VA awards $3.5M electricity contract to Constellation NewEnergy, Inc. for Texas facility

Contract Overview

Contract Amount: $3,537,959 ($3.5M)

Contractor: Constellation Newenergy, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-07-01

End Date: 2025-06-30

Contract Duration: 364 days

Daily Burn Rate: $9.7K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: NTX DALLAS COUNTY ELECTRICITY CONTRACT 2024-2025

Place of Performance

Location: DALLAS, DALLAS County, TEXAS, 75216

State: Texas Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $3.5 million to CONSTELLATION NEWENERGY, INC. for work described as: NTX DALLAS COUNTY ELECTRICITY CONTRACT 2024-2025 Key points: 1. Contract value represents a significant portion of the VA's energy expenditure in the region. 2. Full and open competition suggests a potentially competitive bidding process. 3. Fixed-price contract type offers cost certainty for the government. 4. Contract duration of one year aligns with typical utility service agreements. 5. The award is for electric power distribution services, a critical utility. 6. Geographic focus on Texas indicates a specific regional need.

Value Assessment

Rating: good

The contract value of approximately $3.5 million for a one-year electricity supply is within a reasonable range for a federal facility of this size and location. Benchmarking against similar utility contracts for federal buildings in Texas would provide further context on value for money. The firm fixed-price structure helps manage budget predictability, though it may limit the government's ability to benefit from potential market price decreases.

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 offers. The specific number of bidders is not provided, but this procurement method generally fosters a competitive environment, which can lead to more favorable pricing and terms for the government. The VA's use of this method suggests a commitment to seeking the best value through a broad solicitation.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it increases the likelihood of securing competitive pricing and prevents potential price gouging associated with limited or sole-source awards.

Public Impact

The Department of Veterans Affairs (VA) is the primary beneficiary, ensuring reliable electricity for its Texas facility. The service delivered is essential electric power distribution, crucial for facility operations. The geographic impact is concentrated in Texas, specifically serving the VA facility's location. Workforce implications are minimal, as this is a utility service contract rather than a labor-intensive service.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific bidder count limits assessment of true competition intensity.
No details on energy efficiency or renewable energy sourcing are provided.
Potential for price fluctuations if market conditions change significantly within the fixed-price term.

Positive Signals

Awarded under full and open competition, suggesting a robust bidding process.
Firm fixed-price contract provides budget certainty for the VA.
Contract duration is standard for utility services, allowing for stable operations.
Addresses a critical operational need for the VA facility.

Sector Analysis

The energy sector, particularly electricity distribution, is a critical utility service for all government operations. Federal agencies are significant consumers of electricity, and contracts like this are essential for maintaining facility functionality. The market for electricity supply is generally competitive, especially in deregulated states like Texas, where multiple providers can bid for contracts. This contract fits within the broader category of utility services procurement for federal agencies.

Small Business Impact

The provided data does not indicate any small business set-aside provisions for this contract, nor are there explicit mentions of subcontracting requirements. As a utility service contract, it is less likely to involve significant subcontracting opportunities for small businesses compared to construction or complex service contracts. Further review of the contract details would be needed to confirm the extent of small business involvement.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Veterans Affairs' contracting and facility management divisions. Accountability is ensured through the firm fixed-price agreement, requiring the contractor to deliver the specified service at the agreed-upon price. Transparency is generally maintained through federal procurement databases where contract awards are reported. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Federal Utility Contracts
Department of Veterans Affairs Procurement
Texas Energy Market
Electric Power Distribution Services

Risk Flags

Potential for overpayment if market prices decline
Lack of specified energy efficiency or sustainability targets

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $3.5 million to CONSTELLATION NEWENERGY, INC.. NTX DALLAS COUNTY ELECTRICITY CONTRACT 2024-2025

Who is the contractor on this award?

The obligated recipient is CONSTELLATION NEWENERGY, 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 $3.5 million.

What is the period of performance?

Start: 2024-07-01. End: 2025-06-30.

What is the historical spending pattern for electricity at this specific VA facility?

Analyzing historical spending for electricity at this VA facility would provide crucial context for the current $3.5 million award. Without prior data, it's difficult to definitively assess if this contract represents an increase, decrease, or stable expenditure. Federal procurement databases often contain records of previous awards for similar services at the same location. Comparing the current contract's price per kilowatt-hour (kWh) or total annual cost against previous years, adjusted for inflation and potential changes in facility usage or energy efficiency measures, would reveal trends. For instance, if past spending was significantly lower, it might indicate rising energy costs, increased facility demand, or a less competitive bidding process this time. Conversely, if spending has decreased, it could signal successful energy conservation efforts or highly competitive bidding.

How does the price per unit of electricity compare to market rates in the Dallas County area?

To assess the value for money, comparing the per-unit cost (e.g., price per kilowatt-hour, kWh) of electricity under this contract to prevailing market rates in Dallas County is essential. This requires obtaining average commercial or industrial electricity rates from the local utility provider or energy market analysis firms for the contract period. If the VA's contracted rate is significantly higher than the average market rate, it could indicate a suboptimal outcome despite full and open competition. Conversely, a rate at or below market average would suggest good value. Factors such as contract volume, term length, and specific service level agreements can influence price, so a direct comparison should account for these variables. The firm fixed-price nature also means the VA is protected from upward price volatility but may not benefit from downward market shifts.

What is Constellation NewEnergy, Inc.'s track record with federal energy contracts?

Constellation NewEnergy, Inc. has a substantial track record of securing and performing on federal energy contracts across various agencies. A review of federal procurement data (e.g., FPDS) would likely reveal numerous awards to this contractor for electricity supply, natural gas, and potentially renewable energy solutions. Assessing their performance history involves examining past contract modifications, on-time delivery rates, and any reported disputes or contract terminations. Positive performance indicators would include consistent delivery, adherence to contract terms, and potentially favorable pricing achieved through competitive bidding. Conversely, a history of significant contract issues or overpricing on similar federal contracts could raise concerns about their current award's value and reliability.

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

The primary risk associated with a firm fixed-price (FFP) electricity contract is that the government may overpay if market prices for electricity decrease significantly during the contract term. While FFP provides budget certainty, it limits the government's ability to capitalize on favorable market fluctuations. Conversely, the contractor bears the risk of rising energy costs, which could incentivize them to seek cost-saving measures that might impact service quality if not carefully monitored. For essential utilities like electricity, ensuring service continuity is paramount, and the FFP structure places the burden of managing supply costs and risks squarely on the contractor. The VA must ensure the initial price reflects a realistic market assessment to avoid paying a premium.

Does the VA have specific energy efficiency or sustainability goals tied to this contract?

The provided data does not specify whether this contract includes provisions for energy efficiency or sustainability goals. Federal agencies are increasingly encouraged, and sometimes mandated, to procure sustainable products and services and to reduce their energy consumption. If this contract is solely for basic electricity supply without performance standards related to efficiency or renewable energy sourcing, it might represent a missed opportunity to advance the VA's environmental objectives. A more comprehensive energy strategy might involve soliciting bids that prioritize renewable energy content, demand response capabilities, or energy efficiency improvements at the facility. Further investigation into the contract's statement of work and any associated performance metrics would clarify this aspect.

Industry Classification

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

Product/Service Code: UTILITIES AND HOUSEKEEPING › UTILITIES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: TWO STEP

Solicitation ID: 36C25724F0116

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Exelon Corporation

Address: 1310 POINT ST FL 8, BALTIMORE, MD, 21231

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

Financial Breakdown

Contract Ceiling: $3,537,959

Exercised Options: $3,537,959

Current Obligation: $3,537,959

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 47PA0420D0016

IDV Type: IDC

Timeline