-agencies like the Bureau of Indian Affairs and Bureau of Indian Education. Information on past performance, contract values, and any history of disputes or performance issues would be crucial. A positive track record with similar agencies and contract types would suggest a lower risk for this current award, while a history of issues might raise concerns.

How does the duration of this contract (over 3 years) impact the assessment of value and risk?

The contract duration of approximately 3 years (from May 21, 2024, to March 31, 2027) for the base year indicates a need for sustained electric power distribution services. For a firm fixed price contract, this duration provides cost certainty for the government over the specified period. However, it also means that potential cost savings or better service terms that might emerge in the market over the next three years will not be realized unless options are exercised or a new contract is awarded. From a risk perspective, a longer duration for a sole-source award can amplify the risks associated with potential price inefficiencies or contractor performance issues, as the government is committed for a longer term without the benefit of ongoing competition.

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

Solicitation ID: 140A0424C0002

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3010, WEST 69TH STREET, SIOUX FALLS, SD, 57108

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

Financial Breakdown

Contract Ceiling: $750,000

Exercised Options: $450,000

Current Obligation: $450,000

Actual Outlays: $159,756

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline