VA awards $2.98M contract for electricity supply in Illinois and Ohio, highlighting regional energy needs

Contract Overview

Contract Amount: $2,980,427 ($3.0M)

Contractor: WGL Energy Services, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-10-01

End Date: 2025-04-30

Contract Duration: 211 days

Daily Burn Rate: $14.1K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Energy

Official Description: ELECTRIC SUPPLY OF ALL COMMODITY COMPONENTS UP TO THE DELIVERY POINT AS SPECIFIED IN EXHIBIT 1 OF THIS SOLICITATION FOR FEDERAL FACILITIES LOCATED IN VARIOUS LOCAL DISTRIBUTION UTILITY SERVICE TERRITORIES WITHIN THE STATES OF ILLINOIS AND OHIO.

Place of Performance

Location: ASPINWALL, ALLEGHENY County, PENNSYLVANIA, 15215

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $3.0 million to WGL ENERGY SERVICES, INC. for work described as: ELECTRIC SUPPLY OF ALL COMMODITY COMPONENTS UP TO THE DELIVERY POINT AS SPECIFIED IN EXHIBIT 1 OF THIS SOLICITATION FOR FEDERAL FACILITIES LOCATED IN VARIOUS LOCAL DISTRIBUTION UTILITY SERVICE TERRITORIES WITHIN THE STATES OF ILLINOIS AND OHIO. Key points: 1. Contract value of $2.98 million for electricity supply over approximately 7 months. 2. Competition dynamics indicate a full and open process for this energy procurement. 3. Performance risk appears moderate given the nature of commodity supply. 4. Sector positioning places this within the energy services for federal facilities. 5. Geographic focus on Illinois and Ohio suggests specific regional utility service areas.

Value Assessment

Rating: good

The contract value of $2.98 million for approximately seven months of electricity supply appears reasonable for federal facilities. Benchmarking against similar energy supply contracts for federal agencies of comparable size and geographic spread would provide further context. The firm fixed-price structure suggests predictable costs for the VA, though market fluctuations in energy prices could impact the contractor's margin.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. This approach typically fosters competitive pricing and allows the government to select the best value offering. The specific number of bidders is not provided, but the designation implies a robust bidding environment.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it drives down prices through market forces, ensuring the government obtains services at a competitive rate.

Public Impact

Federal facilities in Illinois and Ohio will receive a reliable supply of electricity. The Department of Veterans Affairs (VA) will ensure operational continuity for its sites. The contract supports the energy sector by procuring commodity electricity components. Local utility distribution networks in the specified regions will be utilized for delivery.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price volatility in commodity electricity markets impacting long-term cost predictability.
Dependence on specific utility service territories may limit future flexibility if needs change.

Positive Signals

Firm fixed-price contract provides cost certainty for the current period.
Awarded under full and open competition, suggesting competitive pricing.
Clear delivery points specified in Exhibit 1 mitigate ambiguity.

Sector Analysis

This contract falls within the broader energy sector, specifically focusing on the procurement of electricity as a commodity for federal facilities. The market for electricity supply is diverse, involving utility providers and energy service companies. Federal agencies are significant consumers of energy, and contracts like this are essential for maintaining operations. Comparable spending benchmarks would involve analyzing other federal or state contracts for similar volumes of electricity in the Midwest region.

Small Business Impact

Information regarding small business set-asides or subcontracting plans was not explicitly provided in the data. As this is a commodity service, the primary contractor is likely an established energy provider. Further analysis would be needed to determine if any subcontracting opportunities exist for small businesses within the scope of this contract.

Oversight & Accountability

The Department of Veterans Affairs is responsible for the oversight of this contract. Accountability measures are inherent in the firm fixed-price agreement and the specified delivery requirements. Transparency is facilitated through federal procurement databases where such contract awards are typically reported. 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
Commodity Electricity Procurement

Risk Flags

Potential for market price volatility impacting fixed-price contract
Dependence on specific utility service territories
Short contract duration may indicate interim need or limited long-term planning

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $3.0 million to WGL ENERGY SERVICES, INC.. ELECTRIC SUPPLY OF ALL COMMODITY COMPONENTS UP TO THE DELIVERY POINT AS SPECIFIED IN EXHIBIT 1 OF THIS SOLICITATION FOR FEDERAL FACILITIES LOCATED IN VARIOUS LOCAL DISTRIBUTION UTILITY SERVICE TERRITORIES WITHIN THE STATES OF ILLINOIS AND OHIO.

Who is the contractor on this award?

The obligated recipient is WGL ENERGY SERVICES, INC..

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 $3.0 million.

What is the period of performance?

Start: 2024-10-01. End: 2025-04-30.

What is the historical spending pattern of the Department of Veterans Affairs for electricity supply in Illinois and Ohio?

Analyzing the historical spending patterns of the Department of Veterans Affairs (VA) for electricity supply in Illinois and Ohio would require access to detailed procurement data over multiple fiscal years. This would involve identifying previous contracts for similar services, noting the award amounts, contract durations, and the specific facilities served within these states. A trend analysis could reveal whether spending has increased, decreased, or remained stable, potentially influenced by energy market fluctuations, changes in facility needs, or shifts in procurement strategies. For instance, if the VA has consistently used firm fixed-price contracts for electricity in these regions, it suggests a preference for cost predictability. Conversely, a shift towards variable pricing or different contract types might indicate a response to market volatility or a desire for greater flexibility. Understanding these patterns provides context for the current $2.98 million award, allowing for an assessment of whether it aligns with historical investment levels or represents a significant deviation.

How does the per-unit cost of electricity under this contract compare to market rates in Illinois and Ohio?

Determining the precise per-unit cost of electricity under this contract requires knowing the total kilowatt-hours (kWh) to be supplied over the contract period and dividing the total contract value by this amount. Without the total kWh, a direct comparison to market rates is challenging. However, if the total consumption can be estimated or is available through further data, it could be benchmarked against average commercial or industrial electricity rates in Illinois and Ohio for the relevant period. Factors such as time-of-use pricing, demand charges, and transmission/distribution fees would need to be considered for an accurate comparison. Given that this is a commodity component supply, the contract likely focuses on the energy charge rather than the full retail rate. Comparing this specific component cost to wholesale electricity market indices or similar federal energy contracts in the region would provide a more meaningful value assessment.

What is the track record of WGL Energy Services, Inc. in fulfilling federal energy supply contracts?

WGL Energy Services, Inc. has a history of providing energy solutions, including electricity and natural gas supply, to various customers, including federal agencies. To assess their track record specifically for federal contracts, one would need to examine past performance evaluations and contract completion data. Key indicators include on-time delivery, adherence to contract specifications, and any history of disputes or contract modifications. Information from sources like the Federal Procurement Data System (FPDS) or agency-specific performance management systems could offer insights into their reliability and performance quality. A review of their portfolio of similar federal energy contracts, particularly those involving commodity electricity supply to facilities in the Midwest, would provide a clearer picture of their experience and success rate in meeting government requirements.

What are the potential risks associated with relying on a single delivery order for electricity supply for multiple facilities?

Relying on a single delivery order for electricity supply across multiple federal facilities in Illinois and Ohio presents several potential risks. Firstly, any disruption in supply from the contractor, whether due to the contractor's own operational issues, unforeseen market events, or disputes, could simultaneously impact all designated facilities. This lack of redundancy increases vulnerability. Secondly, while the contract is firm fixed-price, significant and prolonged market volatility in electricity prices could strain the contractor's ability to maintain supply at the agreed-upon rate, potentially leading to performance issues or requests for contract modification. Thirdly, the specified delivery points within various local distribution utility service territories mean that the contractor must manage relationships and logistics across potentially different utility infrastructures, adding complexity and a layer of dependency on third-party utilities. Ensuring robust contingency plans and clear communication protocols within the delivery order is crucial to mitigate these risks.

How does the duration of this contract (approx. 7 months) align with typical federal energy procurement cycles?

The duration of this contract, spanning from October 1, 2024, to April 30, 2025 (approximately 7 months), appears to be a short-term or interim supply arrangement. Federal energy procurements can vary significantly in length, ranging from short-term delivery orders like this one to multi-year contracts. Short durations are often used to cover immediate needs, bridge gaps between longer-term contracts, or take advantage of favorable short-term market conditions. They can also be employed when facility requirements are uncertain or subject to change. Longer-term contracts, typically one to five years, are often preferred for greater price stability and administrative efficiency. The 7-month duration suggests this award might be a delivery order against an existing indefinite-delivery indefinite-quantity (IDIQ) contract or a specific response to an immediate operational requirement for the VA facilities in Illinois and Ohio.

Industry Classification

NAICS: Utilities › Electric Power Generation, Transmission and Distribution › Fossil Fuel Electric Power Generation

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

Parent Company: Altagas Ltd

Address: 8614 WESTWOOD CENTER DR STE 1200, VIENNA, VA, 22182

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

Financial Breakdown

Contract Ceiling: $2,980,427

Exercised Options: $2,980,427

Current Obligation: $2,980,427

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: 47PA0422D0043

IDV Type: IDC

Timeline