VA awards $2.1M for electricity, highlighting stable energy pricing for Cleveland VAMC

Contract Overview

Contract Amount: $2,133,746 ($2.1M)

Contractor: WGL Energy Services, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-06-01

End Date: 2025-05-31

Contract Duration: 364 days

Daily Burn Rate: $5.9K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Energy

Official Description: CLEVELAND VAMC ELECTRICITY POP 06/01/2024 - 05/31/2025.

Place of Performance

Location: CLEVELAND, CUYAHOGA County, OHIO, 44106

State: Ohio Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $2.1 million to WGL ENERGY SERVICES, INC. for work described as: CLEVELAND VAMC ELECTRICITY POP 06/01/2024 - 05/31/2025. Key points: 1. Contract value appears reasonable for a one-year electricity supply agreement. 2. Full and open competition suggests a competitive market for energy services. 3. No immediate risk indicators identified in the contract terms. 4. Performance is tied to a fixed price for a defined period. 5. This contract falls within the energy generation and distribution sector. 6. The award is a delivery order under a larger contract vehicle.

Value Assessment

Rating: good

The contract value of approximately $2.1 million for a one-year electricity supply for the Cleveland VAMC appears to be within a reasonable range for utility services. Benchmarking against similar utility contracts for large federal facilities would provide a more precise value-for-money assessment. The firm fixed-price structure offers cost certainty for the duration of the contract, which is a positive indicator for budget management.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors were likely solicited and had the opportunity to bid. The specific number of bidders is not provided, but the competition type suggests a healthy market for electricity supply services. This level of competition is generally expected to drive competitive pricing and ensure fair market value.

Taxpayer Impact: Taxpayers benefit from a competitive bidding process that aims to secure the most cost-effective electricity supply for the facility, preventing potential overcharges.

Public Impact

The primary beneficiary is the Cleveland VAMC, ensuring a consistent and reliable supply of electricity for its operations. Services delivered include the provision of electricity, essential for patient care, medical equipment, and facility maintenance. The geographic impact is localized to Cleveland, Ohio, supporting the energy needs of a specific federal healthcare facility. Workforce implications are minimal, as this is a service contract for energy supply rather than direct employment generation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Positive Signals

Awarded under full and open competition.
Firm fixed-price contract provides cost certainty.
Contract duration is for a standard one-year term.
Awarded to a known energy services provider.

Sector Analysis

The energy sector, specifically the provision of electricity, is a critical utility service for all federal facilities. This contract represents a small portion of the overall federal spending on energy. The market for electricity supply can vary significantly by region, but for large consumers like the VAMC, competitive bidding is standard practice to ensure cost efficiency. Comparable spending benchmarks would involve analyzing electricity costs for similar-sized federal buildings in the Ohio region.

Small Business Impact

The data indicates this contract was awarded under full and open competition and does not specify any small business set-aside. Therefore, there is no direct analysis of small business set-aside implications. Subcontracting opportunities for small businesses are not detailed in this award notice, but typically, prime contractors may utilize small businesses for various support services.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Veterans Affairs' contracting and facility management departments. Accountability measures are embedded in the firm fixed-price agreement, requiring the contractor to deliver electricity as specified. Transparency is facilitated by the public nature of federal contract awards, though detailed performance monitoring data is not publicly available.

Related Government Programs

Federal Utility Contracts
Department of Veterans Affairs Facility Operations
Energy Supply Contracts

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $2.1 million to WGL ENERGY SERVICES, INC.. CLEVELAND VAMC ELECTRICITY POP 06/01/2024 - 05/31/2025.

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 $2.1 million.

What is the period of performance?

Start: 2024-06-01. End: 2025-05-31.

What is the historical spending on electricity for the Cleveland VAMC?

Historical spending data for electricity at the Cleveland VAMC is not provided in the current data. To assess long-term trends and value, a review of previous years' electricity contracts for this facility would be necessary. This would allow for an analysis of price fluctuations, changes in consumption, and the impact of different contract types or providers over time. Understanding past spending patterns is crucial for identifying potential cost savings or areas where prices have increased significantly.

How does the per-kilowatt-hour cost compare to market rates?

The provided data does not include the specific quantity of electricity (in kilowatt-hours) or the unit price. Therefore, a direct comparison of the per-kilowatt-hour cost to market rates is not possible with the available information. To perform this analysis, one would need to know the total kilowatt-hours supplied under this contract and divide the total contract value by that amount. Subsequently, this calculated unit cost would need to be benchmarked against average commercial or industrial electricity rates in the Cleveland, Ohio area for the contract period.

What is the track record of WGL ENERGY SERVICES, INC. with federal contracts?

WGL ENERGY SERVICES, INC. has a history of receiving federal contracts, primarily for energy supply. A comprehensive review of their contract history with federal agencies, including the Department of Veterans Affairs, would reveal their performance, compliance, and pricing trends. Analyzing past awards, delivery orders, and any reported issues or successes would provide insight into their reliability and competitiveness as a federal contractor. This information is typically available through federal procurement databases.

What are the potential risks associated with a firm fixed-price electricity contract?

The primary risk with a firm fixed-price electricity contract is that the contractor may face financial losses if energy prices rise significantly above projections during the contract term, potentially leading to performance issues or future pricing increases. Conversely, the government bears the risk of overpaying if energy prices fall substantially. For essential services like electricity, the risk of service disruption is generally low due to regulatory oversight and the critical nature of the supply, but contract non-performance by the supplier remains a theoretical risk.

How does the duration of this contract (364 days) impact value?

A contract duration of 364 days is a standard one-year term, often used to avoid certain regulatory or administrative requirements associated with longer-term contracts. This duration provides a defined period for price stability, allowing the VA to budget effectively. However, it also necessitates a re-competition or extension process annually, which incurs administrative costs and potential market volatility if energy prices change significantly between cycles. For a utility service, a one-year term is common and balances stability with the need for periodic market review.

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: $2,133,746

Exercised Options: $2,133,746

Current Obligation: $2,133,746

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 47PA0422D0040

IDV Type: IDC

Timeline