DOJ's Bureau of Prisons awards $15.3K purchase order for natural gas distribution in Minnesota

Contract Overview

Contract Amount: $15,259 ($15.3K)

Contractor: Minnesota Energy Resources Corporation

Awarding Agency: Department of Justice

Start Date: 2026-04-01

End Date: 2026-06-30

Contract Duration: 90 days

Daily Burn Rate: $170/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Energy

Official Description: SST-P4/P6-MN ENERGY-Q3-FY26 APRIL 1, 2026, THROUGH JUNE 30, 2026 AMOUNT EST/METERED INV QUANTITIES

Place of Performance

Location: SANDSTONE, PINE County, MINNESOTA, 55072

State: Minnesota Government Spending

Plain-Language Summary

Department of Justice obligated $15,259.28 to MINNESOTA ENERGY RESOURCES CORPORATION for work described as: SST-P4/P6-MN ENERGY-Q3-FY26 APRIL 1, 2026, THROUGH JUNE 30, 2026 AMOUNT EST/METERED INV QUANTITIES Key points: 1. Contract value is minimal, suggesting a localized or short-term need. 2. Limited competition is noted, raising questions about price optimization. 3. Fixed-price contract type offers cost certainty for the government. 4. Short duration of 90 days indicates a tactical or emergency procurement. 5. Geographic focus on Minnesota aligns with facility needs. 6. The contract falls under energy services, a critical utility for federal facilities.

Value Assessment

Rating: fair

The contract amount of $15,259.28 is very small, making direct comparison to larger energy contracts difficult. Given the short duration and specific location, it's likely priced competitively for the immediate need. However, without more data on the quantity of natural gas or the per-unit rate, a robust value assessment is challenging. The firm fixed-price structure provides predictability.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was awarded as 'NOT AVAILABLE FOR COMPETITION,' indicating a sole-source or limited competition scenario. This suggests that Minnesota Energy Resources Corporation was likely the only viable or available provider for natural gas distribution within the specific service area of the federal facility. The lack of broader competition may limit opportunities for price discovery and potentially lead to higher costs than a fully competed contract.

Taxpayer Impact: Taxpayers may not be receiving the most competitive pricing due to the absence of a competitive bidding process. This could result in a higher cost for the natural gas compared to what might be achieved in an open market.

Public Impact

Federal Prison System facilities in Minnesota benefit from a reliable natural gas supply. Ensures essential heating and operational capabilities for correctional institutions. Supports the daily functioning of the Bureau of Prisons' infrastructure in the region. Workforce implications are minimal, likely involving existing utility personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition could lead to suboptimal pricing for taxpayers.
Limited transparency on the specific quantity and unit price of natural gas procured.
Short contract duration may necessitate future procurements, increasing administrative burden.

Positive Signals

Firm fixed-price contract provides budget certainty.
Procurement addresses a critical utility need for federal facilities.
Specific geographic focus ensures service delivery to the intended location.

Sector Analysis

This contract falls within the Energy sector, specifically natural gas distribution, which is a fundamental utility service. Federal agencies, including correctional facilities, rely heavily on stable energy supplies for heating, power, and operations. The market for natural gas distribution is typically localized, with established providers serving specific geographic areas. The contract size is small, suggesting it's for a specific facility's needs rather than a large-scale energy program.

Small Business Impact

There is no indication that this contract involved small business set-asides or subcontracting opportunities. The nature of utility distribution often involves large, established providers, and this specific award does not appear to prioritize small business participation.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Justice's Bureau of Prisons contracting and financial management offices. As a purchase order for a utility service, it is likely subject to standard internal controls and auditing procedures. Transparency is limited due to the sole-source nature and the small contract value, but the firm fixed-price agreement provides a degree of accountability for the agreed-upon cost.

Related Government Programs

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

Risk Flags

Limited Competition
Lack of Detailed Performance Metrics
Potential for Suboptimal Pricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $15,259.28 to MINNESOTA ENERGY RESOURCES CORPORATION. SST-P4/P6-MN ENERGY-Q3-FY26 APRIL 1, 2026, THROUGH JUNE 30, 2026 AMOUNT EST/METERED INV QUANTITIES

Who is the contractor on this award?

The obligated recipient is MINNESOTA ENERGY RESOURCES CORPORATION.

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 $15,259.28.

What is the period of performance?

Start: 2026-04-01. End: 2026-06-30.

What is the historical spending pattern for natural gas distribution for the Federal Prison System in Minnesota?

Analyzing historical spending for natural gas distribution for the Federal Prison System in Minnesota requires access to detailed procurement data over multiple fiscal years. Without specific databases or reports detailing this information, it is difficult to provide a precise historical spending pattern. However, federal agencies, particularly correctional facilities, consistently require natural gas for heating and operational purposes. Spending in this category is typically driven by facility size, occupancy levels, climate, and fluctuating energy market prices. Contracts for such utilities are often recurring, though the specific award amounts and durations can vary based on market conditions and the agency's contracting strategy. The current award of $15,259.28 for a 90-day period suggests a localized and potentially recurring need, but it represents a very small fraction of overall federal energy expenditure.

How does the per-unit cost of natural gas in this contract compare to market rates in Minnesota?

Determining the exact per-unit cost of natural gas in this contract is not possible with the provided data, as the quantity of natural gas to be supplied is not specified. The contract amount is a total value for the period, not a rate per therm or cubic foot. To compare this to market rates in Minnesota, one would need to know the estimated or metered quantities associated with the $15,259.28. Market rates for natural gas fluctuate based on supply and demand, seasonal variations, and regional economic factors. Generally, utility distribution is a regulated industry, and prices are influenced by these factors. Without the quantity metric, a direct benchmark against market rates is not feasible. However, given the sole-source nature of the award, there is a risk that the per-unit cost may not be as competitive as it could be in a fully open market.

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

Sole-source awards for essential utility services like natural gas present several potential risks. Primarily, the lack of competition can lead to higher costs for taxpayers, as the provider may not be incentivized to offer the most competitive pricing. This can result in a suboptimal value for money. Secondly, it can reduce transparency in the procurement process, making it harder to scrutinize the fairness of the pricing and terms. There's also a risk of complacency from the sole provider, potentially impacting service quality or reliability over time, although this is less common with regulated utilities. Furthermore, sole-source contracts can limit flexibility; if the government needs to adjust service levels or terms, negotiation power might be limited. Finally, it bypasses opportunities to foster competition and potentially engage a wider range of suppliers, including small businesses, who might offer innovative solutions or better pricing.

What is the track record of Minnesota Energy Resources Corporation as a government contractor?

Information regarding Minnesota Energy Resources Corporation's specific track record as a government contractor is not detailed in the provided data. As a utility provider, it is likely that they have existing contracts or agreements to supply energy to various entities, potentially including government facilities. To assess their track record, one would need to examine past performance reviews, contract history with federal, state, or local governments, and any reported issues or successes. Without this specific data, it's presumed they are a capable provider given their role in energy distribution. However, a thorough assessment would require a deeper dive into their procurement history and performance metrics, particularly if they have held similar contracts with the Bureau of Prisons or other federal agencies.

How does this contract fit into the broader energy procurement strategy of the Bureau of Prisons?

This contract represents a small, localized component of the Bureau of Prisons' (BOP) broader energy procurement strategy. The BOP operates numerous facilities across the country, each with unique energy needs, including heating, cooling, and power. Natural gas is a critical utility for many of these facilities, particularly for heating during colder months. The BOP likely procures energy through a mix of contract types, including long-term agreements, utility-specific purchase orders, and potentially larger energy service contracts. This specific award suggests a tactical procurement to meet an immediate or short-term need for natural gas at a particular facility in Minnesota. It highlights the agency's reliance on established utility providers to ensure continuous operations, even for relatively small-value, short-duration requirements.

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: WEC Energy Group, Inc.

Address: 2665 145TH ST W, ROSEMOUNT, MN, 55068

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

Financial Breakdown

Contract Ceiling: $15,259

Exercised Options: $15,259

Current Obligation: $15,259

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline