VA awards $26.6M natural gas utility contract to NRG Business Marketing LLC for Rhode Island

Contract Overview

Contract Amount: $26,568 ($26.6K)

Contractor: NRG Business Marketing LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-10-01

End Date: 2025-09-30

Contract Duration: 364 days

Daily Burn Rate: $73/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: NATURAL GAS UTILITY SUPPLY

Place of Performance

Location: PROVIDENCE, PROVIDENCE County, RHODE ISLAND, 02908

State: Rhode Island Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $26,568.16 to NRG BUSINESS MARKETING LLC for work described as: NATURAL GAS UTILITY SUPPLY Key points: 1. Contract value represents a significant investment in energy infrastructure for VA facilities. 2. The award was made under full and open competition, suggesting a competitive bidding process. 3. The firm fixed-price contract type aims to provide cost certainty for the government. 4. This contract supports essential utility services, crucial for the operational continuity of VA facilities. 5. The duration of one year indicates a focus on meeting immediate and near-term energy needs. 6. The contract is a delivery order against a larger contract vehicle, suggesting potential for future taskings.

Value Assessment

Rating: good

The contract value of $26.6 million for natural gas utility supply over one year appears reasonable given the essential nature of the service. Benchmarking against similar utility contracts is challenging without specific consumption data, but the price is likely competitive due to the full and open competition. The firm fixed-price structure provides predictable costs for the Department of Veterans Affairs, mitigating risks associated with fluctuating energy markets.

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 approach generally fosters a competitive environment, encouraging multiple bidders to offer their best pricing and terms. The specific number of bidders is not provided, but the method suggests a robust process aimed at achieving value for the government.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it is expected to drive down costs through market forces, ensuring the government secures the most advantageous pricing for essential services like natural gas supply.

Public Impact

Veterans receiving care at VA facilities in Rhode Island will benefit from uninterrupted utility services. The contract ensures the reliable supply of natural gas, essential for heating, cooking, and other facility operations. The geographic impact is focused on Rhode Island, supporting VA infrastructure within the state. The contract supports the operational workforce at VA facilities by ensuring essential services are maintained.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price volatility in future contract periods if market conditions change significantly.
Dependence on a single supplier for a critical utility service requires robust performance monitoring.

Positive Signals

Firm fixed-price contract provides cost certainty for the current period.
Awarded through full and open competition, suggesting competitive pricing.
Supports essential services for a critical government agency (Department of Veterans Affairs).

Sector Analysis

The energy utility sector is characterized by regulated markets and essential service provision. Natural gas distribution is a critical component of this sector, ensuring reliable energy for residential, commercial, and governmental entities. Contracts for utility supply are common across federal agencies, with spending varying based on facility location, size, and energy demands. This contract fits within the broader category of government procurement for essential operational services.

Small Business Impact

The provided data indicates that small business participation was not a specific set-aside for this contract (ss: false, sb: false). Therefore, the direct impact on small business set-asides is minimal. However, the prime contractor, NRG Business Marketing LLC, may engage small businesses as subcontractors, though this is not detailed in the award information. The focus appears to be on securing a large-scale utility service provider.

Oversight & Accountability

Oversight for this contract will likely be managed by the contracting officers and program managers within the Department of Veterans Affairs. Accountability measures are inherent in the firm fixed-price contract type, which obligates the contractor to deliver the specified service at the agreed-upon price. Transparency is facilitated through public contract databases where award details are published. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Federal Energy Management Program
Department of Veterans Affairs Facility Operations
Utility Services Procurement
Natural Gas Supply Contracts

Risk Flags

Potential for price fluctuations in the energy market impacting long-term value.
Dependence on a single supplier for a critical utility service.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $26,568.16 to NRG BUSINESS MARKETING LLC. NATURAL GAS UTILITY SUPPLY

Who is the contractor on this award?

The obligated recipient is NRG BUSINESS MARKETING LLC.

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $26,568.16.

What is the period of performance?

Start: 2024-10-01. End: 2025-09-30.

What is NRG Business Marketing LLC's track record with federal contracts, particularly for utility services?

NRG Business Marketing LLC has a history of federal contracting, primarily focused on energy supply. While specific details on past performance for natural gas utility supply to the VA in Rhode Island are not immediately available from this award notice alone, the company is a significant player in the energy market. Federal procurement databases would likely show other awards to NRG for similar services to various agencies. A deeper dive into their contract history would reveal their experience with firm fixed-price contracts, delivery orders, and performance metrics on similar utility provisions. This would help assess their reliability and capacity to meet the VA's needs effectively.

How does the awarded price of $26.6 million compare to market rates for natural gas utility supply in Rhode Island?

Directly comparing the $26.6 million award to precise market rates for natural gas utility supply in Rhode Island is complex without granular data on the VA's specific consumption patterns, peak demand, and contract terms (e.g., index pricing vs. fixed rates). However, the fact that the contract was awarded under 'full and open competition' suggests that the pricing was vetted against multiple market participants. This competitive process is designed to yield prices at or near market value. To conduct a thorough benchmark, one would need to analyze historical natural gas prices in the region, compare the contract's duration and service level to other large commercial or governmental contracts, and potentially consult energy market analysis reports.

What are the primary risks associated with this firm fixed-price contract for natural gas supply?

The primary risk with a firm fixed-price contract for natural gas supply lies in potential price volatility in the energy market. While the fixed price protects the VA from cost increases if gas prices rise, it means the government forfeits potential savings if prices fall significantly. Another risk is the contractor's ability to consistently meet demand, especially during peak usage periods. If NRG Business Marketing LLC faces supply chain disruptions or operational issues, it could impact the VA facilities' essential services. However, the firm fixed-price structure incentivizes the contractor to manage these risks efficiently to maintain profitability.

How effective is the 'full and open competition' approach in ensuring value for this type of essential service contract?

The 'full and open competition' approach is generally considered highly effective for ensuring value in essential service contracts like natural gas supply. By allowing all qualified vendors to bid, it creates a competitive marketplace where companies are motivated to offer their most attractive pricing and service terms to win the contract. This process helps prevent price gouging and encourages efficiency. The effectiveness is maximized when the solicitation clearly defines the required services, performance standards, and evaluation criteria, allowing the VA to select the best overall value, not just the lowest price. The presence of multiple bidders typically leads to better price discovery and innovation.

What are the historical spending patterns for natural gas utility supply by the Department of Veterans Affairs?

Historical spending patterns for natural gas utility supply by the Department of Veterans Affairs would likely show consistent, significant expenditure across its numerous facilities nationwide. VA facilities, particularly those with large campuses or long-term care operations, rely heavily on natural gas for heating and other essential functions. Spending would fluctuate year-over-year based on energy market prices, facility needs, and contract durations. Analyzing past VA contracts for similar utility services would reveal trends in contract values, durations, and the types of competition utilized. This specific $26.6 million award represents a portion of the VA's overall energy procurement budget.

What are the implications of this contract being a 'delivery order' against a larger contract vehicle?

This contract being a 'delivery order' (aw: DELIVERY ORDER) implies that it is a task order issued under a pre-existing indefinite-delivery, indefinite-quantity (IDIQ) or similar type of contract vehicle. This means that NRG Business Marketing LLC likely has a master contract in place with the government, potentially covering a broader scope or longer period. Delivery orders allow agencies to procure specific quantities of goods or services as needed, often with pre-negotiated terms and pricing. For the VA, this approach offers flexibility in managing its energy needs across different locations or timeframes. It also suggests that the initial competition likely occurred when the master contract vehicle was established.

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: 194 S WOOD AVE 2ND FL, ISELIN, NJ, 08830

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $26,568

Exercised Options: $26,568

Current Obligation: $26,568

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 47PA0422D0074

IDV Type: IDC

Timeline