FTC's $3.7M contract for HQ building power supply awarded to Potomac Electric Power Co

Contract Overview

Contract Amount: $3,696,501 ($3.7M)

Contractor: Potomac Electric Power CO

Awarding Agency: Federal Trade Commission

Start Date: 2021-03-16

End Date: 2026-03-15

Contract Duration: 1,825 days

Daily Burn Rate: $2.0K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: HQ BUILDING ELECTRICAL POWER SUPPLY

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20580

State: District of Columbia Government Spending

Plain-Language Summary

Federal Trade Commission obligated $3.7 million to POTOMAC ELECTRIC POWER CO for work described as: HQ BUILDING ELECTRICAL POWER SUPPLY Key points: 1. Ensures continuous power for critical FTC facilities. 2. Long-term contract provides predictable utility costs. 3. Sole-source award may limit price negotiation opportunities. 4. Performance period aligns with facility modernization plans. 5. Essential service for agency operations and data integrity. 6. Geographic concentration of service within Washington D.C.

Value Assessment

Rating: fair

The contract value of $3.7 million over five years for electrical power supply to the FTC headquarters appears reasonable given the essential nature of the service and the sole-source award. Benchmarking utility costs for large federal buildings in the D.C. area is complex due to fluctuating rates and service tiers. However, the fixed-price nature of the delivery order provides some cost certainty for the agency. Without comparable competitive bids or detailed rate structures, a precise value-for-money assessment is challenging, but the price seems aligned with the criticality of uninterrupted power.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning Potomac Electric Power Co. was the only vendor considered. This is common for essential utility services where a single provider has exclusive rights to service a geographic area. While this ensures service delivery, it bypasses the competitive bidding process, potentially leading to higher costs than if multiple providers had competed. The lack of competition means the FTC could not leverage market forces to secure the best possible price.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive bidding. The sole-source nature limits opportunities for cost savings that could otherwise be realized through a competitive procurement process.

Public Impact

The Federal Trade Commission (FTC) headquarters in Washington D.C. benefits from reliable electrical power. Ensures uninterrupted operations for agency functions, including data centers and administrative services. Supports the physical infrastructure necessary for federal regulatory activities. The contract impacts the local utility workforce in the District of Columbia.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
Lack of transparency in utility rate structures makes independent cost verification difficult.
Long contract duration may not fully capture potential future market rate reductions.

Positive Signals

Ensures critical and uninterrupted power supply to a key federal agency.
Provides cost certainty through a fixed-price delivery order for essential services.
Long-term commitment supports stable operational planning for the FTC.

Sector Analysis

The energy sector, specifically electric power generation and distribution, is a critical infrastructure component for all government operations. Federal agencies rely heavily on utility providers for consistent power. This contract falls under the 'Other Electric Power Generation' category, indicating it covers the provision of electricity. The market for utility services is typically characterized by regulated monopolies within specific geographic areas, making sole-source awards common for essential services like this. Comparable spending benchmarks are difficult to establish due to unique rate structures and service levels for each utility provider and customer.

Small Business Impact

This contract does not appear to involve small business set-asides, as it was awarded sole-source to a large utility provider. There is no indication of subcontracting opportunities for small businesses within this specific contract. The primary impact is on the direct service provider, Potomac Electric Power Co., rather than the broader small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Federal Trade Commission's internal contracting and financial management offices. As a sole-source award for a regulated utility, the pricing is likely influenced by public utility commission regulations. Transparency is limited by the nature of sole-source procurement and the proprietary rate structures of utility companies. There is no specific mention of an Inspector General's direct involvement in overseeing this particular utility service contract, though general agency oversight functions would apply.

Related Government Programs

Federal Building Energy Management
Utility Services Contracts
Critical Infrastructure Protection
Federal Agency Operations Support

Risk Flags

Sole-source award limits price competition.
Lack of detailed cost breakdown for utility services.
Potential for price increases based on regulated utility rates.

Frequently Asked Questions

What is this federal contract paying for?

Federal Trade Commission awarded $3.7 million to POTOMAC ELECTRIC POWER CO. HQ BUILDING ELECTRICAL POWER SUPPLY

Who is the contractor on this award?

The obligated recipient is POTOMAC ELECTRIC POWER CO.

Which agency awarded this contract?

Awarding agency: Federal Trade Commission (Federal Trade Commission).

What is the total obligated amount?

The obligated amount is $3.7 million.

What is the period of performance?

Start: 2021-03-16. End: 2026-03-15.

What is the historical spending pattern for electrical power at the FTC headquarters?

Historical spending data for electrical power at the FTC headquarters prior to this contract is not readily available in the provided data. However, this contract, valued at approximately $3.7 million over 1825 days (5 years), suggests an average annual expenditure of roughly $740,000. This figure represents the cost for essential electrical power supply to the agency's main facility. Understanding past expenditures would require accessing FTC's historical financial records or previous utility contracts. Without this context, it's difficult to determine if the current spending represents an increase, decrease, or stable trend compared to previous periods. The sole-source nature of this award also implies that direct comparisons to prior competitive bids are not feasible.

How does the cost per unit for this contract compare to market rates for similar federal facilities in the D.C. area?

Determining a precise 'per-unit cost' for electrical power in this context is challenging because utility pricing is complex, involving various rate schedules, demand charges, energy consumption tiers, and service agreements specific to each customer and provider. This contract is a sole-source award to Potomac Electric Power Co. (PEPCO) for the FTC headquarters. Benchmarking against 'market rates' is difficult as PEPCO holds a regulated monopoly for electricity distribution in this area. While PEPCO's rates are regulated by the Public Service Commission of the District of Columbia, direct comparisons to other federal facilities would require access to their specific contracts and the applicable rate schedules, which are not publicly detailed. The value of $3.7 million over five years for a federal building's power supply is likely within a reasonable range for essential utility services in a major metropolitan area, but a definitive 'per-unit' comparison is not feasible without more granular data.

What are the specific 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 electrical power is the potential for inflated costs due to the lack of competitive pressure. Without competing bids, the agency has limited leverage to negotiate the lowest possible price. This can lead to taxpayers bearing a higher cost than might be achieved in a competitive market. Another risk is reduced incentive for the sole provider to innovate or improve service efficiency, as they face no direct competition. Furthermore, reliance on a single provider can create vulnerabilities if that provider experiences service disruptions or financial instability, although this is mitigated by regulatory oversight in the utility sector. The FTC, by accepting a sole-source award, implicitly accepts these risks in exchange for guaranteed service delivery.

What is the track record of Potomac Electric Power Co. in serving federal agencies?

Potomac Electric Power Co. (PEPCO) is the primary electric utility provider for the District of Columbia and surrounding Maryland suburbs, serving a vast customer base that includes numerous federal agencies, government buildings, and military installations. Their track record in serving federal agencies is extensive, given their geographic service area. PEPCO is responsible for maintaining the reliability and delivery of electricity to critical infrastructure, including the FTC headquarters. While specific performance metrics for individual federal contracts are not publicly detailed, PEPCO operates under regulatory oversight from the Public Service Commission of the District of Columbia and the Maryland Public Service Commission, which monitor service quality, reliability, and pricing. Their long-standing presence and role as the sole distributor in the region indicate a capacity to meet the demands of federal facilities.

How does this contract align with the FTC's mission and operational needs?

This contract is fundamental to the Federal Trade Commission's (FTC) mission and operational needs. The FTC is responsible for protecting consumers and promoting competition, which requires robust IT infrastructure, secure data management, and continuous administrative functions. Reliable electrical power is the bedrock upon which these operations depend. Uninterrupted power ensures that the FTC's servers, communication systems, and office equipment function without disruption, safeguarding sensitive data and enabling the agency to perform its regulatory duties effectively. The five-year duration provides stability, allowing the FTC to focus on its core mission without concerns about power supply interruptions, which could have significant operational and reputational consequences.

Industry Classification

NAICS: Utilities › Electric Power Generation, Transmission and Distribution › Other Electric Power Generation

Product/Service Code: UTILITIES AND HOUSEKEEPING › UTILITIES

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 701 9TH ST NW, WASHINGTON, DC, 20068

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

Financial Breakdown

Contract Ceiling: $9,071,501

Exercised Options: $5,071,501

Current Obligation: $3,696,501

Actual Outlays: $3,101,952

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 47PA0420D0064

IDV Type: IDC

Timeline