Interior Department awards $2M utility contract to Navajo Tribal Utility Authority for natural gas distribution in Arizona

Contract Overview

Contract Amount: $2,031,005 ($2.0M)

Contractor: Navajo Tribal Utility Authority

Awarding Agency: Department of the Interior

Start Date: 2022-07-06

End Date: 2026-09-30

Contract Duration: 1,547 days

Daily Burn Rate: $1.3K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: UTILITY SERVICE CONTRACT

Place of Performance

Location: MANY FARMS, APACHE County, ARIZONA, 86538

State: Arizona Government Spending

Plain-Language Summary

Department of the Interior obligated $2.0 million to NAVAJO TRIBAL UTILITY AUTHORITY for work described as: UTILITY SERVICE CONTRACT Key points: 1. Contract value appears reasonable for a multi-year utility service agreement. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. The contract duration of over four years indicates a need for sustained service. 4. Performance is tied to natural gas distribution, a critical infrastructure service. 5. The awardee, Navajo Tribal Utility Authority, has a direct mission alignment with serving tribal communities. 6. The contract is a delivery order under a larger agreement, implying potential for future taskings.

Value Assessment

Rating: good

The contract value of approximately $2 million over four years for natural gas distribution services appears to be within a reasonable range for utility services. Benchmarking against similar contracts is challenging without more specific details on the scope of services and volume of gas distributed. However, given the essential nature of the service and the duration, the overall price seems fair. The firm fixed-price structure helps manage cost certainty for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. This method generally fosters a competitive environment, which can lead to better pricing and service quality. The specific number of bidders is not provided, but the use of this procurement method suggests that multiple entities likely had the opportunity to compete for the contract.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it maximizes the potential for cost savings through a robust bidding process, ensuring the government receives competitive pricing for essential services.

Public Impact

The Navajo Tribal Utility Authority directly benefits from this contract, strengthening its operational capacity. The contract ensures the continued delivery of natural gas, a vital utility service. The geographic impact is concentrated in Arizona, serving communities within the Bureau of Indian Affairs and Bureau of Indian Education's jurisdiction. This contract supports jobs and economic activity within the Navajo Nation and surrounding areas.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases in natural gas commodity costs not fully mitigated by fixed-price contract.
Dependence on a single delivery order under a larger contract could limit flexibility if needs change significantly.

Positive Signals

Award to a tribal utility authority aligns with government objectives for supporting tribal enterprises.
Firm fixed-price contract provides cost certainty for the government over the contract period.
Long contract duration suggests a stable and reliable service provision.

Sector Analysis

This contract falls within the Utilities and Energy sector, specifically focusing on natural gas distribution. The market for utility services, particularly to government installations or tribal lands, is often characterized by established providers and long-term agreements. The value of this contract, at approximately $2 million, is moderate within the broader context of federal energy and utility spending, which can range from millions to billions for larger infrastructure projects or comprehensive energy management services.

Small Business Impact

The contract does not indicate any specific small business set-aside provisions. As the awardee is the Navajo Tribal Utility Authority, a larger entity, there are no direct subcontracting implications for small businesses mentioned in this award. The focus appears to be on direct service provision by the awarded entity.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officers and program managers within the Bureau of Indian Affairs and Bureau of Indian Education. As a delivery order under a larger contract, the terms and conditions are established, and performance monitoring would ensure compliance. Transparency is generally maintained through federal procurement databases, though specific performance metrics are not detailed here.

Related Government Programs

Federal Utility Services Contracts
Bureau of Indian Affairs Operations
Bureau of Indian Education Facilities Management
Natural Gas Supply Contracts

Risk Flags

Potential for price volatility in natural gas commodity markets.
Dependence on a single provider for critical utility services.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Interior awarded $2.0 million to NAVAJO TRIBAL UTILITY AUTHORITY. UTILITY SERVICE CONTRACT

Who is the contractor on this award?

The obligated recipient is NAVAJO TRIBAL UTILITY AUTHORITY.

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 $2.0 million.

What is the period of performance?

Start: 2022-07-06. End: 2026-09-30.

What is the historical spending pattern for natural gas distribution services by the Department of the Interior in Arizona?

Analyzing historical spending for natural gas distribution by the Department of the Interior in Arizona requires accessing detailed procurement data over several fiscal years. Federal agencies typically issue numerous contracts for utility services, ranging from small, localized agreements to larger, multi-year commitments. The Navajo Tribal Utility Authority has likely been a recipient of federal funds for utility services in the past, given its mission. A comprehensive review would involve searching databases like FPDS-NG or USASpending.gov for contracts awarded by the Bureau of Indian Affairs (BIA) and Bureau of Indian Education (BIE) specifically for natural gas supply and distribution within Arizona. This would reveal trends in contract values, awardees, and the duration of services, providing context for the current $2 million award.

How does the per-unit cost of natural gas under this contract compare to market rates or similar federal contracts?

Determining the precise per-unit cost of natural gas for this contract is challenging without access to the specific volume metrics and pricing breakdowns within the firm fixed-price agreement. Federal contracts for utilities often include base service charges, distribution fees, and the commodity cost of the gas itself. To benchmark this, one would need to compare the effective price per therm or cubic foot against prevailing market rates for commercial or industrial customers in Arizona, as well as against other federal contracts for similar services. Given that this is a delivery order under a larger contract, the pricing structure might be pre-negotiated. Without the detailed scope of work and delivery volumes, a direct per-unit cost comparison remains speculative, though the overall contract value suggests a significant volume over its term.

What is the track record of the Navajo Tribal Utility Authority in managing federal contracts for utility services?

The Navajo Tribal Utility Authority (NTUA) has a long-standing history of providing essential utility services, including natural gas, electricity, water, and wastewater, to the Navajo Nation. As an entity established to serve tribal communities, its operational mandate is closely aligned with federal objectives for supporting tribal self-determination and infrastructure development. NTUA has experience managing contracts and grants from various federal agencies, including the Department of the Interior. Assessing their track record would involve reviewing past performance evaluations, any documented issues or successes in fulfilling federal obligations, and their overall financial stability and operational capacity. Generally, tribal utilities are critical infrastructure providers, and NTUA plays a vital role in its service area.

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

Potential risks for this natural gas distribution contract include fluctuations in natural gas commodity prices (though mitigated by the firm fixed-price structure to some extent), potential disruptions in supply, and the aging of distribution infrastructure. Operational risks related to maintenance and safety are also present. Mitigation strategies likely involve the contract's fixed-price nature, which shifts some price risk to the contractor. The NTUA's established operational procedures, safety protocols, and emergency response plans are crucial for mitigating supply and operational risks. Furthermore, the contract's duration and the awardee's specific mission to serve the region suggest a vested interest in reliable performance. The government's oversight role ensures adherence to contract terms and service standards.

How does this contract contribute to the Bureau of Indian Affairs' mission regarding infrastructure and services for tribal communities?

This contract directly supports the Bureau of Indian Affairs' (BIA) mission by ensuring the provision of essential utility services, specifically natural gas distribution, to tribal communities or facilities under its jurisdiction in Arizona. Reliable access to energy sources like natural gas is fundamental for heating, cooking, and other daily needs, contributing to the quality of life and economic viability of these communities. By awarding the contract to the Navajo Tribal Utility Authority, the BIA also supports tribal self-governance and economic development, aligning with federal policies aimed at strengthening tribal enterprises. This ensures that federal funds are utilized not only for service delivery but also to bolster the capacity of tribal organizations.

Industry Classification

NAICS: Utilities › Natural Gas Distribution › Natural Gas Distribution

Product/Service Code: UTILITIES AND HOUSEKEEPING › UTILITIES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: TWO STEP

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: HWY 12 N, FORT DEFIANCE, AZ, 86504

Business Categories: Category Business, Government, Native American Tribal Government, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $2,481,005

Exercised Options: $2,031,005

Current Obligation: $2,031,005

Actual Outlays: $1,758,504

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS00P14BSD1060

IDV Type: IDC

Timeline