DOJ's $1.45M natural gas contract for Butner, NC, awarded to Public Service Company of North Carolina

Contract Overview

Contract Amount: $144,608 ($144.6K)

Contractor: Public Service Company of North Carolina, Incorporated

Awarding Agency: Department of Justice

Start Date: 2025-10-01

End Date: 2026-06-30

Contract Duration: 272 days

Daily Burn Rate: $532/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Energy

Official Description: ACCRUAL FOR NATURAL GAS TRANSPORTATION (LDC) SERVICE FOR LARGE SUPPLY FOR FCC BUTNER - 10/1/2025-12/31/2025

Place of Performance

Location: GASTONIA, GASTON County, NORTH CAROLINA, 28053

State: North Carolina Government Spending

Plain-Language Summary

Department of Justice obligated $144,608.02 to PUBLIC SERVICE COMPANY OF NORTH CAROLINA, INCORPORATED for work described as: ACCRUAL FOR NATURAL GAS TRANSPORTATION (LDC) SERVICE FOR LARGE SUPPLY FOR FCC BUTNER - 10/1/2025-12/31/2025 Key points: 1. The contract's value appears reasonable for the specified period, considering the fluctuating nature of energy commodity prices. 2. Limited competition dynamics suggest potential for higher pricing than a fully competed contract. 3. The short duration and specific location may limit broader market competition. 4. Performance context is tied to ensuring essential utility services for a federal facility. 5. This contract falls within the broader energy distribution and utility services sector for federal agencies. 6. The firm fixed-price structure offers budget certainty for the government.

Value Assessment

Rating: fair

The contract value of approximately $1.45 million for a 272-day period (October 1, 2025, to June 30, 2026) for natural gas transportation services needs to be benchmarked against similar contracts for federal facilities in North Carolina. Without specific comparable data, it's difficult to definitively assess value for money. However, the firm fixed-price nature provides cost predictability. The price is likely influenced by market rates for natural gas and transportation infrastructure in the region.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicated as 'NOT AVAILABLE FOR COMPETITION'. This suggests that Public Service Company of North Carolina, Inc. is likely the sole provider of natural gas distribution services to the Federal Prison System facility in Butner, NC, due to geographic or infrastructure limitations. The lack of competition means the government did not benefit from a bidding process that could drive down prices.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. Without a competitive process, there is less assurance that the price reflects the lowest possible cost for these essential services.

Public Impact

The primary beneficiary is the Federal Prison System facility in Butner, North Carolina, ensuring uninterrupted natural gas supply for its operations. Services delivered include the transportation and distribution of natural gas, crucial for heating, cooking, and other facility needs. The geographic impact is localized to Butner, North Carolina, where the federal facility is situated. Workforce implications are minimal for this specific contract, as it primarily involves utility service provision rather than direct labor augmentation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition could lead to suboptimal pricing for taxpayers.
Reliance on a single provider raises concerns about service continuity if the provider faces operational issues.
The contract's specific nature might not offer opportunities for small business subcontracting.

Positive Signals

Firm fixed-price contract provides budget certainty for the Federal Prison System.
Ensures essential utility services are maintained for a critical federal facility.
The contract is with an established utility provider, likely possessing the necessary infrastructure and expertise.

Sector Analysis

This contract falls within the broader energy sector, specifically focusing on natural gas distribution and transportation. The market for utility services to federal facilities is often characterized by limited competition due to geographic monopolies or existing infrastructure. Comparable spending benchmarks would typically involve analyzing other federal contracts for natural gas supply to similar-sized facilities in different regions, considering varying market conditions and regulatory environments.

Small Business Impact

This contract does not appear to involve a small business set-aside, as indicated by 'ss: false' and 'sb: false'. Given the nature of utility provision and the sole-source award, there are likely limited opportunities for small businesses to participate as prime contractors or significant subcontractors. The focus is on ensuring a reliable utility service from an established provider.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Justice's Federal Prison System. Accountability measures are inherent in the purchase order terms, requiring the contractor to provide the specified service. Transparency is limited due to the sole-source nature of the award, but the contract details should be publicly available through federal procurement databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Federal Prison System Utilities Contracts
Department of Justice Energy Procurement
Natural Gas Supply Contracts
Federal Facility Operations Support

Risk Flags

Sole-source award
Lack of competition
Potential for higher costs

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $144,608.02 to PUBLIC SERVICE COMPANY OF NORTH CAROLINA, INCORPORATED. ACCRUAL FOR NATURAL GAS TRANSPORTATION (LDC) SERVICE FOR LARGE SUPPLY FOR FCC BUTNER - 10/1/2025-12/31/2025

Who is the contractor on this award?

The obligated recipient is PUBLIC SERVICE COMPANY OF NORTH CAROLINA, INCORPORATED.

Which agency awarded this contract?

Awarding agency: Department of Justice (Federal Prison System / Bureau of Prisons).

What is the total obligated amount?

The obligated amount is $144,608.02.

What is the period of performance?

Start: 2025-10-01. End: 2026-06-30.

What is the historical spending pattern for natural gas transportation services at the Butner, NC Federal Prison System facility?

Historical spending data for natural gas transportation at the Butner, NC Federal Prison System facility prior to this contract award (October 1, 2025 - June 30, 2026) is not directly available in the provided data. However, the contract value of $1,446,080.20 for a 272-day period suggests an average monthly cost of approximately $531,647. This figure needs to be compared with previous contract durations and values, if available, to identify trends. Factors such as fluctuating natural gas prices, changes in facility energy consumption, and contract modifications would influence historical spending. A comprehensive analysis would require accessing prior contract awards for this specific facility or similar facilities managed by the Bureau of Prisons.

How does the awarded price compare to market rates for similar natural gas transportation services in North Carolina?

Directly comparing the awarded price to market rates for similar natural gas transportation services in North Carolina is challenging without access to specific, granular market data for the period of performance (October 1, 2025 - June 30, 2026). The contract is a firm fixed price for a specific facility, Public Service Company of North Carolina, Inc. likely operates as a regulated utility in its service territory. Market rates can be influenced by factors such as the volume of gas transported, pipeline capacity availability, regulatory tariffs, and the overall energy market conditions. Given the sole-source nature, the price is less likely to reflect competitive market dynamics and more likely to be based on the utility's established rates and cost structure for providing this service to the federal government.

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

Sole-source awards for essential utility services, such as natural gas transportation, carry several potential risks. Firstly, the absence of competition can lead to higher costs for the government compared to what might be achieved through a competitive bidding process. This lack of price discovery means taxpayers may not be receiving the best possible value. Secondly, there's a risk of complacency from the sole provider, potentially impacting service quality or responsiveness, although this is often mitigated by regulatory oversight for utilities. Thirdly, reliance on a single provider creates a vulnerability; any disruption in the provider's operations, such as infrastructure failures or labor disputes, could directly impact the federal facility's essential services, leading to operational disruptions and potential security concerns.

What is the track record of Public Service Company of North Carolina, Inc. in serving federal government contracts?

Public Service Company of North Carolina, Inc. (PSNC Energy) is a major natural gas utility provider in North Carolina. While specific details of their past federal contract performance are not provided in this data, as a regulated utility, they are accustomed to providing essential services under established tariffs and service agreements. Their track record would typically be assessed based on reliability of service, adherence to regulatory standards, and customer service. For federal contracts, their performance would be evaluated against the terms of the purchase order, including timely delivery of natural gas and maintaining service continuity. Agencies often rely on established utilities for such services due to their existing infrastructure and regulatory compliance.

What are the implications of the firm fixed-price contract type for budget management?

A firm fixed-price (FFP) contract type offers significant advantages for budget management by providing cost certainty to the government. Under an FFP agreement, the contractor agrees to a set price for the goods or services, regardless of the actual costs incurred by the contractor. This means the Federal Prison System knows the exact cost of natural gas transportation for the contract period (October 1, 2025 - June 30, 2026), which is $1,446,080.20. This predictability simplifies financial planning and budgeting, as there are no unexpected cost overruns related to the contractor's expenses. The risk of cost fluctuations is transferred to the contractor, who must manage their operations efficiently to remain profitable within the agreed-upon price.

Industry Classification

NAICS: Utilities › Natural Gas Distribution › Natural Gas Distribution

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: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Dominion Energy, Inc.

Address: 800 GASTON RD, GASTONIA, NC, 28056

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

Financial Breakdown

Contract Ceiling: $144,608

Exercised Options: $144,608

Current Obligation: $144,608

Actual Outlays: $43,189

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline